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Fighting for the Sustainable Consumer: A Conversation on Branding, Economic Growth, Risk & Value Propositions

11 Friday Jul 2014

Posted by Aman Singh in CSRwire

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advertising, Apple, books, brand management, Brand Management, brands with purpose, Business, consumer behavior, CSR, CSRwire, doshorts, Edelman, gap, henk campher, Innovation, Leadership, levis, marketing, Marketing, PR, seventh generation, social media, Sustainability, sustainability, sustainable consumption, tesla, toms shoes, transparency


Do consumers care about sustainability or the sustainable attributes of products and services? Would you book a “greener” hotel if the prices were comparative? Did you start paying more attention to labels after the Rana Plaza fire?

When the discussion turns to issues like purpose, risk and connecting consumers with sustainability, Henk Campher becomes fidgety. The Senior Vice President for Business + Social Purpose with Edelman has been at this for a while. Between working with brands like Starbucks, Levi’s, Best Buy, Abbott Labs and REI and leading the Oxfam International Coffee Campaign, Campher has built a reputation for challenging the status quo while operating within the trenches of corporate corridors.

Recently, he wrote a DoShorts book titled Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line [get 15% off by using Campher15 in the voucher section] to put some of his strategies and ideas on paper. We sat down for a conversation on the ideas he presents in the book, why he believes that consumers have bought into sustainability, where he sees the PR industry headed as well as his thoughts on separating the chaff from the substance of sustainability claims [Full disclosure: I was one of the reviewers of the book].

Henk_Campher Excerpts:

You write that the problem is not that consumers don’t want to purchase sustainable products, it’s that brands are unable to bring sustainability to life for consumers. Tips?

The most common mistake companies make is to lean too far to either the sustainability of the product or focus too much on how it comes to life for the consumer. The sustainability of a product is only one part of the story – the what part of a sustainable brand. To bring it to life for the consumer, you have to balance this with how this relates to them.

It is a delicate balance but extremely important. Think of the what part as showing the consumer the arms, legs, etc. of the product. It only tells them what it is but it doesn’t create a connection. To bring it to life we should show the personality and all the quirkiness of the brand – the how – to help them connect and care about the product.

Sustainable branding is very much like dating – you don’t go on a date because the other person breathes and resembles a human being. No, you go beyond that to try to make a connection with how that person relates to you and how you can build a relationship. It will be nothing more than a brief fling if you don’t have that connection.

The same for a product – you need to become a sustainable brand or else you will remain a cheap date and/or brief fling. The model described in the book is meant to be a guide on how to build this long-term relationship AND an insider’s guide on how to keep the relationship fresh.


 

Materiality matrices don’t matter to consumers but they’re proving important in helping companies focus. How can they use these to also engage their consumers?

Start balancing your materiality assessments a bit more. Too often the voices of stakeholders heard in materiality assessments are the loudest and not necessarily the most important voices. Activists, NGOs and sustainability influencers are the ones measured and engaged to inform the materiality assessment. But consumer and customer voices are almost completely absent.

Yet, they remain the most important stakeholder – they bring in the money and add to your business top line! Bringing in their voices will help you determine what areas are truly most material to your company and your most important stakeholders. It will tell you where your major threats and opportunities are as it relates to consumers.

Of course materiality assessments suffer from only focusing on the impact of the product on the supply chain. However, that is only part of the story.

As I argue in the book, you can create the most sustainable cigarette but it is still a cigarette. You have to give equal weight to the impact of the product itself. This will help you determine the weaknesses in how something is made as well as the actual impact of the product itself and help you dodge the dreaded claim of greenwashing.

But how sustainable the product itself is only tells you one side of the story.

It tells us what we should focus on when we engage the consumer but not how we should engage them. The next step will vary from brand to brand – determining how sustainability comes to life in the brand. What is the unique value proposition of sustainability in the brand? How deeply is sustainability embedded in the brand identity? How does it show itself to the consumer? Is it disruptive in engaging the consumer or more reserved?

That’s the model I develop in the book – merging the what and how to create a sustainable brand that resonates with the consumer.

Campher_tips

Getting used to failure is tough – you offer a healthy dose of how the best of brands have gone through it. Some tips for our risk-averse private sector?

Failure isn’t tough – it is part of being in business.

Companies who say they are risk averse are doomed to fail. They will still be making the same boring product that increasingly fewer people buy in the future. It was a risk to create the first iPod. It was a risk to create Tesla. It was a risk to create TOMS. It was a risk to take Dove to where it is today. Sustainability folks are risk averse because they are selling sustainability instead of selling a business opportunity.

And I don’t mean improving the bottom line. That has been done and there is no risk left there. Sustainability folks need to step out of their box and become part of business from a product and brand perspective and deliver against the consumer opportunity.

But it’s not just the sustainability people. It is also the communications and marketing people. They think throwing more money at advertising, PR, social media, etc. will create the breakthrough they need to survive. That isn’t risk. That is table stakes and nothing different from what your competitors are doing. At best you can hope for a better campaign.

We need these groups to understand how sustainability can add to the simple question people ask when they buy a product or service – why should I give a damn?

The answer is more complex than a pure sustainability story but sustainability is absolutely part of the answer. Communication and marketing people speak a different language than sustainability people and in the book I try to bridge that gap to get them to both speak “business.” And business is all about calculated risk taking.


 

“We’ve embedded sustainability into the very core of our business.” We’ve heard this classic line or a similar version of it a million times by now. It’s classic PR speak – but is there any organization out there that could truly say that and demonstrate it?

Lies, damn lies and sustainability PR.

My other favorite line is “sustainability is in our DNA.” No it is not. Making money is in your DNA.

Jokes aside, the simple answer is yes there are companies with sustainability at the core of their business. Method, Seventh Generation, Tesla, etc. were created with a specific sustainability goal in mind. They aren’t perfect but it is absolutely at the core of who they are. But a true answer is a bit more complex than that.

In the book I create a framework to show how sustainability can come to life in a brand. Sometimes it is truly at the core but in most cases it comes to life in very different ways. I identify eight ways in the framework– from ignored to designed. Method is an example of a brand that was designed with a sustainability goal in mind – absolutely at the core of their business. A brand like TOMS was inspired by a sustainability challenge while a brand like Dove aligned itself with a sustainability challenge.

In short, sustainability isn’t a simple black and white world and it constantly changes. And sustainability isn’t perfect.

The only cliché that might be right is the “journey” bit. But it is crucial that we acknowledge and show the different ways that sustainability is part of a brand, as it will direct the kind of engagement we should have with the consumer. You can’t just go out and hit the consumer (or anyone) over the head with a “sustainability is core to our business” baloney. No one will believe it. Know how it is part of you and then find a way to express it in a way that is relevant to both the consumer as well as the brand itself.

A few weeks ago, you participated in a Twitter chat we hosted on the confluence of business sustainability and economic growth. How would a “sustainable brand” approach the conundrum?

I think the “conundrum” is a bit of a red herring.

We can absolutely not consume the way we consume at the moment and we have to understand how to create sustainable economic growth. However, economic growth isn’t a problem when it comes to sustainability. The problem is that the way the economy is growing currently is unsustainable. For instance, in the U.S. you have an ever-growing gap between the rich and the poor. A more equal distribution of the wealth created by economic growth needs to happen.

