BSkyB’s chief executive, Jeremy Darroch, tells Ian Welsh that making a positive contribution to society is how to develop sustainable business success

Jeremy Darroch, chief executive of BSkyB since December 2007, has put his personal stamp on Sky’s ambitious The Bigger Picture strategy, which focuses on reducing the carbon footprint of the company and its stakeholders, encouraging participation in sport and spreading access to the arts.

Speaking to Ethical Corporation’s Ian Welsh, Darroch gives his views on how companies can use powerful brands for good in their communities and why the public sector does not have the monopoly on public benefit.

Q Welsh: What has been the thinking behind the development of Sky’s The Bigger Picture environmental and other sustainability strategies? Is there an abiding philosophy behind it all?

A Darroch: We’re still a relatively young organisation and we want to build a business that is sustainable and durable, that has a real source of value in a broader sense. That is not just in terms of financial value – though that’s important – but also public value.

We firmly believe that a business that contributes more broadly to society is one that is durable in the long term, so we always try to look beyond the narrowness of business operations and contribute and be relevant to our customers and their communities.

Q: Sky has a number of sustainability projects. Where do you think the company is having the biggest impact in terms of environmental performance?

A: The carbon reductions that we’ve pushed through already – cutting our absolute net carbon footprint by 12% against our 2003 baseline throughout the business – have been challenging. Now we’re setting ourselves further targets that will be tough, but ultimately bring bottom line savings as well as significantly reducing our emissions.

We’re also developing methods of using the strength of our voice and media assets, making our customers aware of the climate change challenges that we all face. Then we take this and develop practical things that our customers can do themselves: for example, technology for set-top boxes so that they power down automatically and switch to standby.

Q: What about social projects?

A: We’re proud of our work in schools through the Sky Sports Living for Sport campaign. We use the Sky Sports brand alongside athlete mentors and work with young children who have behavioural or other difficulties and use the power of sport to help get their lives back on track, re-engaging them with school life. It’s been very successful.

Sky Sports is very relevant to young people and so we can interact with them in a way that a public sector organisation, for example, is unable to.

Q: Do you see this as the most effective way of engaging with others – using the influence that your brand has developed and the trust that people have in your brand?

A: I think so. We’re a big organisation with a big voice. Sky is in a third of UK homes. And more importantly, pretty much everyone will know what Sky is all about. That’s a very obvious way in which we can take the power of the brand and use it as an entry into talking to people about these issues and the things that we care about.

Q: If Sky’s relationship with its customers is good, is this an opportunity to increase awareness of a sustainability agenda through television programmes you commission?

A: It’s important to ask why someone subscribes to Sky. It’s primarily about entertainment and the television programming needs to be stimulating and relevant. That’s why to highlight the importance of the rainforests in tackling climate change and as part of our Sky Rainforest Rescue project we have specially commissioned programmes, which we will show on Sky1 in April. We have to be careful – we are a choice for our customers. That’s how the business has been built up. We certainly cannot ram things down people’s throats and must not preach.

That’s why when we talk about the environment we need to back it up with what we are doing ourselves. It’s a balance you can get right.

Our experience from our customers is that they know sustainability and climate change are relevant issues – are in fact among the issues of our time – and so expect Sky to have a position on them.

Q: What about your colleagues: how important is a sustainability agenda for them?

A: It’s very important in terms of staff engagement. We’ve got 16,000 employees and they want to work for a business that can do these things right.

Effective business strategy comes from a number of different things. It’s not just the products that you sell. Also crucial are what your brand stands for and having a motivated workforce who like what the company stands for.

And in terms of direct business benefits, greater efficiency and sustainability mean a lower cost base. There is also increased value for shareholders as sustainability makes us a more attractive business.

Q: How can a company embed a sustainability agenda?

A: When you first start talking about it seriously, the logic fits together very well. Then the real challenge is how to start doing things such as dealing with the environment at scale and build them into the fabric of the business as opposed to simply having an initiative on the side.

