OBSERVE The Odgers Berndtson Global Magazine_ No. 18

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OBSERVE The Odgers Berndtson Global Magazine_ No. 18
OBSERVE
The Odgers Berndtson Global Magazine_
odgersberndtson.com
                                        No. 18
                                        Issue 03 2019
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
For more than 50 years,
Odgers Berndtson has
helped some of the
world’s biggest and
best organisations find
their senior talent.

We do so by forming
strong relationships
with the most talented
people, with those
                            Our special thanks to the
seeking them and
                            following Odgers Berndtson
between our own
                            contributors to this issue:
teams globally to bring
both sides together. It
                            Kit Bingham, London
is because of our deep,
                            Catherine Broome, London
non-transactional and
                            Paul Butterworth, London
lasting partnerships
                            Tony Gaffney, Toronto
that our clients can
                            Clare Glackin, London
acquire, develop and
                            Jane Griffith, Toronto
retain their strongest
                            Elaine Grotefeld, Vancouver
leaders.
                            Lauren van Halderen, Johannesburg
                            Lucy Harding, London
We deliver executive
                            Patrik Kvikant, Helsinki
search and leadership
                            Jonathan Rossotto, London
services to businesses
                            Yan Vermeulen, Singapore
and organisations
varying in size,
structure and maturity.
We do that across more
than 50 sectors, be it
commercial, public or
not-for-profit, and can
draw on the experience
of more than 250
Partners and their
teams in 29 countries.      Observe magazine is printed on
                            Revive Offset 100% recycled paper

odgersberndtson.com

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OBSERVE The Odgers Berndtson Global Magazine_ No. 18
OBSERVE
The Odgers Berndtson Global Magazine_
odgersberndtson.com
                                                  No. 18
                                                  Issue 03 2019

                            the
                      sustainability
                           issue

                                       act now!
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
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OBSERVE The Odgers Berndtson Global Magazine_ No. 18
Welcome

                   Welcome to Observe 18, the                                                              We explore how organisations – and
                   sustainability issue.                                                                 the people who run them – can intensify
                   There has never been a global                                                         their efforts to combat society-sized
                   challenge quite like the climate                                                      problems like the climate crisis.
                   emergency. It is predicted to                                                           We speak to someone who led the
                   affect every person on Earth.                                                         sustainability charge at one of the
                     We have already felt the effects,                                                   world’s largest consumer multinationals:
                   many of them dramatic, yet the                                                        Paul Polman, former CEO of Unilever.
                   evidence is that this is just a taster                                                  We also explore the role of the
                   of things to come.                                                                    Board on taking on a planet-friendly
                     In response, we must accelerate the                                                 agenda. Where exactly does the
                   decarbonisation of the world economy                                                  green buck stop?
                   on an unprecedented scale.                                                              And we look at the place of the Chief
                     So, this sustainability issue of                                                    Sustainability Officer in driving change.
                   Observe magazine is arguably our most                                                   Businesses have an extraordinary
                   important one ever. Because business                                                  power to adapt, and often to lead the
                   has a vital role to play in slowing the                                               way, in finding solutions to big problems.
                   heating of the planet and adapting to                                                   Observe 18, reflects that fact. That’s
                   the future climate. It will take the very                                             why I believe this Observe magazine is
                   best leaders working with extraordinary                                               not just a good read, but a genuinely
                   talent to ensure success.                                                             essential one!
                     In Observe 18, we consider not just
                   the climate mountains to climb, but the                                               Yan Vermeulen is a Partner in the
                   solutions too; across sectors from food                                               Odgers Berndtson Singapore office
                   to shipping, infrastructure to fashion,                                               and is Head of the Southeast Asia
                   mining to finance.                                                                    Industrial Practice

                   OBSERVE
                   The Odgers Berndtson Global Magazine_
                   odgersberndtson.com
                                                           No. 18
                                                           Issue 03 2019
                                                                           Observe
                                                                           To read any of the
                                                                           great content featured
                                                                           in Observe over the
                                                                           past five years, go to
                                                                           odgersberndtson.com and
                                                                           click on the ‘Insights’ tab

                                                                             @odgersberndtson
                                                                             #obobserve

@odgersberndtson                                                                                                                 OBSERVE 3/19 5
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
Under Observation

