Done right, corporate sustainability efforts can please investor groups and outside critics — including such organizations as Environmental Defense and the Rainforest Action Network — at the same time they represent smart business. That was Dow Corning’s goal in December 2005, when the company added Peter Cartwright, executive director for environment, health, and safety, to the company’s 14-person executive committee, its key decision-making group. “The biggest driver for us regarding sustainability is that our customers are telling us that’s what they want,” says Cartwright, who is based in South Wales, U.K. “Customers are interested in environmentally friendly products, energy efficiency, and reducing waste.” He notes that a global survey of customers showed that for 80 percent, sustainability was a key factor in buying decisions.
Cartwright also tracks the impact of energy consumption and waste production on profits. “Energy is getting more and more expensive,” says Cartwright. “So by doing what’s good for the environment, you’re saving money at the same time.” With Cartwright’s encouragement, the company recently broke ground on a US$50 million plant in the British Midlands that seeks to reduce emissions and increase the recyclability of various silicon-based chemicals.
Some companies are particularly creative about their approaches to sustainability and the people who manage those efforts. Wal-Mart CEO Lee Scott has created a program called “Sustainability 360” and has hired people from nongovernmental organizations to implement it. One small but telling step: Because of its work with Environmental Defense, Wal-Mart no longer lets trucks at its distribution centers idle their engines while loading and unloading. Now they turn the engines off, reducing fuel consumption and emissions and saving money at the same time.
General Electric CEO Jeffrey Immelt has also made a splash by naming Lorraine Bolsinger head of the company’s Ecomagination initiative, which similarly aims to position GE as an environmental leader. Her job is to reduce the emissions generated by GE-manufactured equipment, such as jet engines and electric turbines, while coming up with plans to take advantage of sales opportunities in water treatment and alternative energy sources around the world. Bolsinger worked her way up through the company’s energy, aerospace, and aviation divisions, and now has clout in fiefdoms that don’t always cooperate with one another: marketing, sales, environment, health, and safety.
Heidrick & Struggles’s O’Brien says companies are looking for a “new breed” of executives to fill CSO-type positions. In the past, he says, EHS officers were like auditors. They primarily managed statistical reporting processes, working with low-level government officials to produce data about such issues as factory safety.
The new sustainability chiefs are different. “I’ve seen a pretty dramatic rise in the demand for business-oriented, articulate, strategic-thinking executives,” he says. “They have to be able to communicate persuasively to everyone from the shop floor to board members.”
Ultimately, the sustainability officer may go the way of the chief quality officer or the chief learning officer, as companies absorb the key messages that these executives emphasize and embed them into core business processes. But that won’t mean that the creation of sustainability titles was an empty exercise. “It’s not Greenpeace or fringe stuff anymore,” O’Brien says. “It’s become mainstream.”
William J. Holstein ([email protected]) has covered China for more than 25 years, since serving as a correspondent for United Press International in Hong Kong and Beijing from 1979 to 1982. He is a contributor to the New York Times, Barron’s, and Fortune.