Sustainability Strategy Implementation
Read Time: 5 Minutes
An increasing number of companies now recognize that their customers and clients expect them to deliver their goods and services in a sustainable manner. Investors may be aligned with these efforts, as long as the policies support the company’s economic growth. To learn more about how companies can implement sustainability practices in their organization, GLG hosted a teleconference with Kathrin Winkler, former Chief Sustainability Officer of EMC Corporation. This is a condensed and edited version of that event.
There are a lot of terms around this topic: “sustainability,” “corporate social responsibility” (CSR), and “environment, social, and governance” (ESG). From your perspective, are there any differences between these things and, if so, what are they?
That’s a tough question because people do see it differently. When you’re speaking to someone about sustainability, ESG, or CSR, it’s important to ask them what scope they are talking about. I tend to use “sustainability” and “ESG” interchangeably and avoid the term “CSR.” When I was at EMC, sustainability meant everything having to do with the interface between our business — its entire value chain — and society and the planet. So it was everything. But for many companies, sustainability is environmental sustainability, which means focusing on environmental issues. CSR, with the word “responsibility,” could also mean the “whole ball of wax,” meaning that the company has obligations to the communities around it.
Some companies have a sustainability team and a CSR team. Personally, I think that’s wrong. Environmental and social issues cannot be stovepiped. I think they’re deeply intertwined. Environmental, social, and financial things are a three-legged stool. You can’t move one of those things unless you’re considering the implications for the other. Look at climate change. It was pigeonholed as an environmental issue, right? But climate change is very much a human issue. It’s important to bring them together. So these terms mean different things to different people.
“ESG” is an interesting term. It’s taken over. It came out of the investment community, which looks at the implications of environmental, social, and governance issues on the business, not necessarily the business’s impact on those things. But we have adopted the phrase to encompass both business as a system that’s affected and business as an element that’s affecting larger systems. So you’ve got to investigate the usage. As for me, both sustainability and ESG meant the whole thing.
Could you describe how B2B and B2C sustainability efforts differ?
There are differences. It’s difficult to understand what customers want and what they do. They are not always the same thing. B2B companies — like the one I worked for — are directly driven by their customers. We received direct input from our customers about what we were doing and their expectations for the kind of products we were delivering. The supply chain is a strong driver for company actions. We have a better understanding of what customers are looking for because there’s a customer at the end of that. Essentially, the drivers are different, but ultimately the issues are the same.
Can you discuss how to ensure that sustainability is embedded within your company’s operating model?
I could be a little bit richer than I am with a good answer to that question. But simply put, you need to engage the board. To really integrate sustainability initiatives, you need top-down and bottom-up. But when you have bottom-up, grassroots interest in sustainability, and top-down goals, the middle manager is caught in between. I’ve heard it referred to as “just another expletive-deleted unfunded corporate mandate.” When the top-down says, “You must do this,” but you’re not measured accordingly, it’s hard to move the needle. For things to take effect, you need incentives for senior management, middle management, and employees.
When I took over sustainability at EMC, they had already set a goal for energy per employee and wanted that to become an incentive for all employees. But the way we were laid out, we had multiple businesses in the same places, and the majority of our energy use was from our labs. Most employees had no control over that. It’s important that people feel empowered and have agency, so there need to be incentives that support them. That means driving board engagement, which is difficult.
If you are in a sustainability strategy role, you can ask to meet and present to the board. You’d be surprised about how responsive the board can be. We had an annual stakeholder meeting where we brought in NGOs and people related to our most material issues to give us input on our strategy. After solving some timing issues, we had the richest conversation, and it created a greater commitment from the board and a motivation from the top to embed sustainability initiatives in the company.
Should a sustainability officer be a sustainability expert, or someone from the industry in question?
Well, I’m biased, having come from product management, which meant understanding the business from end to end. I believe that’s why I landed and was successful in sustainability. It meant having an internal network. I knew people from many disparate groups. So, bringing together different divisions to achieve a broader goal was much easier when you have a preexisting relationship and can speak their language.
That said, I am seeing an increasing number of people who understand sustainability. But it’s not really about understanding the issues. You can learn that. You really need to understand where the pitfalls are and how to identify the risks. It’s a change management role. And most of the people I see going into a senior role from outside the industry are doing it from a senior role they took inside their industry.
Certainly, bringing in people with experience in climate expertise makes a ton of sense, so it’s a little mix-and-match. If you come from a different industry, you need a strong staff that understands their industry, and you need to trust them. When I came to EMS, I didn’t know much about storage, but I had a very senior product manager who knew the business. I would have never made it to the role of CSO if it weren’t for him.
This article is adapted from the GLG Teleconference “Sustainability Strategies.” If you would like access to the transcript for this event or would like to speak with experts like Kathrin Winkler or any of our approximately 1 million industry experts, contact us.
About Kathrin Winkler
Kathrin Winkler is the former Chief Sustainability Officer at EMC Corporation (now Dell EMC). Having retired in 2016, she is currently an advisory consultant to corporations on ESG strategy and implementation, and as an Editor-at-Large, she writes columns for GreenBiz.com. Before assuming her role as Vice President and CSO in 2008, Kathrin was EMC’s Senior Director of Product Management for Storage Platform Operations, leading the consolidation of hardware strategies across product lines. Kathrin sits on the boards of the Global Electronics Council and ClimateVoice, having previously served on the boards of several nonprofit organizations, including Net Impact and the American Council for an Energy-Efficient Economy (ACEEE).
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