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Chatting LIVE with Mars’ Sustainability Chief: Integrating Sustainability, Driving Responsibility

28 Monday Jul 2014

Posted by Aman Singh in CSR, CSR reporting, ESG

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@marsglobal, agriculture, barry parkin, climate change, cocoa, CSR, CSR reporting, Disclosure & Transparency, employee engagement, environment, ESG, fish, mars, palm oil, renewable energy, Social Media, social media, Stakeholder Engagement, supply chain, Sustainability, sustainability, sustainable sourcing, triplepundit, Twitter chat


On July 24, 2014, I facilitated a live Twitter chat with Barry Parkin, Chief Sustainability Officer at Mars, Inc. and TriplePundit to offer an opportunity to learn more about sustainability at the food manufacturer.

As a lead up to the chat, Mars published its fourth annual Principles in Action Summary, which details the company’s approach to business, its progress, and the shared challenges facing both its Marsbusiness and society.

As one of the world’s leading food manufacturers with more than 130 manufacturing sites and an expansive supply chain, how does the company contextualize sustainability, set goals that encompass its social and environmental footprint, grow its supply chain and do it all responsibly?

For an hour we chatted – with 104 attendees generating almost 600 tweets, over 3.5 million impressions and 27 questions. Here’s the Storify summary.

And here are Parkin’s responses to the questions that we couldn’t get to in the hour:

  • @cmehallow: Does @MarsGlobal use @CDP Water Disclosure to manage/measure its #water impacts?

We have just completed our second CDP Carbon response and are evaluating the Water and Forest programs.

  • @csrdispatch: This might be a cheeky question, but do you feel a conflict between commitment to sustainability and selling junk food?

Our consumers, both people and their pets, get nutrition and pleasure from our products.  We are continuing to look at the role of our portfolio in addressing nutrition and obesity.

  • @dgardinera @dataeco: What have been your experiences with large #renewableenergy procurement?#MarsSusty

Our most recent large scale project was Mesquite Creek, but we have on-site projects or 100% renewable contracts at more than a dozen globally. We also just announced another project in Australia last week: http://www.premier.vic.gov.au/media-centre/media-releases/10219-the-sun-won-t-melt-this-mars-bar.html

  • @kellyfmill: Specific ways #sustainability goals are integreated w/ other departments? 

We believe it’s everybody’s responsibility, therefore we have goals in all functions/departments in the business. 

  • @jsonenshine: Can you share how you are driving farmer productivity? [A3b: Driving farmer productivity is our way to do both.]

Yes, as an example in cocoa, we are providing training, latest planting material and access to fertilizer for farmers.

  • @wssocialimpact: How does @MarsGlobal address sustainability goals in the short term?

We have a range of Sourcing Targets for 2015 and 2020 and Operations Targets (SiG) for 2015. More info at:

http://www.mars.com/global/about-mars/mars-pia/our-operations/sustainable-in-a-generation.aspx

http://www.mars.com/global/about-mars/mars-pia/our-supply-chain.aspx

  • @gurumug: How do you cross-verify #sustainability reporting standards/systems ?

We have a third party audit of our data and an assurance by Corporate Citizenship.

  • @greenguyboston: Glad to see your sustainable sourcing goals, but what is your progress to date against them?

Check out our 2013 Principles in Action Summary to learn more on our progress to date: http://mars.com/pia.

  • @jreneemorin: What are @MarsGlobal biggest challenges working with suppliers on #MarsSusty?

One of the challenges is that we work with 100k+ suppliers and often many tiers of them back to the farmer. 

  • @cmehallow: When @MarsGlobal needs to access capital markets, does its strong #susty program provide advantage?

We are a private, family-owned business, but we do believe that boosting our reputation through sustainability is crucial to attracting great people to work for us

  • @rohitms4: Is there any specific standard to measure your success in #sustainability?

Yes, measurement of impact and not just activity. 

  • @earthshare: How is @MarsGlobal investing in associates and their communities? #MarsSusty

In 2013 we did more than 500K hours of Associate training, and through the Mars Volunteer Program, 19K Associates devoted 70K hours to their communities.

