As alluded to in the BSR conference theme: “Reset Economy. Reset World.”, we’ve entered a brief period where business and society is re-examining core assumptions about how we live and work. There’s a realization that the concept of sustainability is vital and relevant, and that sustainability integration is a business imperative fundamental to innovation, profitability, and ultimate long-term survival.

But it’s not as easy as pressing a reset button (there is no sustainability CTRL-ALT-DELETE key sequence!) In a sense, what we’re talking about is systems redesign. Embedding sustainability is very difficult, not least because of the fundamental culture change that accompanies efforts to integrate and operationalize sustainable business practices. Join that with barriers to implementation ranging from existing political frameworks, lack of scale, and an entrenched system of investor valuation that excludes most social and environmental factors, and the true nature of the challenge becomes apparent.

The BSR conference reflected these hard truths, mirroring in the choice of conference topics what we as sustainability practitioners need to do to move forward. Namely, to

• engage in transparent and collaborative learning and problem-solving,
• create openness for new models and approaches, and
• incorporate a multitude of views, voices, and experiences along the way.

We’ve moved past the early stages where the “low-hanging fruit” in terms of sustainability theory and practice has been harvested. In large part, we know what has to be done—and we know that it will take sustained and considerable effort to achieve systems redesign. Perhaps Ben Verwaayen, CEO of Alcatel-Lucent said it best in his closing plenary (@ 4:09) : “CEO involvement is YOUR measure of success”.  Let’s make it happen.

The Business for Social Responsibility (BSR) conference in San Francisco is in full swing today, and the opening plenary yielded some early insights as to the shape of the event.

Aron Cramer, President and CEO of BSR, highlighted three areas critical for both business and planetary survival in a reset world:

• Innovation
• System redesign (with the first test of whether we can adequately reshape global systems to be determined in Copenhagen in just a few short weeks)
• Leveraging the power of networks

Ernst Ligteringen, Chief Executive of the Global Reporting Initiative, added his own thoughts on the challenge of reshaping systems and economies. He stated that creating a business case for action can be very difficult, as it requires that we justify a transition to a new economy based on current economic fundamentals… something akin to trying to explain quantum physics using Newtonian principles.

Finally, an audience member highlighted the fact that over the past several decades, we have been using what was abundant (natural resources) while trying to squeeze maximum productivity from sometimes limited manpower. With the world population exploding to 9 billion in this century, the equation is reversed, creating another opportunity for systemic change in how we approach resource use and the concept of gainful employment.

Social Media and Sustainability Oct 2009 Newsletter

Everywhere we turn, the term “social media” seems to dominate the sustainability conversation. This month, we take a deeper dive into this evolving world to find out whether those hours spent blogging, tweeting, responding to posts, virtual-networking, and otherwise sharing your company’s content and opinions with the world are time well spent.

Special thanks to our guest editor, Averill Doering, a brand and social media strategist specializing in sustainability communications and the Founder of Cause Communication Strategies, for her contributions to this newsletter!

Social media can be a powerful tool to help companies better understand stakeholder interests, needs, and concerns—and thus to drive shifts in business practice which create lasting economic, environmental and social value.

Social media effectively pulls back the curtain of traditional sustainability communications to reveal not only what has been or is being accomplished, but who is involved in the process, how programs are implemented and ultimately why sustainability decisions are made in the first place.

Social media communications value chain

The powerful effects of social media stem from a few defining characteristics:

• Credibility—Social media communities are built on a common understanding that contributions are authentic, personal perspectives without veiled motivation.
• Relevance—Tools to search, sort, rank, and feed enable users and marketers to access content and follow people that are of personal interest and relevance.
• Engagement—Information is often casual in tone and manner, incorporates audio and video, and is delivered in small bits which are easy to process and share.
• Interactivity—Individuals are no longer simply message receivers.  They can add personal opinions, observations, and information to the discussion, thereby increasing their sense of ownership and value within the community.

By keeping these characteristics in mind and understanding the core tenets of social media engagement, companies can greatly increase the ROI on their sustainability strategy setting and communications efforts.

On October 8, 2009, I had the opportunity to attend the Green Effect awards, an event showcasing winners of the sustainability-focused, social media competition sponsored by National Geographic and SunChips.  

With winners selected by online voters and a panel of judges, the contest awarded five $20,000 grants to consumers with innovative ideas for how to green their communities.

Following the ceremony I spoke with Gannon Jones, Vice President of Marketing at Frito Lay, about Green Effect and the natural synergies between social media and sustainability.  

Gannon emphasized the importance of consumer engagement for driving change in and outside of the organization and reiterated the inspiration behind the contest. “When the SunChips brand first started its sustainability journey, we discovered that there are so many innovative ideas out there which can have a positive impact on the planet. While we’re very proud of the steps we’ve taken, we believe that mobilizing people to take their own steps can create big change.”

