Here are just some of the highlights from the second day of high-octane discussion at Ethical Corporation’s annual New York conference.
1 “Water is cheaper in the desert than it is in the Midwest,” said Larry Berger, EVP and chief technical officer of Ecolab, illustrating the fact that water pricing does not reflect its scarcity, driving over-consumption. “The consumption of resources over the last 30 years has been unsustainable. Unless we find a more thoughtful way to grow we will run out of these vital resources.” But he said companies were increasingly looking at the availability of water when they made investment decisions. Critical to success is long-term planning. “If you are looking at a one- to two- year planning horizon you will get the wrong answers. If you have a three- to five-year planning horizon you often get the right answers,” Berger said.
2 “The key factor in meeting our sustainability goals was changing our bonus structure to tie all of our executives’ variable pay to meeting our sustainability targets,” said Hugh Welsh, president and general counsel for DSM North America, explaining the Dutch company’s strategy. This cascades down the ranks so plant managers also get bonuses. Asked what it had taken to get the CFO on board, he admitted that the CFO at the time had resisted the new pay metrics: “So we got a new CFO.” Another driver was setting an internal carbon price, far higher than EU market price, of €50 per tonne of CO2. Having carbon pricing globally is critical, he said.
3 “Every time we’ve taken a decision on sustainability, it’s inevitably decreased cost, increased efficiency, attracted staff and influenced clients,” said Sandeep Dadlani, president, head of Americas at Infosys, the giant Indian IT company, explaining why setting ambitious sustainability targets makes commercial sense. A goal set in early 2000 to halve per capita energy consumption by 2018 was met six years early by controlling the energy consumption of all its Indian campuses from a single command centre in Bangalore through the Internet of Things. Dadlani said the chief operating officer is the spokesman for sustainability is the company.
4 In an age of increasing automation and artificial intelligence, workers have to be trained in design thinking, according to Dadlani and a few other speakers. Infosys hires 20,000 to 30,000 people a year. “Since what we are training them for will be automated or made redundant, the first thing we teach them is design thinking and about finding the next problem to solve,” Dadlani said. “This gives them a fearlessness about the future, and that their lives will be about lifelong learning.”
5 “One of the reasons forced labour was hidden for a long time was we weren’t speaking directly to individuals. Typical auditing doesn’t uncover that information,” said the head of CSR at a major manufacturing company at a break-out session on human rights in supply chains. With mobile phone penetration in Malaysia and China higher than in the US, they are the most useful technology to communicate with workers. “With smartphones we can pulse survey them as many times as we want to. It’s much easier than trying to get them to fill in long, boring forms.”
6 “At IBM we used to think of millennials in recruitment terms. Oh my goodness, now they are also our clients, our investors, our policy makers and our regulators around the world,” said Jennifer Crozier, vice president of IBM Global Citizenship Initiatives, describing the growing influence of 22- to 36-year-olds in the corporate world. She said one thing that was really important to millennials was not social media but human to human interaction. The company’s Corporate Service Corp, which sends 500 IBMers out every year for a four week stint volunteering in a developing country, was “more competitive than Harvard law school” to get into.
7 Polls show that 66% of workers are disengaged from their workplace, said Jim Keane, CEO of office furniture giant Steelcase. “We’re wasting talent but would never take this approach with water or electricity. It’s not responsible for us to run businesses where we under-utilise resources.” One way that Keane tried to change this at Steelcase was to move the entire leadership team of 20 people from the top floor of its Grand Rapids, Michigan head office to the ground floor of the company’s innovation centre. Among many benefits, this broke down barriers between the leadership team and employees and gave them a feeling of shared purpose.
8 “If you want to millennialise the workforce, you need a company people feel aligned with,” is how Kemet Corporation’s CEO Per Loof finished his presentation on how his electronics company had taken an industry-leading role in sourcing conflict-free tantalum from the Democratic Republic of Congo. He said he had saved $40m and avoided US-mandated assessment and reporting requirements for products containing conflict minerals by sourcing directly from a mining village in Katanga province that supplies only Kemet. He cut out all the middle men and worked closely with village elders. Rather than mechanise the entire mine, which would have thrown people out of work, he mechanised 40% and left the rest a modernised form of artisanal mining. Theft has been non-existent. “We haven’t lost one bag [of tantalum] in four years,” he said.
See our eight key takeaways from Responsible Business Summit New York day one here.#RBSNY supply chain CSR Conflict minerals millennials water management Infosys DSM CO2 climate Steelcase Kemet Ecolab IBM