  • In response to A15: @darrylv asked: That is promising. How about elsewhere in your supply chain? #MarsSusty

Because there are more farmers in cocoa than any other crop we purchase, we started there first and we’re looking to learn from our experiences in cocoa.

  • @beth_rcarnac: As a Mars Associate, I’d love to ask where have you seen our Associates best come together to collaborate on this #MarsSusty

There are Associates at every factory around the world and collaborating across our sites to achieving our SiG goals. 


Want to chat with us? Email me for more details.

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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

Tags

#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

Tags

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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Insurance Giant Allianz Targets Climate Change Risk: Expending “Unavoidable Emissions”

09 Wednesday Jul 2014

Posted by Aman Singh in CSRwire, ESG

≈ 1 Comment

Tags

allianz, barclays, biodiversity, carbon offsetting, climate change, CSRwire, deforestation, energy, Environment, ESG, greenhouse gas emissions, impact investing, insurance, Nonprofits, Philanthropy, redd, regulation, renewable energy, social enterprise, Social Enterprise, Social Entrepreneurship, Social Impact, Sustainability, sustainability, wildlife works


Picture_Martin_EwaldAfter chatting with Barclays’ Director of Citizenship Jillian Fransen on the financial institution’s allegiance to carbon offsetting and how she is leveraging the increasingly popular mechanism to not only offset its unavoidable carbon footprint, I turned to insurance giant Allianz who has also chosen to use carbon offsetting to target deforestation and reduce its environmental footprint.

Excerpts from my conversation with Martin Ewald, Head of Investment Strategy and Renewable Energy/Infrastructure Equity with Allianz Global Investors.

—————-

Describe your emissions reduction program and goals.

Allianz has set itself the target of avoiding, substituting and reducing its own CO2 emissions and is 100 percent climate-neutral since 2012. This means that all remaining emissions are being neutralized – in particular through direct investments in climate protection projects.

By 2015, Allianz aims to reduce its carbon footprint per employee by 35 percent compared to 2006.

What are “unavoidable emissions”?

Unavoidable emissions are CO2 emissions that are intrinsically linked to our business activity, like business travel, that we cannot always avoid or only avoid at very high expense. These emissions are still harmful to the climate. Corporates can take a leadership role in offsetting emissions related to their business activity by investing in responsible sustainability projects – this is not required by regulation in our sector.

But it is responsible behavior and makes good business sense. In fact, we have identified climate change as one of the three most critical sustainability challenges for Allianz (alongside demographic change and access to finance).

Where does offsetting fit into your sustainability strategy?

In addition to our carbon reduction target, being a carbon neutral business is the second pillar of our commitment and contribution to achieving a low-carbon economy.

In 2012, 175,000 credits, each accounting for one metric ton of carbon avoided, were sourced and retired from projects we support – retiring credits means that CO2 certificates, each representing one ton of avoided emissions, are taken off the market. Our remaining carbon footprint was neutralized by credits bought from the carbon market, which underwent a stringent sustainability screening to ensure they met the same high standards as the credits from projects we invest in.

The quality of the underlying projects determines the value of each and every credit in the voluntary sector, and REDD+ rate amongst the highest valued carbon credits.

Why did you choose REDD+ as one of the preferred offsets?

Our investment in REDD+ is consistent with our strategy of supporting effective climate projects in emerging and developing countries. We have invested in forest protection in Kenya with Wildlife Works, one of the leading developers of REDD+ projects. These projects don’t simply protect threatened forests; they also involve the local population and provide them with a source of livelihood.

REDD+ will also raise awareness of how to deal with resources in a responsible manner, besides helping preserve the habitat of the local population. Due to the considerable impact generated, we plan to continue investing in the REDD+ sector.

How has supporting REDD+ benefitted your company – and its stakeholders?

