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Rationality is Ruining Us: Mayors, presidents and governors join major businesses in charting way forward on climate change

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Posted by in Capitalism 2.0, ESG, Stakeholder Engagement, Sustainability

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The rationality of business leaders is leading us to complete disaster.

Voicing concern for the continued lack of action on climate change, World Bank President Dr. Jim Yong Kim joined many others at the closing ceremony of Climate Week NYC (CWNYC) 2015 imploring the community to wake up and smell the air (no pun intended).

Referring to the ever maddening chase of the business case across corporate America, Dr. Kim emphasized that we now have enough facts and figures to address a global crisis unraveling in real time in places like California (see: drought and water shortage), island nations (land erosion) and across our depleting oceans and forests.aman 1

“My son will live through a 2, 3 or maybe even 4 degree Celsius warming. We cannot keep apologizing to our children for our lack of action. We must change course now,” he added, vocally seconded in frustration and urgency by many others who took the stage after him, including Former President of Mexico Felipe Calderon.

After more than ten days of events spread across New York City and covering a multitude of topics – from climate data and social justice to poverty, Rule of Law and women empowerment – CWNYC ended with several notable announcements this week, including commitments from Walmart, J&J, P&G and Nike to strive for sourcing 100 percent of their energy needs from renewable sources, six national banks coming together to ask for a climate treaty and divestment numbers reaching $2.6 trillion.

Mayors, Governors and Ministers Urge Urgent Attention

The week also saw the likes of NYC’s celebrated former mayor Michael Bloomberg and India’s Union Minister of Environment Prakash Javadekar taking the podium to ask policymakers globally to agree on a binding climate agreement at the upcoming Conference of the Parties (COP21) in Paris this December.

Aman 3While Mayor Bloomberg emphasized “you get what you pay for” and that “businesses invest where people live,” citing that New York City continued to be a mecca for business investment because of its early attention to the impact of climate change, the Indian Minister asked policymakers to frame climate change more broadly as a need to shift consumption patterns and lifestyles.

Referring to Pope Francis’ articulation of the “throwaway culture, the minister added, “India is a big country but it is also a poor country…this is about lifestyles and financing a global shift to cleaner sources of energy.”

Poverty is “the biggest pollutant” he said. “Human intentions have led us here and human intellect will help us lead the way out.”

For Vermont Governor Peter Shumlin, climate change is no longer up for debate. Emphasizing that his state’s residents were already living with the impact of climate change and were fully engaged on adaptation, he said:

“We don’t live in the land of denial…a whole generation of Vermonters are learning about climate change the hard way.”

Open for Business: Corporations Show Early Results from Climate Adaptation Efforts

Not too far behind was the corporate contingent including leaders from Ikea, Kellogg’s, Walmart, Nike, BT, DSM, Philips, Siemens and many others as well as the State of New York Comptroller’s Officer, who participated in a plethora of rapidfire discussions, many ably and enthusiastically moderated by UNFCCC Executive Secretary Christiana Figueres, on how they were accounting for climate change risks through various tactics and strategies. Here’s a sample:

  • Product innovation: Siemen’s is rolling out hundreds of windmills, estimated to power 7,000 – 8,000 homes each, Philips and Ikea are leading drive toward LED lighting
  • Advocacy: BT working across sectors on rolling out infrastructure to support the future of clean technology, automation and access for all, Mars joining hands with many other companies through investor advocacy group Ceres asking policymakers to agree on a climate treaty at COP21
  • Value chain mapping: According to Nike’s Chief Sustainability Officer Hannah Jones, the amount of polyester used in one year uses as much fossil fuels as it takes to operate 185 coal plants. Materials matter, she emphasized and therefore, Nike is evaluating its entire ingredient and value chain to understand all points of impact.
  • Circular thinking: IKEA looking ahead at leasing its products, extending their life and helping customers resell, recycle and reuse.
  • Scenario planning: NYS Comptroller’s office increasingly looking at “where we put our money. If companies don’t change their practices, we will move the money.”

None of His Business: Finding the Way Forward in Pope Francis’ Words

In an equally dramatic setting ahead of Pope Francis’ visit to the U.S. – New York City’s Jesuit University, Fordham – Andrew Winston, author of The Big Pivot, Jo Confino, Executive Editor at The Huffington Post, L. Hunter Lovins, president of the Natural Capitalism Solutions and Michael Pirson, Associate Professor for Management Systems at Fordham took the stage to contextualize why a religious leader was cutting through religious and political clutter to issue an urgent call to action.

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Before a packed auditorium of students, professors and others, the three distilled the 80 page Papal encyclical for what this meant for business, for consumers, students and perhaps more overwhelmingly, for humanity. The conversation was variously electric, sarcastic, alarming and deeply touching.

Winston cracked open the discussion by urging the audience to pay attention to what the Pope is saying. “If the Pope is signaling that the end might be nigh, we better sit up and listen. We have serious equity problems and we better start connecting it with environmental challenges quickly.”

Bringing a politically charged topic to life, Lovins alluded to the millions of refugees making their way west from Syria in the hopes of a happier life.

