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I’m extremely proud to share that one of my “CVS Effect” articles was picked as the top leadership article for “Best of 2014 in Sustainability.”

Bestof2014

 

 

 

 

 

 

 

It’s this one: The “CVS Effect” in Effect: Apple, Disney and Chipotle Step Up

Five major brands have just made news for decisions that buck the bottom-line mantra. Could this be momentum for the “CVS Effect”? Take a look and see if you agree. And note too how brands are joining with allies on these issues, while one brand — Chipotle — is potentially breaking major new ground. Keep reading…

My coverage of the Sustainable Brands New Metrics Friday afternoon workshop on top global supply chain risks.

It’s Friday afternoon at New Metrics ’14, and next on the agenda is a workshop offering data-based insights and recommendations on top global supply chains risks from specialists in the field.

The conversation was co-led by Andrew Savini, Manager of Supplier Management & Audits at Intertek, and Mark Robertson, Head of Marketing & Communications at Sedex, who shared their companies’ data analyses of supply chain risks and real-world experience.

To illustrate the scope and scale of the supply chain risk ecosystem, they offered this quote from global beverage company Diageo: “At Diageo, we talk about 70,000 suppliers and third parties, spread across over 100 countries of the world. When multiplied by the number of sub-suppliers in the supply chains, you get in to hundreds of thousands of people impacted by our global supply chain, so it’s vital to prioritize the key areas.”

Starting off, they gave an overview of CSR supply chain key events in the past 10 years, from labor issues at Levi’s and the 2013 Rana Plaza disaster, to legislation, regulations, the proliferation of standards in the late 1990s, and the role of NGOs.

Data is the key to measuring progress towards responsible sourcing, they said, which they defined as the process of purchasing goods and services without causing harm to, or exploiting, humans or the natural environment.

On to risks, they shared the top 10 performance trends that audits around the world are picking up globally – fire safety, health and safety management, level of overtime hours, environment, management systems, machinery, chemicals and worker health/first aid/accidents, building/site maintenance and benefits/insurance – as well as how they look when sliced by China, Bangladesh, the United States, and by industry.

Not surprisingly, more mature industries such as food factories tend to perform better overall, due to years of scrutiny and regulations. By contrast, electronics factories have a way to go because of growth and increasing production.

A key supply chain risk is whether suppliers have controls or evaluation procedures for subcontracted work. In the case of Rana Plaza, many suppliers didn’t know their manufacturing processes were subcontracted to an over-burdened building with locked exits. Globally, audits find that 2 out of 5 suppliers do not have these controls in place, with the number being nearly 4 out of 5 in Taiwan.

A brighter story is the case of the global frequency of adequate fire-fighting equipment — only 1 out of 10 facilities fail at this measurement. This indicates that many years of codes of conduct and auditing have positively influenced fire safety practices.

They then did a deeper dive into labor issues in Cambodia, and showed how signs of the labor unrest that broke out in early 2014 could be discerned in earlier factory audits. A year before labor strikes took place, Cambodia’s overtime rate was 1.5 times more than the global average, signaling that workers were approaching a breaking point.

The conversation moved on to solutions and the case for multi-tier transparency. According to a PwC & MIT study, globally, only a third of companies are actively seeking transparency below Tier 1 in their supply chain. This is a problem because the highest risks and most issues are found deeper down (in the case of a garment’s supply chain, Tier 1 is the assembly, Tier 2 is the mill and Tier 3 is the cotton farm).

Intertek research backs up the case for companies to take on deeper levels of transparency – 40 percent of Intertek audit requests from global clients have something wrong with the audit request entity, and 70 percent of brands in a recent Intertek survey admitted their organizations would most likely lack the capability to trace back to production.

Externally, the drivers for improving supply chain risk management are compliance and traceability. The first, compliance, is fueled by regulations and legislation, investor pressure and consumer pressure. Pressure to improve traceability stems from the reality that in a connected world, issues become news in seconds.

What this means for companies is that transparency is expected, the “bare minimum” is no longer acceptable, greenwashing will be called out and criticized, and companies need to know where the next Rana Plaza could be.

The session wrapped up with their advice for what executives should keep top of mind.

Robertson said that sustainability leaders are looking to “not just meet regulatory requirements but go beyond compliance. That starts with protecting workers and doing more around benefits [such a providing a living wage] or training.”

As well, forward-looking companies are harnessing the power of Big Data from government datasets and news sources, expanding traceability beyond Tier 1 and forming collaborations with NGOs and other business leaders.

My article about the Friday afternoon Sustainable Brands New Metrics 14 workshop on employee engagement case studies.

Rounding out the final afternoon of Sustainable Brands’ New Metrics ‘14, Susan Hunt Stevens, founder & CEO of WeSpire, led a candid, data-rich conversation with representatives from TD Bank, Intel and CA Technologies about their employee engagement programs.

“These three people are doing really amazing work not only in employee engagement, but more importantly, connecting employee engagement to broader business value and key HR metrics,” Stevens said.

She explained that WeSpire technology helps global companies engage their employees in sustainability and responsibility initiatives — she said WeSpire customers have saved over $1M while reducing their environmental footprint in waste, water and energy, since July 2013.

But the real win comes from more engaged employees and seeing that as a real value. She said that disengaged employees cost companies an estimated $450-550 billion in lost productivity. Looked at this way, sustainability isn’t just a department goal but a business driver of overall success. When employees get engaged at work with social and sustainability initiatives, you can measure the impact in overall productivity and results.

Starting off, Linda Qian, CSR Communications Manager at Intel, shared her company’s “cherries and pits” — successes and misses — experience with a global employee recycling program. This was one element of Intel’s overall program that offers options for employees at all stages of the sustainability continuum from “light green” to “dark green.” Notably, she said that Intel ties compensation to sustainability metrics. For this year, the bonus metric was tied to the global recycling rate.