For the CO2 stored by the forests we receive certificates, which we can then use to offset business-related CO2 emissions. This way we ensure our climate neutrality and at the same time make a worthwhile investment. For us the yield also includes enhancing climate protection and biodiversity. We may also benefit from positive branding, but it is too early to tell since 2012 was the first year that we were carbon neutral.

As a financial institution, what is Allianz’s most challenging source of carbon emissions?

Ninety eight percent of our emissions stem from energy, travel and paper. So, the focus is on reducing CO2 emissions in these three areas.

In times of growing business, this is a challenge but we managed to reduce emissions across all three key areas in 2012, i.e. by sourcing lower-carbon energy or by making better use of video conferencing rather than traveling to business meetings.

How are these programs hallmarks of “responsible corporations”?

Since our business activity is not very carbon intensive, investing in REDD+ and similar projects today allow us to lock-in emission reductions over many years. We consider this to be responsible corporate practice: leveraging our capital base to build up the low-carbon infrastructure of tomorrow – be it forest protection or renewable energy, railways or electricity grids. This strategy also pays off, which is important to meet the expectations of our clients and shareholders. And this is a good basis to expand on our sustainable leadership agenda.

What role do you prescribe to Allianz in addressing climate change globally and locally?

We have introduced a group-wide strategy, which commits us to play a lead role in addressing climate change. For us it is about addressing the risks, e.g., the uptake in insurance loss from natural catastrophes, and making use of the opportunities. We have invested about EUR 1.7 billion in renewable energy projects, for instance, and set up a renewable energy fund, which has already attracted significant financial interest from our clients.

Moreover, we offer around 130 green products and services to our customers, including renewable energy home insurance, advisory services related to renewable energy and insurance premium discounts for drivers of electric/hybrid cars. The aim is to integrate climate change into our business  model, step by step building the business case for a climate friendly economy.

How can the private sector play an important role in reversing/addressing climate change? 

By understanding the climate issue as an investment case. Protecting forests is the cheapest way of saving carbon. To speak bluntly: if we first cut down the forest and then try to reduce the same amount of carbon we emitted, it would be much more expensive than just avoiding deforestation.

But as stated before, the most distinguishing factor about REDD+ is the opportunity to carry out investments that help improve social livelihoods and support local communities as well. Therefore supporting projects like the pioneering activities of Wildlife Works are appropriate activities that corporations need to support.

As long as there is no internationally binding climate protection agreement and as long as national regulation lacks teeth, the REDD+ market allows us to participate in voluntary projects around the world to address climate change. Consequently we have just carried out an additional REDD+ transaction in Indonesia.

What do you expect from policy makers to help expand your clean investments?

We stand at a critical juncture. We can continue business as usual with a small but dynamic niche of renewable energy projects and a reliance on fossil fuels for the big chunk of our economy. But this will not prevent dangerous levels of global warming.

Or we embark on a trend change, as we hopefully are seeing right now in Germany.

For this, we need a clear and reliable regulatory framework that gives investors appropriate incentives and the necessary regulatory certainty to finance clean technologies rather than coal or oil.

Originally written for and published on CSRwire’s Commentary section Talkback on September 5, 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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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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Life Technologies: When the Search for Sustainability Becomes a Radical Overhaul

09 Wednesday Jul 2014

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

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agriculture, Brand Management, climate change, cristina amorim, cso, CSR, CSR reporting, CSRwire, Disclosure & Transparency, energy, environment, Environment, ESG, genetic sequencing, ghg, kimberly-clark, life technologies, lifecycle analysis, oil, packaging, recycling, supply chain, Supply chain management, Sustainability, sustainability, terracycle, thermo fisher scientific, zero waste


For Cristina Amorim, sustainability has been an evolutionary journey.

Having spent almost a decade with Life Technologies – a life sciences company that produces a wide range of medical and research science products – which quadrupled in size through a series of mergers and acquisitions in that time, the company’s chief sustainability officer has seen multiple renditions of sustainability evolving to the next level.

