Business:

CI's Prickett says economy not affecting companies' focus on sustainability

As Fortune 500 companies scale back their work forces and adjust business practices to adapt to the slowing economy, how has the economic downturn affected their willingness to invest in sustainability? During today's OnPoint, Glenn Prickett, senior vice president and executive director of the Center for Environmental Leadership in Business at Conservation International, discusses his organization's work helping Fortune 500 companies create sustainable business plans. Prickett also explains how the lack of certainty regarding cap-and-trade legislation is affecting companies' sustainability practices.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Glenn Prickett, senior vice president and executive director of the Center for Environmental Leadership in Business at Conservation International. Glenn, it's great to have you on the show.

Glenn Prickett: Great to be your Monica, thanks.

Monica Trauzzi: Glenn, Conservation International has been working closely with Fortune 500 companies to create sustainable business plans that not only benefit the environment, but also help their bottom line. You've worked with companies like Wal-Mart, Dell, Disney, Starbucks. How has the discussion on sustainability changed on the business level in the past few years?

Glenn Prickett: Well, what's fascinating is what's going on right now. Obviously, it's a very worrisome time for all of us economically. What we've seen, surprisingly, is that the business community has not retreated from their focus on the environment and sustainability. If anything, many of the leading companies are leaning into it. So just last week for example the Walt Disney Company released its first corporate social responsibility report and it included very visionary, long-term goals for improving its environmental performance and trying to inspire its customers and consumers broadly to take action on the environment. So, what we're seeing is that on the one hand companies see some real short-term economic opportunities associated with going green and being sustainable by reducing energy use, reducing waste, and so forth. But they also see a long-term opportunity to position themselves competitively. So companies who have the wherewithal now to take a leadership position on sustainability are going to be that much stronger in the future because in spite of the economy and even in part because of the economy, our natural resource concerns aren't going away and consumers are generally maintaining their concerns about the environment. So smart companies are recognizing this is an opportunity to outpace the competition on sustainability.

Monica Trauzzi: What's the process for coming up with a business plan? Is it different for each company or do you go in with a certain set of standards that they absolutely need to meet?

Glenn Prickett: Right, so every company is unique. So every process looks a little bit different. We find though there are some common elements. And what we tend to do is challenge our partners to really push as hard as they can both on their own footprint, what they can do to reduce emissions, to reduce the energy use, reduce waste, but also how they can work with their suppliers and their customers to make big impacts in their supply chain and in the way their products and services are used. And typically the most successful engagements start with a real commitment from the CEO, from the top levels of the company and then all of the major segments of the businesses are involved and typically there's some form of group that guides the process made up of leaders from all the parts of the business, looking at their own operations, but also at their supply-chain and at the way their products and services are used.

Monica Trauzzi: These companies are reaching out to you for consultation, but where do you see the most pushback? Where are the challenges in the process for you?

Glenn Prickett: I think the easiest part is the awareness of the issue and there we've seen a real watershed in the last two to three years. When we got started in this line of work about a decade ago we had a few kind of lonely visionary CEOs, people at that time like Bill Ford and John Brown who really saw this before the rest of the pack who got involved with CI and their companies worked with us. The real breakthrough moment came when we had the opportunity to work with Wal-Mart. Rob Walton, the chairman, joined our Board of Directors. We and some other groups began working with Wal-Mart on their own sustainability strategy. When Lee Scot announced that, that really open the floodgates if you will and we've had so many other companies since then stepping up to try to understand how sustainability can make a positive difference for their business, not just can they do the right thing, but can doing the right thing help them do better as a company?

Monica Trauzzi: In your discussions with these companies what do they say about the lack of certainty that exists right now regarding a potential cap and trade? How is that impacting their day-to-day business and what decisions they're making?