Take our environmental programme. We had been making good initial progress, but reached a plateau. Now we have an environmental steering group, which I chair, with representatives from across the business. The responsibility of this group is to ask how we build our environment programme into everything that we do.

The impact on our environmental footprint is now considered as part of the process in any decision we make.

Q: Such as?

A: Take our new broadcast centre in London, which is going to be Europe’s most sustainable broadcasting facility.

There are lots of simple but clever innovations. We’re making upfront investment in a combined heat and power plant for the site and in a wind turbine, which will provide a significant portion of the centre’s power.

The studios will be at the bottom of the new building and via a heat transfer system will heat the building when it’s cold. Then on warmer days the process will be reversed and the hot air will be sucked out of the building.

Q: What’s the premium cost of all this technology above constructing a “standard” building?

A: It’s not small. But that’s taking a very short-term view. Sky will recoup any extra cost over the course of 10 years so it is an investment for the long term. And as the building will be here for 20 to 30 years, it will prove to be a very sensible investment.

In the future Sky will have significantly lower operating costs so our successors will be thanking us.

Q: So, this is one of the benefits of being a big company – you can make that investment for 10 years hence.

A: Yes, but it doesn’t mean that small companies can’t do things too. Whenever anyone is developing new facilities they can make them as environmentally sustainable as possible.

The other thing is you can reach out to other companies, including in your supply chain. For example, we are working with independent production companies to see how they can improve the efficiencies of what they do. We are very happy to pass on what we have learned.

Q: You mentioned that a third of UK households are Sky subscribers. Does this give you a sense of responsibility? How does being a part of so many people’s lives affect policy?

A: I fundamentally believe that private enterprise is a source of public value. A plurality of voices in media and news is a core part of any functioning democracy. So I think that businesses such as Sky are sources of public value.

Public value is not something that only the public sector can command. So therefore there is responsibility for companies in our position.

But there is also opportunity. Broadly speaking, what is good for society will be good for business. And if we can do things that people like and value, and these things value us better as a brand, then that’s also going to be good for our business.

Q: You talk about public value. Do you think people, especially in the UK, have a suspicion of private companies?

A: Generally, we know that people have tended not to inherently trust private companies. So there is a big opportunity for the private sector to build businesses that are long term and sustainable.

There is a need for private enterprise to be successful and to build public trust – for no other reason than we are relying on private enterprise more than ever to get us out of recession. We need companies to take the lead.

Q: So are UK consumers becoming more trusting of business?

A: I see no reason why it can’t change. Ultimately, though, it will only happen if enough companies take on the sustainability agenda.

Government has a role here. It has to provide the overall leadership and framework that encourages companies to do the right thing.

But public institutions don’t have a monopoly on public value. Public value doesn’t have to mean not-for-profit. There is no reason why you can’t have a business that makes money and is commercially incentivised and driven, but that also creates real public value and is very focused on the society in which it operates.

This is the first in a series of chief executive viewpoints, where we will give business leaders the chance to give their thoughts on what corporate responsibility and sustainability mean to them. Let us know what you think.

The Bigger Picture: central strategy

As part of “The Bigger Picture”, Sky says it will behave fairly towards customers, staff and suppliers. Specifically, the company focuses on three areas where it believes it can make a real and positive contribution to UK life:

• Helping to create a healthy environment.
• Encouraging participation in sport.
• Opening up the arts to more people.

Source: www1.sky.com/biggerpicturereview

Europe’s most sustainable broadcast centre

Sky’s new £233m studio complex in west London will house Sky’s broadcast operations and Sky Sports teams from 2011. Among the innovations:

• Natural ventilation will expel waste heat from studio lights and draw in fresh air, cutting the need for air conditioning and the overall energy use by 7.5%.
• Rainwater harvesting will allow for green space irrigation and flushing of toilets.
• Wind turbines will provide 90% of the energy needed for office lighting.
• A combined cooling and power plant will provide on-site renewable energy to reduce carbon emissions by at least 20%.

Source: www1.sky.com/biggerpicturereview/environment