Green strategies prove slow to mature

11 October 2012

NEW YORK: Major brand owners around the world are taking a varied approach to developing and implementing sustainability strategies, with many firms still building a business case for this activity.

PricewaterhouseCoopers, the advisory group, polled 25 executives, 23 of which worked on eco-friendly schemes and strategy, while 15 led corporate social responsibility efforts, eight focused on environmental health and safety and six pursued philanthropy.

"I don't think the agenda is too big. I think we'll look back in three or four years time and ask why we have been so timid," Gavin Neath, SVP for sustainability at Unilever, the FMCG manufacturer, said.

Some 22 firms had a board committee dealing with this issue. A further 18 boasted executive sustainability councils, alongside 14 with "green teams" and 11 that had appointed an external advisory council of experts.

"Sustainability has gone from a 'nice to have' to a key business driver. This means that the sustainability team has to sharpen their knowledge of the rest of the business and stay very relevant to the business," said Megan Hellstedt, director of corporate responsibility at Delhaize, the retailer.

However, only two participants reported straight to their CEO. Another seven came under the remit of public affairs, corporate relations or communications teams, and four reported to R&D and strategy units.

"As long as the position is endorsed and sponsored by key executives, it can be located in many places," said Rob Bernard, chief environmental strategist at Microsoft, the IT giant.

Neil Hawkins, a VP at Dow Chemicals, added that insider knowledge was vital. "Someone who hasn't worked in this company for long really couldn't do this job. It requires an insider's viewpoint because our culture is so relationship and network-driven," he said.

Respondents spent 32% of their time engaging internal stakeholders. "We have over 100 CEOs ... so it's critical for us to learn to make the business case for sustainability in a multitude of ways," said Shira Teperow, director, global energy initiative, at News Corp, the media owner.

Developing strategy posted 28% on this metric, while external engagement took up 21% of the average participants' time. Core business operations, like supporting new product creation, logged 19%.

"The best advice I received was: ‘You should be on every investor call and read every earnings report. They need to know that you're a business leader first, and that you're advancing sustainability second," Bob Langert, McDonald's, the fast food chain, said.

The areas in which sustainability executives are likely to play a more profound future role include enhancing the financial case for their actions, working on operational improvements and forging external partnerships, marking a move from strategy to execution.

"Sustainability executives are too busy trying to convert their company, when they should be trying to integrate. If you try to convert, the value executives see will be reputational, not strategic," said Mitch Jackson, a VP at FedEx, the delivery specialist.

Data sourced from PricewaterhouseCoopers; additional content by Warc staff