It can be done – look at Germany, gap between CEO pay and average worker pay is much lower, they have a much higher minimum wage, outgrow the U.S. economy with higher taxes, more social benefits for the poor, a balance of trade in favor of them, etc. Everything that pundits say will undermine economic growth is flipped on its head in Germany – and it’s working.

It is only a “conundrum” because of a lack of political and economic will to address the unsustainable elements of the economy.

On the consumption side, the world will be fine if people consume more of the sustainable stuff. TOMS and Timberland instead of cheap knock-offs on the streets. Levi’s and GAP instead of fast fashion. Fresh fruit and vegetables locally grown instead of fast food. A Tesla or Leaf instead of a gas guzzler. Renewable energy instead of coal. Method or Seventh Generation instead of high pollutant chemicals.

There’s no problem if growth is based on more sustainable choices. How do we get consumers to do this? Well, like I say in the book… more sustainable brands that look at product and brand!

You’ve worked with numerous companies on brand development over the last two decades. What has shifted?

Firstly, social media and the connected world have redefined how brands interact with consumers. Twenty years ago, companies owned brands and sold that to the consumer. Today, they are merely custodians of the brand and consumers own it. The more agile businesses realize that the easier it will be for them to be trusted as the custodians of the brand – the more consumers will give them their loyalty.

Secondly, price Campher_LRand quality have become increasingly meaningless parts of a brand. Companies know that it is almost impossible to compete on price and have brand value. They would love to think that there is a huge quality difference between them and their major competitors but there isn’t. For instance, the difference between most cars in the same category is almost meaningless. So how do consumers make their choices? According to the value proposition offered by the brand.

Finally, the ways in which brand value proposition comes to life for the consumer has shifted. The days of the big advertising campaign is gone. Today they want you to not only be part of their lives but also do things that are unexpected and disruptive. Consumers are flooded with information and visual stimuli each day. How you break through all of that clutter is key. And that goes beyond simple shiny objects. You have to build it into your brand identity and value proposition – so it is as much strategic as tactical.


 

What remains as challenging?

The single biggest remaining challenge is how most companies remain paralyzed by fear without them even knowing it. Companies’ inability to think outside of their walls and being frozen inside those walls are their biggest failures. They are still navel gazing and seeing the world from only their perspective instead of truly understanding the world.

It comes back to the risk question you asked before – you won’t win if you don’t take risks. But so often companies will say they want to win but don’t really have the guts to do it. This is the difference between good brands and winning brands. Like an athlete – Dick Fosbury (go look it up!) changed the world of high jumping because he was willing to by-pass conventional thinking. Apple and TOMS did the same.

Yes you can point out all their faults but they kicked your backside because they weren’t afraid. Why? Because they didn’t look at what you were doing but rather looked at the problem and the consumer and created something to fill that void.

The other major challenge is how shareholders continue to drive company leaders instead of customers. This problem is too obvious to even state but they are so focused on the next quarter and shareholders that they forgot why they even exist. Imagine if they put as much attention to what their consumers truly want.

You work at the unique cusp between classic public relations and responsible brand development. Where do you see the PR sector headed in the next 20 years?

Sustainability will be like digital skills. It will be part of every single part of the PR sector. It won’t be a separate practice anymore but we are still a very long way from achieving that. Too many PR hacks think they can just make it up as they go. Create a cause here and a consumer campaign there. They will get burnt so many times until they move on and the industry really starts to up-skill all of their people.

Remember, agencies are as vulnerable as any of their clients. The hyper transparent world means that any consumer and activist can look at what agency is behind the greenwashing. No one expects perfection but they better start waking up before they are hit by their own BP-style disaster.

My biggest fear is that PR agencies don’t realize that their people are highly under skilled to handle the shifting world and impact of creating a sustainable brand. The industry will be caught out if they don’t start relooking at what they do and whether their people are geared towards the changing world.

And, of course, for them to be a sustainable PR brand, they will need to start asking what the impact of their service is. The model created in this book goes beyond products – it covers services, software, social media and everything else in between.

A main question remains – do you have a sustainable brand?

The answer for the PR sector is the same as with most other sectors – simply, no. But follow the model and you can start creating your sustainable brand. [Grab a copy of Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line – get 15% off by using Campher15 in the voucher section.]

Originally written for and published on CSRwire’s Commentary section Talkback on May 8, 2014.

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When Sustainability Ambitions Become a Living Plan: Unilever Expands, Deepens Commitments

11 Friday Jul 2014

Posted by Aman Singh in Capitalism 2.0, CSR reporting, CSRwire, ESG

≈ 1 Comment

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#iwashmyhands, #sustliving, #toilets4all, agriculture, aman singh, Business, Capitalism 2.0, CEO Network, children, climate change, CSR, CSR reporting, CSRwire, deforestation, Disclosure & Transparency, entrepreneurship, Environment, ESG, food security, keith weed, Leadership, lifebuoy, marketing, project sunlight, Social Enterprise, Social Media, Stakeholder Engagement, stakeholder engagement, supply chain, Supply chain management, Sustainability, sustainability, sustainable living plan, Twitter, unilever, women


Yesterday, Unilever released the latest refresh to its Sustainable Living Plan with yet another subtle headline [don’t blame them for being European]: Unilever Expands Sustainable Living Ambition.

And once again it is seeking to set a mindset shift.

Besides a metrics update that started at the beginning of the month with the announcement that the company had successfully reduced the rate of diarrhea among children from 36 percent to five percent through its Lifebuoy branded handwashing campaign ‘Help A Child Reach 5,’ the company announced its decision to step away from calling the Plan, well, a Report.

A Plan That Is Meant to Evolve

As Chief Marketing Officer Keith Weed told me:

“The Living Plan is meant to evolve. Today, we’re engaging more, we’re collaborating more. We’re not writing a separate report any longer. And I’m proud to say that we’re moving toward an integrated report in our effort show how this is now integrated in our overall plan…why we closed down our CSR department. Sustainability [for us is] integrated, truly embedded across our value chain.”

The company also hosted a live by-invitation-only event in London with 100 senior sustainability influencers to discuss the next iteration of the Plan: an expansion to include three specific social targets:

  • Fairness in the workplace [“We have been working with Oxfam on the condition of factory workers in our extended supply chain in Vietnam – and the lessons we have learned we’re taking global, including a new sourcing policy, which makes clear basic levels of human rights that suppliers must adhere to.“]
  • Opportunities for women [“By 2020, we want to help empower five million women. They’re a key part of our international supply chain.”]
  • Developing inclusive business [“Like our Shakti model in India“]

unilever sustainable living planAnd a re-emphasis of what it considers its most critical challenges:

And a re-emphasis of what it considers its most critical challenges:

  • Helping combat climate change by working to eliminate deforestation, which accounts for up to 15 percent of global greenhouse gas emissions
  • Improving food security by championing sustainable agriculture, and improving the livelihoods of smallholder farmers who produce 80 percent of the food in Asia and Sub Saharan Africa
  • Improving health and well-being by helping more than a billion people gain access to safe drinking water, proper sanitation and good hygiene habits.