The team picked recycling because it was a goal that everyone could contribute to by changing their behavior.  The biggest learnings, or pits, came through a bumpy program rollout and unanticipated employee pushback. But the cherries, Qian said, were that, “The ability to engage all employees in a tangible way does have positive results. We did see an overall reduction in waste produced and increased recycling.”

Brad Peirce, VP of TD Environment at TD Bank, next shared that his company seeks to be “as green as our logo” with leadership in protecting critical forest habitats, greening the urban environment, and a commitment to climate action through renewable energy. In addition, the company believes that engaging employees in these issues helps attract talent, enhance the brand and increase productivity.

Peirce said the bank has found that employees were at different stages along the continuum of green, with some superstars such as an employee named Tim Little, whose passion for talking about TD’s environmental initiatives turns customers into advocates. The challenge was to engage more employees in this way. The solution was the online “Green Pledge Challenges” with seven simple, measureable actions.

To make it go viral through the company, they added game elements and enlisted the support of senior execs and middle management to report progress weekly by lines of business in a friendly competition.

In less than six weeks, 40 percent of bank employees took the Pledge and the number continues to increase.

“We learned a lot from our data about where employees need to do better and how to help them,” Pierce said. “The pledge became a proxy for us to understand our company better, and for employees to see through a different lens that their individual actions add up to collective impact.”

Finally, Andy Wu, Principal of the Office of Sustainability at CA Technologies, discussed how his company measures whether its sustainability programs and initiatives have a positive impact on employees.

In 2011, the company launched numerous employee engagement campaigns, including a Good to Green Game and video vignettes, a Green Teams pilot that expanded in 2012, and the CA Sustain program in 2012. It also added a question to the annual employee survey, asking whether CA Technologies demonstrates its commitment to global sustainability of the environment and our communities.

Over the past two years, the program’s results show increasing employee engagement towards the company’s sustainability commitments. Favorable responses on the 2013 employee survey have jumped from 76 percent to 84 percent. And survey results for Green Team locations were even better in 2012, showing an 89 percent favorable response versus 82 percent favorable for the company overall.

Going forward, Wu said CA Technologies is looking at ways to run studies and separate sustainability from other factors that employees care about. And he noted the partnership role that the Human Resources team plays, saying: “HR has been very helpful in identifying some of the issues we have and how sustainability aligns with retention and satisfaction.”

My wrap-up of Sustainable Brands New Metrics ’14 Friday morning plenaries.

The final morning of Sustainable Brands’ New Metrics ’14 conference started with an invitation from MC Bill Baue, co-founder of the Sustainability Context Group, to imagine “what if?” sustainability pioneer Donella Meadows were in the room and what she would say.

“Am I working at a leverage point that has the most potential to leverage systemic change?” Baue asked, referring to Meadows’ landmark book, Places to Intervene in a System. He then asked attendees to keep this in mind for the day’s theme of analyzing and engaging consumers and employees, and to consider how New Metrics can help us inform and illuminate ways “to transform systems for a more sustainable — and indeed flourishing and prosperous — future.”

Terry Garcia, Chief Science and Exploration Officer at National Geographic, announced the global release today of findings from National Geographic’s fifth 2014 Greendex with GlobeScan’s Eric Whan.

Eric Whan, Terry Garcia, Alexander Gillett

L-R: Eric Whan, Terry Garcia & Alexander Gillett

The survey highlights a growing concern about environment and climate change and how that’s going to impact quality of life. But despite this, it also shows that a corresponding change in consumer behavior has only grown slowly.

Even with this gap between intention and action, there’s some good news in the survey. Whan said that a growing sense of anxiety — an awareness — shows the preconditions for making change. And that, “In my opinion there are no better change agents than marketing and branding people.” He ran through some of the survey’s deeper findings, including which groups seem more willing to change, that people are willing to pay more for more sustainable choices, and what actually motivates them do take actions.

Amy Fenton

Amy Fenton

Next up was Amy Fenton, Global Leader of Public Development & Sustainability at Nielsen, who shared new research on whether consumers actually follow their words and intentions with their wallets.

“In fact, the profound answer is ‘yes,’” Fenton asserted. “Consumers do care and their actions will follow. There are preconditions for how that change occurs, but consumer change can result in increased revenues.” Indeed, the latest data from Nielsen’s 2014 Global Corporate Social Responsibility survey shows that 55 percent of global online consumers across 60 countries are willing to pay more for products and services from companies that are committed to positive social and environmental impact.

Jenny Rushmore

Jenny Rushmore

Focusing in on millennials, she said that since over 50 percent of those willing to pay more globally for more sustainable choices are millennials, this is the group brands need to be thinking of long term.

Next, Jenny Rushmore, Director of Responsible Travel at TripAdvisor, discussed the novel metrics her company is using for its green hotel rating program by saying that it’s “a totally different way of doing research that avoids current pitfalls and opens up new exciting possibilities.” This work is the first time guest perception research has been done with a very large sample set of unprompted responses, gathered from the TripAdvisor’s GreenLeaders database of both sustainable hotel practices (over 4,000) and traveler reviews of those practices (over 30,000).

One of the striking takeaways from the research is that highly-visible green practices like sustainable food that directly add value to the consumer experience can improve the customer’s overall experience and potentially increase revenue by bumping up the hotel’s rating overall.

Highlighting another example of how new metrics can help consumers make better informed purchasing decisions was Alexander Gillett, CEO of How Good. His company’s food rating labels help create shifts in purchasing behaviors by giving shoppers an at-a-glance view of a product’s environmental and social impacts.

Echoing what TripAdvisor learned about customers, the food industry is a bellwether for how new metrics can help influence more sustainable customer decisions in other sectors. “Food is one of the areas where there is positive change,” Gillett said. “Some of the things that are happening in food will probably be happening in other industries in 10 years.”

How Good is finding that giving customers more information can bump up sales for sustainable products. He shared how putting a “This product is great for the environment, society and the world” label on the shelf under a high-rated product led to a 46 percent increase in sales for that item in conventional grocery stores.

