Is your sustainability team thinking enough about human rights?
"We don’t want to sustain, we want to grow and thrive," observed Coca-Cola’s chief sustainability officer Bea Perez during a plenary conversation at the annual BSR conference last week. Moments later, she added, "Don’t be afraid to tell the story when you have a story to tell, even if the story isn’t perfect."
That conviction underscores why Perez isn’t merely the chief sustainability officer for the massive beverage company. (She’s the senior vice president overseeing communications, sustainability, public affairs and marketing assets.) It also reflects the sustainability movement’s gradual but steady incursion into the C-suite, not just as a risk factor but as a catalyst for innovation.
"If you have sustainability on the side, it won’t be transformational," said Vasant Narasimhan, the newish CEO of healthcare giant Novartis, during his BSR keynote later that day. (Narasimhan was the company’s chief medical officer until February.) "If I say that I want people to do it, but it’s not in the targets, it won’t happen. If people know it will be measured, they’ll fully focus on this."
Make no mistake, that means more than simply faithfully shepherding and cataloguing environmental metrics such as energy reductions, water conservation and waste management milestones. While sustainability programs historically have done a great job pointing up the need to steward physical natural resources, the conversation is really incomplete without a more thoughtful dialogue about socioeconomic factors such as diversity, inclusion and fundamental human rights issues. It’s time to stop whispering and start proclaiming. But before that happens, you need to start doing.
Given BSR’s intensifying focus on diversity and inclusion, you won’t be surprised to hear that human resources — and rights — are a big consideration in the organization’s four new planning scenarios, meant to help sustainability teams strategize holistically for the future. After processing my notes from the conference, here are three considerations for those in the corporate sustainability world that have been kind enough to read this far.
Understand the side effects of efficiency, artificial intelligence investments
Last week, Unite Here — the labor union represents thousands of housekeepers on strike against Marriott in cities including GreenBiz’s hometown of Oakland, California — escalated its protests by explicitly calling out the hospitality’s Green Choice program among their grievances.
The initiative, which allows guests to opt out of having their rooms clean and is intended in part as a measure to conserve water, exposes housekeepers to higher quantities of toxic chemicals because the rooms are dirtier when they’re finally available for cleaning, according to the union’s study. Alongside that concern, the program eliminated the equivalent of more than 350 full-time jobs at the 23 hotels considered by the research.
I highly doubt that Marriott’s sustainability team intended for Green Choice to turn into a jobs-reduction measure, but it’s a reminder that the unintended consequences of sustainability initiatives can be devasting.
That’s front of mind for Emanual Chirico, CEO of the world’s second-largest apparel company PVH (the company behind Calvin Klein and Tommy Hilfiger), who considers diversity and inclusion as "integral" to its business strategy.
In the 12 years since Chirico took over as CEO, there have been dramatic changes on the warehouse operations side, he told the BSR conference attendees. It’s no longer unusual, for example, to find driverless forklifts driving around, picking orders for packing and reducing the "human touch." As a result, the $20 per hour jobs are disappearing, he said. "If you are educated and trained, you’ll do better. If not, you’re going to be left behind. … No one is really addressing these issues, offering solutions."
Ignore tribalism and alternate points of view at your peril
Are you as sickened by the polarization and vitriol on social media as I am? Frankly, it’s all I can do some days not to stick my head in the sand, turn off the “haters” and abandon social and nonsocial media. But the reality is that healthy debate is essential for innovation. So, we should resist the urge to block those who don’t share our beliefs: a phenomenon called narrowcasting.
Teaching your team to open their minds to alternate points of view can help a company identify early signals of both risk and opportunity, said Michael McCaffrey, global leader of strategy and insights, global corporate affairs at Johnson & Johnson. "You don’t need to respond equally to everything," he said.
Apply lessons from the past to newer frontiers, notably Africa
Which should receive more attention: initiatives to improve the climate resilience of existing supply chain partners or investments in infrastructure for new locations where this thinking can be embedded into relationships and operations from the ground up, potentially benefiting thousands of people seeking to improve their standard of living?
PVH set out to build a vertically integrated, low-impact manufacturing industry in Africa almost five years ago, where it is the lead investor in an industrial park near Lake Hawassa, Ethiopia. For example, from the get-go, it focused on promoting best practices in labor standards and policies (including rigorous fire and building codes) and in protecting the natural resources there (the facility features a state-of-the-art system that recycles almost 90 percent of the water drawn for dying and washing clothing).
“We are trying to put in place a model that doesn’t mirror Asia,” in particular the mistakes made by the apparel industry in Bangladesh, Chirico said.
Novartis’s investments in Africa — and the United States, for that matter — are calculated to address the larger ethical issue of improving access to new medicines or medical treatments.
That’s why it is overhauling its patent policies to get drugs to market in emerging economies more quickly, why it has poured more than $100 million into treating diseases such as malaria and leprosy, and why it has taken an interest in startups such as Zipline, a drone company that is making blood deliveries into east Africa where the transportation infrastructure is still nascent.
"We could sit on the sidelines and say that it’s not our job, but this is an imperative," Narasimhan said. Today, Novartis is the third largest healthcare company in Africa; by 2020, it seeks to claim the top spot, according to the company’s website.
Investors are increasingly listening for this sort of story, one that reflects a deeper focus on social impact, Narasimhan added, pointing to his conversations with more than 30 major investors during the past several months. "In the long run, if you have a good contract with society, that creates a sustainable business," he said.