Stories from                                           BANKING

around the                                 BACKING GREEN BONDS
                                         Euromoney.com has just voted
world that                               HSBC as the world’s best bank
                                         for sustainable finance, stating: “If
highlight some                           there is one bank that realises the
                                         urgency of getting capital working
of the latest                            for the planet, it is HSBC.” The

thinking on
                                         bank dominates in green bonds
                                         and green loans. Among its deal

sustainability                           highlights last year it had the
                                         inaugural Hong Kong sovereign           €200 million blue bond – a debt
                                         $1 billion green bond, Ireland’s        instrument issued by governments,
                                         first green bond, the first green       development banks or others to
                                         bond for protected agriculture in       raise capital from impact investors
                                         Mexico, the first green bond for a      to finance marine and ocean-
                                         telecoms company (Telefonica) and       based projects that have positive
                                         the first green sukuk in the Middle     environmental, economic and
                                         East. The bank was also the sole        climate benefits.
                                         lead manager on the World Bank’s        euromoney.com

                                                      TRANSPORT                                BRANDS

                                                 PLANE TRUTHS                             PERIOD GAINS
                                         Pieter Elbers, President and CEO        The fight against single-use plastics
                                         of Dutch national airline KLM, is       is now a mainstream issue, but
                                         taking its sustainability credential    activists and environmental groups
                                         very seriously – even advocating        say disposable menstrual products
                                         that some passengers consider           are also a big part of the problem.
                                         alternative forms of transport when        One brand,
                                         it comes to short-haul flights. He      TOTM, is to
                                         says the firm is exploring a “whole     be applauded
                                         range of initiatives” that could help   for its eco
                                         it become more sustainable. Its         products. Its tampons, pads and
                                         Action Plan for air transport in the    liners are all made with GOTS
                                         Netherlands sets a target of 35 per     (Global Organic Textile Standard)
                                         cent less Co2 by 2030 achieved          certified organic cotton and contain
               BOOKS                     partly by introducing sustainable       no rayon, perfumes, gels or chlorine
                                         fuel. KLM’s hub at Schiphol Airport     bleach. TOTM also uses sustainable
         KLEIN ON FIRE                   is part of this overarching plan:       packaging where possible, meaning
                                         terminals, offices, and ground          its tampons come complete
As we go to press, a new book            operations will also be climate         with biodegradable cardboard
from Naomi Klein, On Fire, is            neutral. Schiphol already runs          applicators while its pads are
about to be published. It gathers        entirely on electricity generated by    wrapped in biodegradable or
together for the first time more         Dutch wind and is making efforts        compostable biofilm. Furthermore
than a decade of her impassioned         to increase energy efficiency (for      the packaging the products
writing from the frontline of climate    instance, by using LED lighting)        are shipped in is also
breakdown, and pairs it with new         and limiting commuting.                 environmentally friendly.
material on the staggeringly high        klm.com                                 totm.com
stakes of what we choose to do
next. Klein sees the climate crisis
not only as a profound political
challenge but also as a spiritual and
imaginative one. Delving into topics
ranging from the clash between
ecological time and our culture
of ‘perpetual now’, to rising white
supremacy and fortressed borders
as a form of ‘climate barbarism’,
this is a rousing call to action for a
planet on the brink.
[See more book reviews on pages
32-33 of this issue]

6 OBSERVE 3/19                                                                               odgersberndtson.com
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
Contents
                                                        CONFERENCES                        8 Sustainability: Setting the scene
                                             INVESTING IN THE FUTURE                       Jim Thompson, Head of Odgers
                                                                                           Berndtson’s US Sustainability Practice
                                   The Nordic Chambers Business Forum annual event,
                                   to be held in London on 28 October, will focus on
                                   ‘Investing in Sustainability’. Understanding mega
                                                                                           12 Boardroom
                                   trends is key to developing new business. That goes     The vital role boards must play in rapidly
                                   also for climate change and the wider Sustainable       developing sustainability programmes
                                   Development Goals where the Nordic countries are
                                   seen by many as leading. But looking ahead, what        17 Sector focus I: Food
                                   are the strategic opportunities in sustainability for
                                   companies across technology, services, finance etc.     18 Fashion’s green challenge
                                   – and for investors in both advanced and emerging
                                                                                           The fashion industry needs brave
                                   economies? This always-engaging conference will aim
                                   to find some answers.                                   leaders in order to become greener
                                   [See our feature on ESG, pages 28-31 of this issue]
                                   dkuk.org                                                22 Infographic
                                                                                           Sustainability statistics to make you feel
                                    RENEWABLES                                             both alarmed and encouraged
                                    IT’S ELEMENTAL                                         24 Imagining a better future
                                    According to businessgreen.com the                     Paul Polman, former Unilever CEO,
                                    UK’s National Grid has teamed up                       talks to Observe about sustainability
                                    with the Alan Turing Institute to use
                                    machine learning to more accurately                    28 Money transfer
                                    predict generation levels from wind                    ESG-related investing has come of age
                                    and solar technology.
                                       National Grid is using artificial
                                    intelligence (AI) and machine learning
                                                                                           32 On the shelf
                                    to help predict how much energy the                    The latest sustainability books
                                    UK will reap from turbines and solar
                                    panels when the wind is blowing                        34 Chain reaction
                                    or the sun is shining. The new AI                      Shining a spotlight on the supply chain
PHOTO BY JAN KOPŘIVA ON UNSPLASH

