A Bigger Picture View
Talking to panelists to prep for the event was like a trip to the Forum: a funny but quite wonderful thing happened along the way. Together, we expanded the discussion's scope to include financial and social programs alongside environmental programs, because green isn't where it begins and ends at every company. We also moved from consumer to stakeholder, addressing efforts to reach and involve policy makers, NGOs, shareholders, employees and other critical groups alongside purchasers. It was refreshing and energizing, because so many discussions of sustainability happen in a vacuum, among like-minded people from similar backgrounds. That may feel good, but you easily wind up in an endless feedback loop, your knowledge and thinking idling in neutral.
While we went in agreeing corporate responsibility isn't one-size-fits-all, the ensuing discussion made common cause around a critical concept: transparency. The idea, if not the word, crept into almost every answer, whether the question naturally begged it or not. Panelists hailing from Citigroup, Merck, PSEG and Campbell Soup described efforts to make earlier, franker and fuller disclosure of their sustainability efforts' goals, initiatives, metrics and effectiveness. I'm a big fan. All of our products now carry an Environmental Facts panel stating their contents.
Maggie Kohn, director of corporate responsibility at Merck, is lobbying hard for more disclosure in an industry that is historically and somewhat famously wedded to less-is-more communication protocols. "It hasn't always been an easy sell to senior management to increase transparency and disclose both our achievements and our challenges, but we're seeing it work in terms of increased trust among our stakeholders in how we operate," Maggie said. "There's still a long way to go, especially in demonstrating the value of being the first to disclose potentially controversial information. The more we share about issues like pricing and our activities in emerging markets, the better stakeholders will understand, assess and be willing to support our efforts in critical areas like increasing access to our products among those least able to pay for them."
Katie Cleary, Campbell Soup Co.'s manager of consumer and customer insights, said gauging attitudes about sustainability is a growing part of her research-centric job, and that deeper board involvement has proved critical to increasing transparency. "Our CSR reports are very specific on goals and achievements, and are reported all the way up to the board, with goals and metrics set at individual unit levels. There is full accountability," she explained.
Accountability also runs deep at Citi. "Our reporting captures success and failure, and we require comprehensive explanation of why a goal wasn't met," said Val Smith, the company's vice president for corporate sustainability. An increasing focus of Citi's work is on environmentally sound business opportunities, not just in developed markets but also in emerging ones, where 50% of Citi's business is done, and where responsible decisions can create substantial impact.
I prefaced a question about barriers to sustainability initiatives with the example that consumers hold the gross misimpression that they regularly choose paper towels, bath tissue and other paper goods made from recycled paper, when in fact, only 2% of household paper goods purchases come from 100% recycled paper. Anne Hoskins, senior vice president of public affairs & sustainability at the energy company PSEG Services Corporation, also faces a setting-the-record-straight challenge.
"We need to communicate the true costs of current energy consumption behavior," Anne said. She explained how when carbon impact isn't factored into the consumer price, and with policy initiatives like cap-and-trade failing, telling the real cost story, and converting people from a desire to choose clean energy to willingness to pay the bill is an uphill battle. This is rough sledding. To me, it demonstrates how very necessary "transparency" can backfire and work to opposite effect.
Working in a heavily regulated industry poses other challenges to Anne that the packaged goods marketer in me is happy not to grapple with. Motivating and giving consumers the tools to audit and improve their energy efficiency would seem a no brainer, but Anne's company had to gain approval from state regulators to let it do just that, and to pursue other, innovative programs like making solar energy more accessible to poor communities.
I saw stark contrast among service- and product-centric companies' willingness to pass incremental green manufacturing costs onto consumers. Katie's consumer research indicates that, "some consumers are interested in greener food and beverage options, but that they don't think they should need to pay more for those options." Anne says end users will simply have to pay more for cleaner energy, now or later, either directly out of pocket or indirectly through subsidies. My longstanding opinion from packaged goods is to mightily resist charging a green premium if it isn't justified. It's a cornerstone strategy at my company.
There was lively discussion about NGOs, reflecting panelists' markedly different backgrounds. Val talked about an emphasis on stakeholder engagement around policy development and implementation. She also cited a common misperception, however, that major financial institutions wield more influence over clients' behavior than they actually do. Maggie made a case for direct engagement. NGOs like UNICEF are Merck's on-the-ground partners in getting life-saving products to remote villages in developing nations, where the company has no physical presence, and going as far as negotiating cease fires so its workers can go door-to-door delivering a medicine that prevents blindness in sub-Saharan Africa. Transparency plays a central role in Maggie's NGO relationships, where she said productivity stems from a full airing of shared objectives right from the start.
One size doesn't fit all, indeed.
I came away from the day energized, with a bigger picture of sustainability, new tools to wield in my competitive battles, and new optimism from meeting people deeply committed to putting their employers' resources to work for positive change, not content to rest on laurels. To quote Val, "If you're meeting your own goals for sustainability, you're probably not aiming high enough."