The Holy Grail of Sustainability

This is the second of three posts on the Executive Council’s “Value-Based Sustainability” event last week (read the first post here). As official sponsor of the event, CleanTechies raffled off five free tickets to our Facebook fans, Twitter followers (@CleanTechies) and Newsletter subscribers. The author of this article was one of the lucky winners. Fan us and follow us to learn about upcoming raffles like this!

The Executive Council’s Value-Based Sustainability Forum in San Jose, CA on January 26th was one of a few “road shows” taken around the country.  Focusing on strategy in making the business case of sustainability, resonating themes of the forum included transparency; measurement; and communication or engagement internally with employees, and externally to customers and clients.

An exuberating opening keynote by Adam Werbach, CEO of Saatchi & Saatchi S, started the day.  Werbach defined sustainability as social, economic, ecological and cultural streams which flow into an integrated one.  Transparency, engagement and networking are enablers of sustainability that are to be exercised internally and externally for maximum value.  To connect the core of a business with a social issue is to create a “North Star goal” which, according to Werbach, will ignite passion within the organization, engaging employees.  For example, P&G’s North Star goal: “Sell $50 billion worth of sustainability innovation products by 2012.”

Libby Reder from eBay and Bob Stoffel from UPS acknowledged their customer communities as the force which motivated the company executives to focus on sustainability in their business model and their operations during their interview.  Reder called metrics “the Holy Grail” of sustainability as it is crucial to measure a company’s impact on the environment, but there is a need for development in this realm.

The panel on Green IT explored government incentives for green IT, the role of IT in sustainability, and more on metrics.  Kathrin Winkler, Vice President of Sustainability at EMC observed that IT was used in the past as a service model and is now a strategic partner to be used to help businesses measure their sustainability impact from both ends.

Coca-Cola CEO Mahtar Kent spearheaded the movement where he invited many Fortune 500 CEOs to participate to create a uniform voice of concern, which is not an easy task.  Kent’s drive to bring other companies on board and Coca-Cola’s other sustainability efforts were the focus of Bryan Jacob, Head of Energy and Climate Protection.

Francois Ajenstat, Director of Environmental Sustainability at Microsoft, talked about the measures taken in Redmond, WA on sustainability.  Like eBay and UPS, Microsoft was faced with a plethora of questions about sustainability from clients and customers.  This potent force helped create a new approach to use IT to drive product energy efficiency, supporting research to drive scientific break throughs and leading responsibly as an organization.  However, the large drive for Microsoft is to “increase the output while decreasing the [resource] input” across the industry.

A clean tech motley crew from Verdiem, Stirling Energy, Autodesk, and Pacific Gas & Electric identified the fundamental drivers on the clean energy sector post-recovery as low-capital costs, cultural changes, employee pressure, stimulus package benefits in the form of tax credits, and smarter design.  While some panelists think government subsidies will help, the true push for clean energy will come from the private capital markets.

Frameworks to build a strong business case are image, profit, growth, risk management, and regulations.  Starting with making a case on a high return on profit for a sustainability investment is a good bet for internal buy-in, as presented by Rupert Davis from MontaRosa.  Sustainability initiatives can lead to faster growth in a market, which in turn would help to create new markets.  Also, sustainability would provide higher customer value and would eventually increase sales.  Davis believes it is in a company’s best interest to conduct sustainability practices ahead of the regulation curve in order to be one of the few standing when regulations tighten.  However, risk management study may abate over exposure to harsh market elements and alignment to critical risks.  Davis called for a high regard of integrity when it comes to image: the more good that is done, the better the company will look and therefore more will be sold.

More specific quotes can be found on Twitter via #ecvbs.

Kristen Parrinello is a fan of CleanTechies and an organizer of the winter 2011 sustainability conference at UC Irvine, led by the Paul Merage School of Business.

photo: drp