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

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSR reporting, ESG

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


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

 

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

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire, ESG

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


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

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

A tad ambitious?

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

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

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

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

From Innovation & Efficiency to Sustainability

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

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

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

Carbon Offsets: The Allure for Microsoft

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

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

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

Scale: Impact Through Leadership

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

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

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

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

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

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

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

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

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

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

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire

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


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

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

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

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

Sound like a lot to take on?

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

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

Consider these statistics:

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

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

A Public Benefit Corporation: The Implications

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

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

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

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

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

Aligning Ambition With Impact

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

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

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

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

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

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

Side Effects of An Acquisition

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

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

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

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

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

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

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

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

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

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

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

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

09 Wednesday Jul 2014

Posted by Aman Singh in CSRwire, ESG

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

09 Wednesday Jul 2014

Posted by Aman Singh in CSRwire

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


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

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

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

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

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

Carbon Offsetting: Need vs. Efficacy

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

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

Calling them “unavoidable emissions,” Fransen explained:

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

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

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

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

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

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

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

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

Climate Change: Decoding the Impact of a Bank

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

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

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

The Need For “Some Serious Leadership”

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

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

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

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

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

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

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

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSRwire, ESG

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


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

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

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

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

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

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

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

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

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

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

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

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

Which sectors will you be targeting for immediate collaboration?

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

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

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

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

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

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

What about the private sector?

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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#SharedValue & Sustainability: In Conversation with Nestlé Waters North America

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSR reporting

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Brand Management, consumer behavior, CSR, CSR reporting, Disclosure & Transparency, Environment, ethics, Leadership, nestle waters, packaging, recycling, shared value, social media, Stakeholder Engagement, stakeholder engagement, supply chain, Sustainability, sustainability, Twitter, water


 

A conversation with North America's largest seller of bottled water on how they define Shared Value, their take on what's often critiqued as an "unsustainable business model," their drive for modernizing recycling infrastructure and much more more!

[View the story “#SharedValue: A Chat with Nestle Waters North America” on Storify]

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Decoding Nestlé Waters North America’s Sustainability Journey: Environmental Villain or Facts vs. Emotions?

09 Wednesday Jul 2014

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

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aman singh, Brand Management, Business, corporate social responsibility, CSR, CSR reporting, CSRwire, Disclosure & Transparency, environment, Environment, ESG, extended producer responsibility, heidi paul, kim jeffery, nestle waters, nestle waters north america, Net Impact, packaging, Philanthropy, recycling, shared value, Stakeholder Engagement, Supply chain management, Sustainability, sustainability, transparency, water conservation, watershed management


When a company labels its Annual CSR Report as Creating Shared Value, you have to stop and wonder if they’re responding to the latest buzzword in the market or leveraging its potential by truly embedding it into their reporting and cultural framework.

In its third cycle, Nestlé Waters North America’s [NWNA] latest Creating Shared Value Report attempts to accomplish the latter. Among its headlines:

  • What the company is doing to advance recycling in the U.S.
  • The company’s path to achieving a zero-waste future
  • Its continued efforts to be the most efficient user of water within the beverage industry

To gain some firsthand perspective and background on these goals and the accompanying challenges for North America’s largest seller of bottled water, I reached out to EVP for Corporate Affairs Heidi Paul [Join us for a Twitter Chat today, June 18th, at 1:00pm ET to connect with Paul directly at #SharedValue!].

NWNA_2012_CSR_Report_coverAmong my questions: how does the company balance criticism for selling bottled water while promoting healthy choices, what it is doing to shift its supply chain and use of plastic, its  well-acknowledged work in the area of Extended Producer Responsibility, and how her team plans on including consumers in its drive for sustainability.

Defining “Shared Value”

Paul started the conversation by setting the record straight on the company’s definition of what’s quickly gained momentum as a replacement for CSR: Creating Shared Value.

“We define CSV as a strategic way to achieve triple bottom line sustainability. In other words, be financially, environmentally and socially sustainable.  At the end of the day, Nestlé seeks to create shared value in those areas where we can make the most impact and that are material to our business. Globally, that is in the areas of Nutrition, Water and Rural Development. For our bottled water business in North America, our focus is on healthy hydration, packaging responsibility and watershed management.”

Has the terminology helped NWNA’s citizenship team – 28 people strong across the company – integrate its sustainability goals more effectively within its business units?

“It has done wonders. When you’re looking at philanthropy unconnected to business, it is not really sustainable. CSV focuses our engagement on the three critical topics and asks the whole company to see what can be improved for society and ourselves. We get the benefit of input from our supply chain, employee groups, community partners, etc.,” she said.

Coding the Impact of Bottled Water

Let’s get to NWNA’s main product then: bottled water. Does it feel the twinge of irony every time that is said in the same sentence as “shared value”? Paul chose to answer that with some data:

“Seventy percent of what Americans drink – according to the Beverage Marketing Corporation – today comes from a package, not from a cup or the tap. In fact, our research indicates that if people don’t have access to bottled water, 63 percent say they will buy some other beverage from a package instead, often a sugared or caloric drink with a greater environmental impact.”

“We play a key role in increasing Americans’ consumption of water, which is the healthiest beverage choice. As the data indicates, there is a crucial role that bottled water plays in consumer choice. Everywhere there is a high-calorie sugary, packaged drink available; we want to make sure there is water as well,” she emphasized.

Does the company’s sales data support Paul’s emphasis? “The volume sales increase for 2012 for the bottled water industry was 6.2 percent. And per capita consumption reached nearly 31 gallons, up more than 5 percent from 2011. Further, 51 percent of people who stop drinking sugared soft drinks are switching to bottled water. In fact, bottled water is outselling sugared soft drinks in grocery stores in eight major markets across the country,” she supplied.

