BSR’s Aron Cramer: Leaders need to listen to weak signals

September 26, 2011

Aron Cramer

Today, I’m pleased to publish the second in a series of guest posts about redefining leadership from Aron Cramer, the president and CEO of BSR. BSR (formerly Business for Social Responsibility) works with its 250 member companies to promote a more just and sustainable world, through research, consulting and industry collaborations. Aron, who’s a longtime colleague and friend, has worked all over the world on business issues ranging from labor rights in global supply chains to Internet freedoms in China to the meaning of “sustainable consumption.” Here, he writes about the importance of listening to and learning from voices at the margins.

When I was researching my book Sustainable Excellence, Nike CEO Mark Parker told me that he manages by the principle that “there are a lot of smart people in the world, and most of them don’t work for me.” And while Parker is duly proud of the people he does have at Nike, he points to a central truth: Valuable insight and knowledge is now held in more hands than at any other time in human history.

As we consider how leadership is changing, it is clear that today’s most effective leaders have the ability—and willingness—to listen to weak voices they would have considered irrelevant to their business a generation ago. Indeed, these leaders are able to see across multiple disciplines, perspectives, and geographies.

Historically, leadership used to be exercised by people (usually men) who  had a corner on information, and who would speak with unshakeable authority. They were expected to have all the answers. Today, those who lead do so through their ability to find  all the answers. As Stewart Brand famously said, “information wants to be free.” In a world which is drowning in data, no own can monopolize knowledge; but smart leaders can win by listening to voices that others ignore and by mining the data  for fresh insights. [click to continue...]

Filed Under: CSR, Leadership, Media, Sustainability Tagged With: , , ,

Aron Cramer: Business needs to step up

September 7, 2011

Aron Cramer

Today, I’m pleased to publish the first in a series of guest posts from Aron Cramer, the president and CEO of BSR. BSR (formerly Business for Social Responsibility) works with its 250 member companies to promote a more just and sustainable world, through research, consulting and industry collaborations. Aron, who’s a longtime colleague and friend, has worked all over the world on business issues ranging from labor rights in global supply chains to Internet freedoms in China to the meaning of “sustainable consumption.” Here, looking ahead to BSR’s 2011 conference in San Francisco, he writes about the need for business leaders to step outside the boundaries of their companies to re-energize the sustainability agenda.

Most years, people are reluctant to see summer fade into fall. But the summer of 2011 was a bit of a bummer, bringing hurricanes and earthquakes in the American Northeast; ongoing political stagnation in the United States, Europe, and Japan; and signs that the world’s mature economies are stuck in neutral—and may remain that way for some time. Leaving this summer behind feels like a relief.

It’s up to business to turn things around. That’s why BSR has made redefining leadership as the theme of the BSR Conference 2011.

We view this opportunity as having four dimensions, which we outlined in our most recent annual report. In this series of blog posts, I want to elaborate on each one, beginning with the need for business leaders to invest in the infrastructure required for sustainability. [click to continue...]

Filed Under: Business Ethics, Climate Change, Corporate Governance, CSR, Environment, Politics, Sustainability Tagged With: , , , , , , , , ,

Sustainable Excellence: Is it enough?

November 21, 2010

Last week was a terrific week for corporate sustainability. Unilever unveiled a bold plan to reduce its environmental impact and Chevrolet — Chevrolet! — announced $40 million of carbon reduction projects. Forestry giant Georgia Pacific–owned by the Koch brothers, of all people–signed an agreement to protect endangered forests in the southern U.S., winning praise from the Dogwood Alliance and NRDC. Greenbuild, the world’s largest convention on environmentally-friendly buildings, attracted 1,000 exhibitors and 27,000 people to Chicago. Wow.

None of this will surprise readers of  Sustainable Excellence: The Future of Business in a Fast-Changing World (Rodale, $25.99) by Aron Cramer and Zachary Karabell, a smart, readable and provocative book that argues that business success in the long run will be earned by companies that “integrate consideration of society and the environment into their DNA.”  As CEO of Business for Social Responsibility since 2004, Aron has had a front-row seat (actually, a place on the field) from which to track changes in how business is being done, while Zachary is an accomplished journalist and scholar who also did a stint as a Wall Street money manager. Together, they have provided a map of the ever-evolving  business landscape, along with valuable guidance to executives who must deal with a range of sometimes competing pressures on companies to do good and to do well.

