The participants were Mike Saltzberg of DuPont, Katrina Shum of LUSH, and Elena Avesani, of Oracle, and last but not least, moderator Colin Grant of FigBytes, who didn’t hold back any tough questions to this expert panel. The chances of having insights from sectors this diverse in one room are like a unicorn sighting. That said, the commonalities that connected them were as compelling as the differences that distinguished them from one another.
Colin: Welcome to San Fran-Prius as I like to call it. My favourite game is walking around San Francisco and it used to be Prius spotting, but now it’s Prius or Tesla, or Volt spotting. Try this game tonight. It’s really, really fun. Try going 10 seconds, I kid you not, without seeing a Prius or a Tesla or a Volt or some other kind of plug-in. It’s really hard to do.
So how’s that happening here? Why hasn’t it happened in other cities? It’s this whole concept of the DNA so if ever there was a city in North America to exemplify that it’s here, the home of flower power, the home of the explosion of the Prius and plug-in for the electric car. I’ve been coming down here for about 15 years and that game has gone from 30 seconds to about 10 seconds.
The problem there is that maybe we see one low hydrocarbon car or no hydrocarbon car every 10 seconds – if they’re going past one per second that means nine hydro carbon engines are still burning away. So even in a city like this, with this incredible DNA for sustainability and this type of thinking, we’re still seeing this evolution to 2030 if we have to be close to climate neutrality. The scale up of these technologies has to be enormous going forward.
What I’d like to explore today is this concept of the relationship between the DNA, if you like, our own personal DNA, our own journeys, how we came to be part of what I call the “Sustainarati”, and how your organization came to be here and part of this movement.
I would say there are two types of organizations: the ones that have the founder – I have founded a few companies and this stuff comes from my childhood and my passion and belief. My companies are all founded like that. Then there are the ones where there is some genetic engineering going on. They take the meme of sustainability and CSR and embed that in the organization.
So, putting that out there, on one end of the spectrum perhaps we have the Patagonia type model where you have Yvon Chouinard. No matter what Patagonia does, it always seems to reflect really well back on them. They say, “Don’t buy any more clothing because we don’t want you to buy more clothes”, and their sales go up and the other outdoor apparel companies are wondering how they get away with that. Other outdoor companies are trying to manufacture that meme with authenticity and engineer it. It’s just doesn’t quite cut it the way it is when it’s absolutely core.
I would say that we probably have a spectrum from “born green” type of company here represented by Katrina of LUSH and the companies that evolve and embed sustainability represented by Michael from DuPont, 214 years young today …
Mike: Not me personally … I know I have a gray beard!
Colin: Let’s explore your organizations. If you can give maybe two minutes on what you do in your organization and touch on your own personal journey to being part of the “Sustainarati”, and then we’ll do a bit more of a deep dive into the culture of your organization, where you sit on that spectrum and where you see things going.
Elena: Hello everyone, my name is Elena Avesani, and I am Principal Strategy Manager in the sustainability strategy team at Oracle. I joined Oracle in 1998 and worked in different groups, primarily in product management before joining the sustainability team in 2009 when the sustainability movement was relatively young. It was a grassroots initiative. We kicked off the program in product development, working on products and solutions that enabled our customers to be sustainable.
The rationale behind it was that in a company like Oracle, you always have to align your initiatives with your business model. It was our best bet to have an entry point and push the sustainability agenda and I think it was a winning bet. In 2012 there was a pivotal moment when our real estate facilities team started implementing one of our solutions to track and measure environmental performance: we could actually claim that we walked the talk. That generated sort of a domino effect, other stakeholders joined the effort. Keep in mind we own and lease about 24 million square feet of real estate world wide. That was the beginning of the change in the company.
Katrina: Hi, I’m Katrina. I manage our sustainability program for LUSH in North America. I feel like usually you have no idea who we are or you’re like, “Oh my daughter knows your company!”, so for those of you who don’t know who we are, our founders are based in the UK and they do all of our product invention and innovation. We have 900 stores globally in 56 countries and manufacture in about six countries. In the North American business, we have 7 manufacturing and distribution buildings in both Vancouver and Toronto and they supply product to our 250 retail shops in North America.
I joined LUSH three and a half years ago as a team of one and now we’re at five, moving on to seven, so it’s been exciting to see our team grow. The business itself has doubled in North America in the last two years alone so we’re doing something right. For us, the ethics of the company have been core as a mission driven organization. The founders have always been conscious about how our products and business interact with the environment.