“Are we prepared for what that means for our cities, our local economies?” she asked. “I’ve always said climate change is not a moral issue; it is a business opportunity. But the Pope is starting to make me change my mind… This [climate change, poverty, economics] is not a religious issue. This is a global issue for humanity to confront and address as humans.”

Confino, who recently left The Guardian to lead Huffington Post’s foray into purpose and impact reporting, chose to take a more philosophical point of view advocating that “we need to re-convince ourselves that we need each other; that we don’t have control over everything whether we like it or not.”

On the other hand, Pirson implored education institutions to sit up and take note of what this meant for them.

“Every institution has to ask themselves why they exist and how they are helping the world move forward sustainably. This is a crisis and we need all hands on deck. Everywhere. If we’re not demanding that, we’re wasting our time,” he said.

So where to from here?

When do we shift from call to actions to simply action? While many more companies are stepping up their efforts – General Mills and Kellogg’s serving as great examples as they begin their path toward net zero – on the various threads of climate change, many, many more remain in the shadows waiting and watching.

Regardless of what gets agreed to in December, climate change is already changing our summers and winters (check out WXshift to see for yourself). Changing weather patterns are already impacting farmers’ harvesting timelines and forcing millions to relocate for better proximity to clean water and air. And as this impact spreads beyond the immediate areas under threat, our notions of ordinary and luxury stand to be tested.

We’re going to have to respond. We’re going to have to adapt. Our bottom lines will change.

And we’re going to have to continue to push the leaders and pull the stragglers along. After all, if the future of our children is not worth it, what is?

Earthwards 2.0: Johnson & Johnson Seeks to Evolve Sustainable Product Innovation

09 Wednesday Jul 2014

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In recent posts, I explored the genesis of Johnson & Johnson’s proprietary Earthwards® process and how it has been used to help develop greener products to meet customer needs. For Johnson & Johnson, the process of instilling a sustainability mindset began with introspection and questioning: How does an organization with multiple product lines and a global workforce develop and define greener products? And the process began with a tool called GAIA, or Global Aquatic Ingredient Assessment.

In the beginning, GAIA was operating almost exclusively with R&D because it was a science-based tool with specific emphasis on measuring downstream ecosystem impacts.  Implementation of the Earthwards process accelerated broader adoption and has helped spur greener product innovation based on lifecycle thinking that is, in part, quantified by tools like GAIA. But Earthwards, despite its rigor and initial success, is still in its infancy.

In 2012, Senior Director for Worldwide Environment Health and Safety Al Iannuzzi enlisted a team of experts that volunteered to examine the Earthwards process and recommend areas for improvement. What’s next? I explore the future of the program through the eyes of two well-respected sustainability experts who recently weighed in as part of that expert team: Andrew Winston and L. Hunter Lovins.

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By now, you’ve probably caught a glimpse of that new inspiring Honda Civic 2013 commercial, framing innovation as believing that ‘things can always be better.’  For Winston, making things better begins by asking questions. “As we pursue sustainability in the future, asking the right questions will be as important as the answers we get,” he said.

For the people at Johnson & Johnson, the concept of continuous improvement is a driving force. So it makes sense that their efforts to evolve the current Earthwards methodology into a better process  began with some Earthwardshonest introspection and engagement with a few external experts, including Winston and Lovins.

In a recent phone call with Winston, I asked him his impressions of the Earthwards process.

He believes that the Earthwards process is a solid program with appropriate categories and logical steps that “empowers product developers with information and helps them understand the choices. It’s a well-designed system, but does have its pros and cons.”

I asked him to elaborate.

“They have the right categories, seven in all, but the concern is that a product could be improving in three distinct areas, but these may not be the most important areas to focus on in order to address the products’ greatest material impacts.  There’s a fine line between simplicity and enabling efficient assessments.”

Of course there are trade-offs. But the biggest challenge internally is giving employees the time and information they need to become comfortable with the Earthwards process and appreciate the impacts of improvements across the lifecycle.

“It is a fair point,” said Iannuzzi. “Our Review Board, including three external experts, also helps to keep the process objective, making sure that the brands focus their improvements on meaningful areas. To make this even more robust, we will require each application to address the lifecycle screen hot spot areas identified in step two of the Earthwards process, the lifecycle screen.”

Sufficiently Ambitious or Room for Improvement?

There is broad agreement among the experts that Johnson & Johnson has a long history of – and
interest in – environmental protection and sustainability. “The company has cared about its impact on the environment and on people, and taken a position of responsibility,” Lovins noted.

While both Lovins and Winston said that the Earthwards  process is one of the most comprehensive sustainable product tools in the industry, and in Lovins’ view, “a strong and rigorous process.” She also feels there is opportunity for the company to become even more aggressive in making this a companywide initiative.

“They need to examine the inadequacies of the Earthwards process, align it with tougher science-based goals and then make a commitment to hold every product to those goals.”

Winston had similar sentiments, specifically around the 10 percent benchmark Johnson & Johnson has set for improvements against Earthwards’ sustainability criteria. “The problem with a goal like 10 percent is that it’s kind of an internal-looking, corporate improvement. These goals at the product level need to be shooting for more dramatic increases.”