Glenn Prickett: Yeah, it certainly slowed a lot of the activity around carbon financing, so you asked what are some of the challenges right now? I would say the engagement of the financial industry is a significant challenge given the problems that industry is facing overall and the lack of certainty around the future of the carbon market. So that's affecting the carbon price in Europe for example. So the whole area of financing emissions reductions has really slowed down lately. That's been the biggest challenge. On the flip side, none of the companies have stepped back from their commitment to reducing emissions long-term and to figuring out strategies to help their suppliers and customers reduce emissions long term. Everyone recognizes that at some point there will be an international and a national policy approach to climate change. So the smart companies are getting started early on strategies to reduce emissions.

Monica Trauzzi: What's your take on the business coalitions we've seen emerging over the past few years, like USCAP and BICEP? Are they accurately representing what the business community wants in terms of a cap and trade?

Glenn Prickett: I think by and large, and USCAP deserves a lot of credit for acting early to send a signal to the policy community that business wants a predictable regulatory system for greenhouse gas emissions. Many of the large emitters are represented in USCAP and they're worse scenario would be a patchwork of state or regional regulations and continued uncertainty about what the federal level program is going to be. So I think that was a very important leadership move. BICEP brings other forms of companies to the table and, overall, it's been a very positive message to Washington and to the policymakers that business is ready for policy, they just want certainty about what the policy is going to be.

Monica Trauzzi: The relationship between environmental groups and big corporations has come under fire in the past when there's an exchange of money happening, I mean these corporations are paying you to be a consultant on these projects. Are you less inclined to push these corporate donors to meet more stringent standards because there's money involved?

Glenn Prickett: No, not at all. If you look at Conservation International overall, a very small percentage of our funding comes from companies. It's less than 10 percent. So, as an organization, we're not dependent on that money. If anything, we believe we push harder than a typical consultant would in terms of challenging a company to set higher performance targets because if they don't we've really not achieved our mission of bringing about significant environmental change. And we try to be very transparent about the funding that we do receive and, quite frankly, I would rather have a company fund work that is helping them improve their business performances rather than having to raise that money from a foundation or an individual. I'd rather see that money going to conservation work in the field that's harder to fund. And at the end of the day the results speak for themselves, so we really try to focus on the impact that we have in terms of the change in the business practices in terms of the environmental gain that a supply-chain program can have in the field. And really try to put the spotlight on the impact that we have being transparent about the funding that it takes to do that.

Monica Trauzzi: The work you've done with Fiji for example is interesting because the bottled water industry has faced very heavy criticism from environmental groups because of the negative impacts on the environment. Is that all just positive PR and hype, the work you're doing with Fiji distracting from the concerns and messages that we typically hear about the bottled water industry? I mean what's being done there that's different?

Glenn Prickett: Well, bottled water has been a hot issue as you mentioned. Certainly, where we can, we should all be drinking water as we are here from a cup and bringing our own. But we recognize the bottled water industry is a reality. The bottled beverage industry is a reality. Interestingly, we've, as Conservation International, had a commitment to the nation of Fiji for over 15 years. We had worked with the landowners in several of the large river basins of Fiji to basically call a timeout to some of the commercial logging deals that were going on there and make the argument that we could actually do better in finding funding for conservation. Until the relationship with Fiji Water came along there was no one who was willing to step up and help landowners invest in forest conservation rather than forest destruction. So that was our initial interest in working with Fiji. We were able to work with them to significantly reduce the energy use in their bottling operations, to significantly reduce the energy use in the transport of the product internationally and within the U.S. So, we feel that they've made a significant commitment to reducing the footprint of their operation. They have also committed to be beyond carbon neutral by offsetting 120 percent of their CO2 emissions through additional funding for forest conservation on the island of Fiji. So we feel they're making a significant difference in the nation of Fiji and globally by reducing the CO2 footprint of that industry.

Monica Trauzzi: OK, we'll end it right there on that note.

Glenn Prickett: Great.

Monica Trauzzi: Thank you for coming on the show.

Glenn Prickett: A pleasure, great to be here.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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