He went on to describe that when companies enter into the sustainability conversation online they are engaging with a very passionate audience. So, while it’s possible for the SunChips team to go in and talk about its energy efficient factories, Gannon recognizes that that’s not immediately relevant for many consumers.  Instead, the strategy is to provide consumers with the occasion and resources to express and activate their own passions and to let them discover the Frito Lay sustainability story in the process.  “It’s all very connected,” Gannon concludes, “and consumers are quick to come to our site and check out what we’re doing.”

But the brand value doesn’t stop with simply drawing entrants and online voters to the Frito Lay story.  Each of the five winning groups, in activating their ideas locally, creates a multiplier effect and continues to share this message with their networks.  One of the winners, Carbon Free DC, which started as a meetup group, used a range of social media tools (including their own blog, blogger outreach, Facebook and Twitter) in successfully engaging green minded and socially concerned residents and businesses in their Green Effect project.  At nearly every touchpoint National Geographic and Frito Lay were mentioned as sponsors.  In this way CarbonFreeDC and its 832 members become active messengers for the brand.

Another interesting component of Frito Lay’s strategy for Green Effect was that Gannon was not the main face of the company during the online contest or the awards event.  Instead, the Frito Lay story was told by operations and productivity leader, Dave Haft.  This approach effectively grounded the lighter, consumer outreach campaign with technical facts about manufacturing processes, resource use and packaging.

While the Frito Lay, Green Effect contest offers much insight, there will undoubtedly be more innovation to come. We look forward to hearing from you about your own social media successes!

I sat on a panel at a NIRI chapter meeting on Thursday with Don Kirshbaum, Investment Officer, Policy, at the Connecticut State Treasurer’s Office and Julie Gottlieb, who led the launch of Lenovo’s sustainability program and first report. The discussion was lively: several of the IROs in the room noted that they had never been asked about ESG risk, and one asked whether there had been any studies regarding performance of companies that focus on ESG performance. Happily, I was able to point to SAM’s long-short portfolio (long sustainability leaders, short sustainability laggards), which shows significant outperformance compared with each group; HIP Investor’s HIP 100 Index^SM, which, since 2004, has outperformed the S&P100; and a chart showing the DJSI solidly outperforming both the S&P500 and the DJIA even in this recession.

After the discussion, I was thinking, why are we still having this conversation? How it is that, in this day and age, and despite ample evidence, so many companies still don’t get that sound ESG performance can drive financial performance?

At the risk of oversimplifying, I think that the silo effect is a big factor. The folks in IR don’t talk much to the folks in sales, who, increasingly, have to respond to RFPs seeking information on ESG performance. (Note to federal contractors, if you’re not already getting those questions, get ready: On October 5, as part of a broader executive order, the White House ordered all federal agencies to employ sustainability criteria in the procurement of goods and services (see Section 2(h)). And when the federal government chooses a more sustainable option, it’s not likely to give the losing bidder a call to explain why.)

Yet with more than 11% of all US assets held by firms employing SRI strategies, and with well-respected business journals such as the HBR and the MIT Sloan Management Review extolling the benefits of sustainability as a key driver of innovation (and, ergo, financial performance), there’s no excuse for companies not to get what this sustainability thing is all about.

But some still don’t want to get it. I recently heard one company’s management respond thus to an investor request for greater disclosure of ESG performance: they don’t have to invest in us.

It’s true, they don’t. And increasingly, they won’t.

L’Oréal 2008 Sustainable Development Report Review PDF

The 2009 Women’s Network for a Sustainable Future Summit, held yesterday in New York City, ended with a bang!

Michelle Moore, the Obama Administration’s Federal Environmental Executive, announced the October 5 signing of an Executive Order
Focused on Federal Leadership in Environmental, Energy, and Economic Performance. The order is sweeping: all federal agencies must set greenhouse gas emissions reductions goals within 90 days and meet a series of energy, water, and waste reduction targets. And by the way, the Office of Management and Budget (OMB) will be keeping track of agencies’ progress… and posting the results as public report cards.

It’s no wonder that Ms. Moore was fairly bouncing with excitement–this is BIG news, precisely because the government is so big: $500B in purchasing power, 1.8 civilian employees, 500,000 buildings, 600,000 vehicles. By taking those things that federal agencies have in abundance (people, purchasing power, products, etc),  integrating them with a sustainability-driven agenda, and tracking results, the United States is finally stepping up in a big way.

Beyond the environmental effects of this order, what I also expect to see is BIG savings over the long run. The environmental targets federal agencies must now meet are very similar to ones set by progressive businesses who realize that any waste of resources, water, or energy is really a waste of money. If OMB can report back not only on agencies’ progress towards targets, but ROI and cost savings, what a great message that would be: good for the environment, good for the economy…  and good for taxpayers, too. I can’t wait!