CEO interview: Neil Carson, Johnson Matthey - Give sustainability ‘your best shot’
Neil Carson has spent three decades at the UK chemicals firm Johnson Matthey. After senior management positions in both Britain and the US, he joined the company’s board in 2002 as head of its precious metals division. He became chief executive two years later.
Carson is a member of the advisory board for the Cambridge programme for sustainability leadership. He also served as chairman of the UK government’s sustainable consumption and production taskforce. Carson spoke to Oliver Balch
Ethical Corporation: In the first three years of Johnson Matthey’s ten-year Sustainability 2017 plan, you admit to focusing primarily on the “low hanging fruit”. That’s understandable, but when and how should a company start tackling the harder sustainability issues?
Neil Carson: You have to start somewhere. Essentially, we divide our efforts into two camps. The first camp is resource efficiency. That’s all the sort of things you’ve wanted to do in your office or factory but have never got around to doing. It’s been very beneficial, yet it’ll only take you so far. If you are using 100 units of raw materials, let’s say, resource efficiencies can get it down to 80 or so. More than that though and it means you were really inefficient before.
Our second effort is around innovation. You need to harness your R&D, your clever people, and use sustainability to come up with better products. That way, you can help your customers cut carbon and save finite resources. There’s a lead time, though. You’ve got to give it three or four years before innovation starts to deliver.
Ethical Corporation: When it comes to sustainable products, is there an appetite among your consumers?
Neil Carson: Sometimes your customers will help you when you ask them. But sometimes they won’t. So you have to make assumptions. These aren’t so difficult. If you’re using a finite resource, then it’s likely to become more expensive in five or ten years’ time. Hence, you need to design a product that makes better use of that resource.
Ethical Corporation: How important is transparency to your sustainability efforts?
Neil Carson: It’s essential. For starters, it helps build trust. There’s no point in setting out to do this if you’re not going to tell your stakeholders what you’re doing. We report on our performance every year. And once you’ve told the world about your plans, then you need to give it your best shot.
Communicating our sustainability plan internally has made [sustainability] a big motivator for our staff. It’s one of the things we are talking to investors about more and more, too. Shareholders are looking for people who will run their companies in the best possible way and sustainability is one of the measures for judging that.
Ethical Corporation: You’ve committed to making Johnson Matthey carbon-neutral by 2017. Now you’re reviewing that target. Why’s that?
Neil Carson: When we first started thinking hard about sustainability back in 2007, carbon neutrality was a hot topic. We felt it was something we could sign up to. The target has stimulated all the right actions around the company, but, yes, now we’re reviewing it. From the start, we knew we’d need some other mechanism to justify our residual carbon. We’re worried about an offset approach. When our activities get examined, they have to stand up absolutely. Our carbon footprint is currently around 400,000 tonnes of CO2. What if we have a target by 2017 of designing new products that save several times that figure? The planet doesn’t care who is saving the CO2, just as long as it’s being saved.
Ethical Corporation: Kingfisher’s chief executive, Ian Cheshire, recently said we are “already living off our future capital” and that businesses “will have to adjust to a very different reality”. Do you agree?
Neil Carson: Yes. Given the assumptions that we’ve made for our business – namely, that resources are not being replaced and that they’ll become more expensive in the future – then it’s natural to assume that sustainability will become as important a business metric as any other.
Ethical Corporation: We’ve seen a large number of freak weather phenomena recently, which some people attribute to climate change. Is it time companies started adapting to this, not just trying to mitigate it?
Neil Carson: Adaptation is something that will happen as we progress. There’s a view out there among some NGOs that time has nearly run out. I’m not of that school of thought. As businesses, we don’t need to panic. We have time to make the necessary changes. Nor do I think there’s a strong scientific link between big weather events and the general trend of climate change. Saying that, these events can be quite influential in getting the general populace to change their behaviour patterns.
Fast facts: Johnson Matthey
Headquarters: Royston, UK
Revenue: £7.84bn (2010)
Pre tax profit: £254.1m
Employees: c. 9,000
Operations: 30 countries
Core markets: catalysts, precious metals, fine chemicals and process technology