LAGUNA NIGUEL, CA — Innovation to help sustainability goals is coming from a variety of directions in some of the world’s largest companies, a panel of executives said today.
The event, sponsored by IBM and Esty Environmental Partners at the beginning of the Fortune Brainstorm: Green conference in Laguna Nigel, Calif., brought together an impressive panel of sustainability and corporate executives. All have participated since last year in the Sustainability Innovators Working Group, formed last year to develop new management systems and approaches to corporate sustainability
The executives testified to the role of setting bold goals, engaging employees, and working with external partners — and how all of these things are driving innovation.
The two organizations also released a study of members of the Sustainability Innovators Working Group that found that companies are ramping up their sustainability strategies, but many are climbing a steep learning curve.
According to the study, released at the conference, 23 percent of companies report that they are at an advanced stage of implementation of sustainability; 15 percent say that sustainability is “a core part of our business strategy to generate competitive advantage”; 43 percent say their efforts are “in progress,” though not yet addressing all major aspects of sustainability opportunities; and 19 percent say they are at an early stage.
However, IBM and Esty found that only 15 percent of firms are reporting programs “that are tightly integrated with their overall business strategies.”
The study, announced in November, aimed to learn what strategies, plans, and initiatives companies are pursuing to further their sustainability agenda, and what types of management systems they have put in place to ensure success. Among the participants are Applied Materials, Boeing, Coca-Cola, Diversey, Fedex, Johnson & Johnson, Microsoft, Walmart, Walt Disney, and Waste Management.
The panel of sustainability and corporate executives in Laguna Nigel came from several of these companies.
“What sustainability unexpectedly did for us was to unify the company,” said John Matthews, senior vice president of corporate affairs at Diversey, who described the company’s recent reinvention. “We fundamentally changed the sense of why they are in this company.”
The business benefits of setting big sustainability goals was one repeated theme. Walt Disney Company, for example, set some big, aspirational goals. “It was important to set those because it was important to communicate commitment,” said Beth Stevens, Disney’s Senior Vice President of Environmental Affairs. “It was important to employees to set that North Star.”
“Great outcome of communicating it is that it drives innovation,” she added. “When it comes to greenhouse gas emissions, we have a goal of getting to zero net emissions, and we charge each business for their GHG emissions. So that helps to get the focus on ways to reduce those emissions. It definitely drives innovation.”
Companies also pressed the need for partnerships with suppliers, customers, nonprofits, and others. Coca-Cola’s Vice President for Environment & Water Resources, Jeff Seabright, described the private summit “of the CEOs of our top 35 suppliers,” his company convened in 2009 in Atlanta. “It was a matter of really rolling up our sleeves and inviting our suppliers to co-create with us with innovations we could both benefit from. About 200 ideas came out in 2009 meeting, some major, some incremental. That process helped to unlock a lot of potential.”
Tapping employees’ ideas was another thread across several companies speaking at the event. “It’s really important as you develop your plans to understand what the leverage points are,” explained Walmart’s Senior Vice President of Sustainability, Andrea Thomas. “We get feedback every day about what happens in the stores. If an associate doesn’t ever know what’s going on in the Home Office, you can’t achieve results. Associates have been able to understand how getting support at the store level, see online how others have had success, and how they can replicate.”
For 2011, the Sustainability Innovators Working Group’s goals are to “identify sustainability management differentiators, advance the execution model, and share perspectives on global trends.” In addition, the group says it will implement pilot accelerator projects in several areas, including a “sustainability balanced scorecard.”
Mitch Jackson, Fedex’s VP for corporate environmental affairs and sustainability, best summed up the overall theme of companies having a roadmap of how they’re going to harness sustainability for competitive advantage. “There are companies that know how they’re going to get there and those that don’t.”