Ecolab CEO: 7 ways businesses can drive positive change at scale
As CEO of Ecolab since 2004, Doug Baker has infused sustainability and purpose into the company’s operations and the work it does around the world to help customers achieve their own sustainability goals.
In a packed plenary session at GreenBiz 20 conference, Baker shared his vision about how businesses can and should drive change that matters by delivering both economic and environmental benefits. Here’s his advice.
1. Link your core business to the impacts you target
Ecolab is a global leader in water, hygiene and energy technologies and services. To date, the company has helped customers save 801.7 billion gallons of water, equivalent to the drinking water needs of 2.7 billion people.
Baker noted the importance of connecting a company’s work to advancing the global agenda as defined by the United Nations Sustainable Development Goals (SDGs). In Ecolab’s case, this means prioritizing the focus on SDG 6, which ensures access to clean water and sanitation for all.
Ecolab is working on a new water initiative that aims to improve people’s access to clean water. Baker highlighted projections of a 40 percent mismatch between supply of and demand for fresh water by 2030, noting that one in nine people around the world already doesn’t have reliable access to water.
"If climate change is a shark, water is the teeth, and it’s the first thing you’re going to feel," Baker said, arguing that water needs equal footing with carbon emissions reductions in global climate efforts.
Ecolab is working with the U.N. Global Compact’s CEO Water Mandate to reduce and eventually eliminate water stress around the world.
A number of big companies already have signed up for what Baker described as "a coalition of the willing, an accelerant for what needs to happen." The signatories, in turn, are working with individual watersheds and local coalitions. Part of their efforts include education to get the word out on water, and thus to enlist more people to the cause.
3. You can’t give with one hand and take with the other
For Ecolab, sustainability has become inherent in what the company does. Businesses have to make social and environmental wellbeing a priority, Baker noted. It’s not enough just to wish it so.
"We’re not doing evil during the day and ESG at night," he emphasized. "What a cruddy way to live!"
People often tell Baker that sustainability is natural for a company such as Ecolab, suggesting that it’s a heavier lift for businesses in other industries or lines of service. Baker retorts that it wasn’t natural before Ecolab did it.
"Ecolab’s journey as a company," he mused, "has been to work to understand our process and impact, mostly around the economy but also around sustainability, which are related."
4. Sustainability is no longer optional
As recently as two years ago, Baker would get questions at conferences asking if sustainability was even a relevant consideration for business. That, he said, has changed radically, and business leaders have come to realize that taking environmental impact into account is a requirement. Moreover, a growing number of fund managers are including ESG considerations in their analysis.
Baker clarified that businesses still have to perform financially, which creates a virtuous cycle. "The more we grow, the better impact we’re going to have," he said.
5. Be transparent, and develop a diverse board
"You have to resist resistance to disclosure," Baker urged, explaining that transparency is a necessary element of an effective strategy to improve social and environmental impact.
One way to overcome that resistance is to cultivate a diverse board of directors. Ecolab’s board has evolved significantly over the years, Baker said, and is critically instrumental in the company’s impact agenda. He said other business leaders consistently tell him that increased diversity on their own boards likewise has improved their performance.
Ecolab uses data to reveal opportunities for improved behavior and performance in its customers’ facilities. For example, when it comes to water usage in steel and paper mills, Ecolab has a very good view on best and worst performance thanks to its monitoring technologies.
Businesses across the economy have made a huge investment in digital technologies over the last five years and will continue doing so.
"Use the data you collect to drive efficiencies," Baker advised.
7. Get CEOs out of their silos
Leaders who hope to persuade their CEOs and C-suites to infuse social and environmental purpose into their business strategies will need to help crack their CEOs out of their own, tiny silos.
"CEOs mostly talk to other CEOs," Baker observed, which can insulate them in counterproductive ways. It’s important to provide good ideas to leadership, and to be aggressive.
"This is a historic time, and a huge transformation is required over the next 10 to 20 years," Baker concluded. "If big business doesn’t drive the change we need, it won’t happen."