How to get your board to prize sustainability
Big companies are under increasing pressure from investors to be environmentally responsible. But not all management teams and boards are up to speed on what their company can and should do to improve its footprint, even if employees have good data and solid proposals.
What can sustainability managers do to get their board’s attention?
First, engage with your manager and their managers to propose initiatives that would allow the company to green its operations while providing a positive message around its corporate responsibilities and if the project would save money, make that front and center of your argument, said Rose McKinney-James, a member of the board of directors at MGM Resorts International and a clean-energy consultant in Las Vegas.
"It’s important to position your argument to make the business case for what the company is undertaking and what your main goals are," McKinney-James said Thursday at the GreenBiz 18 conference in Phoenix. "Sustainability is a core value for our company because we see it as a priority in communities where we work and we see it as a prioirty for our employees."
For MGM, which has cut energy usage through efficiency measures and installed more than 8 megawatts of solar panels on some of its Las Vegas facilities, being green is also a way to distinguish the company from competitors in the casino and resorts industry.
If all else fails, do some research. Find out who on your company’s board is a champion of the environment or wildlife issues and figure out a way to reach out to that person show your sustainability proposal.
Show them the January letter that BlackRock Chairman and CEO Larry Fink sent to the world’s CEOs, in which he argued, "To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society."
He challenged companies to develop a long-term plan and purpose, make the plan public and prepare for challenges, all while "articulating a path to financial performance.
"To sustain that performance, however, you must also understand the societal impact of your business as well as the ways that broad, structural trends — from slow wage growth to rising automation to climate change — affect your potential for growth," he wrote, adding that companies should strive to have diverse boards and bring their boards into their decision making early and often.
Taking these actions can help companies preserve their core values and goals in the face of pressure from activist investors for short-term changes, said Darla Stuckey, executive director of the Society for Corporate Governance.
Companies can find ways to be sustainable that also solve other problems, she said. For example, through smart logistics, or using artificial intelligence to determine shipping routes, UPS has been able to cut its fuel usage, which reduces greenhouse-gas emissions, while also improving safety for drivers, she added.
Stuckey’s advice to speed adoption of new, sustainable ideas: "Get to know the board secretary and get something on the agenda."