Last week's
ECO:nomics Conference, the Wall Street Journal's first gathering dedicated solely to the topic of sustainability, offered a snapshot of what may be a pivotal moment in time. One after another, CEOs of industry-leading global companies repeated the fact that CO2, waste, and the environmental and physical constraints of the planet are very real issues and absolutely critical concerns for business.
The roster of corporate leaders at the conference -- which included heads of General Electric, Wal-Mart, Duke Energy, Dow Chemical, Archer Daniels Midland and many more -- clearly articulated the pressing reality of eco-concerns and the imperative for business. The speakers offered a clear commitment to rapidly address energy use (appropriate enough, given it was the conference's focus), but also other challenges that could be more broadly framed in the context of triple bottom line sustainability, and to accelerate change by identifying new technologies and resources, developing new ideas, working with new partners to share information and offering incentives.
Throughout the presentations by the invited speakers and the subsequent Q&A sessions with members of the audience, the overarching message seemed to hold true: corporations and their leaders are taking environmental concerns very seriously, they are committed to making change and are actively exploring ways to respond.
Jeffrey Immelt, CEO of GE, couched his commitment in the context of fiduciary responsibility to his shareholders: "It's about getting ahead of risk," he explained. Placing these new environmental challenges squarely within the realm of the primary levers of corporate financial effectiveness -- risk mitigation, revenue generation and cost reduction -- highlights the ways that CO2, energy access and energy costs have become fundamental concerns for business. In addition, successfully addressing these issues can mean a major windfall for a company: GE, for example, sold $10 billion of wind turbines last year.
At the same time, these gains are not necessarily coming back to the U.S. Andrew Liveris, the head of Dow Chemical, commented that the company has made capital investments of around $60 billion outside of the U.S. last year because this country's energy policy -- or lack thereof -- makes it difficult for businesses to accurately gauge the economic impacts of these investment decisions. Immelt reinforced this message, stating that the United States could have a competitive edge if we don't put our "heads in the sand."
The consistency of the message from these CEOs was so clear and undisputed that the carbon-oriented interviews sounded repetitive by noon on the first day, and audience members began raising questions about topics not on the agenda. Water was a subject mentioned a number of times, as was global political stability, another major risk factor for big businesses operating in a global economy.
Unfortunately neglected throughout the conference, the business realities of implementing significant changes in business practices rarely came up among the interviewers' questions. But Wal-Mart CEO Lee Scott was among the few leaders who gave us a glimpse of the issues, when he spoke of the challenges of consumer education at the point of purchase. Scott also advocated using pricing (and taking lower margins) to help customers make sustainable choices.
Jim Rogers, the head of Duke Energy, opened his talk by commenting that with an issue of this magnitude, we have to address it with optimism and confidence about our ability to solve it. And the urgent need to solve these problems was driven home by Christophe de Margerie, CEO of Total, who argued that his assessment of the impact of peak oil was even more dire than the recently worsened estimates provided by Cambridge Energy Research Associates, a leading advisor to international energy companies.
De Margerie spoke candidly and advised other CEOs to take the risk of being exposed to those who do not agree. He said it is the right thing to do, and that companies should be really clear on what is doable and what is not, and what is doable at what cost and how it will be managed. He also advocated accountability for "full cycle" impact (taking into account the entire lifecycle of products, from manufacturing to disposal), and advised CEOs to explain the "real debate," arguing that using the term "clean energy" is misleading, when the debate is not about clean or not clean, but about the real implications of the various alternatives to fossil fuels.
De Margerie provided a fitting summation in his talk: he advocated being optimistic about the potential, and stated the need to be more vocal about the importance of these topics. In closing, de Margerie threw out the comment that the economic impact of implementing these changes will be "relatively" limited compared to the impacts of not acting.
Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html.
