Tuesday, May 19, 2015

Corporate managers, remember what goes around comes around

I, and a number of people I know, have noticed some corporate people becoming ruder in recent years.

By this I mean say, sending emails, then never replying to responses.

Or saying they want a quote for some work, then never replying.

Apparently, if you work for 'the man', for big corporate, you can treat people like this.

But in the real world, in 97% of most economies, i.e. SMEs, you can't ever treat people like this.

The funny thing is, the corporate people who act like this, often end up out on their own in a year or two or three anyhow.

Then you get the email. "Hi, so and so here, I'm now 'freelance', fancy a coffee?"

"No" is the answer.

"Bugger off gitface" is the subtext.

Just because you did big corporate, doesn't mean the rest of us forget you were rude because you felt like you had the right to be.

You didn't.

You just felt like you did.

What I am saying here is, if you work for a large company, you are not special.

Big companies anyhow generally have zero loyalty to you, and soon (ish) you will end up back in the real world with the rest of us.

I will never have a big corporate job. I was offered them. I turned them down. (Then they stopped offering)

Partly I turned them down because I felt like I could/might turn into the people described above, whom I despise.

Partly it was because also I can't work for anyone else, it feels cowardly to me. Why work for the man? (or woman, or person of uncertain gender, I am just being inclusive here)

And I loathe authority, mainly due to delusional arrogance.

All that aside, there's one simple message in this post:

Just because you work for big corporate doesn't mean you are special. You are not.

And pretty soon, or at some point, you'll need friends outside your little corporate cult bubble.

So best remember that, and the basic politeness any good parent would have taught you.

(I am also available for childen's parties, as the late great Bill Hicks once said)

20/05/15 Update: People keep asking me if this is based on anything in particular or if I am having a bad week. Neither is the case, although I appreciate the kind inquiries. Just wanted to make the point really. A large glass of wine did have something to do with it.

Friday, May 15, 2015

Ecomagination's 10th birthday marks GE's progress from polluter to pioneer

Guest post by Mallen Baker, taken from the excellent Business Respect newsletter, here.

On the 10th anniversary of the launch of GE's Ecomagination initiative, it has been a part of the business landscape for such a long time that it would be easy to forget how big a gamble it represented back in 2005.

Before 2001, when Jack Welch had been in charge, GE was one of the most admired companies in the country, led for two decades by one of the most admired leaders.

Welch brought an obsessive focus on speed and efficiency, with the insistence that the company had to be number one or two in each of its markets.

He was known as one of the most successful businessmen of his generation and he retired on a high, with GE riding high in the stock markets and in terms of its performance.

But he had one reputational blemish. His concern for the environment, and for the social impact of his company's operations, seemed somewhat lacking.

Most famously, the company fought hard - with Welch leading the charge - against any acknowledgement that the company had been responsible for polluting the Hudson river with PCBs. Whilst being the tenth anniversary of Ecomagination, it is also only now that GE's ultimate agreement to dredge the Hudson river for PCBs is now coming to an end.

The problem was that Welch was - by all the standards of his peer group - the most fantastically successful CEO. He was revered by many, and remains so. His company made more money than it ever had, and was studied for the lessons it could teach others.

Those who felt that the companies that were careless of their impact on the environment should by all rights be demonstrably less successful than their socially responsible counterparts were constantly frustrated by this shining beacon to the contrary.

Then Jeffrey Immelt took over, and things began to go wrong. Within days of his appointment, the September 11th terrorist attacks hit GE's aviation, power generation and reinsurance businesses hard. Later, with GE Capital providing half of the company's profits, the financial crisis also took a major toll.

As Immelt announced Ecomagination, GE's stock price was in the process of falling way below the level that Welch had taken it. It was a difficult time to be creating a new direction. It could easily have been that Immelt would have been abandoned midstream and his initiatives confined to the corporate scrapheap.

The truth was that Welch had carried on the balancing act for as long as could have realistically been achieved. He got out just in time, his reputation intact but his legacy a difficult one of consequences.

Immelt's strategy - to reduce dependance on financial services and to make environmental sustainability a key part of GE's portfolio for growth - was obviously needed only in retrospect and was never going to deliver results overnight. But the world had changed. GE had to change with it.

Immelt focused on investment in key growth areas for the company - and one of these was clean technology. The brand 'Ecomagination' was created as an umbrella and focus for this work, and concrete targets were set when it was launched in 2005.