“I’ve spent a decade looking at opportunities and getting sustainability initiatives off the ground that engage every employee, from the copy room to the board room,” she says. On the heels of the announcement that Thermo Fisher Scientific, a giant in life sciences research, is acquiring Life Technologies, I caught up with Amorim on what the past decade has taught her – and her employer – about setting a sustainability strategy that is evolutionary—moving from being good to being smart business.

Evaluating Sustainability: Asking the Right Question

From 2008 to 2012, the company cut energy use by 22 percent, water use by 52 percent, hazardous waste by 13 percent and CO2 emissions by 21 percent, according to its latest sustainability report. With greater growth on the horizon, can Life Technologies continue its sustainability march?

According to Amorim, that’s the wrong question.

“We’re well positioned to harvest the smart business prophecies of sustainability. There is a lot to do to reach a closed loop system and position ourselves in the circular economy. The question is: when do you know you’ve gotten there?”

“I think this is a continuous spiral with no particular end point, but constantly looking for the new frontier that the sustainability lens brings. This is not about creeping incrementalism; it’s about radical change. It’s about turning a moment into a movement, and fostering multiple movements to effect real change”

“Five years ago, no one was talking about zero waste. The economy has changed, allowing zero waste to be a financially viable undertaking. We now have five certified zero waste sites, and the movement goes on. And what would come next?” she continued. “After zero waste, we would envision a zero emissions site—one that has no emissions to air, water, or landfill.”

Now in her fifth year of sustainability reporting, Amorim has spent the better part of the last decade in an environment, health and safety role and understands the complex dynamics of Life Technologies’ Cristina Amorimmainstream products. Acknowledging that her journey has been more about challenging the status quo, she explains:

“We constantly ask questions to challenge what we have been doing. For example, can we source raw materials that are less toxic? That would create a less permitted and safer operational environment with less waste to dispose of. This in turn leads to products that are simpler and cheaper to ship, as they require less packaging, less regulated storage and fewer transportation fees. As a result, our customers will have less packaging and hazardous waste to deal with, reducing their total cost of ownership.”

When Complex Challenges of the 21st Century Meet Genetic Sequencing

So how did Amorim, who was recognized by Ethical Corporation in 2012 as Sustainability Executive of the Year and is Life Technologies’ first CSO, initiate a sustainability strategy that leverages the company’s technology in the markets it serves?

“As I see it, the entire company is the epitome of sustainability. Our genetic sequencing technology has the potential to address some of the world’s most pressing challenges. Just like in the 20th century, computing science turned a mainframe computer into an iPhone, in this century, life sciences is increasingly putting more DNA sequencing power into smaller devices at a lower cost – making it accessible to every scientist in the world. As sequencing is becoming democratized, scientists increasingly have the tools to transform life as we know it.”

In a world where 70 percent of available freshwater is used for agricultural irrigation, Life Technologies products have the potential to transform food economics. By re-engineering seeds, scientists can create higher-yield and drought-resistant crops.

Amorim continues, “As scientists leverage DNA sequencing technology to harvest oil from algae, biofuels will free us from extracting petroleum from the earth and tackle climate change
simultaneously. The significantly decreasing cost of sequencing the genome hastens theLifeTech_2012 development of more effective medicines, vaccines and clinical solutions that alleviate the health and economic burdens on society.”

Embedding a Cultural Shift: A Decade in the Making

As a biotechnology company, Life Technologies manufactures temperature-sensitive products requiring storage and shipment conditions ranging from -80° Celsius to ambient. Cold shipping requires expanded polystyrene (EPS) coolers and refrigerants like dry ice and gel packs, to maintain specific conditions during transport.

As the U.S.’ largest shipper of dry ice with FedEx, each year we ship 800,000 EPS coolers (equivalent to 105 truckloads) and consume 4500 metric tons of dry ice, costing $15 million in packing, refrigerant and freight. Given the poor recyclability of EPS, energy intensity of refrigerants and package weight, this represents our largest environmental impact and opportunity.

How is Life Technologies turning this challenge into an opportunity? Amorim explains, “Our strategy includes eliminating the need for coolers by converting products from cold to ambient shipping, piloting cooler reuse options, and investigating alternative materials to expanded polystyrene.”

