Keep Your Eye on the Globe The new world of corporate environmental officers By Dashka Slater
ONCE UPON A TIME, there were two kinds of green, the green of trees and the green of dollars, and everyone knew that the growth of one came at the expense of the other. Lately, however, this formula has begun to look like an anachronism.
The change is happening for all kinds of reasons. DuPont became interested in the environment after catching hell for damaging the ozone layer with its chlorofluorocarbons. Dell heard the word after CEO Michael Dell was lectured by his teenage daughter. Even Goldman Sachs saw a green advantage in preserving, rather than logging, 680,000 acres in Chile's Tierra del Fuego.
Once top brass decide to integrate environmental goals into their company's business plan, someone has to be in charge of turning press releases into results. Enter the new kids in the executive suite: corporate sustainability officers. These are top managers who apply an environmental lens to every business decision their company makes--from the design of an office building to the development of new products. Often they report directly to the CEO.
We interviewed six sustainability officers at six companies in six industries. Most say they got their jobs not because of their green pedigrees but because of their business acumen.
PAUL MURRAY, director of environmental safety and sustainability, Herman Miller
Herman Miller, makers of high-end furniture like the Aeron chair, was founded by a man who talked about making his company a "good steward for the environment" in the Stone Age 1950s. So when Paul Murray arrived at the company in 1988 and promptly proposed forming an environmental-quality action team, it was an easy sell. The group had one goal: eliminate waste. "Everyone thought we were nuts," Murray recalls. "Herman Miller was sending 41 million pounds to the landfill each year."
By 2006, Murray says, the company had reduced its waste to 6.6 million pounds, largely by developing packaging that can be reused by suppliers. The zero-waste goal remains elusive, but since the company has doubled in size, says Murray, "it could have been 80 million pounds." Reducing waste saves Herman Miller about $50,000 per year, while income from recycling last year topped $1.8 million.
The company is also redesigning each of its products under a protocol it calls "design for the environment." To make sure the materials it uses are truly green, Murray's team asks company suppliers for their formulas. If a toxic substance shows up in the mix, the team works with the supplier to remove it.
Murray also spends a lot of time talking to other companies about what he does and how he does it. "It will only make our job easier if our competitors get on the bandwagon," he says.
HANNAH JONES, vice president of corporate responsibility, Nike
How did Nike--long a target of anti-sweatshop activists--end up third on Business Ethics magazine's 2007 list of the 100 best corporate citizens? Turns out that bad press is a powerful motivator. "We were under siege," explains Hannah Jones, who monitors everything from overseas working conditions to environmental performance. The siege mentality has given way to something more proactive. The key revelation, Jones says, was that environmental, social, and economic goals were not at odds. Take the "samples" room of a factory, where workers accrue overtime rushing to meet deadlines. Switching to digital mock-ups of new designs reduces overtime and waste, since most samples often end up in landfills.
While anti-sweatshop activists think Nike still has a long way to go when it comes to wages, they acknowledge that the company's environmental efforts have reduced workers' toxic exposure.
Jones says her job is to "drive a strategy of sustainability into the heart of the business model." That means rethinking the materials that go into Nike shoes, the packaging they come in, and the sneakers' ultimate fate when they're discarded. (Old sneakers are ground up to make playground surfaces and running tracks.) In 2006 Nike solved a thorny problem particular to its signature Nike Air sneakers: SF6, the chemical inside the shoes' air pockets, is a potent greenhouse gas. After 14 years of research, Nike eliminated all global-warming gases from its shoes, reducing its total greenhouse-gas emissions, it says, by more than 80 percent since 1997.
STEVE YUCKNUT, vice president, sustainability, Kraft Foods
During his 20 years at Kraft foods, Steve Yucknut has done everything from inventing new kinds of display cases and packaging systems to running the beverage division. But when he was tapped for the newly created sustainability post last year, he was asked to change the company's entire way of thinking.
Since then, Yucknut has held a lot of meetings--small ones with division heads, big ones with entire divisions--in which he has spread the sustainability gospel. Still, he's more interested in results than pontificating, he says. When Kraft became the largest buyer of Rainforest Alliance-certified coffee, for example, Yucknut says managers knew they'd be paying 8 to 14 cents more per pound for beans that were grown on wildlife-friendly farms. But the certification later helped Kraft get the contract to provide coffee to McDonald's franchises in Europe.
Now the company is focused on packaging, weighing factors like greenhouse-gas impacts, recycled content, recyclability, and product-to-package ratios. "We're going to change the culture, and we're going to change the processes," Yucknut says. "The culture will take time. The process is a little faster."