The company said it would more than double its research investment in cleaner tech from $700m in 2004 to $1.5bn in 2010. It said it would introduce more clean-tech products annually, doubling its revenues from such products from $10bn at the time of launch to at least $20bn by 2010. It also pledged that, alongside this process, the company would reduce its own greenhouse gas emissions even as its activities grew.

In the event, it exceeded these initial targets and then continued to build on them. The company had made $15bn investment in cleaner tech by 2014, and had generated more than $200bn in revenue from Ecomagination products. It had also reduced its greenhouse gas emissions by 32 percent.

Since the early falls, GE's stock price has gradually been engaged on an upward trajectory - although it still hasn't regained the dizzy heights of the end of the Welch era.

What sort of innovations have come out of Ecomagination? Some of the highlights include:
  • The GEnx aviation engine - the quietest, most energy-efficient engine of its type.
  • Movement Planner software that enables trains to move freight faster and more efficiently on existing rail lines.
  • The ZeeWeed ultrafiltration system for water treatment.

None of these have the public profile of consumer gadgetry, but they are all part of the process of reducing the environmental impact of everyday engineering.

It hasn't been a journey without its controversies. Some of the Ecomagination technologies - such as those to do with clean coal or with fracking - are not considered by some to be that green.

And the fact that Immelt has spent $14 billion on companies aiding oil and gas drillers - with oil and gas accounting for a quarter of the company's industrial revenue in 2014 - has even mainstream commentators questioning whether Immelt's strategy is now outdated in the way that Welch's was before him.

Whilst Ecomagination has proven, over its ten years, to be a highly successful branding and consolidation exercise, raising the profile of GE as a generator of solutions for the sustainable age, it has arguably been an incremental change on the old model, rather than a revolution.

Perhaps we have been spoilt by certain consumer-facing companies, such as Unilever, more radically setting the bar to change their business model. But at the same time, it is impossible to underestimate just how much Immelt's actions at GE changed the mood music for what was expected of the major corporation in the 21st century.

Certainly today, the idea has gained considerable currency that - not only can a successful business achieve that success whilst being at ease with the planet, but perhaps that is much more than ever a precondition for such success.

Click to enlarge below.

 Upcoming relevant, PowerPoint free, discussion-based business meetings from Innovation Forum:

(if you read all the above, these are where you can meet fellow executives from companies working on all these issues)

Does ethics have an image problem?

Yes, argues Katherine Bradshaw of the Institute of Business Ethics. She offers some solutions in this guest post.

This week’s results of EY’s 2015 Europe, Middle East, India and Africa (EMEIA) Fraud Survey show that while nearly half of UK survey respondents said regulation in their sector had increased, only 15% said this had resulted in an improvement in corporate ethics.

Less than a third of UK respondents rated their own company’s ethical standards as ‘very good’, showing the disconnect between regulation and business behaviour.

If regulation doesn’t work, how do you create and maintain a strong ethical culture?

The language of compliance, of punishment and mistrust isn’t working.

Stories about ethics focus on bad apples, fraudulent employees intent on misconduct. But the reality is that the majority of employees want to do their best for their organisation.

Ethics is personal. Just as everybody thinks they have a good sense of humour, so everybody thinks they are ethical.

That’s why it can be a challenge for companies to communicate to employees what they mean by ‘doing business ethically’.

Sometimes, unethical behaviour may be so ingrained into a company’s culture as to be considered ‘the way business is done around here’, and so may not be considered unethical at all.

Talking about ethics can raise different emotions in people: they might be offended (“How dare you? I have been working here for years; no one has ever suggested I was anything but ethical!”) or too busy (“I don’t have time! I’ve got real work to do.”) or just don’t care (“Whatever.”)

Ethics has an image problem – it’s seen as being about misconduct, corruption, black and white, bad behaviour, but it is more than that.

By the coffee machine, in the staff room, at the away day, you will often hear people talking about ethical issues without even realising it; issues of fairness or trust, conflicts, and dilemmas.  Employees communicate about ethics, regardless of any communication programme.

Communicating ethical values is not as simple as informing employees about regulations, facts, figures and procedures and checking they are compliant.

Ethics goes beyond compliance and springs from intrinsic values – like honesty, fairness, openness - that underpin behaviour. That’s why discussions about ethics must start with concepts that touch employees’ sense of self.

The very reason why values are the key to ethical behaviour – the fact that everyone has values and values inform everyone’s behaviour – is also the reason why ethics can be difficult to pin down.

