The Business Case for Green & Clean

Posted by Tracy on Feb 24th, 2010 | 1 comment home title

About the Author: Tracy Robinson joined MontaRosa in 2009 as search execution leader. Prior to that Tracy spent almost four years as an associate at Heidrick & Struggles, the global executive search firm. As a member of its Global Technology and Financial Services Practices, she worked on officer- and VP-level searches for private, venture-backed and publicly traded companies. Read more from this author

So there I was, fortunate to be surrounded by an impressive array of sustainability professionals from top Bay area and Silicon Valley companies and others, including MontaRosa’s Sustainability Practice Head, Rupert Davis. Many had C-level titles while others were leading nascent green/energy/environmental initiatives at their companies. We had gathered in San Jose, CA, to attend the recent Executive Council Leadership Forum on Value Based Sustainability: The Business Case for Green & Clean and it was fascinating.

In the room there was much buzz about the challenges businesses face around sustainability. The spirit of collaboration impressed me at this invitation-only event.

The forum aimed to help senior executives create competitive advantage through their sustainability and “green” initiatives, driving the most value from current efforts and identifying the most promising opportunities for future action. It provided a great opportunity for networking and relationship building.

I found many of the day’s topics engaging: implementing real strategies for sustainability rather than “greenwashing” for the sake of publicity and marketing; creating a green supply chain; the role of technology – or clean tech – in sustainability; and lessons from COP15 in Copenhagen.

But this blog isn’t meant simply to be a report on what happened there; I’d rather share some of what I learned:

Companies that are getting the most from sustainability efforts are engaging in a discussions beyond their own firms. They are forming alliances up and down the supply chain, talking to NGOs, joining industry initiatives, etc. They’re thinking big picture.
Sustainability can boost employee morale, like at eBay, and customer engagement, like at UPS and SAP. These are both proven profitability boosters. In a world where talent and customers are fought over aggressively, companies ignore sustainability at their peril.
There is much interest in the metrics of sustainability but, as yet, no commonly accepted body of knowledge about what is most important to measure.

So – my take on the event? Clearly the companies in attendance represented different points on the continuum regarding awareness of, commitment to, and investment in sustainability initiatives. Sustainability is woven into the fibers of certain organizations, while at others it is more of a peripheral objective they’re beginning to work toward. Some are aiming higher than others, that’s for sure.

“In 2008 we stepped back and realized our field and customers were asking for sustainability. We went from tactical to strategic in our approach,” said Scott Bolick, VP of Sustainability at SAP. That elevation was something I heard more than once that day. Still, it can be challenging to get the CEO or CFO to focus on sustainability because the metrics are just evolving.

“Metrics are still the holy grail in this [sustainability] space,” said Libby Reder, Head of Environmental Initiatives at eBay. Rupert provided something of an answer to Libby’s challenge at the end of the day when he pointed out that J&J’s internal rate of return on their sustainability investments was about 16% — as good as what a top private equity firm achieves after they put a company through a performance improvement process.

Peter Williams of IBM, one of Scott’s co-panelists, emphasized getting sustainability out of the CSR (corporate social responsibility) area and integrating it the operations in individual business units and into the supply chain, where the greatest results will be achieved. “3-4% of our total energy usage is spent moving water around,” Williams said. Doing simple things like dynamically optimizing pumps every 30 minutes can cut energy use by 15%. “15% of that 3-4% is a number worth the effort,” he said.

This was echoed by 1E CEO Sumir Karayi in speaking about the 2% vs. 98% debate in Green IT (IT is estimated to consume 2-4% of total energy in developed countries), “The 2% is a big idea, first because it’s really 4% … you only need 25 of those solutions to solve the whole thing.”

There’s much to accomplish. In his opening remarks, Adam Werbach, CEO of Saatchi S, said that “the next 10 years are going to be more traumatic than the last 10 years.” Yet In his closing, Rupert offered up ways to make it through the trauma through actionable guidance for companies to further their sustainability plans and create the business case to sell a sustainability strategy internally and gain executive buy-in. I’m sure Rupert will have more to say on that in upcoming blogs.

Tracy

Note: Check out Thomas L. Rosenberg’s review of the forum for a succinct summation of Rupert’s remarks and other commentary.

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One Response home title

Pat Takata says:

March 5, 2010 at 12:25 am

Great write-up. I learned alot and am keeping this for future reference. You did well on your first attempt at blogging! Did you send this to Jody, too?

MOM