What It Will Take To Drive More Investment In Sustainability | Convoy

What It Will Take To Drive More Investment In Sustainability

Sustainability is truly a hot button topic today. From the major multinational companies which have made significant investments in sustainability to startups organizing as B corps so sustainability is embedded into their DNA, there is simply no denying our moral compass is gradually moving more toward meeting the needs of the present without compromising the ability of future generations to meet their needs.

In our Business of Sustainability interview series two key questions I ask guests are “what will it take to drive more investment in sustainability?” and “how do you articulate the business value of investing in sustainability?” A few highlights follow:

1. Kimberley Sundy, Director, Corporate Sustainability at Kellogg Company: “Shoppers are demanding transparency and accountability. They want to know where their foods come from. And they know that eating plant-based foods is better for the planet so they’re looking for plant-based options. Customers have been really aggressive in setting aspirational goals for themselves from a corporate perspective and we’ve been really aggressive in setting aspirational goals for ourselves. So, it’s been nice to be able to collaborate with them and find out where those ambitions overlap and how we can create value together.”

2. Zach Freeze, Senior Director, Strategic Initiatives, Sustainability at Walmart: “If you think about the definition of sustainability, we have to continue to be able to put products on our shelves in the years to come and we depend on the planet to do that. We have to make sure we’re good stewards to the planet, and we’re taking care of that. We’re putting people and the planet first. And that’s intrinsically tied to our business mission and our goal as a company. Our CEO believes it and understands it and understands the connection to, what he calls shared value, which is really about taking all stakeholder perspectives into consideration to make sure that we deliver for the customer, the investor, the associate, the shareholder, and all of that, we feel can be done and should be done in order to be a truly sustainable company.

3. John Sadlier, Chief Sustainability Officer at Ardagh Group: “People are getting more conscious about businesses that are sustainable. It’s really important that we are as sustainable or as circular as we can so that we play our part in what the consumer is now demanding. It’s also an opportunity. We’ve got super materials and the more sustainable we can make those materials, the more value we can give society with those materials.”

4. Kelly Fisher, SVP/Head of Corporate Sustainability at HSBC: “More and more people are working sustainability into their day jobs. The amount of people that want to bring me to a client meeting and talk about the sustainable finance products that we have to offer or the way we share their values has increased exponentially year over year. 2020 was awful for everyone. Some of us in the field were very afraid we would see it be a year where people said, let’s set aside this green agenda for a while because this is going to be a year of crisis and we actually saw the opposite. HSBC, for example, was the first to the market early in the spring with research that showed ESG stocks were outperforming other stocks in the market volatility that happened in April. And that’s what investors are always nervous about. “Well, wait, of course I want to invest in companies that have better ESG performance, but I also want a return.” And we were the first to market with a COVID bond in Asia and we saw a lot of our clients stepping forward and saying, “You know, what you’re doing with this on green, we want to do that with some social, some sustainable finance products that would support our social activities.” So, the fact that instead of people sitting to the side last year and saying, “I’ll get back to that later,” they’re actually doubling down on the activities they’re doing around ESG and sustainable finance which gives me even more cause for hope as we come out of this crisis together.”

5. Jeff Smith, Vice President of Sustainability at Six Senses: “We want to identify what could actually be longer in terms of time and broader in scope. It’s looking outside of the hotel business by supporting education in our local community which helps us address our future need for hiring good people from that community. Or investing in medical equipment for the local hospital, so when our people get sick, they go to that hospital. We want to have those community services in good standing because the hotel needs those to thrive. The same with wildlife. If we degrade our beaches or if the forest around the hotel was completely cut clear and there’s no wildlife, we lose that wildlife asset which is an asset to the tourism component of our business. Addressing the strategic risk is a big element of it. Another part is thinking about how sustainability can add value to your product offering. I would advise any business in sustainability to think of strategic risk first and address those risks, but then also going above that to actually add value to your product.”