Roya Kazemi

Roya Kazemi

After a break, the sessions continued with Roya Kazemi, Director of GreeNYC, the NYC Mayor’s Office of Long-Term Planning and Sustainability. She shared research that the City has done on how best to engage residents on sustainability issues, and what her team has learned about branding, messaging and media strategies that get results.

When NYC Mayor DeBlasio recently announced the city’s new goal to achieve an 80 percent reduction in emissions by 2050, he not only made NY the largest city in the world committing to that goal, but also made Kazemi’s job that much bigger. There’s a lot that the City is doing on the levels of infrastructure and policy, but consumers have to be a big part of that. “Household energy use is 39 percent of New York City’s CO2 emissions, so consumers have to be a big part of it,” she said. She pointed out that consumer behavior change can have an impact in a matter of months, compared to legislation that can take years.

Suzanne Shelton

Suzanne Shelton

Kazemi then described the data-driven approach they’re using to guide strategic decision-making. The detailed plan they rolled out focuses on the top 10 actions to reach people who aren’t currently doing them, to help NYC get a significant way to the goal using a positive voice, clear call-to-actions, and the use of a branded mascot named Birdie.

Kazemi’s presentation was a perfect tee-up from New York’s citywide plan to Shelton Group CEO Suzanne Shelton’s, on applying behavioral economics to inspire behavior change around energy-efficiency actions.

“Energy-efficiency is actually the best thing we can do for the environment,” Shelton said. “The problem is that none of us really want to be energy-efficient — and that’s a perception problem.” She laid out the program her company runs with utility companies to drive energy-efficiency behavior change. The “Do 5 Things” program rests on the insight that getting people to do just five things — not 2 and not 25 — is the sweet spot for getting customers engaged, happy with their savings and highly likely to do the next thing. She described how they tailored messages and methods to four distinct customer segments and used off-beat marketing messages to catch customers’ attention.

Steph Sharma

Steph Sharma

“If you want to change behaviors,” Shelton said, “you have to know who you’re talking to, customize the actions for them, make the action list manageable, and apply behavioral nudges over time.”

Shifting gears a bit, Steph Sharma, Managing Partner of Lead the Difference, posed a provocative metrics question to the room: “If human capital is a company’s greatest asset, then why does business-as-usual reflect it only as a liability?” She then explained how ongoing analysis is delving into the possibilities of making human capital more real on the balance sheet, how it could be measured, what the barriers are, and what it could mean for how we organize and manage businesses overall.

If the task is to discover which metrics represent the actual value created by humans, then one of the challenges is to determine the right inputs and outputs. As the analysis continues, Sharma said that information will be shared widely and openly. “This is all about keeping humans central,” she said, towards the goal of making humans a real asset to businesses and doing it correctly.

Tom LaForge

Tom LaForge

Finally, Tom LaForge, Global Director of Human & Cultural Insights at Coca-Cola, took the stage to discuss how culture shifts are changing how brands see themselves and position themselves in the marketplace.

“What’s emerging is that brands are starting to stand for something good — we’re entering an era where brands stand for solving problems of society,” he said. “Corporations and government have the power to make change. What I’m hoping is happening is that we the people — including the people who use your product — think that the good they want to see in the world is possible if they team up with the right people.”

The morning wrapped up with LaForge saying, “This is the world you have to prepare your organization for. This new era of social branding is about what’s the right way to do business. Start thinking about words like ‘right’ and ‘good.’ We are assessing brands at a social level and we need metrics that can help us measure and assess if a brand is helping society.”

My coverage of the Sustainable Brands New Metrics 14 Thursday afternoon workshop on the #socialfootprint approach to product sustainability.

L-R: João Fontes, Dirk Voeste, Charles Duclaux, Sébastien Zinck and Lindsay Clinton. | Image credit: Sustainable Brands

Thursday, the second afternoon at Sustainable Brands’ New Metrics ’14 conference, featured a follow-up deep dive session into the topic of one of the morning’s well-received plenary presentations — how to quantify a product’s “social footprint” as a next step in assessing sustainability.

While the sustainability field has developed many ways to assess products’ environmental footprints, until now few tools have helped accurately measure the social impacts that products have on workers, local communities, suppliers, consumers and more throughout their life cycle.

This workshop expanded on the Sept. 1 release of the Handbook for Product Social Impact Assessment, developed by PRé Sustainability and a Roundtable of 12 leading companies in various industries: Ahold, AkzoNobel, BASF, BMW Group, DSM, L’Oréal, Marks & Spencer, Philips, RB, Steelcase, The Goodyear Tire & Rubber Company, and a chemical company led by PRé.

The Handbook gives companies a tool to understand risks and opportunities in product development through the whole supply chain, and support better decision making.

Lindsay Clinton, Director at SustainAbility, moderated the panel of representatives from BASF, L’Oréal and Steelcase, and João Fontes, Social Footprinting Expert at PRé.

Fontes explained what sets this tool apart from others in terms of measuring social impact: “This social footprint integrates a lot of efforts and tools that companies have available at different departments. In terms of the methodology, the social footprint is life-cycle oriented, while at the same it gives the practitioner the flexibility to define the scope of the assessment.”

Charles Duclaux, Head of Corporate Responsibility Reporting and Environmental Innovation for L’Oréal, explained his company’s motivation to join the Roundtable, saying that the initiative “perfectly fit with one of our 2020 sustainability commitments to social and environmental improvements.” Participating in the Roundtable pilot also moves the cosmetics company forward in fulfilling its pledge to help customers make more informed choices with product information.

Then, Sébastien Zinck, Manager of Eco-design and Life-Cycle Assessment for Steelcase, described how his company conducted a pilot to evaluate the social impact of one component part of a chair. “We see the big potential of these metrics to make improvements on social issues, and bridge the gap between academic research and industrial needs,” he said.

