Net Impact

Ratings, rankings and the world’s most sustainable company

January 26, 2012

I’m skeptical about efforts to rank and rate green or sustainable companies, and I have been for a time. [See 100 Best Corporate Citizens? What a CROck!] It’s terribly difficult to compare big and small companies, retailers with manufacturers, software firms with oil companies, etc. We once tried at FORTUNE, and gave up because we decided it couldn’t be done right.

Having said that, I’m impressed with the rigor and methodology used by a Canadian magazine called Corporate Knights to produce its 8th annual list of Global 100 Most Sustainable Companies, which it calls “the most extensive data-driven corporate sustainability assessment in existence.” The ratings are transparent and they encompass social as well as environmental metrics, among them energy, carbon, waste and water productivity, diversity and employee turnover, safety and, interestingly, the ratio between CEO and average worker pay–a revealing metric that most such rankings do not include. Disclousre: While I played no part in putting the list together, I did write a profile of Novo Nordisk, the top-ranked company, for Corporate Knights.

A couple of things to note about the list. First, US companies perform poorly. There’s not one US-based company in the top 10. Intel (No. 18) Life Technologies (No. 15) is the highest ranked US-based firm, followed by Intel (18), Agilent (59), Johnson Controls (64), Procter & Gamble (66) and IBM (69). Lest you suspect a Canadian bias, our neighbors to the north did no better. The top-ranked Canadian firm was Suncor (48), which calls itself an “oil sands pioneer. Go figure.

Of the 22 countries with companies that made the list,  the UK led the way with 16 Global 100 companies, followed by Japan with 11 and France and the US with eight. Northern European countries (Denmark, Netherlands, Norway, Sweden) punched above their weight, which isn’t surprising.

Int [click to continue…]

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REI’s Sally Jewell at Net Impact

November 5, 2011

Sally Jewell – 2011 Net Impact Conference from Net Impact on Vimeo.

Sally Jewell, the chief executive of REI,  is the most unpretentious big-company CEO I know. When we first met a couple of years ago for dinner in Washington, she arrived in toting an REI backpack (made from recycled material). She’s plain-spoken, direct and a good interview.Her company, as you might expect,  is committed to minimizing its environmental footprint. (Without  a healthy planet, there’s no business for REI.)

So I was delighted when Sally agreed to a keynote interview at the 2011 Net Impact conference last week in Portland. We talked about how REI has lowered its energy and GHG emissions while adding stores, about the (unfair) competition from Amazon and about how ideas percolate up, down and around the retailer.

Some 2,600 people attended the New Impact confab which, as always, was a great event. I’m only slightly biased, as a board member of Net Impact; the organization’s mission is to inspire and equip young people to use the power of business to make a more just, sustainable world. You can hear more about Net Impact on the video below from Liz Maw, Net Impact’s executive director.. The interview with Sally is nearly an hour long, but I’ve posted it here, figuring that at the least REI employees may want to watch.

And, if you are one of those people who plans ahead, please mark your calendar for the 2012 Net Impact conference on Oct. 26-27, in Baltimore, MD.

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Starbucks: We are indivisible

October 30, 2011

I’m not much for patriotic displays, but I’m proud to wear this red, white and blue wristband inscribed with the word INDIVISIBLE.

I hope you’ll wear one, too. They’re available, beginning Tuesday, at Starbucks, for a donation of $5 or more to a project called Let’s Create Jobs for USA.

The program aims to create thousands of jobs across the country, by investing community development financial institutions (CDFIs) — mostly credit unions and community banks — that will then lend to small businesses, nonprofits, housing and commercial developers, micro-enterprises and the like, all to spark the economy and create jobs.

I’m a fan of this project,  for several reasons.

First, there’s no more front-of-mind issue in America today than jobs. So this a great example of how a big company can help tackle an important  problem–while enhancing its reputation as a business that supports its communities.

Second, Let’s Create Jobs for USA underscores the fact that, despite the rhetoric from politicians, jobs are best created by the private sector.  If you’re anti-business, you’re anti-jobs.

