Global Sustainability

21 Leading CEOs Show How to Do Well by Doing Good

Mark Lefko

• Publisher: Morgan James Publishing
• Year: 2016
• ISBN:
  9781683501787
• Topic: Business
• Subtopic: Sostenibilità nel business
• Index: Business

Smart business leaders care about Sustainability. It's not just good PR—it's good business, and a growing number of leading CEOs are embracing it.

Mark Lefko's Global Sustainability examines this vital subject from the perspective of today's most influential business leaders. Global Sustainability means ensuring that everyone on Earth has what they need to survive and thrive. But in order for this to be feasible—and sustainable—businesses need to be able to turn a profit. Lefko shares profound insights gleaned from his one-on-one interviews with business leaders of all stripes, from the CEOs of Global Multinationals, Fortune 50 giants to visionaries leading plucky startups. Learn from these CEOs and others: Sir Richard Branson-Virgin Group, Paul Polman-Unilever, Ann Sherry-Carnival Australia, Feike Sijbesma-DSM, David MacLennan-Cargill, Marc Benioff-Salesforce. In exclusive interviews, these 21 leading CEOs explain:

• How the Global Sustainability movement is shaping the growth of the most profitable companies around the world
• How your company can participate fully in this movement—and profit from your participation
• How your guiding ethical principles shape your company's identity … and why they're vital to your survival

Global Sustainability is about more than just doing good; it's about doing well by doing good.

CHAPTER 1

ESTABLISH GUIDING PRINCIPLES

“People must have righteous principles in the first, and then they will not fail to perform virtuous actions.”

—Martin Luther

The first and most important best practice for sustainability is to know what you stand for, and to be able to communicate your values to your employees, your customers, your shareholders, and the world at large. Who are you? What do you stand for? What drives you besides the bottom line? What commitments are you willing to make and stand by regardless of what happens? And are any of these commitments so vital to your company’s identity that you are willing to keep them even at the expense of your ability to maximize profits?

These are not merely abstract questions; the answers will determine how you conduct your business for decades to come, both in lean times and during periods of prosperity. Your values must guide every business decision you make, and their importance to your brand cannot be overstated.

The Importance of Your Principles to Your Customers and to the Public

As I said, your guiding principles are inextricably linked to your brand, i.e., the public’s perception of what you stand for. Your principles are the clearest signal you can send to indicate how you can be expected to act in the world. By establishing principles, you reassure every potential customer that he or she can support you with a clean conscience. Many of your customers—and perhaps even some of your suppliers—will decide whether to do business with you in large part based on their perception of you as a company that supports and upholds their values. And as I noted in the Invitation you’ve just read, the twenty-first century’s easy access to information guarantees that if you fail to live up to your moral commitments, your customers will find out!

Perhaps the best, most explicit example of this practice in action can be seen with Cargill, the family-owned food-processing giant. I discussed this subject at length with CEO David MacLennan.

“It’s the legacy of our founders and their descendants that they’re committed to ethical business,” he told me. “So there is complete support and buy-in. It’s just part of the family-owned shareholder culture and ethos.”

Cargill holds itself to seven “guiding principles,” which it posts prominently on its website:⁵

1. We obey the law.

2. We conduct our business with integrity.

3. We keep accurate and honest records.

4. We honor our business obligations.

5. We treat people with dignity and respect.

6. We protect Cargill’s information, assets, and interests.

7. We are committed to being a responsible global citizen.

Nor does Cargill stop with this strict code of corporate conduct: the company also features on its site the “Cargill Cocoa Promise,” which offers reassurance to consumers concerned about whether their cocoa is obtained in an ethical manner. (We will discuss the Cargill Cocoa Promise at greater length in chapter 5.)

Cargill isn’t alone in wearing its proverbial heart on its sleeve. The Indian multinational conglomerate Tata group displays its values prominently online, as do Unilever, Natura Cosméticos S.A., and The Dow Chemical Company. Tata’s principles are expressed in a video, in which a voiceover tells us, “[O]ur mission [is] to improve the quality of life of the communities we serve globally through long-term stakeholder value creation based on leadership with trust—for customers, communities, employees, partners, and shareholders.”⁶

“Our mission is at the core of our business, so we’d better make sure it’s a live document. It’s a live part of our business.”

—Seth Goldman, CEO, Honest Tea

Salesforce, a San Francisco-based cloud-computing company, likewise prominently features its values on its website. The “About Us” link on the site’s navigation bar brings up a list of options that includes an entire page about trust, and why they value it (there is also a link to a page dedicated to the subject of sustainability).

“This is our culture,” Salesforce CEO Marc Benioff told me. “That is, we are a company that’s committed to four things: One—trust, the trust with our customers, employees, and partners. Two—growth, because in the tech industry, if you’re not growing, you’re dying. Three—innovation; because we’re a technology company, we’re constantly innovating and delivering next-generation capability. And four—equality; we believe in equality for all, and we’re willing to dedicate part of our time to our mission to help those who are less fortunate than we are.”

Guilherme Leal, co-chairman of the board of directors at Natura, told me about Natura’s Sustainability Vision (which also can be found on the company’s website.⁷)

“Natura wants to go further than just reducing and counteracting the impacts of its activities,” he said. “We believe businesses must create net positive impact, which means contributing to regenerate nature and make society fairer than today. That’s why in 2014 we developed a new Sustainability Vision. It directs our business to generate positive social, environmental, economic, and cultural impacts by 2050, and sets ambitions and commitments through 2020.”

