Aim, Ready, Fire: Creative Disruption at Ceres Conference

The annual Ceres conference can often be described more by numbers than words. Big numbers like ten trillion -- that's the dollar value of assets under management by a Ceres-coordinated alliance of institutional investors and financial firms. Or ambitious numbers like 60 to 90 percent -- the long-term reductions in greenhouse gas emissions below 1990 levels by 2050 as advocated by Ceres and many of its investor, NGO, and business partners.

There were other big numbers enumerated at this year's event, held last week in Boston, especially by executives at major corporations. There were time scales of 18 months and forty years, direct investments of billions of dollars, distances of three yards (and a cloud of dust), and equivalents of 54 million tons. While most of these numbers were associated with establishing goals, the way in which they were arrived at is very different from what we expect from corporate leaders.

Call it the new unreasonableness as companies set targets before the means to meet them is really understood. Several executives called for businesses to be the great disruptors. Whether shareholders and NGOs accept this trend is yet to be seen.

Consume to Live or Live to Consume

In his conference opening address, SC Johnson CEO Fisk Johnson noted that as the world closes in on seven billion people, maintaining the current rate of consumption would cause us to start running out of resources in forty years. Comparing the incremental approaches taken so far in dealing with environmental issues to the apocryphal frog in boiling water, he called for disruptive step change -- change by businesses as well as consumers -- to get the frog to jump out of the pot.

The changes called for by Johnson are disruptive because they involve changing what is valued in the products and services we buy. Tossing rolls of toilet paper into the audience (and calling out the names of the manufacturers), Johnson explained how our desire for softness leads to the destruction of boreal forests as shorter recycled fibers cannot produce the same cushy feel as the longer fibers from old growth trees. He doesn't blame consumers; rather he believes it's the role of business to help them change. "We need to change the culture of consumption in this country. You can't make an environmental choice if you don't know there is one."

To help consumers as well as their design engineers understand their choices, the company has created the Greenlist, a program used to classify ingredients considered for use in products by their impact on the environment and human health. While this has helped SC Johnson reduce toxic and other problematic ingredients from their products, it can also have a negative impact on the company. Mr. Johnson noted that their effort to eliminate chlorine from Saran Wrap has resulted in a less competitive product that may soon be phased out.

While Johnson called on businesses to change, he knows the bigger challenge is getting consumers and governments to join the disruption. "Instead of keeping up with the Joneses," he called for changing the culture of consumption in America so that we're focused on "being greener than the Joneses."

Three Yards and a Cloud of Innovation

Other corporate disruptors spoke at Ceres as well, perhaps most notably during the workshop on business model innovation. Moore's Law, the observation that the number of transistors that could be placed on a computer chip will double every eighteen months, was invoked by several of the panelists, including one from General Electric, who referred to it while describing his company's investing strategy.