Ben Packard

Third, although credit for the campaign ultimately belongs to Howard Schultz, Starbucks CEO, Let’s Create Jobs for USA unfolded as it did because of a connection between Ben Packard, vice president of global responsibility at Starbucks and Mark Pinsky, president and CEO of the Opportunity Finance Network, a national network of CDFIs. Ben, Mark and I serve together on the board of Net Impact, a great organization of students and young professionals whose purpose is to inspire and equip young people to use the power of business to make the world a better place.

Let’s Create Jobs for USA is very much in the spirit of Net Impact. [click to continue…]

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How to hire a hotel desk clerk

February 12, 2011

I’m surprised by how casually some companies  hire.

Hiring matters. A lot.

Just ask Chip Conley, the founder and executive chairman of boutique hotel company Joie de Vivre.

“I chose that name because it’s hard to spell and hard to pronounce, and most people don’t know what it means,” he jokes.

Despite the name, Chip has made Joie de Vivre a big success because he focuses relentlessly on hiring the right people, and creating a workplace where they can grow and thrive. He’s the author of Peak: How Great Companies Get Their Mojo from Maslow, an excellent management book based on the well-known hierarchy of needs of psychologist Abraham Maslow. (See my 2007 blogpost, Peak Performance.)

“The most neglected fact in business is that we’re all human,” Chip says.

Chip, who is 50, started Joie de Vivre right after he graduated from Stanford Business School. Joie de Vivre is now the  2nd largest boutique hotel company in the U.S. (behind Kimpton). It employ 3,500 people in 35 hotels, 19 restaurants and five spas. Last year, Chip sold a majority interest to a private equity firm run by John Pritzker of the Chicago family that used to own Hyattt.

I’ve known Chip for years. He’s always full of ideas  Last week, he gave a talk in San Francisco to the board of Net Impact. (Great organization, by the way: check it out here.)

Chip argued, as he does in Peak, that great companies succeed by meeting the highest expectations and desires of their workers and customers.

For workers, the base of the pyramid is money. That’s about survival.

Above money is recognition. That’s about listening to people, giving them opportunities to grow, applauding their accomplishments.

At the top of the pyramid is meaning. That’s about giving people the sense that they are making a contribution to the world, that they are part of something bigger than themselves.

“Your goal (as an employer) is to help people move up the pyramid,” Chip says.

You need to start with the right people. So, for example, when Joie de Vivre  interviews job candidates who want to work at the front desk a hotel  —they’re called hosts—they’re asked to talk about a time in the last month when they did something for someone else that made the other person happy, and made them happy, too.

It’s obvious why, right?

If making other people feel good makes you feel good, you’re going to like working as a front-desk clerk. You’ll greet every guest who approaches the desk with a smile, and genuinely look forward to helping them in any way you can.

If you don’t much like helping people, you’ll see the job as eight hours of drudgery and the guests will notice.

For the hotel, that’s the difference between repeat business and a disappointed guest.

For the desk clear, it’s the difference between a calling and a job, Chip notes.

“A calling energizes you,” Chip says. “A job depletes you.”

Chip’s been fortunate to find his calling as a hotelier, a writer and a speaker. Here he is, giving a TED talk.

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The Power of One: eBay

December 6, 2010

“The Power of One” is a series of stories about people who have made their companies more sustainable. (See yesterday’s story on UL Environment.) They can’t do it alone, of course. But by coming up with a good idea, enlisting the help of others and making persuasive arguments, one person can change a company and, sometimes, more. That may require thinking outside the box; today’s story, about Karenina Susilo of eBay,  is instead about thinking about a box.

Lorin May and Karenina Susilo of eBay

Lorin May and Karenina Susilo of eBay

During her five years working at eBay, Karenina Susilo has spent a lot of time staring at screens. Karenina, who is 33, is a designer and an expert on user experiences — her masters degree from Stanford is in learning, design and technology, and she worked at Yahoo! before joining eBay in 2005. Her job is to help make it easier, more convenient and more fun for eBay’s users to do whatever it is they want to do when they come to the site.

You might think that working in software is pretty cool, and it is. But when people do it day in and day out, some of them evidently get the urge to work with real stuff–something you can hold in your hand. So, at least, says Karenina, who with her colleagues has spent a good bit lately working on a box.