Through a robust stability testing program, we have proven that some of our products can safely withstand ambient transport conditions. Just like transporting ice cream from the supermarket to your home freezer– we don’t carry a cooler or dry ice in our trunk.

“So far we’ve converted genetic analysis, sequencing, cell culture and molecular biology reagents, top-selling capillary electrophoresis and transfection reagents. The impact has been significant—each year, we now ship 250,000 fewer EPS coolers (33 fewer truckloads), use 2400 fewer metric tons of refrigerant, and save $4 million in operational costs globally. Most importantly, we know our packaging becomes our customers’ waste. These product conversions help us leave less branded garbage in their hallways.

Of course, the effort requires engagement across multiple functions. “From R&D to distribution and sales & marketing, everyone has a part to play. We tapped into natural leaders across these functions to become ambassadors for these initiatives. It provided them with visibility and career growth opportunities. They are delivering cost savings, protecting the environment and feeling good about it,” she added.

The Externalities: Collaborating with Suppliers

While these examples prove a significant point about how sustainability thinking can shift mindsets on profit, purpose and business value across organizations, what about Life Technologies’ external supply chain? With over 50,000 products and complex transportation cycles, how is the company addressing sustainability in its supply chain?

“I have a hard time understanding the traditional concept of ‘greening the supply chain.’ Asking hundreds of suppliers to fill out forms and check boxes provides no tangible value. We could never understand how to take action on that supplier data,” Amorim explained. “Instead, we find more value in partnering with key suppliers.”

One example is Kimberly-Clark. On the path to zero waste, Amorim and her team went dumpster diving one morning to understand their waste streams. What they found was a sea of blue and
purple  latex gloves.

We approached the glove supplier, Kimberly-Clark, who partnered with us to implement a glove take-back program. It started in one location and has today expanded to five. We segregate the gloves at the point of use and Kimberly-Clark sends them to TerraCycle, who turn them into purple park benches. This partnership provides true value—glove take-back helped us achieve our zero waste goal and helped Kimberly-Clark increase their revenue by becoming our sole glove supplier globally.

Take Back: Turning Obligation into Opportunity

The circular economy has arrived. That is what excites Amorim, one of very few female CSOs in the private sector. “The regulatory environment is also helping us close the loop. The WEEE [Waste Electric Electronic Equipment] legislation in Europe is one example,” says Amorim.

WEEE institutionalizes the cradle-to-cradle concept as a means of keeping electronic equipment containing heavy metals out of landfills. “Wouldn’t you like it if Maytag removed your dishwasher at the end of its life? I can’t move it and it doesn’t fit in my trashcan. In Europe, we now have to set up a take-back scheme for all of our instruments. How can this be done profitably?”

“We realized that by taking instruments back only to recycle the parts was a cost burden. Instead we bring them back to refurbish certain product lines for resale, harvest high-value parts to be used on service calls, and responsibly recycle what’s left.”

For Life Technologies and other companies, refurbished instruments open up an entire new market. At a lower price point, instruments such as DNA sequencers are more accessible to more scientists. And with increased revenue, the WEEE obligation becomes an opportunity.

While issues like cold chain shipment, waste, and regulatory compliance present thorns on the way to the gilded goal of a closed-loop model for Life Technologies, triangular connections in its supply chain and their appetite for cutting-edge innovation leads one to believe the opportunities are endless for Amorim and her team.

As the exuberant sustainability chief concludes, “We’re aiming for radical.”

Originally written for and published on CSRwire’s Commentary section Talkback on July 22, 2013.

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Stakeholder vs. Shareholder Value: Connecting the Sustainability Dots With Philips, Drexel University & Profits4Purpose

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire

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aman singh, cause marketing, corporate citizenship, corporate social responsibility, CSR, CSR communications, CSRwire, employee engagement, ESG, HR, Leadership, philanthropy, phillips, profits4purpose, shareholder value, social media, Stakeholder Engagement, Sustainability, sustainability, transparency, Work culture, workplace giving


Is there a connection between employee engagement and shareholder value?

