Winston, Desso, Coke Explore Ways to Reimagine Business on #SB14sd Day Two

The second day of SB '14 San Diego kicked off with a morning full of inspirational plenary presentations examining how we can reimagine business to become a positive global force.

Gil Friend, Chief Sustainability Officer at City of Palo Alto, gave the opening remarks, reminding attendees of how the US transformed itself during the Second World War to respond to problems that would not wait. Friend suggested that the several social and environmental issues currently afflicting our planet represent a call to action to transform our economy just like our forebears did.

Rich Fernandez from the Search Inside Yourself Leadership Institute asked the audience to close their eyes and imagine their ideal world. “Live and work as if your vision is being accomplished with your every action,” he said.

For the first plenary, Andrew Winston, author of The Big Pivot, discussed some of the major issues that we will need to address moving into the future. Some of these include: demographic and social change, shift of economic power to the east, rapid urbanization, climate change and resource scarcity, and technological breakthroughs. If we don’t tackle these issues, nothing else matters. The rise of big data also is transforming the lives of everyone on the planet as it creates a truly connected and open world.

Our current system, however, is too fragile to endure the test of time, especially as climate change-related weather disasters increase in frequency. Winston cited the devastation of Hurricane Katrina on New York City’s power grid as a prime example of how flimsy our power grids are.

To create a sustainable future, Winston offers three primary pivots:

1. Vision Pivot — Set service-based goals, fight short-termism, pursue heretical innovation
2. Partner Pivot — Get customers to care, collaborate radically, become a lobbyist
3. Valuation Pivot — Change incentives and engage

Sometimes it’s hard for us to “sell” sustainability because we don’t have all the hard numbers, Winston said. However, on a sinking ship would we wait to act until we “had all the numbers?” Companies such as Tesla and CVS are showing the bold sustainability actions can be taken even when it doesn’t immediately make business sense. For example, CVS cut out the sale of tobacco, which typically earned the company $2 billion a year.

We should stop selling products that don’t fit our mission, and sell more of the things that do. Most importantly, Winston said, we must seek to act beyond our immediate businesses and change the overlying system. Sometimes this means even collaborating with competitors, as Coke and Pepsi have done in their efforts to remove harmful chemicals in refrigerants.

Next, Alexander, CEO at Desso, presented how his company is disrupting the carpet industry by going beyond eco-efficiency, and pursuing eco-effectiveness. The average person spends 90 percent of their time indoors, and poor air quality indoors leads to many chronic health issues. Desso has developed a carpet that captures fine dust, improves air quality and is made from 50 percent Cradle-to-Cradle certified materials. The company has a manufacturing facility in Europe that takes old carpets and break down elements, avoiding the landfill.

“In redesigning, you come to all kinds of new possibilities,” said d'Escury. “This is what sustainability is; it’s making a better life for all of us and innovating.”

“What if all the brands and all the businesses in the world had a net positive ambition?” Sally Uren, Chief Executive at Forum for the Future, asked the crowd.

Uren told the audience that brands should strive to be Net Positive, which entails investing in innovation and publicly engaging in influencing. While critics have said Net Positive is repackaged CSR and PR Puff, ambition levels of net positive are high — from doing less bad to doing something great — and the companies pursuing net positivity are striving to integrate this approach into business and the overall system in which it operates.

Following Uren, the CEO of Avery Dennison, Dean Scarborough, took the stage to talk about his company’s struggle with making the business case to shareholders for sustainability. Avery Dennison operates in a B2B environment, which makes it difficult to sell sustainable products to customers, who often opt for the cheapest possible option.

Though Avery Dennison was able to achieve several internal sustainability goals, it was tough to meet product goals because of the higher cost of sustainable materials. Scarborough tasked his team with finding sustainable materials for use in products they could sell for the same as traditional products. At the end of the day, his job as CEO was to create value for shareholders, and he could lose his job if he didn’t deliver. Through collaborations with the likes of FSC and Rainforest Alliance, the company is gradually closing the cost gap with sustainable materials and making it a more attractive option for customers.

Next, Andy Savitz, author of Talent, Transformation, and the Triple Bottom Line, reminded attendees of the critical role of HR in driving employee engagement in sustainability initiatives.

Since the 1950s, businesses have gone from being expected to only make money and provide philanthropy to today’s several responsibilities. There also has been a shift from employees as cogs in a corporate machine to allowing workers to bring their own personal flair to work. Employees want to bring their values to work and expect employers to share these values. As Generation Y takes over the workforce, this will be more and more important, as they display a desire to work for purpose, not just a paycheck.

HR has its hands on so many levers that can change human behavior, and has emerged from its bunker to play a critical role, Savitz said. Taking care of your own employees is at the heart of sustainability.

“CSR without HR is simply PR,” said Savitz. “Purpose goes far beyond alignment of values — it’s also about creating opportunities to advance purpose at work.”

Public-private partnerships also are a driving force of sustainability in the business world, academia, and civil society.

Arizona State University’s Dan O'Neill and City of Phoenix’s John Trujillo dove in the details of the City of Phoenix’s Reimagine Phoenix campaign, which aims to engage residents to help the City reduce its waste 40 percent by 2020. The duo said at the core of their mission is the belief that there is no such thing as trash, only resources. O’Neill and Trujillo also called for universities to shift their research towards purpose that can help lead to a sustainable future. For example, the ASU is working with the Dutch city of Haarlemmemeer to advance the circular economy in the area.

Concluding the morning plenaries was Coca-Cola’s Derk Hendriksen, who heads up the company’s EKOCENTER program. These kiosks are designed to “help people help themselves” in the developing world by providing safe drinking water, allowing people to connect to the Internet, and delivering products and public services. Eventually, Coca-Cola hopes to offer more complex services such as microfinance and business classes. A "downtown in a box," EKOCENTER is not a silver bullet, Hendriksen admitted — just part of the brand’s learning journey.