To change behaviour, messages about ethics not only need to be understood intellectually, they need to be part of the organisation emotionally.

To create a culture of ‘doing the right thing’, we must reframe messages about behaviour.
Stories define who we are, what we do, and why and how we do it.

Company culture develops from the stories we tell each other.

So the stories we tell should cast employees as the heroes. We should celebrate the guardians of the company’s ethical culture. Employees are the protectors of its reputation. They need support, not regulation, to help them do the right thing.

Communicating Ethical Values Internally: an IBE Good Practice Guide is available here.

 Upcoming relevant, PowerPoint free, discussion-based business meetings from Innovation Forum:

(if you read all the above, these are where you can meet fellow executives from companies working on all these issues)

Thursday, May 14, 2015

Summary presentation of "No Deforestation" progress, challenges and opportunities for companies

This morning I gave a presentation to the Quebec Forestry association about 'No Deforestation' commitments by companies.

I tried to look at the drivers, the companies, the NGOs, the responses, challenges and opportunities.

It's very visually oriented and took me about two days to put together.

I hope readers find it of some use. Here's the link.

Wednesday, May 13, 2015

Some difficult questions for Unilever about sustainable growth - and some answers

 So last week Unilever said it was revealing "growing evidence that integrating sustainability into its business is driving growth, cost efficiency and resilience for the future."

They sent me the below highlights. Which sound very good.

I had a few questions, which you can find underneath the headline results just below, and the responses from Unilever.

Their headlines:

·         Many of Unilever’s brands that have led the way on sustainable living (including Dove, Lifebuoy, Ben & Jerry’s and Comfort) are achieving above average growth, with high single and double digit sales over the past three years.

·         These brands accounted for half the company’s growth in 2014 and grew twice as fast as its other brands.

·         Within the Company’s supply chain, there is promising progress with more than 55% of agricultural raw materials now sustainably sourced, reducing the risk to supply - more than half way to its 2020 target of 100%.

·         Unilever has achieved its target of zero non-hazardous waste to landfill across its factory network, and is making significant reductions in CO2 from energy and water in manufacturing, reducing them by 37% and 32% per tonne of production respectively since 2008.

·         Unilever has made cumulative cost avoidance of over €400m through eco-efficiency measures in its factories since 2008.

·         In addition to this, last year (2014) Unilever made over €200m of savings through manufacturing, logistics, material efficiencies and research and development which can be attributed to the Unilever Sustainable Living Plan.

·         Unilever confirms that it is on track to meet most of the Unilever Sustainable Living Plan goals, which they set in 2010 – as it looks to decouple its environmental footprint from its underlying sales growth and increase its positive social impact.

My questions and their responses:

1) How do you link sustainability with brand growth? Can that really be done?

"Research by Havas Media shows that meaningful brands outperform the stock market by 120%.

From our side, we have found that our brands with purpose – our ‘sustainable living brands’ – which include Dove, Lifebuoy, Ben & Jerry’s and Comfort – are achieving above average growth, with high single and double digit sales over the past three year - and accounted for half of Unilever’s growth in 2014.

Here are some examples of how sustainability has driven brand growth:

·       Dove continued to grow strongly in 2014, with its Self-Esteem Project contributing to its performance.
·       Lifebuoy has enjoyed four years of sequential double-digit sales growth.
·       Moving to sustainably sourced tomatoes has helped propel Kissan tomato ketchup to #1 in its category in India.
·       Domestos has led our efforts on sanitation in partnership with UNICEF, supporting the Community Approaches to Total Sanitation (CATS) programme which aims to eliminate open defecation through behaviour change and increased access to sanitation. Domestos sales continue to grow strongly and were up 7.3% in 2014.

2) How do you convince investors of this link?

Investors are increasingly aware of the risks and opportunities of steering businesses successfully in a world where resources are finite and where interdependencies are complex and unpredictable.

Research shows that the market and consumers are moving this way too – and being at the leading edge places us at an advantage in learning how to build on this for future growth.

Nielsen studies have shown that 55% of consumers said they were prepared to pay more for ethical brands.

We also know that millennials (21-34s) are twice as responsive to sustainability credentials as 35-49 year olds and four times more than 50-64 year olds. Companies that do the right thing and that plan for the long term will be rewarded.

3) With regard to agricultural raw materials, where’s the most success, and where are the challenges, in terms of specific commodities?

More than 55% of our agricultural raw materials are now sustainably sourced, reducing the risk to supply. This means we are now more than half way to our 2020 target of 100%.