“The idea of working on something tangible was pretty cool,” she says. People got excited about it.”

Maybe that’s because this was no ordinary box. Karenina and a group of software designers–who eventually joined forces with dozens of other people across eBay–came up with a durable, environmentally friendly shipping box.

This box is good for the planet because it’s made from Forest Stewardship Council-certified, 100% recycled material and it can be reused countless times. It’s good for eBay sellers because it saves them money; they don’t have to buy their own boxes. It’s good for eBay buyers because when they receive a box, they can sign up for $1 in eBay Bucks, a rewards program. And it’s good for eBay’s business because it creates loyalty among both buyers and sellers, and enhances the company’s reputation as a “green” brand.

What’s most interesting about this story, though, is how eBay, as a company, made it relatively easy for Karenina to get outside the box of her regular job. Every year, eBay sponsors an event known as the Innovation Expo. It’s a science fair for grownups–employees bring their [click to continue…]

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Glimpsing the future at Net Impact 2010

October 30, 2010

My favorite conference is Net Impact’s annual gathering, mostly because of the crowd—this weekend, about 2,500 people, most of them MBA students, undergrads and young professionals, gathered at University of Michigan’s Ross School of Business in Ann Arbor. These fare the smart, passionate and committed business leaders of tomorrow. I’m proud to be on the board of Net Impact, a nonprofit that helps its members harness the power of business for the greater good.

So much programming is crammed into the two-day event that it can’t be captured in a single blogpost or experienced by anyone, because dozens of sessions on different topics unfold simultaneously. But here are a few highlights:

What’s the future of recycling? It’s an unhappy fact that recycling rates haven’t moved up much since Earth Day. Yes, the original Earth Day, back in 1990. But innovative companies like TerraCycle, RecycleBank and Waste Management–yes, Waste Management, through a subsidiary called Greenopolis–are experimenting with clever and promising new ways to move the needle, by rewarding consumers for recycling.

I first wrote about RecycleBank in 2007. [See Turning trash into cash at Fortune.com] The company measures homeowners’ curbside recycling, and then rewards those who recycle with points that can be redeemed for stuff at more than 1,500 companies. “The idea of consumer behavior change is at the heart of our business,” said Ian Yolles, the chief marketing officer at RecycleBank, who previously worked at Nike and The Body Shop. The company is growing–it now operates in more than 300 communities in 26 states — and its investors include Coca-Cola,  venture capitalists Kleiner Perkins and Generation Investment Management (the fund led by Al Gore and ex-Goldman partner David Blood). RecycleBank generates most its revenues by saving municipalities money (lower tipping fees, higher revenue streams from recycling) and taking a share of the savings. [click to continue…]

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GE’s Immelt: I thought wind was a “hula hoop”

November 13, 2009

ge-logoGE’s chief executive, Jeff Immelt, opened the Net Impact 2009 conference this morning at Cornell University and, as usual, he was thoughtful and provocative. He was bullish on GE, of course, but, after this tough year for the U.S. economy, he sounded more pessimistic than usual  about where the country and its economy are going.

The American consumer, the financial services industry and the construction industry were the major drivers of America’s long boom, going back to the 1980s. None is likely to drive  economic growth in the future, Immelt said.

Instead, he noted, growth will be most robust in the developing world–places like China, India and Brazil that have bounced back more quicly than the U.S. from the global downturn–and it’s by no means clear that U.S. industry is positioned to capitalize on that growth.

Immelt said:

There’s more growth outside the United States than there is inside the United States. We have to recognize that our destiny is connected to the emerging world. We have to repurpose ourselves as an exporter.

The trouble is, the U.S. isn’t educating as many engineers as it should be, he said. Nor are the U.S. government and U.S. companies investing as much as China, say, in energy researchjeffrey_immelt_preview and development. Public policy. also remains a big question mark when it comes to energy because, so far at least, Congress has been unable to pass regulation of global warming pollutants. Other countries are moving faster.

“There’s going to be 10 million jobs created in clean energy,” Immelt said. The question is, will those jobs be in the U.S., in China, or elsewhere?