The Rarity of Receiving Honest Feedback

I was catching up with Weed – who was among the initial creators of the USLP and continues to lead it across the organization today – right after the live event. And he was in a good mood. “In its early days, everyone was genuinely impressed [with the USLP] and were always polite in giving us feedback. They were probably also scared of scaring us off. But now, three years in, they’re more open with their feedback,” he told me.

The company is making good progress.

Besides good results from its #Iwashmyhands and #toilets4all campaigns, for example, some of the reported highlights include:

  • Over 75 percent of its factories have achieved zero non-hazardous waste to landfill
  • A new technology would reduce plastic in its Dove body wash packaging by 15 percent
  • Forty eight percent of agricultural raw materials are now from sustainable sources, up from 14 percent in 2010,
  • It completed training over 570,000 smallholder farmers and increased the number of Shakti women micro-entrepreneurs in India from 48,000 in 2012 to 65,000 in 2013
  • Avoided costs of €350million since 2008 in reducing raw materials and implementing eco-efficiency measures in factories on energy, water and waste
  • Launched compressed versions of its Sure, Dove, Vaseline deodorants across the U.K., which equal to 25 percent of CO2 savings per can.

As Weed counted off, “We’ve integrated USLP into our core business, brands like Lifebuoy are experiencing double-digit growth signifying that integrating sustainability in the core of your brand works, we’re creating less waste, saving money, creating eco efficiencies across our value chain, and if positioned right, can have everyone involved engaged.”

Unilever on TwitterDemonstrating the [Sustainability] Case Internally

“But perhaps the most important highlight is that we are starting to show progress against our commitments and core belief [about integrated sustainability into our business] internally,” he added.

But other challenges emerged.

“Although water usage across our manufacturing facilities was down, when you take into account our entire value chain, it actually went up as did our greenhouse gas emissions. Also scale is tough.”

And the need for good partners.

“We’re stepping up working with others on transformational change. We’ve learned a lot in the last three years. We need to work with others. For example, deforestation contributes 15 percent of GHG – we’ve been doing a lot of work on palm oil by ourselves. Now [we want to] expand the efforts to government and civil society so that we can get to zero net deforestation by 2020,” he added.

Challenges: Finding Partners, Changing Habits

For a brand as diversified and exposed as Unilever, finding partners that share ideologies are critical as is changing consumer behavior.

Last year, we collaborated with the Unilever team on a communication strategy that told the USLP story as well as helped the company engage in critical dialogue with its diverse audience. Besides a detailed blog series penned by Sustainability Chief Gail Klintworth that took us behind the scenes and on the ground with the USLP goals – and a live Twitter chat that generated hundreds of questions – one of the toughest challenges that emerged was influencing consumer behavior.

And some things are finally starting to shift.

Like the 180 million people who now know how to wash their hands properly. Or the 55 million who now have access to safe drinking water.  Or the 70 million people who have already watched/engaged with Unilever’s innovative Project Sunlight.

“The point is to make sustainable living commonplace. We’re an optimistic company – if you get engaged, let’s work together,” said Weed. “Stakeholders are telling us they felt this was very much a part of our business. People are sitting up and talking.”

Numbers aside, changing habits is hard – and it remains the company’s toughest challenge. “We’re using everything we can from celebrities to local partners and rewards. They say it takes 30 days to change a habit. Initiatives like Project Sunlight are important because of this,” he said.

Or the decision to replace current deodorants with compressed versions. “People see smaller cans and think it’s not value for money,” Weed offered. “But if there is any company that has the resolve to take on these challenges, it’s us. We know markets, scale, know how.”

So what’s next?

Engagement, engagement and more engagement. As the marketing chief put it, “We need to engage more people to think beyond their own communities and families. It will happen.”

More about the USLP Refresh here.

Originally written for and published on CSRwire’s Commentary section Talkback on April 29, 2014.

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Integrated Thinking: SAP Refocuses Sustainability Targets to Maximize Impact

11 Friday Jul 2014

Posted by Aman Singh in CSR, CSR reporting, CSRwire, ESG

≈ 1 Comment

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aman singh, Brand Management, BSR, cdp, cloud computing, CSR, CSR reporting, CSRwire, data, Disclosure & Transparency, employee engagement, ESG, green cloud, impact, Innovation, integrated reporting, nigel topping, peter graf, renewable energy, sap, Social Media, social media, Stakeholder Engagement, strategy, Sustainability, sustainability, sustybiz, technology, Twitter


How do you continually increase your positive social and environmental impact while growing your economic bottom line?

It’s a question that has many sustainability professionals preoccupied as global business returns to some sense of stability amid a rising urgency to curtail its footprint and address critical issues like climate change.

For technology companies, which are targeting emerging markets for growth and increasingly touting the efficacy of the cloud as a solution, this is a particularly precarious question. Peter Graf, chief sustainability officer at SAP, believes integrated thinking can help.

We chatted live with Graf and sustainability heavyweights BSR CEO Aron Cramer and CDP Executive Director Nigel Topping on April 11, 2014, at #SustyBiz.

But before you grab the recap, here’s some context.

Green Consumption: SAP Shifts to Cloud

In its second Integrated Report, SAP offered more context regarding its decision to shift to a cloud business model. The technology giant also announced it has started to power all its data centers and facilities globally with 100 percent renewable electricity as of January 1, 2014, which it predicts will help “eliminate carbon emissions caused by its customers’ systems by moving them into SAP’s green cloud.”

SAP_integratedreport_2013

Ambitious or not, the new goals indicate a significant shift for the company as it figures out how to involve its consumers in its sustainability targets without compromising on its growth ambitions. And according to Graf, switching to Integrated Reporting was important to help move the company closer to thinking in a more integrated manner about its business model, its impact and its long-term future.

As he stated in an interview last year, they didn’t have to change tracks. But it was time.

“We have been reporting on our sustainability performance since 2008. The report has grown in sophistication over the years and we even won several awards in the last two years for our report’s interactive nature, etc. So technically, we could have continued on that road.”

Creating Value

So how has Integrated Reporting helped SAP integrate its sustainability goals with its business strategy?

“One, it has brought business strategy closer to how we create value – our green cloud is a perfect example of that. Second, we have aligned the structure of our report with the IIRC framework, including new navigation that allows people to filter content according to different types of capital (ESG). We’re also continuing to support the G4 framework and have become better at explaining the short-, mid- and long-term impact of integrated reporting than last year,” said Graf.

And how does SAP’s performance stack up for 2013?

For one, as its business has grown so have its emissions and environmental footprint. “As a cloud company, we acquired Ariba and Success Factors but kept our budget stable to buy renewables, which is why renewables reduced [from] 51% in 2012 to 43 % 2013. It is clear that we want to put sustainability into the core of how we create value. So moving to 100% renewable electricity is a natural consequence of the shift of our business model into the cloud.”

Retention is marginally down as is employee engagement.

“While employee engagement was slightly down by 2%, our overall score of 77% continues to represent an industry leading performance. We believe the small reduction is due to our shift in strategy to the cloud. The good news is that we have already taken steps to drive employee engagement up toward our goal of 82% by 2015.”