Several similar questions came up in a recent webinar I facilitated, held in partnership with Profits 4 Purpose with guests Philips and Drexel University. While the question doesn’t have a linear answer – as is often the case with sustainability – it did take us through quite a conversation on connecting engagement with value, how CSR strategies affect business performance, the whole conundrum of measurement as well as what the latest research suggests.

Daniel Korschun, Assistant Professor and Fellow at the Center for Corporate Reputation Management at Drexel University, led the conversation by sharing some of his research with our audience.

“We’re moving into a new phase …since the 1950s we have had a debate about whether more CSR is better than less. While I don’t think this debate has been completely settled, there is general agreement among most practitioners that the core issue today is how we do it, not the quantity. That means we need to concentrate on effectiveness, which is where I have focused my research,” he started.

Employee Engagement: All About Signals

Employees are paying attention to CSR, he said.

And they notice when managers or customers support the company’s CSR initiatives.  When they notice this support, they are more likely to develop CSR and business performance“feelings of membership with a company.” In its most powerful form, we may begin to hear things like “I am an IBMer or a UPSer.” This feeling of membership then translates into a whole host of measurable outcomes like job performance, intent to stay in the job, or intent to volunteer.

For example, Korschun said he finds that people who feel this sense of membership are 87 percent more likely than others to be among the top performers of their company. And these effects hold even after controlling for pay satisfaction, personality traits, tenure, and work experience. The big lesson then?

  • Make CSR an open secret! “The more people who are discussing your behavior, the better.”
  • Have upper management act as champions: “If people don’t feel that management is aligned with your CSR strategy, impact will be muted. Executives don’t need to dictate CSR from the ivory tower but employees must know definitively that their leaders are on the same page, and are committed to social responsibility.”
  • Encourage contagion across stakeholders: “Engage customers in the same CSR programs as employees? Programs that get customers and employees to join forces (especially on volunteering sites) can create a bond…and that sort of contagion can lead to both happy employees and happy customers.”

Philip Cares: Formalizing Responsibility

Melanie Michaud, Senior Manager for Internal Communications with Philips North America took the baton from Daniel to evidence his data and research with how the practice and implementation of employee engagement maps out across a corporation. Emphasizing that Philips USA did not have a process in place till 2010 to vet requests and manage engagement across the company. “It was sporadic and led by employees who cared about various causes,” she said.

After several acquisitions, the company realized they needed a more formal process to align all its community development work with its business and employee base. That led to Philips Cares, through which, the company focuses on environment, education and health.

With tremendous uptick in the number of volunteers [over 8,000 volunteers] and donations in the 15 months since the program launched, Michaud highlighted the following keys to the success of Philips Philips caresCares – crucial for those managing relatively new programs or on the verge of launching one:

  • Do your research
  • Have a clear vision
  • Engage leadership
  • Have a volunteer tracking mechanism
  • Align with nonprofit partners
  • Emphasize local champions
  • Have consistent program branding
  • Engage in storytelling
  • Give employees a voice
  • Walk the talk

Setting a Global Strategy With Local Impact

So how does Philips ensure its CSR strategy is global in scope while local enough to support its communities?

That’s something we’re continually challenged with. We’re always tying everything back to our vision and mission of improving lives through innovation. We’re also doing some research now about rolling out a program like Philip Cares globally. In some areas there is greater interest than others and we’re currently working out how that will all work out,” Michaud responded.

One of the questions that came up during the webinar was around the survey Philips uses to seek feedback and make changes to its program. Emphasizing that the survey was a work in progress, Michaud said questions revolved around identifying causes, target audiences, types of volunteering activities as well as a bunch of open-ended questions for more elaborate feedback.

Practice vs. Software: Connecting Volunteerism With Impact

For Jason Burns, CEO of Profits 4 Purpose, the task was to connect Korschun’s research and Michaud’s practical perspective to how companies can best measure and track CSR and employee engagement activities. “We’re focused on helping companies make employee engagement simple, innovative and relational,” he started.