I focus particularly on environmental sustainability and work very closely with our Ethical Buying team and Charitable Givings team which form the core ethics column of business. Prior to working with LUSH, I worked with Aramark in contracted food services working with higher education institutions so it was really interesting to move from a large company that has the potential to have large impact across 500 universities but which is slower moving, to a company like Lush which is a lot more nimble, 20 years young, to be able to work in an environment that’s really entrepreneurial and innovative.
Mike: I’m Mike Saltzberg. I lead DuPont’s biomaterials business What we do in biomaterials is that we’re looking to invent new processes and new materials that start with renewable resources rather than petroleum. Today we have a $300 million business that’s based on using cornstarch to make a chemical that goes into a polymer that’s used in carpets and in shirts. We have a number of other projects where the whole goal is to move off of fossil fuel based chains for materials and onto renewable based chains.
Personally, I was trained as a scientist. I spent my whole career bringing new technology to market. I’m always playing with that interface around bringing new technologies forward. I’m a material scientist by training. The last 11 years I’ve been in this biomaterials space. It’s sort of a new emerging area. There’s not that many examples of people being commercially successful with biomaterials but our Sorona businesses is one of them and there’s a lot more beginning to accelerate.
To address the company piece, I think again, Colin sort of set this up – the story of DuPont is the story of American industry if you go all the way back to Thomas Jefferson in 1803 and the gunpowder business, then the chemicals business. When I joined the company more than 29 years ago our products were primarily based on petroleum, with an oil company in our portfolio. And most of our businesses were extremely energy intensive, resource intensive kinds of business and over the 29 years I’ve been there, the portfolio of businesses has changed dramatically.
If you look at what DuPont does today, it’s a lot about agriculture, seeds and products that make agriculture more productive – nutrition, health. The business I’m in, we sell enzymes that are solutions that allow people to do things like laundry and animal feed much more productively, so it’s been a huge transformation of the business portfolio.
Also, in terms of the approach that the company’s taking towards sustainability, again like American industry, if you went back to the 1900s it was all about progress at any cost and lots of implications of that. In the 70s the DuPont company went into a strong compliance mentality and I think what’s happening over the last 20 to 30 years that I’ve been there is that I’ve watched as they’ve moved from a compliance mentality which is “this is the stuff we’ve got to do to stay in business”, to building sustainability into what we do internally.
It was little bit like the story Elena just told, a huge wave in the 1980s where we went through all of our plants and by reducing waste, reducing the amount energy used, and got all the economic benefits internally. And where we are today is a completely different place where, particularly my business the cutting edge of that, everything we do, every product that we make, every piece of research and development that we do builds into that. It’s not “Here’s the product and here’s the sustainability story”, it’s part and parcel of it so every product that we do in biomaterials, not only is it high performance, not only is it from renewable resources, but the process used to make it is substantially better.
As an example, the biggest product we make today uses about 60% less GHG emissions and much less of every other metric you could look at from water to GHG emission to everything else in that process so it’s a combination of better products, but also better process.
Colin: I’m CEO of a company called FigBytes. What we do is take daily data for organizations, link it to their sustainability vision and then link their sustainability vision to the United Nations Global Goals, (or any existing or custom framework they choose), which are all about, “Can we make the key progress to solving the world’s problems by 2030 and then fully solve these problem by 2050”?
Time to get to our Q&A, addressing each company’s continuation of, or adaptation to, the essentials of corporate DNA and the practices that define their respective profiles and practices.
Mike, taking a progression like that in mind, 50-100 years ago, 100% of chemicals would have been petroleum derived. Now you’re heading up the new frontier on biochemicals. What percentage of the chemicals produced now are biological and how do you see that going between now and 2050 – the trajectory?
Mike: First, I think it’s important there’s always been some renewables, so cotton is a fiber that competes with nylon and polyester, so there’s always been a certain percentage of renewables. Today if you look at the high-performance sector we’re trying to attack, with new materials, today it’s quite small – in the single digit percentage. We’re growing much faster than the market as a whole, but I think it’s going to be some time before we are at a substantial percentage, maybe 10 years.
Colin: I’m going to put you on the spot. What’s a substantial percentage within 10 years?
Mike: If you can imagine in bulk terms, about 10 to 15% would be a substantial amount.
Colin: What’s driving that within the culture of the organization? So if the DNA is “we take petroleum and make clever things with petroleum”, and Mike comes along and talks about all this tree-hugging stuff, how much is that driven by somebody like you? Passion? By examples, like Interface where they’ve almost completely removed carbon from their entire supply chain and how much of it is risk avoidance? We won’t have petroleum forever, we see price spikes etc.