In the audience for Immelt were more than 2,000 members of Net Impact, a great organization whose purpose is “to inspire, educate, and equip individuals to use the power of business to create a more socially and environmentally sustainable world.” (Disclosure: I’m a new member of the Net Impact board.) Immelt has made GE’s “ecomagination” campaign a hallmark of his tenure as CEO and he said his focus at the company has been to marry capitalism and sustainability. [click to continue…]

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Biz and NGOs: too cozy?

November 14, 2008

Only a mindless anti-business zealot (and unfortunately there are still too many of those) would argue that environmental groups should not cooperate with big business when they have shared interests. Even activist groups like Rainforest Action Network and Greenpeace work closely with big companies like Citigroup and Coca-Cola, to help them make their operations more efficient or their strategy more environmentally friendly.

But there’s lots of debate about whether NGOs should accept money from their corporate partners. Does it compromise their independence? Threaten their credibility? Or enable them to bring in more money, and therefore have a bigger impact? That’s the topic of today’s Sustainability column.

By coincidence, I spent the day at the Net Impact conference in Philadelphia where corporate-NGO partnerships were one topic on the agenda. (Net Impact is an organization of business students and young business people who are committed to using business to make the world a better place. Some 2,400 people attended the very impressive event at Wharton.) I moderated a conversation about a corporate-NGO alliance with John Brock, CEO of Coca-Cola Enterprises and Carter Roberts, CEO of the World Wildlife Fund, and then listened to another where Ken Mehlman of private-equity firm KKR and Elizabeth Seeger of Environmental Defense Fund talked about their work together. CCE’s Brock and KKR’s Mehlman both said their firms got real value out of the partnerships—in terms of advice on how to better manage their operations, and from the public-relations value of the association with a green group. ”If we’re going to save the plant, we’re going to do it by making a profit,” says Mehlman. “That is the only way tit will be truly sustainable.” (When private equity firms, which are notoriously unsentimental, get serious about “going green,’ then you know the business case has become truly compelling.)

Interestingly, CCE and its sister company, Coca Cola, pay the WWF for its advice, and make donations to the group to help restore rivers and streams. But no money changes hands between KKR and EDF.

There are good arguments for both models, and you can read them in the column. My belief is that the NGOs, at a minimum, need to be transparent about their dealings with business. That is, they need to disclose how much money they are taking from their corporate partner over what period of time, and what services they are providing in return. One controversial partnership, a deal between the Sierra Club and Clorox, fails to meet this test. Here’s how the column begins:

Some environmentalists attack bottled water. Not Conservation International, a Virginia-based nonprofit that aims to protect the earth’s biodiversity.

When Fiji Water announced a sustainability initiative last spring to help protect forests on the remote Pacific Island of Fiji, Conservation International Peter Seligmann praised the move.

“We applaud Fiji Water for offsetting the climate impact of its products, reducing the impact of its operations, and funding crucial conservation efforts that support local communities and protect some of the last remaining forests in the South Pacific,” he said in a Fiji Water press release.

The endorsement didn’t surprise anyone who understands the relationships between Fiji Water and Conservation International. The privately-owned bottled water company pays Conservation International – neither party would say how much – to finance the work they do together. Stewart Resnick, who owns Fiji Water with his wife, Lynda, sits on Conservation International’s board and donates to the group.

Such cozy arrangements are increasingly common as big companies work side-by-side with big NGOs (non-government organizations). Clorox secured the endorsement of the Sierra Club – and the use of its logo — for a line of eco-friendly cleaning products, called GreenWorks that the company introduced late last year. Neither will disclose how much cash is involved.

You can read the rest here.

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Talking sustainability with Wal-Mart

October 13, 2008

Wal-Mart’s sustainability efforts are leading to some unorthodox conversations inside the retail giant. Consider meat and bottled water—some workers at Wal-Mart have promised to eat less meat and drink less bottled water as part of their “personal sustainability projects” because both are bad for the environment. More than 18,000 Wal-Martians have pledged to quit smoking as part of their PSPs, which are being promoted out of Wal-Mart’s home office in Bentonville. You see the contradiction, don’t you? Wal-Mart sells lots of meat, bottled water and cigarettes. So it’s asking its workers to stop buying stuff that it’s selling in vast quantities to its customers.