What are the key components to capture their attention? Burns summarized his comments in three neat categories:

  • Inspiring vision with easy execution: “We see a lot of companies starting with the end goal in mind, asking employees to focus on tracking…that’s less than inspiring. As human beings, we desire to be part of something bigger than ourselves so its important we start with a vision.”
  • Measuring impact: “Excel kills impact…how can we launch a strategy and review it for impact in real time and in alignment with employee engagement, mission and partners? Can we solve a specific problem that fits within the mission of a business? Can we cast a ‘what if’ scenario for employees to be motivated, to make a difference and get involved in a real easy and seamless way?”
  • Sharing a compelling story: “You’ve executed the strategy, and achieved great impact but why is it important? The most powerful piece for an employee when they volunteer is being part of that impact firsthand. The next powerful piece for those who might not be on the ground is communication, the story. It goes beyond the numbers.”

While the P4P platform helps companies do all of the above in one centralized place, what stood out was the fact that it also leverages the data into meaningful stories, disclosure commitments and  p4p_webinar_5filings. As Burns explained, “We saw companies that had the vision but were having difficulty making the management seamless with vendors, contractors and excel sheets. Things were duct taped and often a nightmare and we wanted to open that up to make the process productive and inspiring for all involved.”

Connecting The Dots Between Engagement & Shareholder Value…

But Jason’s iteration of execution versus measurement and reporting brought us back to a core question we began the panel with: how are companies like Phillips connecting the dots between volunteerism, engagement, retention and business growth?

“In terms of definitive links all the way to shareholder value, we have research connecting the steps of a CSR program all the way through. There is, however, no one study out there that links the end point with any one of the steps along the way. My research connects job performance with CSR and others have linked that to shareholder value. So while the connections are there, there is no one study that we can point to,” offered Korschun.

For Philips, it’s still to be determined, said Michaud.

“It is still a bit fragmented but we have moved from a theory to a practical emphasis on measurement and tracking. And the research being conducted is definitely encouraging, albeit complex,” added Burns, highlighting a trend we’ve been seeing on CSRwire as well where researchers are now, finally, being able to grab data on voluntary disclosures and link the connections between measurement, the various threads of sustainability and the question of value.

…Regardless of the Economic Climate…

What does the research then say about the impact of CSR programs on shareholder perspective and behavior irrespective of the economic climate? [Audience question]

While Korschun said he wasn’t aware of any studies that have looked at the influence of economic climate on how CSR drives value, “we generally find that for customers, the effects are clearest when CSR and employee engagementmost other product features are at parity. This suggests that CSR might become a little less important for consumers during a recession, when price becomes more critical.”

He added: “However, for employees, the company is a big part of their identity. So as long as a person feels fairly secure in their job, CSR should still have a similar effect. Putting this together, I would conjecture that ROI might drop a bit overall during a recession, but the drop would be uneven across stakeholders.”

…And Company Performance

“The weight of the evidence in academic studies suggests that there is a small positive effect of overall CSR on overall company performance. In my view, each company will have programs that are more and less effective. Since employees can express their commitment to the company in many ways, it is very difficult to put an ROI figure on any single program. The best way to measure it is usually to choose a couple of outcomes that are critical to shareholder value and then examine the link between CSR program(s) and these outcomes,” Korschun offered.

Final word on the erstwhile ROI of social contributions and impact?

For Michaud, this is a toss-up.

“We have some of the basics in place about measurement but I think qualitative measures are as significant. They’re really the next level of ROI. Of course, media stories help as well but we’re this is a discussion that is really ongoing for us.”

“A lot of companies are surveying employees and getting positive results. Now we need to work on finding the stories of impact,” added Burns while Korschun recommended systemic thinking:

I ‘d like to recommend [to companies] that they start with the goals. If one of your business challenges is employee retention, start with that and work backwards. Ask yourselves what is the right program that can have social/environmental impact and create business value at the same time?

Download the slides.

Originally written for and published on CSRwire’s Commentary sectionTalkback on June 25, 2013.

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