Next up was BASF’s VP of Sustainability, Dirk Voeste, who spoke about his company’s upstream position in many of the products made by fellow Roundtable members, the responsibility that comes along with that, and how this tool can help make better business decisions.

“Social metrics are getting very critical for us,” he said, noting the importance of using a standardized frame for making decisions.

Fontes walked through the steps of the social footprint methodology, which is similar to a Life Cycle Analysis. The process starts with setting goals and scope, moves on to data inventory, and then to reference points as performance indicators for benchmarking and comparison. Roundtable members helped create and validate the process that also incorporates international standards for social issues.

At the end of the seven-step process, Fontes said, “you have a visual dashboard color-coded, where you can see the areas where you or one of your business partners are doing a great job, as well as the areas that need attention.”

While still a work in progress, the social impact tool has huge potential to help companies measure and improve their relationships between products and people through the entire product value chain.

The speakers said the next phase of refining the product social footprinting methodology is underway and the Roundtable for Product Social Metrics is looking for new corporate members to join and collaborate.

My coverage of the Sustainable Brands New Metrics 14 Thursday afternoon workshop on adding context to sustainability goals.  (First half written by Tamay Kiper.)

A two-part session on Thursday afternoon explored sustainability context through examining the evolution of corporate sustainability goals, and case studies from leading companies proactively applying it to their goal-setting processes.

First, Sustainability Context Group co-founder Bill Baue — moderator of both parts — led a discussion on the state of corporate sustainability goals and equipping companies with practical advice on how to incorporate context.

Baue started by explaining the concept of context — which calls for assessing “the performance of the organization in the context of the limits and demands placed on environmental or social resources at the sector, local, regional or global level” — and raised the question: “Where are we now in sustainability and where are we going?”

Panelist Mark McElroy, founder & Executive Director of Center for Sustainable Organizations, further explained the necessity for Context Based Sustainability (CBS) in environmental goal-setting, as well as the need to turn to climate science for thresholds, to then devise a way to apportion them to organizations. A new CBS method, the MultiCapital Scorecard (MCS), which Ben & Jerry’s has just adopted, puts Trajectory Targets (interim goals) and Triple Bottom Line concerns in scope and assessing performance relative to both final (Sustainability Norms) and interim (Trajectory Targets) goals.

Next, Bob Willard picked up where his morning plenary presentation left off, further explaining The Future-Fit Business Benchmark — which defines the science-based, minimum acceptable levels of environmental and social performance that a company must reach if it is to be truly sustainable and fit for the future — and expanding on the 21 Key Performance Indicators (KPIs) for businesses. Social KPIs were divided into 5 categories (Employees, Community, Customers, Investors and Suppliers, & Partners) and Environmental KPIs included Energy, GHG, Water, Materials, Products, Waste and Land. A company’s Future-Fit performance on these KPIs ensures its environmental and social impacts do not contribute to the issues.

Andrew Winston, author of The Big Pivot, engaged the audience with the latest updates from the PivotGoals Data introduced at SB’14 San Diego in June, and emphasized that 75 percent of Fortune 200 companies now publicly share sustainability goals. Echoing McElroy’s and Willard’s insights, Winston divided these goals into two categories: Science-equivalent — what external thresholds would demand for some large part of the business (not the full value chain); and “Future Fit” compatible — moral, ethical, or based on a flourishing model, but not technically ‘science-based.’ Winston encouraged the audience to track companies’ sustainability goals online on PivotGoals.com, and feedback from the audience was to track these goals periodically to see if companies were successful meeting these goals.

Then Cynthia Cummis, Deputy Director of GHG Protocol at the World Resources Institute (WRI) introduced its science-based target-setting framework, which aims to raise the ambition of corporate GHG reduction targets to support a transition to a low-carbon economy and keep the planet below a 2-degree temperature rise. She then explained how WRI’s Sectoral decarbonization approach (SDA). — a sector-specific decarbonization pathway based on the 2ºC carbon budget, expected sector activity and mitigation potential — aims to engage the leading multinational companies to set science-based emissions reduction targets by the end of 2015, and demonstrate to policy-makers the scale of ambition among leading companies to reduce their emissions and act as a positive influence on international climate negotiations.

After a round of audience questions and a short networking break, Baue returned with a fresh set of panelists to delve into case studies from EMC, Cabot Creamery and Autodesk, detailing each company’s experience incorporating sustainability context into their efforts.

“We’re in transition from incremental goals towards more ambitious goal-setting that takes the larger context of ecological limits and social impacts into consideration,” Baue said.

Emma Stewart, Head of Sustainability Solutions for Autodesk, kicked things off the three reasons her company got into science-based goal setting.

“As an environmental scientist, I’d never seen the level of consensus and clear guidance that we have on climate science,” she said. Secondly, she found the current practices around goal-setting to be “ripe for disruption” due to short-term timeframes and guesstimate benchmarking that would “save the climate, but 39 years too late.” And finally, rising regulations expectations beginning to affect Autodesk’s customers opened an opportunity to be more responsive to their needs.

This analysis led Autodesk to build C-FACT (Corporate Finance Approach to Climate-Stabilizing Targets), a science-driven method for setting GHG emissions reduction targets against real-world limits, which Autodesk has since made freely available to all companies.

EMC’s Chief Sustainability Officer, Kathrin Winkler, spoke next about her company’s role as one of the first to set a carbon-reduction goal with the EPA climate leaders program. They hit that initial goal and then moved on to setting, and achieving, better ones for 2012, 2015, 2020 and 2050. Winkler described how the company has customized its glidepath for achieving its carbon stabilization goals, based on the C-FACT model, and cautioned that flexibility is key to meeting future challenges.

“The thing with absolute goals is that they kind of lock you into a mindset, and depending on what happens with climate science, business might need to do more,” she said.