According to Rand Waddoups, who is Wal-Mart’s senior director of strategy & sustainability, this can be awkward for the company buyers in charge of meat, bottled water and tobacco. Traditionally, it’s the goal of buyers to drive sales in their category. But Waddoups tells me, “Wal-Mart doesn’t want to increase the sales of tobacco. So if you are the guy whose job is to increase sales and profits in tobacco, that’s hard place to be.”

“Maybe not all of our buyers should be increasing their sales and profits,” he muses. Instead, they are lobbying for change. The company’s bottled water buyer, he says, has been encouraging suppliers to use less plastic in their bottles. The buyer is also thinking about selling water to people who could refill their own containers. Similarly, meat buyers are “doing some really neat things about decarbonizing their supply chain,” Waddoups says. “They’re improving what they can, and they are getting excited about other alternatives.”

I spoke to Waddoups last week as part of a series of calls on Leadership and CSR that I’ve been hosting for Net Impact, a nonprofit association of young business leaders who want to use business to improve the world. You can listen to my conversation with Waddoups here.

Rand has been at WMT for eight years. We met last spring at the Milken Institute’s global conference, and enjoyed a dinner together. An MBA from the University of Arkansas, Rand started at Wal-Mart as a merchant, which means he had to buy, price, promote and place products. “My responsibility was ice. Frozen water. I increased sales and profits,” he recalls. He moved into strategy and sustainability a couple of years ago, and clearly has a passion for the work.

The economic downturn, slump, recession or whatever you choose to call it has not slowed down Wal-Mart’s sustainability work at all, he says: “There’s been no better time to apply sustainability than when times are tough. It is absolutely in line with the everyday low price philosophy.”

So Wal-Mart is pushing ahead on multiple fronts. A couple of initiatives in particular excite Rand—a summit in China later this month when CEO Lee Scott and other Wal-Mart execs will pull together about 1,000 suppliers to talk about sustainability. I’d expect that Wal-Mart will move forward then with a “sustainability scorecard” that it plans to use to rate all of its suppliers, as a way to persuade them to reduce their own energy usage, emissions and waste. Scott told me last spring that he also wants to use the summit to reinforce the message that Wal-Mart intends to seriously enforce labor standards at supplier factories around the world.

Rand also said he’s excited about Wal-Mart’s “zero waste” goal. This will take years to accomplish, of course, but already Wal-Mart is throwing away a lot less and recycling more. The people who run its TLE (that’s Tire Lube Express) operations are recycling used motor oil, oil and air filters, oil bottles, etc. The company wants to find ways to turn more of its food waste into compost. It’s reducing packaging, as has been widely reported.

Wal-Mart is so big that it doesn’t even know how much stuff it is throwing away, in total. “One of our greatest struggles is to know where we are,” Rand says. But here’s compelling evidence of progress: In 2006, Wal-Mart’s trash was an expense because the company had to pay haulers to take most of its away. This year, it is a revenue item because it makes more from selling recyclables than the cost of sending waste to landfills. “On the whole now, WMT makes money on its trash,” Rand says.

Of course, Wal-Mart, like every company, has a long, long way to go to become “green.” “I think it’s important for all businesses to recognize that they are not sustainable,” Rand says. For now, there are unavoidable tensions between the fundamental drive of Wal-Mart (and all companies) to sell more stuff, and the environmental imperative that we use less of everything that isn’t renewable. The only way out of that box is to redesign products and services so that they are truly sustainable–a gargantuan task.

In that context, the conversations around PSPs are intriguing. About half a million Wal-Mart employees have taken on their own sustainability projects. (Here’s a 2007 New York Times story about them.) Wal-Mart associates are carpooling, recycling, losing weight, exercising more, watching less TV, etc. For his part, Rand turns his food waste into compost for his garden—relieving him of the need to buy tomatoes from his employer, at least during harvest season.

It’s hard to know where all this will lead. At the very least, the involvement of thousands of rank-and-file employees create its own pressures for Wal-Mart to take sustainability seriously. There’s no turning back now.

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