Debating the Efficacy of Cloud

Which brought us back to the question of cloud computing. With mixed feedback from the media, how does the company explain the rationale? “The cloud has a variety of advantages. First of all, you achieve better economies of scale. The entire data center is shared between all customers using our servers, network, storage, etc. We have also been implementing a wide variety of energy efficiency measures, such as cold isle containment, more efficient hardware, and detailed energy consumption transparency,” he said.

And because SAP now has a green cloud, the carbon emissions of its customers get eliminated.

But it’s also key to put all of this against the lens of consumption. As Graf noted, while energy consumption of IT is growing at 3.8%, data centers usage is growing 7.1%. “Data centers are doubling in growth vs. IT as a whole when it comes to energy consumption. That’s why a green cloud is critical.”

How? By leveraging multiple routes to get to its goal of 100% renewable energy. “First of all, we are producing some of the renewable electricity ourselves in solar plants in the U.S. and Germany. Second, we are procuring renewable energy and renewable electricity certificates from a small, select group of providers.” SAP is working with CDP and the WWF to determine criteria that the production of renewables the company acquires will have to meet. “Finally, we are producing carbon offsets ourselves by investing into the Lifelihoods Fund, an investment fund that literally plants hundreds of millions of trees and returns carbon offsets rather than financial returns,” he added.

A Triple Bottom Line Conversation

From carbon credits to direct investment in renewables, SAP is implementing a comprehensive strategy aimed at taking advantage of all available avenues to reduce its negative impact. But Graf’s emphasis on influencing end-user impact also brings us full circle back to where we started: How can technology companies most demonstrably and positively influence consumption and development?

For Graf, it’s about going back to basics – and embedding sustainability into the core of your  tweet-jam-sap-sustybizbusiness strategy.

“Sustainability and growth are not contradicting. The problem is that most companies run a “sustainability strategy” in parallel to their corporate growth strategy. In such a setup, sustainability goals are often perceived to be in contradiction to growth aspirations. The trick is to evolve from having a sustainability strategy to a corporate strategy that is sustainable. It’s about taking a broader point of view, understanding the impact of decisions not only on financials, but also on the environmental or social capital of the company,” he said, adding, “Any conversation of growth needs to be a triple bottom line conversation. ”

So is the way forward for companies to decouple sustainability from growth? How can companies continue to grow and expand their business profiles—profitability—while reducing their negative impact? It was a compelling conversation – grab the details at #SustyBiz!

Originally written for and published on CSRwire’s Commentary section Talkback on April 10, 2014.

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#SodexoCR: A Conversation on Integrated Reporting, Responsible Supply Chain Management, Values, Ethics & More…

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSR reporting, ESG

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aman singh, Brand Management, community development, CSR, CSR reporting, Disclosure & Transparency, diversity, employee engagement, Environment, ESG, ethics, integrated reporting, marketing, Social Media, social media, sodexo, stakeholder engagement, supply chain, Sustainability, sustainability, Sustainability Report, Twitter


https://storify.com/AmanSinghCSR/sodexocr-a-conversation-on-integrated-reporting

 

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Carbon Policy: Inside Microsoft’s Efforts to Integrate Sustainability into its Financial Model

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire, ESG

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Accountability, Business, carbon finance, carbon offsets, carbon offsetting, careers, climate change, CSR, CSRwire, Disclosure & Transparency, emissions, Environment, ESG, management, microsoft, renewable energy, Social Enterprise, social impact, Supply chain management, Sustainability, sustainability, technology, tj dicaprio, transparency


On July 1, 2012, Microsoft issued a new corporate policy across 14 business divisions in over 100 countries: Every division would now be accountable for its carbon emissions.

Under the Carbon Neutral and Carbon Free Policies, the company put an internal price on carbon, where the divisions pay an incremental price linked with the carbon emissions associated with energy consumption and business air travel. The funds are then used to invest internally in energy efficiency, renewable energy and carbon offset projects globally.

A tad ambitious?

Not at all, believes TJ DiCaprio, Senior Director of Environmental Sustainability at Microsoft.

“We’re following three pillars to achieve carbon neutrality: 1) Be lean through reducing our energy consumption by driving radical efficiency through use of technology, and reduce air travel to internal meetings. Our primary emissions, for example, come from our data centers’ energy consumption. We also monitor and reduce energy consumption from our offices and software development labs. That’s roughly 30 million square feet worldwide,” she explains.

The other two pillars: 2) Be green by investing in renewable energy and carbon offset projects; and 3) Be accountable through cascading an internal price on carbon globally.

The policies also help Microsoft employees band together beyond the usual. “By internalizing the otherwise external cost of pollution, the price of carbon is now part of the profit and loss statement across business divisions. We have now integrated this across the financial structure and engaged the TJ Dicaprio 2012executives and employees on our commitment to mitigating climate change and investing the funds  appropriately,” she says.

From Innovation & Efficiency to Sustainability

For a long time, the marketplace has associated the technology giant with innovation and efficiency. Now, the company is vying for a third accolade: sustainability.

Acknowledging the impact the company can have in swaying the entire marketplace, DiCaprio says: “We’re constantly asking how we can lean and green our operations. Where can we not only drive efficiency, but also increase the percentage of renewable energy we purchase. How can we support the supply and demand and how can we drive progress through long-term renewable energy purchase agreements.”

Of course, there are other ways Microsoft is becoming greener. For instance, how can the company that reaches over 100 countries support carbon sequestration in developing countries? “When there is sustainability, education, and jobs – all of these tie together when we’re discussing carbon offsets and supporting low-carbon economic development around the world. In fact, offsets are significantly important in extending our reach and value globally,” she emphasizes.

Carbon Offsets: The Allure for Microsoft

In the last two weeks, I had heard similar sentiments from Barclays and Allianz, both financial institutions with global footprints – and investing significantly in carbon offsets. Why then was offsetting not spreading across more organizations? DiCaprio believes there are multiple factors, not least, a challenge in transparency.

“The market is maturing and we are seeing a more professional approach to using technology to manage and store data as well as established standards. There is a growing confidence in the ability of these projects to meet stiff criteria and standards, and to continue to meet these standards over time as cloud services allows for data to be managed and stored, demonstrating lower leakage. We employ a rigorous approach to our investments,” she says.

And herein comes the alignment, i.e., how DiCaprio’s team is managing its carbon reduction policies as a lever to align its business priorities around how technology can enable transparency, education and sustainable economic development. One of the offset providers Microsoft works with is Wildlife Works – who run the Kasigau project in Kenya– with an emphasis on carbon sequestration, social enterprise, and wildlife preservation. “We have been working with them for a year now. We believe that climate change is a serious challenge, and supporting carbon sequestration through carbon finance supports local jobs and provides new educational opportunities for the youth – making a huge difference in improving lives.”

Scale: Impact Through Leadership

Her only worry: without more private sector involvement, Microsoft’s efforts will remain insular.

“This is an exciting time for the private sector to work across our stakeholders and create corporate policies that make sense for business and help support low-carbon economic development. One of the benefits of setting a carbon neutral policy and an internal carbon fee is to set an example for how a business can run more efficiently, reduce waste and carbon, and address its environmental footprint,” she says.

