Sustainability Must ‘Solve for Shared Value,’ Executives Say
The pandemic and some of the problems it created meant logistics and sourcing became superstars in any company because it was almost impossible to get goods, according to Pete Sadera, editor in chief of Sourcing Journal who was moderating a panel called “A Place at the Table,” at the Sustainability Summit: The Road to 2030 in New York in late April.
He predicted sustainability will soon turn a corner and experience the same sort of reputational whiplash. And in many ways, it is already happening. Companies have named sustainability experts to their staffs, yet each comes at it from a different angle.
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Kathleen Talbot, chief sustainability officer and vice president of operations, Reformation, is the first person to have that in her title in the company, which she calls “mission driven,” with a sustainability ethos at its core.
“I know what the business impacts are and I know what I’m asking of my colleagues and my team,” she said.
Also on the panel were Marco Reyes, senior director of sustainability, Walmart, who has worked for the retailer for more than two decades and watched sustainability come to the fore, and Chris Fox, chief sustainability officer, Hanesbrands Inc. He is trained as a lawyer and worked in corporate responsibility for years before being named to his current position. Unlike Walmart’s Reyes, his job involves factories with all the environmental and sustainability challenges that implies. Some 70 percent of Hanesbrands’ total unit volume is produced in those plants.
“We have that lever to go and enact change to transform industries for the better,” he said. “Our thinking is, how do we solve for shared value? Good for business, good for people, good for the planet?”
He feels a responsibility to democratize sustainability, to bring together NGOs, governments and other retailers to set the bar in a way so that everyone makes progress, drives technology and makes sustainability an idea that is available to many, he said.
Fox said he asks himself if sustainability is a meaningful consumer proposition. In other words, “is it affordable to the folks we’re selling to” who shop for low-cost products at Walmart?
Customers are not the only group that has to be convinced — staff have to be brought on board, too. Walmart holds meetings quarterly, and sustainability and regeneration were the subject of the last one, Reyes said. The message is always there: not only is this who we want to be, this is who we’re going to be.
“You have to provide paths for everybody to onboard,” he said.
He gets champions and sponsors in the executive ranks and their business units, develops roadmaps, executing strategies then tracking progress, giving people exposure but also holding them accountable. They have yearly sustainability milestone meetings where they discuss where they can do better and do aisle-by-aisle walkthroughs to compare and discuss products and packaging. “We’re making big, big transformations and really changing mindset so it doesn’t become another step or another check in the box,” he said.
At Reformation, Talbot said company policy for internal engagement involves quarterly sustainability reports the way some companies do with financials. The company has instituted a department sustainability scorecard that reaches the sub-department level, so directors are accountable for goals and metrics they’ll track each year. She reports that 90 percent of the teams understood their roles, and their individual contribution to Reformation’s mission and purpose. “That’s everything to me,” she said. “That’s my measure of success.”
At Walmart, success is measured in transparency, Reyes said. The retailer states its goals, saying “this is what we’re trying to do,” and what we would love for you to do, too, and admits it when it falls short and tries to improve.
“We try to lead by example,” Reyes said.
Walmart gives partners a platform, tools and calculators for them to apply to their own businesses and create change. It lays out non-negotiables, like treatment of workers or uncertain ways of sourcing.
Further, Walmart encourages people to recognize good behaviors. An incentive program gives an award to one of the top tier of suppliers and offers access to special events and leadership interactions.
“And by the way, we’re building and becoming a regenerative company,” he said. “That means we’re going to continue in that path of working with suppliers that are moving in that direction with us.”
Fox noted a hard lesson he learned in sustainability when Hanesbrands was spun off from Sarah Lee in 2007. The company had to turn over every rock possible to save money in order to pay down some debt. The goal at the time was to cut its $100 million energy spend by 25 percent. Fast forward about 15 years and the investments made in renewable energy are paying off. Hanesbrands has big biomass plants attached to both of the large textile mills and one mill is completely renewable.
“We’ve saved hundreds of millions of dollars through our sustainability efforts,” he said.
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