At the end of the day, Paul believes, the company’s job is to talk about why bottled water is a choice – nestle waters north america brandsan amply available one – and why it should be available anywhere packaged beverages are being sold.

Is Nestlé Waters North America’s Business Model Sustainable?

That brought us to the next obvious thread: the plastic being used to produce the bottles. Recalling a keynote given by former NWNA CEO Kim Jeffery at a Net Impact conference years ago, I asked Paul how the company handles its fiercest critics regarding its use of plastic.

In a jungle of facts, fiction and emotions around environmental issues, Jeffery confronted the audience back in 2009 with a firm and resolute stand: we sell bottled water and we are doing everything we can to make that process sustainable.

Where there was a finality of “take it or leave it” to Jeffery’s remarks four years ago, Paul took a more nuanced approach to respond.

“Limited resources need to be used again and again. We have taken the mantle of becoming part of that solution. The larger point is there are billions of servings of beverages being sold everyday in some sort of package. Some populations are getting most of their calories from bottled drinks. And every time they choose water over a different drink, they’re making a more healthy and environmentally friendly choice,” she said.

And is a goal of reaching 60 percent recycling ambitious enough considering the climate and environmental challenges we face?

“At the time we were setting the goals, the nation was at a 28 percent recycling rate for PET plastic and thought that a goal to double that rate was ambitious and would require big changes. We had a lot to learn. We began to study recycling programs and the patchwork of policies and systems that were in place but were not moving overall recycling rates very much. There are big opportunities for increasing recycling by improving collection in public places, business and industry and in urban residential buildings. Today, however, there is no money going to fund this expansion of infrastructure.”

“There is also the issue of competing systems. Bottle bills for example do raise the recycling rates for bottles and cans, but actually reduce the efficiency of curbside because it is taking the most valuable commodities, which reduce the revenue, potential from curbside. Our goal was to work with others and find the most efficient system with the highest impact,” she emphasized. “

Environmental Villain or a Case of Facts vs. Emotions?

Of course the plastic of the bottled water we consume is bad for the environment. But so is almost every other product and consumer packaging we use in our day-to-day lives as study after study has shown.

Turning the argument on its head though, would we be wasting as much or filling up landfills as quickly as we are if we didn’t have the choice of bottled water to begin with? Where does consumer choice end and producer responsibility kick in?

Identifying that as another area for impact, Paul picked up:

“If bottled water isn’t available, people routinely purchase another packaged drink, one with calories and with a heavier environmental footprint. The availability of bottled water in times of natural disasters, where often tap water can be compromised, also creates a role for bottled water that goes beyond most product categories. Bottled water provides a reliable second source of water in these situations – that’s something everyone in our company is proud of.”

So when your business model is set around selling a product that is healthy and encourages nutrition while understanding and targeting its impacts through a well laid out sustainability strategy NWNA_priorities– as  Jeffery succinctly put it in his exit interview with Greenbiz Publisher Joel Makower earlier this year – is it fair to be labeled an environmental villain?

Perhaps, perhaps not.

The Challenges of Sustainability

As Paul reiterated, the journey of tackling facts vs. reality has been full of challenges and continues to be an uphill task. “Like anything else, our work in the area of recycling, water conservation and reducing our social and environmental footprint has been a constant education,” she said, citing the lack of modern and efficient recycling system as one of the company’s top challenges.

“Not too many people understand the current system in place. There are numerous questions like who is funding what, how does it work, who are the middle men, how do we get to the next stage, where can we build in efficiencies, etc. And if the goal is to accept our responsibility as a producer to recycle efficiently toward a goal of zero waste, then we need answers to these questions.”

“We’ve always said we’re open to options, and so far the option that we have seen with the highest potential to be low-cost and efficient is a well-constructed EPR system, run by industry. What makes this complicated is there are a dozen different ways EPR has been implemented globally. Many of those are not efficient. This uncertainty about the ability to do it “right” makes others in the dialogue want to take more of a “wait and see” approach. Even if you convince people who, done well, EPR in the form being proposed is the best solution, there are doubts about implementation across the board,” she said.

Other challenges?

Consumer vs. Producer Responsibility

Paul cited the potential of collaboration in building more sources for wind and solar energy, as well [“we’re not there yet but this is definitely on our radar”].

There is also a need for collaboration in the area of water stewardship. “Improving watersheds will require collaborations among the various stakeholders within a watershed, be that users, scientists, environmental groups or government. Nestlé Waters North America manages the watershed areas around the 40 springs we use that are overseen by our 10 Natural Resource Managers. We have also made a commitment to collaborate on two watershed projects per year,” Paul said.

And what about NWNA’s consumers? How does the company leverage its brand to shift consumer behavior?

“In the 1970s, recycling meant ‘putting it in the bin.’ Today, this is old news. What motivates people now is when they understand its benefits. If a consumer recycles a water bottle after use, the greenhouse gas impact of that bottle is estimated to be reduced by more than 15 percent.”

“Also, we need to close the loop on what happens to the bottles after they are recycled. They are not trash; they are a resource that can be used again and again. Right now our 50 percent r-pet bottles in our Arrowhead, Deer Park and Resource brands shows consumers what happens when they recycle. It becomes a new bottle. The visibility of this message on our bottles helps us tell the story that we need much better recycling to become a more sustainable world.”

The company’s top challenge moving forward?

“At the end of the day, you want zero impact, but is that possible? Our challenge is to keep finding those ways to improve when it feels like you’ve reduced the impact to the minimum,” she said, finishing with a flourish: “You need to find the next frontier every time – that’s the goal. And the challenge.”

Originally written for and published on CSRwire’s Commentary section Talkback on June 18, 2013.

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