“The model we have designed is simple and repeatable. The more organizations that adopt a similar model, the better off we will all be. The model is built to align with an organization’s  priorities and business strategy while supporting the demand and supply of renewable energy and a low-carbon economy,” she added.

Having recently celebrated the one-year anniversary of the carbon fee implementation, DiCaprio believes it is fulfilling its purpose of bringing together the business mission and a priority of driving efficiency and developing low-carbon economies. While the first year was focused on building the necessary infrastructure to flow through a financial cycle and get the price associated with emissions charged to business units, now DiCaprio also sees the importance of communicating the benefits of the successful model.

“The more we can communicate that carbon finance is a very effective way to integrate the cost of pollution into our economic structure, the more we can help others integrate carbon pricing and the impact of climate change into long-term business planning,” she says.

After all, it’s about taking into account the true cost of doing business.

And DiCaprio’s aspiration speaks to a global sentiment awaiting global acceptance: “We must understand quickly how to tie managerial accounting and the real cost of doing business with traditional financial models. For example, Microsoft pays for energy consumption but it also pays for the cost of offsetting the pollution associated with it. This is the direction we need to follow.”

As the technology company continues its journey, DiCaprio hopes many more organizations will pivot and begin to leverage the “magic of creating and supporting new markets that support sustainability on a global basis.” Only time will tell if once again Microsoft can attract some followers.

Originally written for and published on CSRwire’s Commentary section Talkback on September 12, 2013.

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Campbell Becomes America’s First Public Company to Acquire a Public Benefit Corporation: In Conversation with Plum Organics’ Cofounder

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire

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beechnut, benefit corporation, Brand Management, Business, Campbell Soup, CEO Network, clif bar, community development, corporate citizenship, CSR, CSRwire, delaware, Disclosure & Transparency, Environment, hunger, impact, Leadership, leadership, Management, organic food, philanthropy, plum organics, Sustainability, sustainability, Work culture


Redefining corporate law. Targeting the node of enterprise to shift capitalism.

Those were some of the thoughts running through Neil Grimmer’s mind as he joined eight other businesses to welcome Benefit Corporations in Delaware in July, 2013.

As cofounder and President of Plum Organics – along with a small group of parents – Grimmer’s philosophy has been pretty straightforward: Every kid deserves the best nutrition and no child deserves to go hungry.

The result: an organic food line that prioritizes nutrition, environmental conservation, reduced packaging [a supply chain assessment of the traditional glass jar vs. the Plum pouch was undertaken that showed energy consumption for the latter was much less, fossil fuel consumption for their transportation was a ninth, and they’re 14 times less likely to end up in landfills even with aggressive recycling of the glass jars] and an accompanied mission to target child hunger.

Sound like a lot to take on?

Grimmer’s conviction came from experience. As the former VP of strategy and innovation with Clif Bar, he knew a thing or two about product development that infuses innovation with sustainable practices. “At Clif, I looked at sustainability as a journey, not a method. We’ve adopted that here at Plum,” he says.

Plum Organics went from recording $800,000 in sales in its first year [2008] to $93 million in 2012.

Consider these statistics:

  • 60 percent of retailers in the U.S. carried Plum in the latest quarter
  • The No. 3 baby food brand in the U.S. after Gerber and Beechnut
  • The top growing brand in the baby food category by actual dollars and percent growth this year, with 135% growth vs. a year ago

While the numbers tell their own story, here’s the kicker.

A Public Benefit Corporation: The Implications

Plum Organics is a certified Benefit Corporation. And now with Delaware’s recognition of the legal status, parent company Campbell Soup Company – who announced plans to acquire Plum in May Plum_Organics2013 – becomes the only company in the U.S. with a fully owned subsidiary that is also a Public  Benefit Corporation.

“Our business success at Plum has been based on creating a great product in a way that respects the highest levels of corporate citizenship. It is actually good business to be a good corporate citizen – and our success speaks to that belief,” says Grimmer.

Grimmer is excited – about the notoriety as well as joining hands with an iconic American brand, well-known for its altruistic actions and social causes.

“We have a mission centric core: nutrition and solving hunger with our benefit corporation status our secret sauce and innovation driving the entire process. Campbell has a dual mandate: strengthen the core Campbell business while driving new consumers and innovation. It’s a perfect marriage,” he explains.

With global aspirations [“Hunger and health are global issues.”] and a lofty ambition [“Make sure our products get into every high chair and lunch box globally.”], Grimmer “wanted a partner who would drive both [our goals] with us and help us pave the way to address a more global need that kids have. We have innovation driving our core – we launched over 150 products in the last six years specifically addressing nutritional needs of young families.”

Aligning Ambition With Impact

After spending some time with Campbell Soup Company CEO Denise Morrison, Grimmer’s search Plum Organics Super Smoothiecame to an end.

“As our company grew, so did our ability to impact the world,” says Grimmer. And being a benefit corporation meant the added leverage of a model that places impact and profits in the same sentence. Like The Full Effect program, which was launched this year to target 16 million kids who go without daily meals every day.

“We now had the scale and capability built into the business to make an impact. So we designed a Super Smoothie jam-packed with nutrients,” he says.

So far, Plum has committed to producing and distributing half a million Super Smoothies in 2013. Sound familiar? In 2012, Campbell led a similar one-of-a-kind campaign to produce more than 40,000 jars of “Just Peachy” salsa exclusively for the Food Bank of South Jersey, using fresh, local New Jersey peaches that were not able to be sold because of blemishes but were fine to eat. The initial run from last year’s harvest generated $100,000 for the Food Bank of South Jersey through retail sales.

“Collaborating with Plum made sense for us on several levels. They’re a mission-based organization and their focus on eradicating childhood hunger is strongly aligned with our work nationally and in Camden, N.J. – where Campbell is headquartered. That helps build the collective impact we can have.”

“Plum and Campbell are both consumer-centric companies, and we share a focus on innovation, a critical component of success as we continue to marry our citizenship commitments with the Campbell business model,” responded Dave Stangis, Campbell’s Vice President, Public Affairs and Corporate Responsibility.

Side Effects of An Acquisition

Clearly, the stars align for the two companies but at the end of the day, Campbell is a public company with shareholders and the pressures of satisfying quarterly balance sheets. Will the acquisition bring along with it the familiar headaches of layoffs, change in management and perhaps even a shift in models?

“Plum is a standalone business and will remain so. I will continue to lead Plum Organics and our team is staying intact,” says Grimmer, who plans on remaining an active member of the recently established Plum board of directors. The company will also continue to headquarter in California.

Stangis who has been leading the iconic company’s CSR efforts since 2008 was also quick to cut to the chase about the two organizations’ merged path going forward. “We’re in the process of structuring the Board for Plum. We’re proud to say one of our subsidiaries is a founding member of  the Public Benefit Corporation league.”

“We have already begun working with Neil and the Plum team. We are connecting on joint priorities and sharing Campbell’s CSR and sustainability resources,” he added.

“We’re looking forward to leveraging Campbell’s capabilities and skills to grow the Plum brand. As we dig into these opportunities, we will also be looking to focus on aligning our public benefit corporation with Campbell’s mission, model and culture. They have such a strong CSR program that the opportunities to target hunger are endless,” Grimmer explained.

