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July 08, 2011
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Home » Making CR Second Nature

Corporate responsibility executives gathered for the CRO Conference in Chicago to discuss the innate growth and automation of sustainability and ethics practices

By Danielle Lee

The Windy City of Chicago, Ill., proved a fitting locale for the CRO Fall Conference 2007 on Sept. 12, as the day of speakers, panel discussions and case studies included a larger focus on climate change issues, as well as corporate philanthropy and sustainability perspectives in the continually widening field of corporate responsibility.

The 237 attendees inside the historic and art-covered walls of the Union League Club, heard from CEOs, other senior executives and social responsibility and sustainability academics and experts about the many facets of the market.

Nature was a primary focus, from the literal inspiration it lent Interface, which modeled a carpet product after the random patterns found in forestry, to the focus on a “natural” integration of what a particular company does best. Many executives, such as GE Foundation President Bob Corcoran, voiced the sentiment that companies should push positive change that aligns with their business model.

Corporate Philanthropy Panel
“Do what you do best,” Corcoran advised in the day’s Corporate Philanthropy panel. “Hook up your employee base with that, to amplify it; get even more impact.”

Fellow panelists Motorola Foundation President Eileen Sweeney and BP Foundation President Pat Wright echoed this employee focus, saying companies should consider mentoring programs, and recruit employees through education initiatives.

“For us it’s a pipeline issue,” said Sweeney. “We are looking to hire engineers, and of course we want women and people of color to come into our company and work with us, so it’s a great future for them and it all starts with kids getting turned on to science at a young age and we’re trying to make that happen.”

This involves acknowledgement of the current education crisis in this country, which is “not a political crisis but a sustainability crisis,” said Corcoran, because as Wright added, the next technological breakthroughs are going to “come from the people.”

The BP Foundation has consequently become more active in grant-funded teacher training, a $15 million program started in California and expanding to three more states next year.

“We talked to an assistant principal here in Chicago,” said Wright, “who said I cannot go out today and hire an eighth grade science teacher. They do not exist. I cannot hire one.”

GE has narrowed the focus of its grant programs, while doubling the overall dollar value.

“We identify key areas where we want to affect outcomes,” Corcoran said. “This isn’t a feel-good kind of program for us to give money so we can feel good about it, this is to give money to make a difference.”

For these grants, GE has targeted five school districts in cities where more than 1,000 employees are located, such as Louisville, Ky. CEO Jeffrey Immelt spends four hours a month mentoring the superintendent and school board, focusing on a strong math and science curriculum.

The Motorola Foundation has a similarly focused “girl-centric and engineering-centric” agenda through its Innovation Generation program, with recipients of $3.5 million in grants to be announced in the coming weeks.

Also on the panel, Margaret Coady from the Committee for Encouraging Corporate Philanthropy (CECP) commented on lessons to be learned from the privately funded but highly publicized Gates Foundation.

“Anybody with an interest in philanthropy can learn something from what the Gates Foundation is doing, certainly,” Coady said. “They take a lot of risks, have well defined theories of change. They create meaningful partnerships with their nonprofits, grantees, and their interest extends way after the ink on the check has dried. And they fund long-term impact-measurement studies that they try to learn from and incorporate in their next round of grants.”

Coady credited a move toward transparency and increased CEO visibility with the push toward philanthropy measurement.

Executive Director of nonprofit member organization Net Impact Liz Maw added that strategic integration of the business model is a large part of what its surveyed members are looking for in corporate philanthropies.

Over on the Sustainability Panel...
Susan Graff said she doesn’t consider herself a “tree-hugger,” but she’s embracing the notion that green companies will prosper.

Graff, CEO and principal of sustainability service provider ERS Global, kicked off the discussion on the “Sustainability Keynote Panel: Green as a Growth Strategy.”

Arguing that corporations need to move beyond defensive strategies like cost and risk reduction, Graff said smart corporations should adopt a “pro-active strategy” to increase retention, create a sustainable culture, improve brand awareness, penetrate new markets and differentiate products.

And, once companies decide to launch a serious sustainability program, it’s vital that the CEO “put a stake in the ground” and exhort the company and its employees to follow through on the business plan.

Panel members, including current and former executives from Interface Americas, a commercial carpet manufacturer, and Kraft Foods, respectively, highlighted the disparate phases that their companies find themselves in regarding CR and sustainability.

Interface hopped onto the sustainability bandwagon more than a dozen years ago when actually there was no bandwagon. That’s when Ray Anderson, the founder and chairman of the firm, discovered he couldn’t answer a client’s question about the intricacies of Interface’s environmental strategy.

It was a tough question, according to John Wells, Interface America’s president and CEO, because the company didn’t have a sustainability strategy at the time.

Wells described to conference attendees how that daunting question helped spur Interface’s 12-year sustainability journey, which led to the company’s reducing greenhouse gas emissions by 60 percent, avoiding $336 million in waste-management costs, and pledging to be producing zero waste by 2020.

One Interface product, Entropy, which the company developed along the way, now accounts for about 35 percent of Interface’s sales. This modular carpet, introduced after the company dispatched designers out into the woods and boondocks to find out if they could mimic some of nature’s sustainable processes, uses random design patterns.

Every modular piece has a slightly different pattern and color so when a piece of the carpet needs replacement, an installer can reinstall just that little piece instead of the whole carpet.

With Entropy, Interface has reduced waste in carpet installations from around 10 percent to 1 percent, Wells said.

The sustainability process is at an entirely different stage at Kraft Foods, noted Richard Gylling, the company’s former Vice President of Supply Chain Sustainability.

Kraft embarked on developing its sustainability efforts in 2006 after Wal-Mart called in suppliers to assess how they are integrating sustainability into their business processes, Gylling said.

Gylling said he studied Kraft’s sustainability options, and then had to plot a strategy on how to get senior management and shareholders to buy into the sustainability push. He brought in outside experts from Interface and Graff’s firm, ERS Global, to help make the case to senior management, including senior vice presidents in R&D, global supply chain, and marketing. And he sought the vice presidents’ help in making the case to shareholders.

Kraft, he said, is focusing on how to embrace sustainability, and is endeavoring to develop new products and markets.

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