Up next was Jed Davis, Cabot’s Director of Sustainability, who shared his company’s context-based sustainability journey as a nearly 100-year-old Vermont-based cooperative with 1,200 dairy farm families. He described the company’s sustainability motto — “Living within our means, Ensuring the means to live” — as a “straightforward way of baking in context-based sustainability that implicitly is about respecting some thresholds and limits.”

Baue and the panel then fielded inquiries from the room about how CBS and C-FACT can be applied to resources other than carbon (as Cabot is doing for water), material traceability, and for small businesses and cities. Stewart noted that the City of Palo Alto has just adopted C-FACT as its baseline target, as Autodesk customized the methodology for cities earlier this year.

Winkler shared another example of when context involves a company setting its own thresholds. Most hardware IT companies set goals for materials take-back in terms of tonnage, she said, but a better question to ask is: “How much are we getting back in terms of what we put out? Making e-waste isn’t the goal. The point is to create a closed loop. In this case, you set the threshold.”

The session closed with plenty of questions left to ask about ambitious sustainability targets and practice, but with a clear sense that setting real-world science-based goals is no longer just a possibility, but an imperative.

Here’s my latest for Sustainable Brands.

Seven months ago, this series kicked off with CVS’ surprise announcement that it would no longer carry tobacco products in its retail stores. Fast forward, the company announced Sept. 3 that it had met its goal a month ahead of schedule and had a new name to match its bold, new vision of a tobacco-free America — CVS Health.

In follow-up articles, I’ve talked about leading businesses that have taken big steps for the common good because it’s the right thing to do — even if it costs the company financially in the short term — and the most recent talked-about companies banding together to work on climate and energy issues.

This time I want to point to a trend of businesses being called out publicly to make their “walk match their talk” on climate action commitments, political contributions and trade association memberships. It’s worth noting that pressure from responsible investment and climate action groups factor into all of the examples below, as more proof of the power of collaboration.

By nature I’m more inclined to shine a light on positive examples, but this wave of businesses being exposed for disconnects between their stated values and actions merits a closer look. My hope is that these efforts will spur actions that we can broadly acknowledge as steps in the right direction for leading brands.

I started tracking this issue of talking-versus-walking in January when the Union of Concerned Scientists released a report called Tricks of the Trade: How Companies Influence Climate Policy Through Business and Trade Associations. The report shows that “companies choose not to be transparent about their affiliations with trade and business associations.” One of the key issues that author Gretchen Goldman raises are disconnects between businesses’ positions on climate change versus the positions held by their business and trade groups.

In March, Intel became the first US company to commit to aligning its company policies and political contributions. The decision came after what was described as “fruitful negotiations” with investor group NorthStar Asset Management, Inc. and the filing of a shareholder proposal. In hindsight, this news that didn’t get a lot of ink early in the year looks prescient. What’s notable here is that the commitment goes behind disclosure — “tell us what you’re doing” — to doing things differently in the future.

Then, a much-shared article in June by Climate Progress discussed the US Chamber of Commerce’s preemptive swing at President Obama’s climate plan (the Chamber’s report opposed EPA rules that hadn’t been released yet, saying that they would be bad for jobs and the economy). The quote that grabbed my eye was this: “The Chamber does not speak on behalf of Prudential.” Well then, I wanted to ask, who does?

Then last month, Microsoft announced it had cut ties with the American Legislative Exchange Council (ALEC) because of concerns about the lobbying group’s opposition to renewable energy. Pressure from two responsible investment groups — The Sustainability Group and Walden Asset Management — played a role in the decision. And a few weeks later, a Common Cause-led campaign with over 50 organizational co-signers called on Google to drop its ALEC membership as well.

Which brings us up to earlier this month, when Forecast the Facts released its new “Disrupt Denial” report and social media campaign. The group says that “companies like eBay, Ford, Google, Microsoft, and UPS also contributed to the $641 million climate deniers in Congress have received from US businesses since 2008.” It’s too soon to say if this campaign will be successful, but if it is, then Intel’s example provides a path for other companies to follow.

As the year has progressed, I’ve felt increasing optimism from examples in the business world, op-eds and mainstream media that climate reality is winning out. The World Bank released a statement in August showing business leader support for carbon pricing and China just announced it will have a carbon market up and running by 2016. More companies are stepping up to talk about climate change as a material business risk and sharing their energy plans with investors and shareholders. And many of those companies have signed on as supporters for the Sept. 21 People’s Climate March in New York City that kicks off Climate Week and the Sept. 23 UN Climate Summit.

At the same time, there are plenty of people ready to write off the Summit’s chances for a treaty in 2015 or if it’s even possible to stave off climate catastrophe. But what’s different this time is that the business world has been asked to take on larger and more meaningful commitments. The We Mean Business coalition announced it will launch on Sept. 22 with a new report on the business case for moving swiftly to a low-carbon economy and the opportunities available to those companies who take action now.

The science is clearer than ever that our globe is heading towards “irreversible” climate impacts. So there’s not a day to waste — as individuals, business owners and citizens — to make sure future generations have a world fit to live in.


My latest for EarthPeople Media and the wonderful Anna Clark.

Baders-Book600x350

Putting “Responsible Business” Out of Business

Christine Bader’s book The Evolution of a Corporate Idealist: Girl Meets Oil offers hope and practical advice for anyone trying to stimulate meaningful change in our multi-stakeholder, shareholder-beholden, profits-focused world. Doing this kind of work is hard, but then again, pretty much anything worthwhile usually is.

The book tells Christine’s story of working with BP before the Deepwater Horizon disaster, and then with a United Nations effort to prevent and address human rights abuses linked to business. In addition to her own “Corporate Idealist” story, the book profiles other outsider-insiders who are working for positive change from within major corporations. The book concludes with a must-read Corporate Idealist Manifesto that makes room for morality as well as the business case.

I first met Christine at the 2014 Sustainable Brands conference in San Diego this past June where she was a panel moderator. At lunch one day, we started talking about the role of human rights in the CSR conversation and then continued our conversation later by phone. We started our call by talking about how strange it is that “Responsible Business” is a category at all.