And this is where Grimmer believes the conversation needs to shift.

“There is a new economy emerging of consumers who are looking to purchase from companies with a mission. They’re building a virtuous circle. When consumers support a business, you end up growing quickly with more exposure and higher impact,” he says.

Of course, being a public benefit corporation is but one element of Plum Organics’ success. It’s an exciting business story.

But the bigger story here is about being able to make an impact by combining a good product with sustainable attributes and an associated social and environmental cause. And that is where Grimmer wants to push his colleagues across corporate America further.

“The business community needs to look at how they are creating values alignment with their core consumers in a marketplace where loyalty is getting scarce. Let’s create many more of those virtuous circles.”

Originally written for and published on CSRwire’s Commentary section Talkback on May 1, 2013.

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The Social & Environmental Case for Carbon Offsetting: In Conversation with Barclays

09 Wednesday Jul 2014

Posted by Aman Singh in CSRwire

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Accountability, barclays, carbon, carbon offsetting, climate change, CSR, CSRwire, deforestation, Environment, ghg, governance, jillian fransen, leadership, lending practices, redd, social enterprise, Social Enterprise, Social Entrepreneurship, Social Responsibility, Supply chain management, Sustainability, sustainability, wildlife works


This is Part 1 of a series examining how leading companies are leveraging carbon offsetting and REDD+  to sustain their environmental footprint and target climate change.

“Our vision is about having a proportionate social impact on society.”

That’s how Jillian Fransen, Barclays’ director of Citizenship describes the bank’s elevated – and recently refreshed – sustainability agenda. Among the new elements: a three-year CSR strategy released last year, new stretch environmental targets, supporting growth among the SME sector, and a new Balance Scorecard, which benchmarks remuneration for the bank’s top 125 executives according to four Cs – one of which is Citizenship.

Fransen’s team is also on the cusp of launching an industry-leading Code of Conduct, besides managing and maintaining a 60 million-pound Community Investment Fund and a 20 million-pound Social Innovation Fund, created specifically to seed projects and partnerships that really push the needle on sustainability.

But, of all the things Barclays is doing, what piqued my interest was a core concentration on reducing its unavoidable emissions through carbon offsetting in the company’s climate program.

Carbon Offsetting: Need vs. Efficacy

Now while carbon offsetting has suffered from its share of misconceptions – and remains a relatively new idea in the U.S. – there is a critical need today to get past the debate and begin addressing unavoidable emissions.

Because despite the most robust plans in place that curb air travel and other activities, commerce requires both energy and fuel. And with the growth, availability – not to mention supporting infrastructure – of renewables relatively slow, it becomes a question of operating with what’s available. That is the reality for businesses. And Barclays is no exception.

Calling them “unavoidable emissions,” Fransen explained:

“We buy offsets for the footprint we incur outside our minimization program. We are doing everything we can to minimize emissions but there are those unavoidable emissions that we just cannot remove – like air travel. So to minimize their impact, offsetting fits quite well in our Climate Program.”

The Program focuses on three areas: climate change, developing products for low carbon economies and risk management services for clients with low carbon opportunities.

The firm, which wants to minimize its environmental footprint by 10 percent by 2015, works with Wildlife Works and Reducing Emissions from Deforestation and Forest Degradation [REDD+] projects for its offsets strategy. According to the United Nations website, REDD+ “is an effort to create a financial value for the carbon stored in forests, offering incentives for developing countries to reduce emissions from forested lands and invest in low-carbon paths to sustainable development.”

As Sibilia decoded in his article, the intended impact of the offsetting (emission reductions) leads to not only forest conservation but also a parallel movement to create self-sustaining social enterprises that recuperate the local economies and build social independence. Therein lies the true impact of UN REDD Programmeoffsetting, he concluded.

For Fransen, similarly, the appeal of working with REDD+ lay in Wildlife Works’ expertise and experience in protecting threatened forests  – and its track record with local communities. “Twenty percent of emissions come from deforestation so it made sense for us to partner with organizations that could help us find areas where forests were being destroyed. That way we can have direct impact where it is most needed,” she said.

Then there is the added advantage of targeting local communities in key markets where Barclays operates. “We wanted to take accountability for our footprint. Additionally, Wildlife Works operates in Kenya, which is a key market for us. We are in 13 African countries – the oldest bank across eastern Africa — so having an on-the-ground partner there was key for us. ”

The real impact of implementing a carbon offsetting strategy then for Barclays?

“Create accountability for a footprint that the firm is otherwise unable to get rid of. That wakes people up. When we can have localized impact, it’s a win for us,” she responded.

Climate Change: Decoding the Impact of a Bank

Besides what seems to be the main area – air travel – what is Barclays most challenging source of carbon emissions?

“We have a network of hundreds of small branches. Our biggest challenge is availability and collection of relevant data about our water and paper use as well as waste. Not all our operations have the same level of management and facility support. Especially in Africa, it is very hard to ensure commitment to some of the improvements that are required in this year,” she said.

Another challenging area is the bank’s indirect impacts through its lending practices. “Where we choose to lend and what impact that has on the environment is critical. We need to hit this on a macro level. When you go to lend to an oil and gas company, we need to stand up to our commitment. They work with a minimum of 16 banks – we’re one piece of a large network,” she explained.

The Need For “Some Serious Leadership”

While our conversation mostly focused on Barclays’ carbon reduction strategy, it was hard to contextualize that without questioning what role Fransen’s contemporaries in the financial sector needed to play to sensibly address climate change.

Could Barclays continue to make progress without reciprocation from a sector busy repairing tarnished reputations from the financial crisis?

“There is a major shift going on toward a realistic understanding of what we need to do to adapt to climate change. In my opinion, none of this is happening quickly enough though. We need some serious leadership within our industry in the next five years to change gears on climate change,” she emphasized.

“Our biggest challenge is making it real for everyone in the organization. We have 142,000 employees that manage a matrix of clients and customers. The [impact they can have] is profound. I’d like to see us capitalize on this matrix much more. There’s a feeling, not limited to banking, that we’re doing our bit and everyone else will do theirs – and we’ll be okay.”

“Fact is, the issues are way more pressing for us to rest on that assumption.”

Originally written for and published on CSRwire’s Commentary section Talkback on August  28, 2013.

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Significant Challenges & Opportunities as The Sustainability Consortium Takes Standardization to China

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire, ESG

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BSR, china, CSR, CSRwire, Disclosure & Transparency, Environment, ESG, human rights, manufacturing, nanjing university, ngo, nonprofit, supply chain, Sustainability, sustainability, sustainability measurement, sustainability standards, the sustainability consortium, tsc, wei dong zhou


Last week, The Sustainability Consortium [TSC] announced its expansion to China.

Still in its infancy years, the group has successfully stayed under the radar as it worked with its influential member base and academic partners to evolve the tools and methodologies it seeks to create with the hope of standardizing consumer products sustainability.

With research partners playing a critical role in its global ambitions, the group has decided to partner with Nanjing University, one of the top five universities in China, to expand the scope and the testing ground for its research. The Consortium also announced the appointment of a new executive director.