6. Gretchen Grani, Regeneration & Sustainability Lead at Guayaki Yerba Mate co: “We’re already seeing shifts, especially this year. Policy is a big one. All of the new policies around climate and carbon pricing, electric vehicles, incentives for regenerative agriculture, that’s shifting — especially for food and beverage. This year we saw consumers step up and ask for the demand of corporations to support Black Lives Matter and also to start having diversity and inclusion programs. So, all of that is happening even this year. Risk is another big one. With all the wildfires and hurricanes and social unrest, it’s becoming risky and expensive to operate in an unstable world. It is also going to require a paradigm shift in seeing things as an extractive way of doing business — perceiving stakeholder value as essential for business success.

7. Jane Franch, Director, Strategic Sourcing & Sustainability at Numi Organic Tea: “All businesses need to be asking themselves, what risks does climate change bring to my business and what am I not accounting for here? I think we’ve had the luxury and the ability to not look it straight in the eye for far too long and we are getting to the point now where it is no longer a luxury that any business can afford. Nobody can ignore anymore what is happening with climate and on the supply side, it’s affecting our distribution network, it’s affecting the incoming materials that we’re trying to get to places that you now can’t travel to because there is this storm or this hurricane or this typhoon. So it really is deeply affecting all aspects of business and anybody who’s not seeing that right now is not asking the right questions. As soon as we can ask ourselves those questions and connect the dots and really look at what this means in a clear-eyed way for my business moving forward, then I think we can start to get to some of those priorities and where we might want to take action.” 

8. Wylie Robinson, Founder and CEO at Rumpl: “The customer has to demand it. If the customer is demanding it, you can very easily align your fiscal success with responsible business because you can very clearly state that our customers are asking for this, we can now do this responsibly and make sure that we’re providing the customers with what they want. And that should correlate to increased revenues and increased business overall.”

9. Yalmaz Siddiqui, Vice President of Corporate Sustainability at MGM Resorts International: “Many people come to this space with the perception that there is a tradeoff — if you’re going to adopt environmentally and socially progressive or beneficial programs, you’re going to necessarily cause the economics of the enterprise of the organization to suffer. The truth is, just like any other decision, you need to choose how sustainability or social impact shows up in your organization. And choose the range of things that drive value for your organization. And some of that could offer significantly beneficial economic value. I’d say that the investor is central to the future of corporate sustainability because literally in the last two years, there has been a very very, very significant upswing in interest by investors, the folks who have the funds that go into or do not go into companies in terms of capital. Meaning investors who want to acquire or invest in your company, or take equity positions are going to want to know what you’re doing because of the environmental social governance practices. And so, if you want investment capital, if you want to lower the cost of capital ultimately, then you need to be focused on these things. And then that legitimizes a lot more expenditure, a lot more strategy, a lot more hiring for this because you know it’s going to enable capital.”

10. Thomas Heckroth, Director of Strategic & Responsible Sourcing at Stitch Fix: “Throughout my career, I’ve tried to tie good sustainability performance to business success or good business performance. I think it’s easier for senior leaders to buy in when they see that clear data. Environmental performance or just sustainability performance in general leads to better outcomes on the business side too. So that triple bottom line that we started talking about in the early 2000s and 1990s got us into this world. But I also think that business aside, there’s a reality that’s setting in when you look outside. If you’re in California, the fires that have been raging, those are getting worse and worse each year. That’s a function of climate change. We know that to be the case. You see floods and the derecho that swept through Iowa — just weird weather patterns that are sticking around longer or being more severe. So, there’s a reality there that says we have to change and to succeed as a business, to continue to be around as a business, I think it leads us to understand that we have to change. So, there’s the business success side that I think is encouraging people to make more investments, but there is also the reality, the imperative, that we have to change how we’re operating in order to succeed. And I think the greatest thing about sustainability, especially in the environmental space, is that it’s not just a cost. You’re investing now for the future. There is an immediate cost, but there’s also a payoff in the end. It’s a much easier conversation now, I think, to have with senior leaders about the trade offs but also the benefits to sustainability within your business. You really have two things that are tying folks together and that’s the reality of the world that we live in and the business imperative now for the future.”