To achieve that, we need to drive change to entire systems. We are focusing on key commodities such as tea and palm oil where we have the most influence.

Soy, fruits and dairy have been areas of success over the last year.  For example in North America, we have promoted sustainable soy by working in partnership with Field to Market, our supplier ADM and ADM’s farmers, the Iowa Soybean Association and WWF.

We expanded from our first pilot of 44,000 acres in 2013 to 160,000 acres in 2014 to create a supply of sustainable soy for Hellmann’s.

We were also the first company to make a commitment to sustainable soy in Latin America and are being recognised for these efforts.

For example, Hellmann’s has been commended by Walmart in Brazil for its commitment to sustainable soy as part of Walmart’s Sustainability End to End programme.

The commodities that have been particularly challenging are sugar and palm. For sugar, the challenges are around industry alliances for two feedstocks - beet sugar and cane sugar.

We are always working towards a common and pre-competitive sustainable sourcing approach.

In cane this exists through Bonsucro, and in beet this has resulted in the implementation of the Farm Sustainability Assessment, developed through the SAI Platform, which the European sugar industry has embraced and is starting to use. This represents a significant step forward.

On palm, our vision is that, by 2020, we will achieve a transformation of the palm oil market so that the entire industry will move to 100 percent sustainable palm oil.

We have made good progress towards our own targets – all of the palm oil directly sourced for our European food business is now traceable to certified plantations - but we cannot end deforestation by ourselves. We need governments, business and the entire industry on board to drive this system-wide change.

We are pleased to see organisations working together – for example the Consumer Goods Forum whose members (including Unilever) have committed to helping achieve zero net deforestation associated with four commodities: palm oil, soy, paper and board and beef by 2020.

We have since extended this commitment to our tea businesses and supply chains. We are also a signatory of the New York Declaration on Forests, which saw over 170 organisations come together at the UN Climate Summit to pledge to halve deforestation by 2020, end it by 2030 and restore 350 million hectares of degraded land.

4) Does Unilever believe the RSPO can remain credible in the face of so many challenges from influential NGOs? What is your role in reforming it?

We will continue to support RSPO certification. As part of our drive to transform the palm oil industry, Unilever will continue to call for a commitment to NO new developments on peat areas, regardless of depth or extent and zero net emissions from land use change.

We recognise that the RSPO needs to be strengthened and we are very committed to working with the other members to make necessary changes. 18% of global production is currently RSPO certified; this is just over 12 million tonnes. RSPO members have the potential to increase this production to 40% of total production volume.

We believe that a profitable and sustainable palm oil sector must achieve the right balance of social, environmental and economic objectives. This is a shared responsibility between governments, the private sector and civil society. This is why we are working with industry leaders and NGOs, to move towards a collaborative solution."

 Upcoming relevant, PowerPoint free, discussion-based business meetings from Innovation Forum:

(if you read all the above, these are where you can meet fellow executives from companies working on all these issues)

Tuesday, May 12, 2015

NGO 'accountability', or at least performance, under the microscope

NGO accountability is a dance as old as time itself (a phrase used regularly, at least the last part, on the excellent Bugle podcast)

Accountability as a word is a bit like transparency.

Unless we get really quite specific it's hard to know what it can actually mean that's any use.

And now there seems (I say seems, who knows, we have kind of been here before) to be a reasonably well-funded effort to try to work out how to measure or at least consider how to measure, NGOs.

As Marc Gunther reports:

"The encouraging news is that efforts are underway by big foundations and independent evaluators to better judge the effectiveness of all nonprofits, including green groups.
Among the leaders in this movement is GuideStar, which harbors ambitions to become a Bloomberg-like information portal about nonprofits, to enable smarter decision-making by donors and NGOs alike. The Bill and Melinda Gates Foundation last year pledged $3 million to help GuideStar bulk up its offerings.
Jacob Harold, the 37-year-old president and CEO of GuideStar, is in the thick of the conversation about nonprofit performance. A Stanford MBA, Harold worked as a climate change campaigner for Rainforest Action Network and as a grant-maker focusing on effective philanthropy at the William and Flora Hewlett Foundation, so he’s thought a lot about how to measure the impact of environmental groups.
It doesn’t make sense, he says, to try to devise a single metric or set of metrics to compare all green groups. But it might be possible to come up with ways to compare organizations within focus areas such as conservation, education, research or advocacy."
It all looks like a worth-while and interesting project. 
But there is a bit of a problem here. 
Firstly, comparing say, Greenpeace and WWF, is about as useful as trying to compare Shell and BP. 
That is to say, almost no use at all. Organisations are best compared to their own past performance than with mis-matched peers who operate in very different circumstances for the most part. 
Secondly, no matter what some measurement NGO or rating system says, if campaigners or other NGOs can show performance to supporters and deliver results with companies, that's where they will see their mandate coming from, not some scoring system. 
I can see elements of this being useful for foundation committees to consider donations in really specific areas, particularly around 'partnership' / implementation NGOs, but I can't see it being any use with campaign groups. Still, it's likely worth keeping an eye on. 
Bill Gates has put money in, and he does get things done, like him or not. 