Wei Dong Zhou, who will be responsible for setting the strategic direction of the Consortium’s projects in China, has worked in the field of CSR and sustainability across multiple sectors for over 20 years, including stints with the Chinese government, Business for Social Responsibility [BSR], nonprofit organizations, as well as managing CSR and sustainability strategy for the private sector.

I caught up with the new director to get a preview of the Consortium’s immediate plans, insights into the state of sustainability in China as well as how he plans to align his organization’s ambitions with the economic targets of the Chinese private sector.

Why did you decide to switch from a well-established group like BSR to a research-based – and much younger – organization like the Consortium?

The Consortium provides a great platform for developing product-based sustainability. Also, TSC offers a new approach to use scientific methodology to develop useful tools for companies. This is a TSC_logovery tangible opportunity for business. I am also attracted by the idea of using the combination of  academic research and private sector leverage to grow sustainability.

What can you tell us about the state of sustainability in China? And what opportunities do you see for the Consortium?

The Consortium is entering China at a very good time. The Chinese government is new and busy with its 12th Five Year Plan, which involves several goals related to sustainability. Lots of these goals will require masterful collaboration between the government and Chinese business, making the need for a medium like TSC critical.

Also, the need for standardized measurement is significant, especially for China’s widespread manufacturing sector. TSC’s tools can be the perfect solution for Chinese manufacturers since a lot of their Western customers are already TSC members. It will be in both parties’ benefit to implement these standards and begin measuring apples to apples.

In other words, TSC meets a crucial marketing demand of China’s manufacturing sector.

Then, of course, there is the lack of standardization. With companies using several different measurement systems and internal software currently, TSC’s system will provide a great way to integrate these systems and help Chinese companies manage their sustainability performance.

Which sectors will you be targeting for immediate collaboration?

China’s manufacturing output, as a percentage of global totals, looks something like this: we produce 65 percent of the world’s fiber, 70 percent of the world’s toys, 40 percent of apparel, 34 percent of the total garments imported by the U.S., and over 100 million air conditioners and 65 million washing machines annually.

With that large a manufacturing footprint, we will initially target the clothing and textile, electronics, toys and general merchandise industries for immediate partnerships. That is where TSC can have the most impact. Many of our members sell these products in the west. They want their Chinese manufacturers to tackle sustainability the “TSC way.”

Earlier this year, we published a series with The Conference Board on the state of the NGO sector in China. The findings were alarming. They pointed to a sector in disarray, a misplaced emphasis on public perception and growing pains for the business community. How do you plan on navigating that in coming months?

NGOs, unfortunately, are still in their early years in China, partially because of limited funding opportunities and government restrictions. Most NGOs in China, for example, still cannot register as non-profit organization due to the complex approval process.

But there are some NGOs – IPE, SEE, Earth Village, and Friend of Nature – that have been active in environment protection, philanthropy and social justice. International NGOs are also playing active roles in areas like women’s health, bio-diversity, HIV-AIDS, nature conservation and human rights.

We want to learn from their successes. This means demonstrating how our work on product sustainability can support China’s new Five Year Plan and help Chinese manufacturers cut costs, reduce business risks and improve relationships with their business customers.

What about the private sector?

The private sector has played a much more important role in the growth of the Chinese economy, contributing nearly 60 percent of GDP, 50 percent of gross taxation and creating 80 percent of the employment opportunities in 2012.

This is particularly true for industries like textiles, electronics, toys and general merchandise. The leaders within these industries are, therefore, active collaborators and prioritize stakeholder engagement. This is a huge market for us to develop localized tools and systems that standardize sustainability performance while meeting the needs of Chinese business. By helping these companies cut costs, reduce business risks and improve relationships with their business customers, we will help them grow.

Another sector that has been rapidly growing ever since the Sichuan Earthquake four years ago is private foundations. Already, there are 1,900 private foundations across the country versus 1,350 public foundations. The cumulative impact and creditability of these private foundations is growing much more quickly and credibly than their public counterparts primarily because they are more transparent about their activities.

But these represent a much longer-term target for us as they remain in development phase despite their rapid growth.

Is China’s business sector, especially manufacturing, ready for standardized sustainability standards?

Sustainability standards are at the beginning stages of development here in China. There are a few labeling programs, mostly initiated by government-affiliated agencies and industry associations, that companies have started to use but there is a clear lack of enforcement as well as consistency.

The public is starting to show concern about the credibility of these standards, however, particularly in food products – like the recent melamine milk scandals and toxic capsule incident. Chinese consumers lack the necessary understanding and awareness to drive their purchasing decisions according to sustainability concerns.

At the same time, some large manufacturers are paying more attention to the sustainability of their products as a way of increasing their market competitiveness, reducing their risk-profile and reducing cost through efficiency. For TSC, standardization isn’t about adding another layer to the process. It is a cost-effective way for companies to improve the sustainability of their products and a consistent way for them to communicate that to their business customers.

Since a large focus of TSC in China will be on decoding complex supply chains, what challenges do you anticipate ahead?

A large challenge will be applying sustainability standards developed predominantly in the West in China. Our challenge will be to determine how TSC tools and systems can be localized to meet the needs and standards of the Chinese market. The partnership with NanJing University will play a critical role in answering this question. They will also act as a neutral hub for us to connect with other stakeholders, particularly in the Chinese government.

Another challenge will be getting buy-in from the small and medium-size enterprise sector [SME]. How can we convince Chinese suppliers and manufacturers to buy into the concept of sustainability and offer practical tools and solutions to improve their performance? This will be challenging mainly because sustainability issues still remain a very ad hoc topic for small companies. We can overcome this by helping them become better businesses: cutting costs, reducing risks and building customer relationships.

My priority will be to convey our support to the Chinese suppliers of TSC members and international business. That is where TSC can play an instrumental role – leveraging business incentives to encourage Chinese suppliers to lead with sustainability.

Originally written for and published on CSRwire’s Commentary section Talkback on August  26, 2013.

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As Delaware Registers its First Benefit Corporations, a Conversation With the Early Adopters

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire

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Accountability, bcorp, benefit corporation, blab, Brand Management, Business, capitalism, corporate governance, CSR, CSRwire, delaware, exemplar, farmigo, Innovation, method, new leaf, plum organics, rsf social finance, Sustainability, venture capital


On August 1, 2013, Delaware welcomed a record 17 companies to register as Delaware benefit corporations on the statute’s first effective …

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Changing Gears at JPMorgan Chase as a CSR Strategy Evolves

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSR reporting, CSRwire

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000 jobs mission, 100, aman singh, Brand Management, Business, clean energy investment, community development, Corporate Governance, CSR, CSR report, CSR reporting, CSR strategy, CSRwire, Disclosure & Transparency, ESG, impact investing, jamie dimon, jobs, jpmorgan chase, Leadership, mark tercek, peter scher, small business investment, social finance, Social Responsibility, Stakeholder Engagement, Sustainability, Sustainability Report, the nature conservancy, transparency, Wall Street, Work culture


In the wake of the financial crisis, your industry continues to face high scrutiny and low trust. How is society better off because of what JPMorgan Chase does?