Some of J&J’s leading products are doing more than the required 10 percent anyway, so why stop there?

According to Iannuzzi, Johnson & Johnson sees the potential to raise the bar, perhaps substantially on some dimensions, but also recognizes the need to balance meaningful improvements within the original intent of Earthwards.

“J&J is always up for a challenge, but we want to make sure we don’t raise the bar so high that it becomes detrimental to Earthwards’ intended purpose of widespread adoption,” said Iannuzzi. “If we make the bar so high that almost no product can get there, no one would pursue it.”

 New Blueprint Needed?

According to a recent study commissioned by Johnson & Johnson titled The Growing Importance of Sustainable Products in the Global Health Care Industry, 54 percent of health care organizations globally say green attributes are very important in their purchasing decisions of health care products medical wasteand supplies. And this trend appears to be gaining traction, as 40 percent of global hospitals expect their future request for proposals to include sustainability criteria for the products they purchase. Among the greatest concerns hospitals share are the amount of energy they use and the volume of waste they generate.

With data like these indicating that the strongest push for sustainability is coming from within the healthcare sector, how will this influence the evolution of the Earthwards process?

To get at the heart of this question, Winston suggests that Johnson & Johnson ask itself whether doing better than 95 percent of its competitors is good enough.

In fact, Winston said Johnson & Johnson should go further than others and has challenged the company to raise the requirements for Earthwards recognition. For example, the baseline could be higher than the current 10 percent improvement needed to achieve recognition in the different categories, especially in the energy efficiency category, in light of the general scientific consensus that greenhouse gas emissions need to be reduced by 85 percent by 2050.

Iannuzzi responded: “We plan to better understand the greenhouse gas emissions impacts of the improvements we make this year with the Earthwards process and consider ways to further encourage them in our products.”

Lovins suggests the company be more transparent with customers about where it is in the process of sustainable product development and where it is going. Iannuzzi’s team is already responding by sharing more content on www.earthwards.com including more information about the 36 products that have received recognition so far and other external-facing efforts like a six-part series with CSRwire.

Internal Certification Process, Not a Sustainability Strategy

Coleman Bigelow, Johnson & Johnson Global Sustainability Marketing Director, sees the Earthwards program as an internal product stewardship and green marketing process rather than a long-term sustainability strategy like that of Marks & Spencer’s Plan A or Unilever’s Sustainable Living Plan.

The Earthwards process ensures “every product we produce has undergone a lifecycle screening and is as sustainable as possible. For the first time, we have a process that offers something to the developers, the R&D folks, as well as the marketers and sales associates,” Bigelow explained.

Iannuzzi, a Johnson & Johnson veteran of 28 years who has spearheaded the Earthwards program internally from the start and is a popular sustainability champion among the team, doesn’t foresee the company taking an approach akin to GE’s Ecomagination with a separate structure, either.

“Our philosophy is to embed sustainability into every product, not create something special or separate,” Iannuzzi explained. That said, the company does plan to track how much of its revenue stems from Earthwards recognized products. So while it is not its own revenue generating business unit, per se, it certainly could prove to save the company money over the long haul as well as drive innovation internally.

When I asked Iannuzzi about Earthwards’ ten-year plan, he reflected.

“Ideally, I envision it as a way of showing customers how we are coming up with more innovative products using sustainability as the driver. This means moving Earthwards process away from being an add-on and moving it toward full integration.  External communication will also be key.”

“But right now, it’s not as well integrated as we would like,” Iannuzzi admits.

Regardless, Winston seems convinced that Johnson & Johnson’s efforts have been both aggressive and innovative as a whole. The next tricky move for the company, say the experts, is to be mindful of how quickly the Earthwards program grows in scope without losing sight of the program’s quality.

As the team at Johnson & Johnson prepares for Earthwards round two, the experts’ advice should help the healthcare company scale its journey from green to greener without losing sight of the ultimate goal: A sustainable planet for future generations.

For now, it’s back to the white boards.

About Andrew Winston and L. Hunter Lovins

A globally recognized expert in green business strategies, Winston is the author of Green Recovery and co-author of Green to Gold, the international best-selling guide to what works – and what doesn’t – when companies go green. Winston is also founder of Winston Eco-Strategies, a sustainability consultancy dedicated to helping companies use environmental strategy to grow, create enduring value, and build stronger relationships with their stakeholders. He writes extensively on green business strategy, including a weekly column for Harvard Business Online and guest byline articles on Huffington Post.

Lovins is an award-winning sustainability consultant, featured speaker at conferences across the globe and author of Natural Capitalism: Creating the Next Industrial Revolution. Lovins is also president and founder of Natural Capitalism Solutions (NCS), which creates innovative, practical tools and strategies to enable companies, communities and countries to become more sustainable. Lovins is also a professor of sustainable business management at Bard College and Denver University, and consults for large and small companies, and governmental clients.

Originally written for and published on CSRwire’s Commentary section Talkback on March 13, 2013.