Mixed Greens: Green Giants, Green Shoots, Green Lions and Green Whisperers

Two different views of corporate sustainability collided in my inbox last week.

One email said that Freya Williams will speak at the US BCSD/WBCSD/Yale meeting next month. Freya Williams’ Green Giants book argues persuasively that business sustainability and business strategy have to be one and the same, not two competing directions.  She details seven businesses which have created great “win-win” outcomes, companies growing their business by integrating sustainability issues into core business strategy. She offers great examples and lessons, describing these leaders’ “epiphanies” and how those translated into business strategy and process.

A second email came from a friend and former client who now works for a regional service company nearing $1b in annual revenue. The email said:

I am trying to locate an article … directed at the executive level, indicating why they should care about sustainability.  This should probably be old news but in [this] sector that is where we are.  We use a lot of water but are recycling and the conversation about climate change doesn’t have a day-to-day impact (at least not yet)…. [T]he Harvard Business stuff and other articles would almost certainly leave our executives shaking their heads.

That friend is a Green Whisperer, helping to nudge business leaders toward awareness and progress.  That company’s leaders are unlikely to be Green Giants in any foreseeable future.  They are not likely to make game-changing transformational leaps requiring career-threatening courage, unyielding commitment and contrarian tendencies (characteristics Williams cites).

Green Giants are great exceptions but not the norm.  Let’s use reporting as an example.  I certainly don’t think reporting is the definition of sustainability progress but it is an indicator of effort.  Freya Williams points out that “95 percent of the largest 250 companies in the world now [produce] a sustainability report,” but:

Beyond that group, though, the news is less good. First-generation sustainability reporting— the process of reporting on employee turnover, energy, greenhouse gases, lost-time injury rate, payroll, waste, and water is still limited to just 3 percent of the world’s largest 3,972 listed companies and 0.04 percent of the world’s small listed companies.

Thyme_and_Goat_Cheese_Tart_With_Mixed_Tender_Greens_in_Champagne_VinaigretteThe reality of corporate sustainability is that we have to have a lot of different types of “greens”.  We certainly need the leaders, the disrupters, the Green Giants. Let’s recognize, applaud and learn from them. We also need the Green Whisperers. They are not blessed with Green Giants as bosses. They toil in the trenches, trying to move the majority of companies in the right direction.  They deal with the hard truth that epiphany is not an easily-reproducible management process.

We also need Green Lions, who take the lead and charge ahead, leading from the middle.  GM’s John Bradburn is a great example, leading his company’s zero waste effort, driving innovation and material reuse and cost savings all at once.

And we need to nurture the Green Shoots, the game-changing ideas that may take years of hard work, nurturing and perseverance before they start to sprout.  The US BCSD’s Materials Marketplace is a great example. After more than a decade of small experiments in making the circular economy real, the Materials Marketplace is now sprouting in Austin and other locations around the US and winning international attention.

We’re bringing a lot of these different greens together in one big salad bowl, a hands-on session in New Haven next month (June 14-15 2016). We’ll have the perspectives of Green Giants and Green Lions, Green Whisperers and Green Shoots.  We’ll see what they can learn from each other, and what they can create together.  Come join us there, and see what you can get from – and add to – the mix.

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in blogs. To share this post, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

I was wrong about CSR/sustainability reporting

I’ve been skeptical about the value of CSR/sustainability reporting.  I now have to admit I was wrong. Partly.

For years, I viewed reporting as a necessary evil: necessary for transparency and meeting stakeholder expectations, but evil in terms of disproportionate effort and dysfunctional impacts on strategy.

I’m not opposed to reporting.  Going back to the first corporate environmental reports in the 1980s, doing a report has been a great way to hold up a mirror for senior management, helping (or forcing) them to see how their company looks from the outside in. (Disclosure: ERM is one of the world’s leading providers of EHS/CSR/Sustainability reporting services.)

But I have been wary. In an early blog, one of my new year’s resolutions was:

4. Don’t confuse reporting with doing. Transparency is important, but results are more important.

Many readers agreed, saying “too much time spent chasing data to report has led to putting off long term strategizing,” or noting:  “I liked #4 a lot as reporting can take an inordinate amount of time!” I’ve echoed those sentiments over the years.  I’ve frequently urged clients: “Don’t let the reporting tail wag the performance dog.” I often quote a client who said: “I’m afraid my reporting is writing checks that my performance can’t cash.”

Now, though, I’m seeing companies use the reporting process as an incredible strategic tool, as a lever to raise the strategic discussion in their company.  What’s changed?

Fundamentally, the reporting process (in some companies) has changed from peer competition and branding, to a truly strategic process admittedly with branding implications.  Give credit to evolving GRI guidelines, growing analyst attention, and simply the maturing of the art form. Give some credit also to the great subversive work of the green whisperers.

In the past, the reporting process juggled several questions:

  • What do we want to talk about?
  • What good pictures, stories and data do we have that we can use?
  • Who – if anyone – is listening?
  • What do the loudest stakeholders want to hear about?

Increasingly, the process revolves around four very different questions:Reporting-Process (1)

1. What matters?

“Materiality” has finally gotten serious. It has become a true business risk process, asking “what matters to the business?” and “what matters to the stakeholders who matter to the business?”

2. What do we do about “what matters”?

This is the real strategic opportunity. You don’t have to just lunge from materiality to writing any more. This is a huge change.  This step can drive deep questions of goals, priorities, and performance.

3. What do we say about what we do?

You have to talk about “what matters,” but more to the point you have to talk about what you’re doing about the issues that emerged from question #1.

4. What do we do with what we say?

In some companies the emphasis is shifting from “the report” to “communication and reporting.” It’s a process now, not an event.  As one colleague pointed out, “We focus on who owns each chapter of the report going into the process.  We don’t talk about who owns each section coming out of the report.” That’s the emerging challenge: integrating the annual document into an on-going process of communicating with (not just to or at) stakeholders, both inside and outside the company.

Is the process perfect now? No.  Can it still take too much time and attention? Yes. Can the tail still wag the dog? Sure.

But the trend is going the right way. Some companies are using the reporting process to drive deep discussions of business risk, prioritize actions, and stimulate on-going dialog. In some cases, this is an evolution in the companies who were already leaders.  In other cases, it’s a “leapfrog” opportunity for companies who are coming late to the game: they are starting out with a focus on strategy, rather than having to unlearn or dismantle a document-driven, communications-only process.

“Necessary” is increasingly trumping “evil.” I guess I was wrong.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.]