Why do we accept that as the default?” said Christine. “It’s like saying, ‘Some of my money is in socially responsible mutual funds.’ But what does that mean the rest of my money is in? I think the whole mission is actually to make the ‘corporate idealist’ label and ‘responsible business’ redundant.”

From there we talked about collaborations, how human rights can add structure to the CSR conversation, and what’s ahead for the world’s Corporate Idealists:

Claire: I’m interested in the business collaborations that are starting to pop up in our world like We Mean Business, the new Risky Business Report, and everything that BSR is doing. What do you see coming for the CSR world in the near future? Do you believe that business will be able to affect US policy in the next four years?

Christine: Well, I mean business has always impacted policy in the US, and I think that some would argue that business has too much influence over policy in the US. But you’re asking a slightly different question, which is can business influence policy for the better?

In the US, certainly I think it’s clear that business does have the capacity to influence policy. And so, yes, I think that business standing up and saying climate change is important and we need policy can actually spur regulators to act because sometimes they’re reluctant to act because they assume that business wants nothing less than more regulation. But actually that is not the case. What business wants is consistent regulation and predictability. And right now business does not have that on the environment or on corporate responsibility more generally.

So, I’m not at all surprised that there are coalitions of companies calling for legislative action on climate change because they need certainty to be able to invest at the scale that we need them to and want them to.

Claire: Are you aligned with any of these coalitions or collaborations besides BSR?

Christine: I’m part of the Global Network Initiative, which is the voluntary initiative by Google and Microsoft and Yahoo! It was created by them, and a few other companies have joined since working with human rights groups, socially responsible investors, and some academics, which is the capacity that I’m a part of that. And I’ve been involved with others over the years like the Voluntary Principles on Security and Human Rights when I at BP and the Business Leaders’ Initiative on Human Rights when I was working for the UN Special Representative on Business and Human Rights.

Q: Do you see any shifts happening in the industry for better business practices?

Christine: Yes. I think that these collaborative initiatives are really powerful. And I think they are really a positive trend. I really am heartened to see that companies realize that these are noncompetitive issues. At the beginning of the Global Network Initiative, seeing Google and Microsoft and Yahoo! get into a room with human rights groups was quite astounding. The extractive industries are sort of used to it because that’s part of their business. They’re fierce competitors, but they’re also joint venture partners in a lot of places around the world.

For the tech industry, it’s been interesting to see them on the same journey to build trust and recognize that these issues are noncompetitive, and that it behooves them to work together and to work with human rights groups. I think it was tough because a lot of tech companies are founded on the premise that they are all about free expression and changing the world. For them, it was new to say, “What do you mean we have problems and present risks to users? That’s not our intent.”

And of course it’s not their intent. But there are risks in many of their products and services. And so, to see them come around to collaboration with human rights groups has actually been really heartening. I think that’s really positive. I think companies and everybody else are understanding that these big issues will not be tackled by any company alone, and that collaboration is really the way forward.

Claire: Any predictions about what may be ahead for breakthroughs?

Christine: I think that it will be really interesting to see how the the role of human rights in this conversation evolves in the next few years because the endorsement of the UN Guiding Principles on Business and Human Rights in 2011 was a really big milestone. It was the first time that there was multi-stakeholder, global consensus on the human rights responsibilities of corporations.

I think that it’s a really helpful framework for companies to use because there is a universal declaration of human rights that was agreed more than 60 years ago by the international community. It’s helpful because there is no universal declaration of sustainability or CSR. And I think that’s where a lot of the frustration with CSR emanates from because companies have to kind of figure it out for themselves.

Claire: Where do you see openings or possibilities for companies to bring human rights more into the CSR conversation?

Christine: One of the things that I’m doing right now is facilitating a human rights working group for BSR. This is a few dozen member companies across industries who come together every couple of months to talk about how to integrate human rights into their companies. And I don’t think any of them have human rights in their titles. But they know that this is important and that it’s helpful and that the guiding principles are now an expectation of stakeholders.

Claire: How are you getting the message about being a corporate idealist out, in addition to speaking at industry and CSR events?

Christine: One important way is to speak at business schools. And when I go, I’m not just speaking to the Net Impact club or sustainability varsity team. Second is the writing that I’m doing in the general media, that I hope serves some of that purpose as well. The ones for The Atlantic have totally caught fire. And I’ve been a guest a couple of times on a BBC World service show called Business Matters.

Claire: How can we help people move past the blocks of not wanting to think about things like child labor or human rights abuses?

Christine: A couple of the people who I interviewed who work in the supply chains said that there are a couple of different stages to their work. The first one is building awareness of issues like child and forced labor in their supply chains.

The second stage, which is perhaps more important, is getting their colleagues past wanting to say, “Oh my God, there’s a kid there. Cut and run.” It’s their job to try to explain that running from the situation will actually make it worse for the children. I think we’re all trying to figure out how to move into the next phase, which is addressing root causes.

Claire: Well, it’s incredibly helpful because that really diagnoses the problem and gives you a chance to fix it for good.

Christine: I think a lot of people are coming to recognize that having a multinational company in a developing country can help shine a light and help bring good practice.

Claire: What else can Corporate Idealists do to help their companies be better?

Christine: Know that sharing the stories of the people and communities that a company affects is part of your job. So many people that I interviewed talked about how important it was for them to get out in the field, for them not to lose sight of the workers in the factories and in the communities. And then bring those stories back into headquarters. I mean spreadsheets are important, but they only get you so far. Whether it was telling stories or bringing in photos or arranging senior executive trips out to the field, it was so important to bear witness. That’s when people really get it.

Here’s my latest for Sustainable Brands.

Previous articles in this series talked about leading businesses taking bold steps on their own for the common good — because it’s the right thing to do — even if it costs the company financially in the short term.