What’s the business case for sustainable excellence? They write:

What has made sustainable excellence necessary is the simple imperative of maintaining profitability in a world altered by a trio of interlocking challenges: the financial crisis that hobbled the economy, the rise of the emerging world and the increased urgency to decouple economic growth from natural resource consumption.

In short, the drive to integrate sustainability into business is a function of thousands of companies recognizing that now and in the future, this is the only viable path forward.

Aron and Zachary tell stories about GE, Google, DuPont, Shell, Levi-Strauss, BP, PepsiCo, Starbucks and Coca-Cola, among others–companies that, to varying degrees, are redefining themselves to deal with the long-term trends they’ve identified, and to meet the rising expectations of business that come from their employees, their customers, communities and NGOs. [click to continue...]

Filed Under: Sustainability Tagged With: , , , , , , ,

Sustainable consumption: Opportunity or oxymoron?

August 19, 2010

Imagine that you’re the chief sustainability officer of a FORTUNE 500 company. During a meeting with your CEO, you say: “We need to talk to consumers about using less.”

Improbable? Sure.

Impossible? Perhaps not.

An important conversation to start? Absolutely.

So, at least, says Aron Cramer, the CEO of Business for Social Responsibility (BSR), a nonprofit association of companies, whose mission is to promote a just and sustainable world.

“The American model of consumption cannot be extended to the entire world, and won’t be, because the planet simply can’t support it,” Aron told me, when we spoke by phone the other day. Yet billions of people around the world want to improve their standard of living. Figuring out how they can enjoy a better life, without destroying the environment, “is the mother of all innovation challenges,” Aron says,

Last month, BSR published a 26-page report called The New Frontier in Sustainability: The Business Opportunity in Tackling Sustainable Consumption [PDF, free download). It’s an attempt to get business leaders to think about what sustainable consumption might look like.

The topic “has been the third rail of sustainability politics,” Aron told me, but he added, with his usual optimism, that “more companies are ready to have this discussion.”

If nothing else, the report makes clear the urgency of the issue. Citing a WWF report [PDF], it says:

By recent estimates, our global footprint now exceeds the world’s capacity to regenerate by about 30 percent, and if our current demands continue, by 2030 we will need the equivalent of two planets to maintain our lifestyles.

And yet:

…countless people have insufficient access to basic needs like food, clean water, and adequate shelter, and they also lack access to the resources they need to improve their lives. In 2006, the 1.2 billion people in the OECD countries had an average annual income per capita of US$30,580, while the 5.4 billion people in the rest of the world earned an average of US$3,130. Of those, 19 percent suffer from hunger, 28 percent are drinking polluted water, and 29 percent are illiterate.7 More than 2 billion people continue to rely on less than US$2 per day to meet their needs.

The question is, what business opportunities, if any,  await companies that figure out how to give poor and middle class people what they want in a sustainable way? [click to continue...]

Filed Under: Consumption, CSR, Environment, Leadership, NGOs, Religion, Sustainability Tagged With: , , , , , , , ,

IKEA, beyond plastic bags

November 26, 2008

I’ve long been a fan of IKEA and I became a bigger fan earlier this fall when the Swedish-based chain of home furnishing stores banned plastic bags in all of its U.S. outlets. So when I heard that Anders Dalhvig, IKEA’s CEO, was speaking at this fall’s conference of Business for Social Responsibility, I asked him to sit down with me to explain more fully the company’s efforts to become a more sustainable business. I wasn’t disappointed, and so IKEA is the topic of today’s Sustainability column. There’s also some video online of my conversation with Dahlvig.

Here’s how the column begins:

You probably know IKEA as a seller of affordable, stylish furniture that comes in “flat packs” – with more than a little assembly required.

To keep prices down, IKEA asks customers to put together their own desks, chairs and bookshelves. That reflects the company’s roots in Sweden, where it was founded in the 1940s by Ingvar Kamprad, a farmer’s son who sold pens and seed packets to his frugal neighbors. (The IKEA name comes from his initials, those of the family farm, Elmtaryd, and the nearest village, Agunnaryd.)