TOD ARBOGAST, director of sustainable business, Dell
When Dell CEO Michael Dell vowed to make his company "the greenest technology company on the planet," it became Tod Arbogast's job to figure out how. Arbogast, who had previously run Dell's recycling efforts, says he asked the CEO in his sustainability job interview what was required for the position. "Courage," Dell replied.
Dell has committed to recycling or reusing 99 percent of the waste from its manufacturing facilities by 2012 (it has already cut out 93 percent), removing polyvinyl chloride and brominated flame retardants from new products by 2009, and becoming carbon neutral by 2008. (The latter will be achieved largely by buying carbon offsets, which is far less impressive than eliminating fossil-fuel consumption.)
These commitments have made even longtime critics like Barbara Kyle, national coordinator of the Computer TakeBack Campaign, describe Dell as an environmental leader. But what about the rest of the industry and the overseas suppliers? Arbogast plans to school them all. Sharing information will help drive the kind of industry-wide changes that create economies of scale and guarantee the availability of materials, he says. Arbogast is now hectoring the extended supply chain that stretches from raw materials to overseas factories. "We've asked them to measure their greenhouse-gas emissions," he says. "Just as we know quality and other factors by commodity, we will know greenhouse-gas emissions by commodity. We'll be able to drive reductions."
LINDA FISHER, vice president and chief sustainability officer, DuPont
DuPont, the "better things for better living ... through chemistry" inventors of products like nylon, Teflon, Corian, and Kevlar, may not be the first company that comes to mind when you think of green technology. But after public uproar over its ozone-depleting Freon culminated in a 1988 decision to phase out production, DuPont learned two things about the relationship between business and the environment. One was that hurting the environment hurts your reputation. The other was that environmentally friendly products make money. The ozone-friendly refrigerants DuPont used to replace Freon ended up being more profitable than the original, according to Fortune magazine.
Linda Fisher's job is to keep those two revelations in the minds of company decision-makers. She came to DuPont at a time when it had already done a fair amount to clean up its footprint, reducing its greenhouse-gas emissions, she says, by 72 percent by 2004 and airborne carcinogens by 92 percent by 2006. But the company also had a major toxic problem on its hands: perfluorooctanoic acid (PFOA), a probable carcinogen used in the manufacture of Teflon that is now in the blood of nearly all Americans. For decades, DuPont resisted EPA pressure to phase out the chemical. But in 2006 it agreed to eliminate its use of PFOA, and announced that it would reduce its air-carcinogen emissions by at least 50 percent from 2004 levels, by 2015. Fisher says her role was to help coworkers "understand that the market was moving away, people were concerned, and even though governments hadn't taken action, we needed to get new products out there."
In 2006 DuPont set a goal of earning $2 billion in revenues by 2015 from products that improve energy efficiency or reduce greenhouse gases. Products fitting that definition include lightweight materials for cars and airplanes; chemical coatings for solar cells; and bio-PDO, a corn-based polymer that can be used to make fabrics and carpets. The plan is to bring products to market that are more energy efficient, use less water, are less toxic, and still meet the customer's needs, Fisher says. "If business gets this right, it'll be transformative."
MARK TERCEK, managing director, Center for Environmental Markets, Goldman Sachs
Mark Tercek is an investment banker--a Harvard MBA with 23 years of experience at Goldman Sachs. He knows a lot about business, not so much about science and public policy. And so, he says, he thought it was "a weird idea" when then-CEO Hank Paulson tapped him for a job in sustainability.
But Paulson had his reasons for choosing an investment guy rather than an environmentalist. "We've tried to base our environmental program on solid business fundamentals," Tercek explains. "That way it will likely endure even during down parts of the cycle."
In 2005 the company issued an environmental policy that included a statement in favor of mandatory carbon caps, a commitment to invest $1 billion in clean energy, and a vow not to finance projects that degrade natural habitats. The chance to see how deep those commitments ran came in early 2007, when two of Goldman Sachs's private equity clients proposed a leveraged buyout of TXU Corporation, a Texas utility then planning to build 11 new coal-fired power plants. With Tercek's help, Environmental Defense and the Natural Resources Defense Council joined the negotiations, and the result was 3 coal-fired plants instead of 11, plus a $400 million investment in energy-saving initiatives and a commitment to support a national carbon cap-and-trade policy. Not everyone is cheering; Rainforest Action Network, for example, called the deal "three plants too many." But, Tercek says, the fact that Goldman Sachs was willing to put its green values in the path of the biggest leveraged buyout in U.S. history signaled that the days of see-no-evil investment are drawing to a close.
Photos, from top: Tom Gennara, Derrin Battles, Callie Lipkin, J. Michael Tucker, Thom Thompson, Steve Moors; all photos used with permission.
Globes courtesy of 1-World Globes, www.1worldglobes.com