Mike: We sit back in the value chain so we’re not like LUSH or Oracle, where we’re out front and people recognize our products. We’re bringing ingredients to people that use them in their products so we have to have pull from our customers. We have to understand what they need and provide them a solution.
To develop an entirely new solution, for example, a product that we have now, it’s been on the market for 10 years, and we worked on it for 12 years before that, it just reached $300 million in sales this year, so you have to have a very long term view and a lot of commitment to a lot of R&D to find those solutions. It’s a combination of internal push and external pull from customers.
Colin: Are people seeing reduction in risk as you put less energy consumption into your processes?
Mike: Yes, it’s as much about telling a good marketing story as it is about reducing risk. There’s compliance risk but there’s also commodity risk – oil is extremely volatile so if you can move off of that it takes that risk out and also I think the marketing story is more important.
Colin: Katrina, I’ve heard CSO’s and VPs Sustainability say, “If I do my job right, in five years I’ll put myself out of a job”. So what does LUSH sustainability mean to you?
Katrina: Sustainability has always been at the core of the business, but as we continue to grow, it’s a question of how we keep true to who we are. When I first started, the conversations went along the lines of … we source 100% post consumer recycling content for everything – why wouldn’t you? We’re going to serve vegetarian meals at our conferences – why wouldn’t you? A lot of things were just assumed decisions that we made. As we continue to grow and scale up the business, how do we keep a piece of the culture alive and how do we get more intentional about it?
Colin: Did you do a formal CSR report or was that just unnecessary because you’re LUSH?
Katrina: That’s an interesting question. We haven’t communicated anything in the past but we do have all the information we’ve been talking about. The interesting piece of this of this is that we do a good job of telling the story internally to our own employees and a lot of them can speak directly to the initiatives that we’re doing, to our customers. We’re very much about that customer experience in the shop. But we haven’t done a very good job in terms of outreach and promoting what we do externally, and I think that’s part of how we are as a company. We don’t spend any money on traditional marketing so a lot of it is through getting influencers into the factories and speaking to those folks who are then sharing our story.
Colin: That’s very much the Patagonia model. The story goes out in front of Chouinard and tells the story for them and other people try and duplicate it and find it very hard.
Elena, please talk about how the software delivery model has changed and how’s that impacting your workplace environment, DNA. You’re trying to “cloudize” probably all of your offerings?
Colin: It must be quite a struggle in doing that. How does that impact your overall solutions? You have two impacts: 1. People using your software that can reduce their own footprint and 2. The impact of the organization itself. It is increasing or decreasing?
Elena: The shift to the cloud is very exciting from a sustainability perspective because of the opportunity of offering a hyper-efficient delivery of software, platform, and infrastructure services to our customers. From a global perspective, I think it’s going to be extremely beneficial in terms of waste reduction and increased efficiency.
From an internal perspective, the challenge is that our own footprint is skyrocketing right now. In 2015 we consumed more than 900,000 MW hours of energy and we are investing in new data centers. That means that our impact is going to be higher and higher. To face this, we are pushing the company towards more aggressive renewable energy sourcing because that’s the only way we can offset this increase in energy.
From a customer perspective, the additional benefit is that we’re pushing towards a circular model: we build our own infrastructure, we use our own servers, we have total control over our resources, and we recycle and re-use 99.6% of our equipment. We also have a takeback program available to our customers. They can return obsolete equipment from any part of the world free of charge, giving us control over e-waste we would be responsible for.
Ultimately, I think the shift is going to be fantastic in terms of impact the IT industry has on the planet. It’s going to be … seismic, even if it will take a while to get there. Given that we have a lot of legacy buildings, the transition for the built environment is more challenging. Retrofitting sustainability is more expensive than embedding it at the onset of construction or while negotiating a new lease. For all of our new data centers we have sustainability guidelines in terms of procurement and energy efficiency requirements.
Colin: The RE100 (Renewable Energy 100)?
Elena: We’re not there yet. So far our goals are 33% by 2020. We might achieve it way before, and we are working to get to a 100% commitment but we are not going to do it until we have a solid plan on how to achieve it.
Colin: That comes back to my question around DNA. You were more of a tradition software company morphing into a new world.
Colin: Some of the Bay Area companies are saying, “We don’t know how we’re going to do it, but we’re going to 100%”. So is that an artifact of the DNA, of the culture?
Elena: Yes, we are not going to commit to an aspirational goal without having a solid roadmap that we can share with the public. That’s part of the transition. Oracle is an established, very fiscally responsible company, and not marketing driven. As a sustainability professional you want to push the agenda but you also need to be pragmatic and value driven.