The flat packs also serve another purpose: They lighten IKEA’s environmental footprint. A delivery truck filled with flat-packed chairs can carry the equivalent of six trucks of fully-assembled chairs. “We must stop transporting air,” said Anders Dalhvig, IKEA’s president and CEO. So the next time you struggle to get an IKEA bookshelf to stand straight, you can take solace in knowing that you are doing the planet a favor.

Today, IKEA’s commitment to the environment goes well beyond flat packs. The fast-growing, privately-held company – sales last year were $21.2 billion Euros (about $27 billion) – has promised to buy more of its wood from sustainably managed forests, to use fewer raw materials in its products, to buy renewable energy (including solar panels for a store that opened in June in Brooklyn) and to curb business travel.

You can read the rest here.

For those of you not familiar with BSR, it’s a global business network and consultancy focused on sustainability, led by the very able and likable Aron Cramer. The organization runs a great conference every year that I try not to miss because it brings together leading thinkers and doers from the progressive business world. GE’s Jeff Immelt was among the speakers this year. You can check out session summaries and video from this year’s conference at www.bsr.org/conference.

Filed Under: Consumption, CSR, Energy, Environment, Sustainability Tagged With: , ,

“An emotional, social, economic reset”

November 6, 2008

“This economic crisis doesn’t represent a cycle. It represents a reset,” Jeff Immelt, the CEO of General Electric, said today. “It’s an emotional, social, economic reset.”

And the biggest impact of this “reset” will be greater government involvement in the economy, and in the affairs of business, for better or worse.

“People who understand that will prosper,” Immelt said. “Those who don’t will be left behind.”

Immelt spoke to the annual conference of Business for Social Responsibility, an association of about 250 companies that are looking for more sustainable ways to do business. About 1,200 people from companies, NGOs, consulting firms, PR shops and government agencies are here for the group’s powwow in New York.

The GE chief executive didn’t put it exactly this way, but he made clear that the meltdown on Wall Street and the election of Barack Obama will bring an end to a couple of decades of nearly blind faith in free markets and deregulation. (Heck, even Alan Greenspan has admitted that.) Going forward, stronger government intervention will be a fact of life, here in the U.S. and around the world.

The question, of course, is how deep and how wide the government involvement will be. You can be sure that the Obama administration will regulate the financial industry. But will Washington bail out the automakers? Freeze foreclosures? Tax fossil fuels? Make it easier for workers to join unions? All of the above?

Adjusting to this new reality will take some doing, Immelt said. “I’m a free market guy and fundamentally a Republican,” he told BSR. (That put him in a distinct minority in this crowd, which is packed with Obama fans. A BSR survey released today found that nine in 10 of the conference participants believe Obama will have a positive impact on advancing the agenda of corporate responsibility.) But while he may be a free market guy, Immelt’s no ideologue. He acknowledged that the government has always been deeply involved in the economy; research funded by the defense department helped spur the technology revolution of the 1990s, for example. What’s more, he said, prosperity depends on what he called four “pillars” of education, energy, health care and a financial services sector that promotes innovation. Education is a government obligation, of course, and the other three sectors he cited–energy, health care and financial services–have always been heavily regulated.

Interestingly, Immelt suggested that President-elect Barack Obama make clean energy a top priority when he takes office. Energy’s a big problem, he said, but unlike, say, health care, it is a problem that can be solved relatively easily, and with substantial benefits for the economy and the environment. Not incidentally, GE, a big player in wind energy and nuclear power, and a wanna-be provider of “clean coal” plants, stands to gain from an aggressive government push for clean energy.

“Clean energy is a combination of technology and public policy,” Immelt said. “I think this is imminently solvable. It creates jobs. There’s not a lot of downside.” GE, he said, is devoting about half of its $6 billion a year in R&D investment to clean energy and clean water technologies.

Immelt also sounded a positive note about his work with the U.S. Climate Action Partnership, an alliance of GE, DuPont, Alcoa and other big companies with environmental NGOs like Environmental Defense Fund and the World Resources Institute. The GE executive is the big cahuna behind U.S. CAP, which favors mandatory regulation of greenhouse gases, a role that has taken him a long way from his days as a young GE plastics exec who had developed a “healthy dislike for environmental NGOs.” Now he’s pals with the likes of Fred Krupp of EDF and Jonathan Lash of WRI.

