How Can Corporations Provide Leadership for Sustainability?
By: Kathleen Miller Perkins
During the March 2016 meeting of the Executive Master of Natural Resources (XMNR) program, a panel of corporate sustainability professionals gathered to tackle the question of what corporations owe to society. The panelists included
- Beth Heider, Chief Sustainability Officer of Skanska USA;
- David Walker, recently retired Senior Director of Global Operations and formerly Senior Director, Environmental Sustainability for PepsiCo;
- Rob Kaplan, Co-founder and Managing Director of the Closed Loop Fund and formerly Director of Sustainability for Walmart Stores; and
- Mark Weick, Director of Sustainability and Enterprise Risk Management at The Dow Chemical Company.
The panel began by suggesting that some companies exist solely to create wealth for their shareholders. Others take a broader perspective and commit to minimizing harm to the world and its inhabitants. But Mark Weick, Dow Chemical, argued that companies should define their role in society more broadly. He contended that the commitment to “do no harm” does not go far enough in a world that is fraught with so many far-reaching and urgent problems. He suggested that corporations can and should assume leadership in in attacking these global challenges. In fact Dow Chemical has committed to redefining its role in society to encompass a broader perspective.
In agreement with Weick, Beth Heider, Skanska, maintained that not only should businesses commit to addressing global issues, but that they should do so in collaboration with others such as government, NGO’s and universities. She said that the Paris Climate Conference marked the first official recognition that the government cannot solve sustainability-related challenges alone. Participants stated unequivocally that a new type of boundary-crossing collaboration is imperative. According to Weick, this type of “courageous collaboration” will require most companies to change their cultures to support new relationships and more fluid boundaries.
Rob Kaplan, Walmart and Closed Loop Fund, said that companies must rethink how they approach stakeholder groups outside of the companies’ traditional borders. To support his argument, he reported that 90% of Walmart’s impact on the environment comes from their supply chain. Walmart expects their suppliers to work at reducing these negative impacts. However rather than taking a more traditional hands-off approach with these suppliers, Walmart seeks ways to partner with them to make money together while, at the same time, reducing negative impact on the environment.
David Walker, PepsiCo, asserted that companies and their expanded networks of stakeholders must balance short-term goals with long-term objectives to succeed into the future. He acknowledged that this balance is hard to achieve in an environment where quarterly results and returns to stockholders trump all else. He suggested, however, that companies must take risks in order to stave off threats that could that could endanger their futures. He pointed to PepsiCo’s investments in the development of nutritional snacks as an example of the company’s commitment to taking chances in the short-run that contribute to a long-term solution to the growing obesity problem.
While all of the panelists acknowledged that issues pertaining to corporate sustainability are complex, they also agreed that the challenges are worth tackling. They asserted that it is the responsibility of corporations to take a leadership role in addressing those issues that threaten our societal well-being and the survival of our planet.