Colin: Is there a danger in this conservatism, in what we’re hearing about millennials saying they’ll only work in a place that fully manifests their values? So if they’re interviewing at Oracle and they’re interviewing at Facebook and they say we’re shooting for 100% renewable energy, or Apple says “Look at all the solar panels on our giant spaceship donut thing that we just built”! Is there a danger … ?
Elena: There is a danger and we are very aware. Obviously renewable energy is a key theme in the IT industry, but we also have a very strong corporate citizenship program in terms of education, volunteering, diversity. We’re building a high school on campus, supporting a public charter school, focusing on design thinking. Oracle employees volunteer every quarter to teach kids on topics ranging from data visualization to wearable technology. I personally teach about the circular economy and sustainable design. Furthermore, we are a very efficient and extremely well managed company from an environmental performance perspective. We were ranked number 10 by Newsweek last year as the Top Green Companies in the US and number 17 worldwide, above Microsoft and Apple.
Colin: Could you say that again louder?
Elena: Number 10 in the Top US green companies and number 17 worldwide in Newsweek Ranking. We have strong energy efficiency programs. They’re not very sexy but they’re incredibly effective.
Colin: But isn’t that Marketing’s job, to make the stuff that isn’t terribly sexy, very sexy?
Elena: Yes, but we’re an engineering-driven organization, not a marketing-driven organization. Oracle is not a B2C company, our customers are the DuPonts of the world, but nevertheless they are big drivers for change. Key account customers like Unilever, AT&T, DuPont want to know how we manage our data centers, our supply chain and procurement practices, and labor practices, including our approach to defending human rights. Big companies want to know that their vendors are socially responsible. Employee retention is something quite new because now we are competing with companies that tend to be more B2C and so they have to be more vocal and marketing driven than we usually were. This is shifting the way HR is approaching sustainability and corporate citizenship, being more communicative about our achievements and what we do. We need to educate our talent that sustainability is complex and should be embedded in every aspect of our business.
Colin: I mentioned the Sustainable Development Goals. I’m going to go back to them. I’ve been in this game for a couple of decades and I’m always looking forward – we’ve got to solve certain problems by a certain point in time otherwise nothing can be defined as sustainable if we’re not all on that trajectory together. I’m going to imagine for a minute that we did solve the world’s key problems by 2030. One of them is plastics in the ocean. We’ve all seen the article saying there’ll be more plastic in the ocean than fish by 2050 unless we have a moonshot. There’s an example of one of the Global Goals.
We have poverty, we have renewable energy and education etc. If your company was to play a key role in in helping to drive your industry and society towards the achievement of these Global Goals by 2030, which bit would you choose and how would you manifest? We’re talking utterly transformative – we’re talking moonshots. If that had to happen and this was your legacy piece that you are leaving behind, what would that look like?
Mike: I think for us the best thing we can do is come up with better technology solutions to give people better choices when they’re making their products and doing it at scale. One of the things we always talk about internally is, what we don’t want to do is come up with really expensive solutions that rich people buy. Like a polymer for carpets that is the Tesla of carpets – it doesn’t solve the problem. We might make a bunch of money out of it, but it won’t ever get to scale and doesn’t really have an impact, so part of the issue is to go with solutions that can be scaled big enough to make a difference.
As an example, we talked about plastics in the oceans. One of the things is these microbeads. We don’t make the microbeads today but they’re plastic and they go out through the drain when you wash your face. What we’re working on is a solution that would be biodegradable so someone like LUSH who’s trying to make a face scrub, gets an alternative where they can give their customer everything they want at a reasonable price and still solve the problem. I think that’s what it’s really going to take. We’ve never been successful convincing people that they need to pay more for products that don’t work as well.
Again, sitting back in the value chain, we’re not the people who are out marketing to the consumer so what we need to do is enable our customers to be able to come up with solutions that work, at a reasonable cost, and can be scaled.
Colin: Good corporate answer. I’m going to push you a little bit further. The ocean is full of plastic already – trillions of pieces of plastic. We’re now seeing Unilever, many of the brands that you service, Coca Cola, PG, have said “We’re all in for cleaning up the oceans”. They don’t know how they’re going to do it because nobody does, but we’re saying, “We have to do it”. Can you see DuPont taking part in something like that?
Colin: And what brand value could you get out of that that justifies the CFO saying, “We’re going to let you spend …”.