This time I want to point to the latest wave of businesses working collaboratively on the urgent, common ground issues of renewable energy and climate policy. In America’s history of westward expansion and exploration, pioneer families came together in wagon trains for mutual support. In the same way, the examples below show that businesses are taking action, together, to ensure a more certain future that’s good for all of us and for business.

To start off, a June 2014 clean energy report by Ceres, WWF and Calvert Investments supports the idea that this trend is gaining momentum. The report makes the case that big US companies are already investing in renewable energy as a basic “business as usual” material issue, including UPS, Cisco Systems, PepsiCo, United Continental and General Motors. These and the other companies in the report have already saved a billion dollars in energy costs and upped their business planning certainty. Far from a fringe or boutique concern, renewable energy investment is about knowing where your energy is going to come from tomorrow, and having some sense of how much it will cost.

It’s worth noting that several cross-sector partnerships and multi-stakeholder groups for climate issues have been working on these issues for years. The UK- and EU-focused Prince of Wales’ Corporate Leaders Group first convened in 2007. And the US-focused group BICEP has been advocating for energy and climate legislation since 2008, with its Climate Declaration attracting over 700 corporate signatories to date. (For more examples of creative, effective partnerships on climate-impacting issues, take a look at Sustainable Brands’ collaboration and co-creation channel.)

But just in the past three months, there have been several high-profile announcements, as well as one intriguing low-key entry. These are four groups to watch:

1. March 2014 — Business Alliance for the Future Meets for First Time
The Business Alliance for the Future is a new alliance of alliances that’s being organized and supported by about 40 business affiliations including BSR, B Team, Ceres, World Business Academy, SVN, National Association of Women Business Owners, Young Presidents’ Organization and others to “to connect, magnify and exponentially accelerate, business’ role in building a world where business excels, people thrive and nature flourishes.”

The group first met in March in Santa Barbara, CA and it is scheduled to meet again in October at the Fowler Center for Sustainable Value at Case Western University. The Alliance is formulating its strategy around the intention to dramatically impact existing game-changing projects (to the tune of 5x in 5 years) by fostering action-oriented collaboration.

According to Alliance member Jeana Wirtenberg, co-founder of the Institute for Sustainable Enterprise, who is heading up one of the working groups, “There are several collaborative action team initiatives already well under way, including: amplifying and spreading a new business narrative; creating 100 percent renewable energy economy; participating, aligning around, and designing a grand economic strategy; and developing and implementing a new corporate scorecard and metrics.”

2. May 2014 — We Mean Business Coalition Launches
While we don’t have specifics yet about what this group will tackle, We Mean Business stated goal on their website is to call for “ambitious climate policy and bold climate action.” The group is like a super-pod of business action leadership, with partners from BSR, CERES, CDP, the World Business Council for Sustainable Development, the Climate Group, and the Prince of Wales’s Corporate Leaders Group, in conjunction with Nike and IKEA.

3. June 2014 — Small Business Poll Shows Support for Market-Stabilizing Rules
In late June, the American Sustainable Business Council released poll results showing that US small business owners support climate rules for market stability and predictability.

The survey found that “clear majorities of small business owners are concerned about how climate change will affect their companies, including its impact on energy costs, health care costs and the infrastructure they depend on. Survey respondents voiced strong support for government action to address climate change, specifically, efforts to limit carbon pollution from power plants which produce a third of all U.S. carbon emissions.”

I find this poll interesting because it shows that leaders from small US businesses are on the same page when it comes to wanting business certainty in the face of climate instability as many of their colleagues at global behemoths.

4. July 2014 — Launch of Renewable Energy Buyers’ Principles
And on July 11, the World Wildlife Fund (WWF) and the World Resources Institute (WRI) announced that 12 major companies — spanning communications, manufacturing, consumer goods and tech — are jointly asking utilities and energy suppliers to offer more renewable energy products.

The Buyers’ Principles provide a coordinated starting point for what these companies need in terms of options, financing, contracts and emissions levels. The inaugural signers are Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter and Gamble, REI, Sprint, and Walmart. I’m hoping that this will be an unmistakable unmet need signal to the energy market that yes, business wants more renewables and is willing to pay for them.

In my mind, these groups are coming together now for one profound reason. With government paralysis on one side and entrenched lobbying for the fossil fuel status quo on the other, the Cavalry isn’t coming. If renewable energy and climate action are going to be truly become Business as Usual for successful companies — as Ceres’ clean energy report posits — then business has to make it happen.

Together, I see all these efforts leading up to this September’s UN Climate Summit in New York City, where business will be asked to take on larger and more meaningful commitments. Just last week, the UN event’s organizers and partners called for business leaders willing to stand up for carbon pricing “as a necessary and effective measure to tackle climate change.”

And then, it will be time to take all this positive forward momentum to the COP21 meeting in Paris in December 2015. That’s where, once again, the entire world will attempt to agree on climate action and who is going to pay for it. I’m hopeful that, by the time we get there, collaborative efforts like these will have blazed the trail for business to be a major part of the solution.

Here’s my latest for Sustainable Brands.

Resources for grappling when “all perspectives seem true,” and long-established categories are crumbling

In 10 earlier parts of this series, we discussed 20 pitfalls in the sustainable business metrics field. (Find the first 7 articles here and the last three here.)

Think you have it bad trying to accurately measure and report on your company’s carbon footprint and supply chain impacts?

Perhaps you’ll feel better after hearing this cautionary tale. The journal Nature recently reported a prank played on the publishers of well-respected science journals. For reasons that aren’t completely clear, 120 completely gibberish papers made it through peer review, were published, and then withdrawn after the prank was revealed.

How on Earth could this have happened? How could such an absolutely bedrock scientific principle as peer review fail so utterly?

The answers have to do with an all-too-human reluctance to trash the work of supposed peers. Add in the biases we’re all subject to in assuming that “experts” (or at least those posing as them) know what they are talking about. You also can’t rule out simple laziness.