A brilliant essay on the road to corporate commitments to Deforestation-Free supply chains

Frances Seymour recently gave a superb opening speech to our No deforestation conference in Washington, D.C.

Here's a bullet point summary of some key points from that event.

With her colleagues at the Centre for Global Development she's now written it up as a short essay.

It's really something you should read if you care about forests, and good story telling.

Here's a bit about it:

"The essay addresses the challenges likely to be faced by corporations and non-governmental organizations as they collaborate to implement recent commitments to deforestation-free commodity supply chains. The essay takes as its inspiration and a source of lessons learned Theodore Roosevelt’s 1913-14 expedition to explore the River of Doubt, a tributary of the Amazon river in Brazil".

Here's the HTML version and here's a one click link to a PDF.

Or, you could not read it, and waste time looking at your phone for the 150th time today or deleting largely pointless emails and learning much less.

Your call*.

(*Passive/aggressive blogging, is this a new genre?)

We'll be debating this whole No Deforestation area with 40 leading brands, NGOs, suppliers, traders, farmers and others in Singapore on September 28-29. Email Charlenne.Ordonez@innovation-forum.co.uk if you'd like to be involved in the conference. 

The Sustainable Sugar Forum (London, 16-17 June) will also look to assess the growing demand for sustainable sugar and how companies can build sugar supply chains that are ethical, resilient and secure from environmental pressures.
Speakers etc from the International Sugar Organisation, Bonsucro, SABMiller, Nordzucker, the International Finance Corporation, Mars, Shell, ED&F Man, AB Sugar, Fairtrade Foundation, ASR-Tate & Lyle, Cristal Union, Suiker Unie and Sainsbury’s.

You can see the full event details of speakers and agenda here.

How large companies measure and value sustainability

Dear blog readers, 

Innovation Forum has organised a complimentary webinar on ‘how big business measures and values sustainability’ that I would like to invite you to join.

On the panel we have senior executives from BT, Interserve, Tullow Oil, and Aberdeen Asset Management. 

It’s free to join in. You can sign up here

The discussion is focused on how businesses from different sectors are prioritising their CSR valuation.

The speakers will address such questions as: 

- how are businesses defining relevant value at the moment?
- what are their key priorities in valuation this year?
- what do investors want to hear from corporates?

The webinar discussion is an hour and will take place on 19th May, 14.00-15.00 BST/15.00 – 16.00 CET.

If you can't listen to the webinar at this time, we are sending recordings to everyone that signs up. 

Once again, you can register for the webinar here 

I hope you can join. 

Any questions just email or call my colleague Natasha:

Natasha Bodnar
Innovation Forum
Events and Insight for Sustainability
+44 (0) 203 780 7432

Monday, May 11, 2015

What is sustainable business innovation? (free presentation)

Here's a link to a presentation embedded also below on "What is sustainable business innovation?"

It's an impossible question to answer given all the definitions (see slides for that) but I've given it a try using practical examples of product, service, process and strategy innovation, such as they are.

Look forward to any comments as usual.

Circular economy and finance industry – what’s the connection?

IF recently held a webinar on the circular economy and the role that the financial industry can play in the movement. 

We wanted to ask the following questions:

• Circular economy is about material products, modern finance is immaterial, what relation is their between the circularity movement in business and the financial industry? 

• Is there a commercial incentive for financial businesses, such as banks for example, to engage with a company looking to transition to a circular business model? 

• Practically speaking, how will it change what financial institutions offer their clients? 

Speakers include: 

• Richard Kooloos, head of sustainable banking, ABN AMRO 
• Gert-Jan Sikking, ‎managing director, innovation institutional business, PGGM 
• Gerald Naber, ‎vice president sustainable lending, ING

You can listen to it here. And below of course.