Mike: That’s the hard part for us as we typically don’t get the brand value because we’re not going downstream to consumers. But again, what we could do is come up with a solution that says, “What are you going to do with all this plastic?”. What technology could turn this into something that’s useful?
Colin: You’d make it transformative?
Mike: That’s what we’re good at. We’re not the marketing guys, we’re the guys that come with good technology solutions that can solve problems. That particular one, that’s what we could do. Proctor and Gamble is one of my biggest customers, so we could work with those guys and say if we collect all this plastic, what are we going to do with it? Can we work together to come to a way to make it work?
Colin: Can you share, is that discussion underway at DuPont?
Mike: Yes, absolutely. It’s a similar thing to what Elena said earlier, we’re selling to our customers and they’re looking to us to help them, to be their CSR or similar roles. They need technology, they need new solutions and that’s what we have to do, is bring it to them.
Colin: Exciting! Katrina, how’s LUSH going to save the world?
Katrina: Save the world? That’s a very good question. We work across all of the SDGs in many different ways. The unique thing about us is that we are a very vertically integrated company. You often have companies that just focus on selling or retail or other companies that just focus on manufacturing products. That’s where we’re pretty unique as a company because we go all the way from product innovation and sourcing, we have a buying team that’s called the Ethical Buying Team, they’re not just a buying team. All the ethical buyers are very well informed and tuned into the environmental issues and the social and cultural context related to their ingredient portfolios.
In that, we have what we call a Sustainable Lush fund, affectionately known as the Slush fund, where 2% of our buying spend goes towards regenerative agriculture projects in communities where we source ingredients. We essentially took all of or raw materials, broke them out into climate zones and then looked at keystone ingredients in those climate zones and said, “How can we build permaculture projects, regenerative agriculture and agroforestry to essentially build out a more direct supply chain for those ingredients?
There’s a lot of really innovative work that we’re doing in that space that touches on poverty, education, climate change, water issues, and really delves into it. Our “We Believe” statement, our mission statement, says we believe in making mistakes and trying over again. Part of the philosophy of the Slush fund is to grow the capacity of growers and producers and to support their communities and livelihoods in a meaningful way, while understanding that not all projects may be commercially viable while the eventual goal and intention would be to move those products into our supply chain. There’s some really neat work we’re doing there.
We manufacture products and we sell them, so we have the touchpoints in manufacturing and retail, but we do a lot on the customer end too. It’s where we have a lot of opportunity not just in creating products that are what we call “Naked”, aka, no packaging, but also in being a real campaigning company and using our 250 retail shopfronts to do campaigns on issues that matter to us, such as tar sands, microbeads, or palm oil.
The ethical campaigns we do often cover complex issues with varying opinions, but it’s about raising awareness and starting the conversation. If you’re in a shop in Calgary and we’re doing an ethical campaign on the tar sands, how do you have that conversation? We’ve had broken windows and we’ve had customers who have walked out because they don’t believe in an issue. Our founders and our CEO are ok with that. We’re here because we want to stand for issues we believe in and push policy or legislation through, whether it’s banning microbeads or ending trophy hunting.
As a vertically integrated company, we’re fortunate to be able to have a positive impact on what happens upstream in our supply chain, and downstream with our customers.
Colin: What’s the most inspiring, tear-jerking stories from your supply chain that you can share with out.
Katrina: There are so many. Two of our ethical buyers shared stories at a recent meeting managers meeting which were both very impactful. One was the company that makes our canvas bags. It was an interesting story because the ethical buyer really helped shed light on many of the challenges faced by women in India, getting stuck in a cycle, and being able to provide a way out that’s driven through market. It was inspirational to see this company that grew significantly and how many women they’ve been able to influence and how the lives of those women and their families has been able to transform communities.
Colin: Elena, quick comment on how Oracle might help save the world by 2030. Then we’ll put it out to the audience.
Elena: I know you mentioned the Sustainable Development Goals. Out of all the 17 goals, the areas where we articulated goals are quality education, affordable and clean energy, industry innovation and infrastructure and partnership. I think given our scale, the largest impact for us is definitely industry innovation and infrastructure. We have more than 400,000 customers in 145 countries so enabling our customers to run their businesses sustainably is the best way we can help the world wide community to achieve these goals and have a positive impact.
It’s clear these organizations, which couldn’t be more different on paper, all have in common a cultural DNA that identifies them as dominant in the gene pool when it comes to sustainable innovation and practices. Whether embedded from inception or adapted through changing times and market demand, it doesn’t matter as long as the intentions are true and the people driving the organizations have bought in, heart and soul.
A big thanks to this great panel for sharing their personal and corporate stories with us.