Leal isn’t just blowing smoke here: Natura has been a member of the Union for Ethical BioTrade—which is dedicated to preserving biodiversity and ensuring fair dealing throughout supply chains—since the organization’s founding in 2007.⁸

Unilever isn’t at all coy about their commitment to sustainability; the section of their website devoted to the subject is conspicuously featured on the navigation bar at the top of every page.⁹ By making their Sustainable Living Plan impossible for visitors to miss, the company sends an unmistakable message to consumers: global sustainability is a core value from which Unilever will never budge. And lest anyone mistake their promises for empty platitudes, Unilever spells out its own stake in solving the world’s problems:

[T]he changes [in climate, population, and resource availability] will pose new challenges for us too, as commodity costs fluctuate, markets become unstable and raw materials harder to source. There is no “business as usual” anymore. The old economic systems are no longer fit for purpose.

The Dow Chemical Company’s website offers us a look at Dow’s seven ambitious “2025 Sustainability Goals.”¹⁰ These goals, which Dow hopes to achieve within the next decade, include the development of “a circular economy where materials formerly considered to be ‘waste’ are turned into new products, and the goods we use every day are designed to be fully recycled.”

In mentioning Dow’s 2025 Sustainability Goals, Natura’s Sustainability Vision, and Unilever’s Sustainable Living Plan, I have perhaps strayed somewhat from the prescription I mean to offer in this chapter: to establish principles. But while the plans, visions, and goals touted by those companies are not guiding principles in the same strict sense as Cargill’s, they still have the desired effect of clarifying these companies’ resolve not to contribute to the world’s problems. They also ensure accountability in the future: if Dow, for example, were to abandon its stated goals at some point a few years down the road, or if it were discovered not to have been taking them seriously, the public outcry would be enormous … and that would be bad for business.

The Importance of Your Principles to Your Employees

“We found that by embracing sustainability, we were connecting more strongly with our employees. It really resonated with them. We were able to recruit and retain better talent. We were also doing a better job and gaining traction and … credibility within the community.”

—Mike Kaplan, president and CEO, Aspen Skiing Company

It’s admirable for a company to set ambitious goals, but it can only hope to achieve such goals if its employees are willing to adopt them as their own (this is one reason why employee well-being and morale will be the subject of an entire chapter later in this book). In order for this to happen, employees must have the sense that the company takes its principles seriously, and that these principles arise from sincerely held convictions. Most people are not utter fools, and no one likes to feel as though he or she is being lectured about the break-room recycling bin in order to stroke a supervisor’s sense of moral superiority, or in order to burnish the company’s image as a socially responsible corporate citizen.

On the other hand, employees who are inspired by the company’s mission—and who understand the reasons behind that mission—will go to great lengths to further it. This can and should be taken into account from the time an employee is hired. Applicants should be favored who evince an affinity for the company’s goals, not just in business (which of course is a job requirement), but also in matters of principle.

François-Henri Pinault, chairman and CEO of clothing and luxury-goods manufacturer Kering, told me, “[Our values dictate] every action, every decision that is taken in our business. [They] cannot be … taken into consideration [only] at some point of a process or at the end of a process, or in the middle. And as I said to my team … this is who we are. So, you cannot cheat with that. It’s not an option. We are like this; we think like this; we breathe like this. And so everything has to be seen through this dimension of sustainability.”

If you succeed in inculcating your employees with your company values, the results can be far-reaching. Cargill’s David MacLennan told me this story when I interviewed him:

I’ll never forget, two years ago this July, I was at one of our facilities in Ukraine. And I walked in and there was a poster numbered one through seven, and there were pictures of employees on it. It was the same layout and color scheme [as the posters we hang in our United States offices], but everything was in Ukrainian. And we went upstairs, and on that person’s desk was a copy of the guiding principles. And I thought, That tells me something: that it’s not me sitting in Minneapolis or our leadership team proclaiming our guiding principles; it’s in the system. And so I think the role of leadership is to say, “Here’s what we think is important; here is above all else where we want to go and how we’re going to conduct our business. And I have seen firsthand evidence that that resonates with people. It’s cross-cultural.

Once they’ve become ingrained in your culture, your company’s values and ethical standards will become a selling point with which you will be able to attract and retain talented, ambitious people. I asked Mr. Pinault whether his company’s culture had any effect on the kinds of job applicants Kering attracted.

He said, “We transformed, years ago, our process of recruitment to involve questions about sustainability for all the candidates, to test their conviction about that … and [since we have become] more and more known as a sustainable company, and [since we have begun to ask] those questions, we have [received] amazing feedback from candidates who are very receptive. The young generation asks us questions about that before we [can ask them] our own questions about [their feelings about] sustainability. This is a very strong trend. They all come in with questions about that topic. So, it’s very important, and in the future [it will be] one of the key components of [employee] loyalty that you can rely on as a company.”

Mr. Pinault’s experience is not unique: according to Unilever CEO Paul Polman, “Unilever gets 1.8 million applicants [per year]. We are the most looked-up company on LinkedIn after Apple and Google because these people want to work for a purpose, [and for] a company with a purpose. In fact, more than half of our recruits tell us that they join us because of our Unilever Sustainable Living Plan, and they want to make a difference.”

Jon Provisor, CIO of Internet service provider Guidance, says, “I have had employees come and say, ‘I joined Guidance because of your view on the environment.’”

Dr. Mukund Rajan is the chief ethics officer of the Tata group and oversees all corporate social-responsibility acti...