That’s how The Nature Conservancy CEO Mark Tercek starts off his interview with JPMorgan Chase CEO Jamie Dimon – featured prominently at the beginning of the financial behemoth’s latest Corporate Responsibility Report. While the interview is meant to address the heightened focus on transparency improvements in risk management and operational sustainability, the key idea is to highlight one main issue: trust.

In fact Tercek’s first question is telling of the intent and content of the interview that follows.

To drill deeper and learn more about JPMorgan Chase’s sustainability activities in 2012 as well as how the institution prioritizes intangibles like customer trust, ethics and responsible leadership into its business strategy and operations, I turned to Peter Scher, EVP and Global Head of Corporate Responsibility.

Leveraging all of its Assets to Invest in Communities: A Bank’s Citizenship Journey

“The most important thing we want to convey through the Report is that we’re using more than just our money and resources to make a positive impact. [Our]scale and global reach puts us in a unique  Peter_Scher_JPMChaseposition to not just spend money, but use the core expertise of our company and employees to make a difference for our clients and communities,” he started, adding, “We want to focus on using all of our resources to support our communities.”

In 2012, JPMorgan Chase raised and provided $2 trillion in capital and credit for its clients worldwide. It also donated more than $190 million to nonprofits in 37 countries while its employees volunteered 468,000 hours in local communities.

“We’ve helped over 77,000 U.S. veterans find jobs working with other companies through the 100,000 Jobs Mission. We see investments in our community as long-term investments, just like we would look at investments into our business,” Scher explained alluding to CEO Dimon’s quote in the report:

If we can help our clients grow around the world, they will in turn generate the jobs, small business growth and other economic activity that builds strong, vibrant communities and generates more sustainable economic growth and prosperity for all.

But how does that contextualize into day-to-day operations at the bank?

A couple of ways. Our clients and our business are key components of our communities, not just pieces of a balance sheet. For example, some of our clients are municipal governments, hospitals, and healthcare institutions. We help them provide vital services to people,” he said.

“In 2012, we provided $85 billion to nearly 1,500 nonprofit and government entities in the U.S. and around the world. Despite the crisis in Europe, we didn’t pull out of our investment commitments. We continued to provide billions of dollars in credit and financing to European clients – corporate and sovereign. That was a testament to our values as a company and underlined how we approach business. We are part of these communities for the long run.

At the height of the financial crisis in the U.S. three years ago when lending was lean, JPMorgan Chase announced increased lending to small businesses to boost the economy. It made good on that commitment and today is one of the largest lenders to small businesses in the country. “We also hired 1,000 small business bankers to help us find small businesses to invest in. This commitment has small business lendingincreased every year since then – from $7 billion in 2009 to $11 billion in 2010 and $17 billion in 2012,” explained Scher.

Despite the increased lending and a resolute desire to beat a deepening crisis by focusing on core competencies and a community-based approach, 2012 was a tough year for the financial leader.

We had significant trading losses which cost us money and embarrassment – more the latter since we made record profits in 2012. It also showed that we weren’t immune to making the mistakes other companies made. What we were proud of was that we didn’t try to hide any of it or explain it away,” he said.

For example, the bank – after Dimon’s very public apology – made its Control agenda a top priority leading to a re-prioritization of its major projects and initiatives, deploying massive new resources, and dedicating critical managerial time and focus to the effort. Specifically, the bank:

  • Established a new firm-wide Oversight and Control Group separately staffed and reporting directly to the Chief Operating Officer with the authority to make decisions top down, in command and control fashion.
  • Appointed a business control officer in every line of business to report jointly to the line of business CEO and the firm-wide Oversight and Control Group.
  • Staffed every major enterprise-wide control initiative with program managers and oversight group managers, including COOs.
  • Made it mandatory for the Operating committee to meet regularly with regulators to share information and hear any criticisms.

I have worked in a lot of different public and private institutions during the course of my own career and have not found one that doesn’t make mistakes. The real test is how we address them. And at JPMorgan Chase, starting with the senior leadership, there was never any effort to hide or explain away our mistakes. In fact, there was a commitment that we were going to use them as an opportunity to become a stronger company,” Scher added.

Building a Culture of Responsibility

Corporate responsibility can be challenging at any company. Particularly for one that belongs to a sector that remains as tarnished for its dealings of the past decade today as it were in 2008. What is JPMorgan Chase doing to shift the mindset and modus operandi of its industry?

Well, we’re starting at home, with our 260,000 employees in more than 60 countries – and we’re letting our employees know how the firm contributes to their communities,” he said.

Are JPMorgan Chase employees driving the demand for non-financial disclosure?

Yes, there’s demand from many of our stakeholders, including our employees, to know how we match up in our actions versus our commitments. We’re also starting to see demand from our clients. The financial crisis really focused people’s attention on what companies are doing and could do to help contribute in a positive way to the community,” Scher emphasized.

“The fact is, if our communities are growing, that’s good for us as a business. More growth means more banking services – and we want to be a part of their future. Besides, clients want to know that companies they work with are responsible and thinking of their impact on society.

Global Footprint, A Comprehensive CSR Strategy

With a substantial community investment commitment as well as programs to rehire military veterans, bolster investment ties among cities in the US and worldwide through its Global Cities Initiative, and impact investing goals – principal investments focused on emerging markets added up to $50 million in 2012, clean energy investments –over $6 billion in clean energy investments in 2012 deployed, the bank is leveraging its global footprint effectively to grow the global economy.

JPMorgan Chase CSR ReportIt’s also trying to help address some of the world’s most pressing challenges.

For example, urbanization.

Half the world’s population already lives in or around cities. That’s going to increase to 70 percent in the next few years. That translates into a lot of challenges for what our infrastructure can support: energy, healthcare, water, job creation, etc. And for us as one of the largest lenders for these projects, that has significant ramifications.”

“So we’re trying to use our resources and expertise to help address these challenges. We’re working on understanding how policymakers are dealing with these across the world and trying to bring in some creative thinking to help them shift as the economies transform. We’re also thinking of how we can finance energy exploration and development in a more sustainable way.”

“In the U.S., for example, a lot of these investments have focused on natural gas. We’re identifying best practices and creating a risk assessment framework to help us influence our clients’ policies and procedures and help them conduct their energy operations in a sustainable manner,” he explained.

And how is the bank’s Social Finance arm faring? It launched in 2007 to serve the new and growing market for impact investments – new business models that deliver market-based solutions for social impact.

According to Scher, JPMorgan grew its Social Finance principal investments to nearly $50 million in commitments for funds focused on helping improve the livelihoods and quality of life of people living in poverty around the world, with a particular focus in emerging markets. “In addition to making principal investments, we’re also working to help shape and grow the field of impact investing, by providing client advisory services and data-driven thought leadership,” he added.

At the end of the day, with a Report that runs into 90 pages replete with data, interviews and the makings of a comprehensive CSR strategy, JPMorgan Chase seems to be pulling all the strings it has available to make a positive impact on its constituents – with some appreciable humility thrown in for good measure.

Originally written for and published on CSRwire’s Commentary section Talkback on August  1, 2013.

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Connecting the dots between Business, Society & the Environment

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Connecting the dots between Business, Society & the Environment

In Good Company: Singh on CSR

Connecting the dots between Business, Society & the Environment

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