11. Mary Tullis Engvall, Senior Director of Corporate Responsibility at Cigna: “When stakeholders demand it. There are absolutely companies, especially ones with CEOs that are very purpose driven, but by and large, I really think what is moving the needle on this are stakeholders speaking up loud and clear. The work that Black Rock has done this past year by really changing it from a philosophical approach to how they look at companies to a very formal approach and using ESG as a proxy for good management. What the investor community is doing right now and making all of this, very real for companies, is important. And certainly employees, customers, clients, and the whole concept of supply chain sustainability where our clients are asking us everyday in every RFP, because they want to do business with companies that are like minded. And certainly the investor side, certainly the client-customer side, but I really feel that the employees are going to be driving this. Employees have really understood their role and found their voice and want to be part of really positive change and I think they will drive it from the inside.”

12. Danika Padilla, Director of Social Impact at Meow Wolf: It’s really going to take long-term investment. Whether those investments are coming from companies or government, or private funders, it costs money to do this work. It costs money to hire the staff to create these systems. I think it’s going to take a lot of investments from many different places and funders. It is also going to take the tools. If we can create tools that you can better use to assess your impact and to set your goals it provides a better understanding of where you are, where you want to be, and we’re really looking at our supply chain as one of the biggest places for those critical investments in the future.

13. Mia Davis, Director of Environmental and Social Responsibility at Credo Beauty: “When I started doing this work in the early 2000s, I was looking at companies like Patagonia, Clif Bar, Luna Bar, and Ben and Jerry’s, and I still look up to all of them. They’re incredible corporate stewards, but corporate responsibility and stewardship wasn’t happening. There was a lot of cause marketing. There was a lot of lip service versus sustainability and I think what we’re seeing now is a much more meaningful push, which is so important and absolutely necessary because we’re truly at a tipping point, especially with regard to the packaging and plastic, consumption and waste. But I think that it will only keep growing. I think when the consumer is demanding that companies be, not only more mission focused in general, but have key sustainability goals, and that they’re actually delivering on them, that is the key. As a society, we can’t keep externalizing costs and leaving it for another generation to deal with. We’re all paying the price, the environment, human communities, etc., and it’s absolutely got to stop. We have to stop making stuff this way. So I’m really hoping to be linking arms with other advocates, other organizations, and certainly other companies that see that they have an absolute responsibility and a moral imperative to start to improve the way that we bring consumer products to market.”

14. Tiila Abbitt, Founder & CEO of Aether Beauty: “I’m a firm believer that the consumer drives change. So when the consumers are asking about environmental footprints, about anything they want to know about packaging, people have to answer and people have to take responsibility for what they’re putting out there. I do think as a brand you should start small and then keep building. I’ve seen companies have these crazy goals in like 4 or 5 years, and, admit they don’t know how they’re going to do it but they’re going to do it. And that’s fine, but I think it’s a little bit more realistic to affect things that you can affect and then keep growing versus making all of these over-promised statements and under delivering because at the end of the day, if you disappoint this client or create a conversation of untrust, that is a very hard client to get back.”

15. Amy Blyth, Director, Program Development and Partnerships at Fair Trade USA: “There are three macrotrends that are really going to push more and more companies toward investing in sustainability and bringing it into the core of their business. The first one is consumer awareness and consumer interest in sustainability. Millennials and particularly Gen C show so many surveys and so many studies that not only do they state that they want to buy products that are made in a more sustainable and ethical way, but that they actually are purchasing them. In addition to the fact that they are looking for employment where they feel like their place of work is creating purpose and that their work is driving purpose, not only in the company but in the community at large. And so that is really starting to drive consumer preferences and employment and talent preferences is really starting to drive companies to make some of these investments. The second one is investors. Black Rock has come out stating they are more interested in hearing about companies’ ESG or environmental social and governance performance, not only just their financial performance to make better investments into, vote against board members and things that are not aligned with those principles or risk mitigation. And the third one is governance. In some places we are seeing some improvement and in some places I hope to see governments putting more interest and input into regulations that will move the needle on some of these larger systemic industry issues that need to get solved that no one company can do by itself. So, you really need those three to be in line in order for companies to kind of come along on the journey and then it will be really turnkey and kind of obvious for companies.”