Having said that, Immelt made clear that neither his position on climate change, nor his belief in GE’s much-hyped EcoMagination initiative, spring from any personal love for the outdoors. “I’ve never camped,” he said. “I don’t fish.”

But the science of climate change is “pretty much irrefutable,” he said. What’s more, GE’s business of selling products that help solve environmental problems is growing, from about $5 billion when EcoMagination was launched to about $17 billion today.

Besides, big companies don’t like uncertainty and there’s an enormous amount of uncertainty right now about what a President Obama and Congress will do to regulate greenhouse gases. Even worse, Immelt noted, you could argue that the U.S. already has de facto, unspoken regulation because of the growing opposition to coal-fired power plants.

“The last 49 coal plants haven’t gotten permits,” Immelt said. “Guess what. When that happens, you do have an energy policy. You just don’t know it.”

Better to have a full-scale democratic debate about what our energy policy should be. You can be sure that when that debate unfolds next year, GE’s voice will be heard.

Filed Under: Climate Change, CSR, Energy, Environment, NGOs, Sustainability Tagged With: , , , , , ,

Obama, clean tech and change

November 5, 2008

What an extraordinary night for America! Here’s a brief dispatch from the streets of Washington, D.C., before getting to today’s column: The U Street neighborhood was known as “Black Broadway” in the 1920s–Duke Ellington grew up nearby, jazz clubs thrived, theaters were built and a black-middle class grew there for years. It remained the cultural hub of black D.C. until 1968, when it was all but burned down after the assassination of Martin Luther King. After a period of blight, U Street was reborn as a vibrant neighborhoo in the 1990s, as restaurants, clubs and condos sprung up. Last night, it was the site of a spontaneous street party, with blacks and whites, mostly young people, hugging one another, celebrating the election of Barack Obama. Can anyone doubt, after this election, that dramatic change can happen in America, and in a hurry, too?

Which brings me to today’s Sustainability column, a look at the prospects for clean technology. I’ve recently spoken with several venture capitalists who are optimistic — despite the credit crunch, despite the recession, despite declining oil prices — about the business of producing clean energy and creating a more sustainability economy. Here’s how the column begins:

Some people are saying that the clean energy revolution is over, before it has even begun. “Alternative energy suddenly faces headwinds,” declared The New York Times. “Winds shift for renewable energy as oil price sinks, money gets tight,” reports The Wall Street Journal. “Will the Economic Crash Take Down Our Hopes for Clean Energy?” asks Alternet.

There’s no doubt that recent developments cast a cloud over the renewable energy business. The capital markets have turned risk-averse, making financing for alternative energy hard to come by. Declining oil prices make it harder for cleaner transportation fuels to compete with gasoline. In a slumping economy, the government will be reluctant to pass climate change legislation that will raise gas and electricity rates.

Never mind – there are compelling reasons, even now, to believe that the U.S. is on the verge of a dramatic shift, away from a economy dependent on cheap fossil fuels and towards cleaner, greener, more efficient ways of doing business.

Recently, I spoke with three leading venture capitalists who focus on clean tech: William E. “Wilber” James of Rockport Capital, Alan Salzman of VantagePoint Venture Partners, and Paul Maeder of Highland Capital Partners. Needless to say, they are biased – they are invested, personally and professionally, in renewable energy and other clean technologies.

But they all see powerful forces driving the U.S. economy towards a more sustainable way of doing business in the long run.

Obama’s election will bring new energy to the environmental movement. McCain would have been a welcome change, too, but the environmentalists and business people I’ve talked to today seem jazzed by the election of Obama.   (I’ve spoken to quite a few people, because I’m at Business for Social Responsibility’s annual conference in New York) . They understand that government policy matters enormously to the environmental movement.

As Frances Beinecke of NRDC wrote in a email this morning:

Barack Obama’s election is a huge win for everyone exhausted from playing defense. Count us among them. It rekindles our hope that environmental protection may be restored to its rightful place as a treasured American value.

On the most important issues of the day — from global warming controls to clean energy solutions to wilderness preservation — President-elect Obama campaigned on behalf of far-sighted policies that NRDC has championed for years.

You can read the rest of my clean tech column here.

Filed Under: Climate Change, CSR, Energy, Environment, Leadership, Politics, Socially Responsible Investing, Sustainability Tagged With: , , , , ,