We’d like to add another provocative possibility to this negligence soup: that the journal editors gave a pass to the gibberish articles because, influenced by postmodernism, they assumed at some level that the authors just had a different, alternative, but legitimate view of the world.

That’s postmodernism for you.

For those former business majors who missed it in Humanities class (likely most of us), postmodernism is a school of thought that reacts against “the assumed certainty of scientific, or objective, efforts to explain reality.” What a person believes about the world comes from their own personal interpretation. There are no certain and universal truths. Everything is relative. All viewpoints have inherent validity. (Think of the perception-challenging art of Warhol and Rauschenberg, and the music of Glass and Cage.)

While this may seem like a huge stretch, we think there’s real value for sustainability practitioners to consider lessons from postmodernism. Put the simplest way we can think of, acknowledging postmodernism’s influence helps us deal with nuance. Because postmodernism prioritizes skepticism and the reevaluation of assumptions, we believe it’s a rich topic that helps us acknowledge the inescapability of prejudgments and biases in our measurement frameworks as we aim for more sustainable business outcomes.

Pitfall XXI: Don’t fail to account for your audiences’ postmodern biases & “truths” and seeing things from their points of view.

Love it or hate it, postmodernist thinking — and the perspective it brings against accepted “truths” — is entrenched in our world. (Not officially, explicitly, or necessarily consciously, but it’s there.) It’s part of our hyper-connected lives, where many individuals’ experiences carry more weight than ever before. For most of history, unless you were at the very top of business, society or religious life, your experiences and opinions probably didn’t count for much outside of your inner circle.

Even just 50 years ago, much of the world had pretty much the same New York Times front page each morning. The set of facts selected and presented by a small subset of thinkers were, for the rest of us, “objective” reality. As Walter Cronkite famously signed off his newscast each evening: “And that’s the way it was.” In saying so, publically and with the weight of his “authority,” he made it true.

Today, social media offers each of us many windows on the world that reflect our individual choices and shape our experiences. Plus, we have the power to broadcast our own personal views of reality, and what things mean, to many others.

Taken to the office, this means sustainability practitioners have to grapple with bosses, colleagues, stakeholders and customers who may have very different views of what things mean, based on precisely the same data and facts you’re looking at. They probably are just as certain of their interpretation as you are of yours.

Perhaps relatedly, you may have noticed that conventional ways of categorizing things are breaking down in area after area. Things just don’t seem to stay in their proper boxes anymore. The dilemmas that come out of these shifting perspectives are right up postmodernism’s alley.

Pitfall XXII: Don’t fight most of the mushing together of conventional categories, how you choose to address them, and then how you measure the effectiveness of your actions.

A partial list of these box-rebels includes:

Luckily for us, if postmodernism contributes in some ways to the new kinds of emerging dilemmas facing sustainability practitioners, it also offers some guidance. Here are three resources: one directly about postmodernism, one that embodies it, and one from a relatively new scientific field that takes us to a similar place.

  1. Delve into this 2001 “Bioscience” journal called Dragnet Ecology—‘Just the Facts, Ma’am’: The Privilege of Science in a Postmodern World by T. F. H. Allen, Joseph A. Tainter, J. Chris Pires and Thomas W. Hoekstra. The authors argue that sustainability efforts that are modeled on Joe Friday’s forensic methods alone — “just the facts” — won’t succeed in a postmodern world because they lack the elements essential for managing problems within complex systems. They argue for scientists to become experts at crafting narratives — stories — as well as facts. By looking at things this way, the authors argue, scientists will be able to better advise business leaders and policy makers on complicated environmental problems.

    The most basic benefit here is increasing weight for an already commonly expressed need for scientists to become better communicators. This article made the case for science communication skills back in 2001, and it’s being increasingly echoed today.

    A second benefit is support for scientists who are showing a willingness to go outside of their traditional role of fact-developer, and be actual players in the policy advocacy world. This cuts against the traditional expectation that scientists do their research thing and stay out of policy/political scrums. We’re seeing increased visibility from scientists such as James Hansen (NASA & 350.org), Neil Degrasse-Tyson (“Cosmos”), and Michael E. Mann (The Hockey Stick and the Climate Wars).

  2. The New Journalism movement that grew out of the 1960s civil and social tumult offers notes for acknowledging nuance, or even better, grappling with it. This kind of reporting, at its best, allowed for the writer’s active physical participation in the events of the story, with the benefit of generating unique insights.
  3. The field of behavioral economics has clear lessons for distinguishing between how we like to think we make decisions (very rationally) versus how we really do (subject to many cognitive biases affecting actually being rational).

CONCLUSIONS

While these streams of thinking run (very) outside the sustainable business mainstream, we think this approach can help you with thorny challenges of moving your company further towards sustainability, and then understand the nuances of trying to measure that.

We hope they spark new perspectives on additional current, box-escaping themes such as the:

  • deepening of stakeholder relations;
  • the emergence, coming from a number of different spheres, of actually defending emotions in decision-making and even spirituality; and
  • increasing attention to “happiness” as a way to reflect human welfare and satisfaction even within the “give-me-a-number” metrics world.

It’s important to remember that we are not advocating throwing out objectivity (or its pursuit), facts, truth, and good science. Neither are we advocating an “anything goes” world. But at the very least, just citing something as, say, objective or rational, doesn’t necessarily make it so.

A helpful tip comes from author Michael Suk-Young Chwe, who notes that, all of us, not just scientists, need to accept that full neutrality or unbiasedness is impossible. It’s a burden we shouldn’t have to bear. The trick is better self-awareness, acceptance of doubt (which science, at its best, already values), and awareness that even science is “fundamentally a human process.”

Precisely because we’re all fallible people, operating in a complex world, it ultimately works in favor of our role as sustainability problem-solver to acknowledge uncertainties in the environmental and human realms, including in how we measure things.

Maybe postmodernism isn’t so crazy after all.