16. Christine Riley Miller, the first Global Director of Sustainability at Samsonite: “More and more, with younger employees coming into and growing into the organization, they start to believe in sustainability and recognize that you don’t have to sit in the sustainability function in order to have an impact on your company footprint. So, whether you’re in the supply chain or HR or product design, distribution, regardless of where you are, you can help shape your company strategy. As more and more people start to be aware of their role and take some responsibility for that role and say, “Hey, what can I do?” We’ll start to see that grow. I also think as companies start to see that consumers and investors in particular, are more interested in what companies are doing to mitigate their impact on the environment, on their workforce, on the people in their supply chain, that companies will start to see the value of it. Consumers will start to make decisions through their spending. Investors will start to make decisions through the companies that they’re willing to invest in, and I think we’ll start to see companies continue to move in that direction.”

17. Katherine Pickus, Vice President of Global Sustainability at Griffith Foods: “Customers and individuals are asking more and more questions about where the food comes from and this is taking place, not just in the food sector, but all around. People care. They want to understand what the environmental impacts are. They want to make sure that the companies are not only transparent about what they’re doing, but they also want to see action. They want to see solutions. And if a company wants to be around in the next 10 to 20 years, they need to take action in this space.”

18. Danielle Jezienicki, Director of Sustainability, at Grove Collaborative: “I think consumers are the biggest part of that equation. Just, people asking for it and demonstrating through purchasing sustainable products are where they’re interests are and that they’re not going to go backwards. Consumers just voting with their dollars and using their voice.”

19. Annie Agle, Senior Director, Corporate Social Responsibility at Cotopaxi: “There’s not a lot of clarity on priority coming from legislation or from political leaders, and business, at the end of the day, needs to be given a sense of direction. A lot of the problem with, say human rights due diligence and supply chain or sustainability comes from the fact that it is voluntary — especially when you get down to human rights and sustainability. These are things that are not legally prosecuted. And especially when you look at human rights, that is the duty of the state to protect human rights. Right now, there is no legal obligation to adhere to any human rights. There’s a moral responsibility. The UN guiding principles for businesses certainly made a great suggestion around businesses having a responsibility to uphold human rights and climate activism, and environmental best practices, but there’s no legal obligation. I don’t think you’re ever going to get the kind of buy-in you need if there’s no policy to back it up. Until you see widespread or a more internationally cohesive set of obligations, I don’t think you’re going to get that kind of holistic buy in from the business community. It is one thing if you’re in a consumer facing company — there is consumer accountability. But a lot of companies are more intermediaries, especially if you’re a small to medium-sized enterprise, you might be a software provider, you might be a parts provider, and those companies don’t really have any visibility to consumers. And they don’t really have any incentive to prioritize sustainability. And given their position in the global economy, it might be pretty hard for them to do that. And so, I think it’s important for policy leaders to step up and think about those considerations. I think it’s easy to blame companies, but I think right now, most companies just have a lot of confusion around what they’re supposed to do or how to start and I think that’s a challenge.”

20. Ryan Emmons, Co-Founder & CEO at Waiākea: “It’s a data-driven economy and I think consumer demand for sustainable products is really what’s going to drive change. It is going to be a couple brands that are doing exceedingly well in beating out a lot of competitors in their categories. That’s going to make a lot of people start to question why and if sustainability is a big part of that business model, they’re going to know why. And then, that’s how you get change. When sustainability basically becomes the must have for capitalism it will cause a shift. And that shift is starting to happen right now because people are realizing that you can’t not address climate change, and you can’t not address sustainable packaging because you just won’t sell and I think we’re still 5 years away from that big shift, but we’ve definitely been starting to see that over the last 10 to 20 years.”

Jennifer Wong
Jennifer is the Head of Sustainability at Convoy, helping transportation leaders make progress against their environmental and social impact goals.