- The way that we have learned, I think,
over time to build the business case for sustainability
is really at three different levels that we talk about.
The first is
protecting and managing our reputation and our brand image.
So all of the work that we do helps to
protect the company's reputation.
That's the basics.
In fact, this is how the whole field
of corporate sustainability as we call it today
really started about 20 years ago.
It was about managing what stakeholders thought of you
and how they viewed you.
But that really is table stakes these days.
The next level is what can you do around sustainability
and better human rights practices
that actually helps productivity
that can save you money,
that can improve productivity?
As we look at that, for example,
the water less program we have to use less water
in our manufacturing process actually saves
about five cents on every unit.
That may not seem like a lot,
but if you add it up across millions of units,
it becomes real money.
The worker wellbeing programs that we have
that improve workers health,
that improve workers financial standards,
this makes them happier workers,
more engaged workers, more productive.
It reduces turnover and absenteeism
in our contract manufacturers.
They see that.
So the business case that we've been able to document
is a 4:1 return for every dollar that's invested
in these kinds of worker wellbeing programs,
the payback to the supplier is $4.00.
So that's the productivity part of the business case.
The last part of the business case,
and the one that sometimes we still struggle with
trying to achieve, is growth.
How does sustainability contribute to growth?
Either revenue growth or innovation?
We see it very clearly in innovation.
As we set out to reduce the kinds of chemicals
that we use to make our product,
we actually discovered a different process
for finishing our jeans.
What we discovered is that lasers
could get the same look as some chemicals could.
And this new process that uses lasers
is called FLX, Future Led Innovation.
And it is replacing now some of those chemicals
that we used to use that required workers
to wear heavy protective equipment and masks and gloves,
and us to install all kinds of engineering solutions
at the vendor level.
We don't have to do those anymore,
because we eliminated the use of those particular chemical.
That's on the innovation side.
Now, on the growth side, it's harder.
That's where we're really trying to
take all of the good work that we do
around sustainability, embed it in our products,
and tell that story to the consumer.
It's harder right now,
because today we know there's just a very small percentage
of consumers that are willing to pay more
for a more sustainably-made apparel product.
Maybe different for food,
maybe different for consumer products, cosmetics.
But for apparel it's still a very small percentage
of consumers who are willing to pay more.
So we're still trying to figure out
how we add to the growth equation
in terms of the business case for sustainability.
- In spite of all the bad news in the world today
the good news is more and more people
are now demanding companies
to be responsible to the community.
Cause marketing is a big thing now in the private sector.
Consumers now are picking brands that actually invest
in the community that seem and have more
responsibility to communities.
And that's a good thing.
While Trump has stepped back
from the Paris Climate Agreement,
we have seen our private companies step up.
We have seen our sub-nationals step up.
We have seen private companies now say
what more can we do.
And that's really hopeful.
One of the companies that I'm most in awe of
and inspired by is our partner Ecos.
It's led by a CEO of color, a woman of color,
named Kelly Vlahakis.
She has been able to lead Ecos,
a cleaning supply company,
to be zero waste, carbon neutral, and water neutral.
The first ever.
A cleaning manufacturing company itself, right,
but the first ever company can do that.
And not only that,
when we were able to go see her facility,
her employees love her.
They get paid good wages.
They're deeply committed to the issue.
And this is a global company.
I lift them up because on the one hand
it's important for our private sectors to step up.
The second point is great, we're beginning to see that push.
In fact, a lot of the people attribute
the Paris Climate Agreement to the commitment
of our private sector in order for it
to have happened in the first place.
But now we really need to have private companies
step way up the way that Ecos have,
because we all know that 1.5 degrees is still not enough.
We just need to have some
bold leaders, some bold CEOs to step up
and lead the industry and lead the work.
- Lots of companies have now figured out,
and at TNC we're always encouraging them to figure this out,
that doing the right thing for the environment
is usually the right thing for their business too.
Sometimes you might have to be creative
in how you think about that.
You might need to take a medium
or longer term perspective than otherwise.
But it's hard for me to think of many businesses
who are doing the right thing for nature
doesn't benefit your business.
There are many, many examples to point to.
One that comes to mind right away is Walmart.
Walmart is a controversial company.
I'm sure they would prefer to be viewed
as less controversial.
But they're in everybody's spotlight.
So 15, 20 years ago,
15 years ago I think would be about the right timeframe,
they decided to take a hard look
at whether they could be a better environmental citizen,
and do that in order to improve their reputation.
But do that in a way that would
also improve business results.
The more they looked at the opportunity,
the more they found.
The first sets of things they did, for example,
really focused on energy efficiency in their stores
and in their distribution system.
And of course, they quickly discovered
the more efficient they became,
the savings fell to their bottom line,
but their environmental footprint improved too.
Then, Walmart is a bold company,
and they've got some bargaining power
as such a dominant retailer.
For many of the biggest consumer goods in the company,
Walmart is by far their biggest customer.
So Walmart's got some clout.
Walmart has now been in the practice
of convening the CEO's of their big suppliers.
It's a who's who of some of
the biggest companies in the world.
They also invite the CEO's of some
of their friendly NGO's.
I'm one of them, so I show up.
And Walmart has gotten very good at graciously,
but forcefully, requiring all of their suppliers
to up their environmental game.
The most current example of this is something
Walmart's doing called Project Gigaton,
whereby Walmart aspires to reduce greenhouse
gas emissions in their supply chain by one gigaton.
That's a lot of greenhouse gas emissions.
I'm sure they'll pull it off.
Then, in turn all of those companies
who are participating in this,
they've all discovered in their own way
that this is in their best interest too.
As they get more sophisticated in managing
their supply chain what happens?
They find cost savings.
They find operational improvements.
Better community relations.
What else happens?
As they seek to recruit young people
into their companies young people want to work
for companies whose values match their own.
So it helps on that front.
More and more investors care about company's
environmental performance.
So they're favored for those kinds of reasons.
It becomes a very virtuous cycle,
and lots of good things happen
from these kinds of corporate initiatives.
But it's a little bit tricky and complex,
because we're always finding the harder we look at this,
there is even more we would like companies to do.
As commendable as it is that Walmart
and their suppliers together with NGO's like us and others,
are working to reduce greenhouse gas emissions
by one gigaton in the Walmart supply chain.
That's positive.
We are also saying to all those companies
we need you to be more forceful and assertive with us
here on Capitol Hill when we push for
government policy we need.
So I think it's a requirement for NGO's,
for customers of big companies,
for investors to keep pushing the envelope.
How can we ask companies to do more?
And I expect what we'll find as we do that
companies will do that and they'll find
that it runs down to their bottom line best interest too.
So this ought to be a win-win,
but we need to be pushy to make it happen as best we can.