Tucked into HP Inc.’s Sustainable Impact Report published in May is a factoid more climate-conscious businesses should monitor and report on — the amount of sales revenue that is directly attributable to environmental, social and governance considerations.
In the case of HP, the 2020 fiscal year was the second consecutive year in which the company generated more than $1 billion in commercial business tied directly to those considerations. (It first started trumpeting this information in 2018.)
That figure explicitly covers deals where HP has a business-to-business relationship and an HP sales representative is asked by a potential customer to answer certain questions related to sustainability, ranging from materials selections to energy efficiency to other considerations, such as labor and employment practices.
HP’s move to disclose those numbers is unique within the tech industry. "In the last few years, we’ve actually started to track the impact, and we specifically started to track the impact of how many customers are requiring in their RFP responses a section on sustainability," said Christoph Schell, chief commercial officer for HP, when I spoke with him last month. "This has increased steadily, but in the last 18 months — and I think this has a lot to do with COVID — it has gone through the roof."
The latest sales figure reported by HP for fiscal year 2020 was actually lower than for fiscal year 2019, when sustainability-linked sales reached $1.6 billion. When I asked for more details, an HP spokesperson said the mix of business customers and requests for proposals in any given year will affect the amount that the company is likely to report. It’s worth noting, however, that even though the total amount was smaller during the pandemic period, the total number of deals that HP won because of these factors close to doubled — reaching 218 wins in FY2020, compared with 111 wins in FY2019, the spokesperson said.
For employees working in roles not traditionally associated with sustainability, understanding how and where to contribute can be elusive.
For context, HP reported net revenue of $56.6 billion for FY2020, off 3.6 percent from FY2019. The number includes both commercial revenue from the company’s business customers for everything from personal computers and printers, along with professional services and sales related to its extensive consumer product portfolio.
HP wouldn’t have been able to achieve this goal if sustainability concerns were relegated only to a dedicated team, although that’s important for strategy, Schell said. Earlier this year, HP began encouraging each of its roughly 55,000 employees to set a "sustainable impact" goal as part of FY2021 goal-setting exercises.
"For employees working in roles not traditionally associated with sustainability, understanding how and where to contribute can be elusive," wrote HP Chief Sustainability and Social Impact Officer Ellen Jackowski in a February blog outlining the initiative. "Understanding how and where to contribute can be elusive. By giving employees the training and support to connect individual sustainable impact goals with their everyday job responsibilities, we’re creating a focused, connected network of impact that’s aligned with our corporate vision and strategy."
That applies to everything from product design to procurement relationships to customer support and so forth, noted Schell. "It needs to be part of the culture of every individual team," he said. "It needs to be part of the handoff when you go from one team to another. They cannot drop the ball on any of this. So, the consistency of how you do this, I think, is very important."
That said, it’s important to respect that there will be regional nuances that must be acknowledged. When I spoke with Schell, a German-born executive who has held international sales positions covering the Middle East, Asia, Africa and South Pacific, he noted that sustainability factors carry different weights in different regions and the concept has broadened to include social factors that will vary from place to place. "There’s more chapters to the book," Schell said. "It has a lot to do with diversity and inclusion, and that, particularly in the U.S., was a very hot topic in the last 1.5 years."
HP is working on making that a differentiator. Within the tech sector, the company has taken a particularly aggressive approach to hiring under-represented groups, including Black and African American individuals, and women of all ethnicities. In June 2020, the company set a goal of doubling the number of Black and African American executives by 2025. Here, too, its progress has been uneven, based on the data disclosed in its 2020 Sustainable Impact report.
For example, 25 percent of HP’s leadership were women as of Oct. 31, slightly more than the previous year but slightly less than two years earlier. In the report, it didn’t break out leadership numbers by ethnicities but "all minorities" (including Black/African American, Hispanic/Latino, Asian, Native American, Hawaiian/Pacific Island and multiracial individuals) accounted for 28.9 percent of HP’s overall workforce of about 53,000 as of Oct. 31. That was slightly higher than the year-earlier figure.
That focus on improving HP’s standing on social aspects of ESG, particularly diversity and inclusion, also extends to suppliers. "We actually decided to reach out and rope our entire ecosystem into that," Schell said. "So, for example, for suppliers that we give contracts to. And we gave them goals. We gave them goals on diversity and inclusion, and we took contracts away and award contracts that were more in tune with that."
The company’s long-standing sales channel program was also updated to reinforce HP’s more intentional focus on sustainability. An optional training initiative launched in February, HP Amplify Impact, encourages the company’s sales and installation partners to get trained and assessed on their policies for environmental, social and community engagement. In exchange, those organizations will receive a certification and become eligible for an awards program.
Schell said the HP sales team is actually meeting with partners individually to guide them through the process, and he’s had to hire more people to support the interest. "What all of them give me as feedback is that [a focus on social impact] is different to other partners that they’re competing with," he said, referring to partners that he’s discussed the program with. "They also see it as fundamental now in how they respond to and how they speak with customers."
The goal is to get least half of the partners in the HP Amplify channel program enrolled in the Amplify Impact program by 2025 — as of mid-July, more than 1,500 had opted into the initiative, Schell said. HP counts more than 250,000 channel partners worldwide.
Is there a future in which all of HP’s revenue might be linked to sustainability factors? When asked Schell if that was a goal, he suggested that it’s important for the company to get ahead of demand. "I think the goal has to be that the products and services that we offer are 100 percent sustainable," he told me. "That’s how we think about it. So you don’t really leave it up to a customer to decide whether they want to buy a sustainable product or service or not. Everything needs to be sustainable. I think that’s the goal."