                                    prediction models have improved solar
                                    forecasting by a third. The project is                 40 Cleaning up our act
                                    similar to the collaboration between                   A two-part look at cleantech
                                    Google and AI innovators Deep Mind,
                                    which is also using AI technologies
                                    to better predict energy output from
                                                                                           47 Listen up!
                                    wind farms. National Grid says that by                 Some of the best sustainability podcasts
                                    2025 it aims to be able to operate a
                                    zero carbon electricity system.                        48 Reality check
                                    nationalgrideso.com                                    Inclusion & Diversity within the
                                                                                           sustainability framework
                                                            FOOD                           51 Sector focus II: Shipping
                                               LET THEM EAT… INSECTS
                                                                                           52 Rise and rise of the CSO
                                   As climate change
                                                                                           A look at the developing role of the
                                   continues to wreak havoc
                                   on global food production,                               Chief Sustainability Officer
                                   some enlightened folk
                                   are looking to other forms                              56 Why Asia must do more
                                   of food that require far less                           MNCs in the area need to up their game
                                   land to feed us. One company,
                                   Micronutris, is the first French farm for               58 World’s most important bank
                                   edible insects for human consumption.
                                                                                           Plastic Bank wants to save the oceans
                                      Mealworms and crickets are transformed into
                                   flavoured crackers, energy bars, chocolate and pasta
                                   packed with proteins, fibres and vitamins. During its
                                                                                           61 Sector focus III: Mining
                                   lifetime one mealworm eats the grand total of half a
                                   shaving of carrot. What’s not to like?!
                                                                                           63 Odgers Berndtson worldwide
                                   micronutris.com                                         A list of all 61 offices in 29 countries

                                     @odgersberndtson                                                                        OBSERVE 3/19 7
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
Overview

                 sustainability:

W H A T
   L                    I E S
 A H E A
                 Jim Thompson on
                 why organisations
                 – and the people
                 who run them –
                 must intensify
                 their efforts to
                 combat society-
                 sized problems
                 like climate change

8 OBSERVE 3/19                         odgersberndtson.com
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
Overview

                                                                                  Corporate sustainability has three          On the social side, meanwhile,
                                                                                  parallel mandates: to manage the         companies are investing huge
                                                                                  impact of business decisions on          amounts of time, money and energy
                                                                                  the environment and society while        in order to align themselves with
                                                                                  improving the long-term viability        their increasingly values-conscious
                                                                                  of the business. Hoping to “meet         customers. One of the best examples
                                                                                  the needs of the present without         of this comes from the diamond
                                                                                  compromising the ability of future       industry, which has spent enormous
                                                                                  generations to meet their own needs”,    sums implementing mine-to-
                                                                                  the sustainable business movement        consumer blockchain technologies
                                                                                  was first embraced by a few altruistic   that can demonstrate to morally
                                                                                  individuals, then grew to have some      scrupulous consumers the authentic
                                                                                  marginal marketing or brand benefits,    and nonviolent provenance of their
                                                                                  and now offers its practitioners         gems. Why? Because a company’s
                                                                                  measurable financial benefits.           environmental and social policies are
                                                                                     Perhaps this is why the world’s       now, more than ever before, closely
                                                                                  largest and most influential companies   informing the bottom-line.
                                                                                  have become increasingly vocal              As sustainability initiatives shift
                                                                                  about their environmental and social     from basic environmental compliance
                                                                                  commitments: they’re cutting their       and corporate responsibility to
                                                                                  carbon footprints, they’re audibly       core and remunerative aspects of

                                                               D                                                                                 ➜
PICTURES: UNSPLASH / IKON / WIKIMEDIA COMMONS / PLASTIC BANK

                                                                                  focusing on operational waste            doing business, the structure of the
                                                                                  reduction, they’re investing in new      sustainability function is changing.
                                                                                  green technologies, and they’re using    Sustainability teams, which often
                                                                                  their clout to promote social agendas    used to be subsidiaries of marketing
                                                                                  on both local and national scales—       departments, are now becoming
                                                                                  all while maintaining their fiscal       distinct departments of their own.
                                                                                  commitment to good governance.           Some companies are even elevating
                                                                                  Microsoft, for example, carbon           sustainability officers to the C-level,
                                                                                  neutral since 2012, has pledged to       giving their Chief Sustainability
                                                                                  reduce its total operational carbon      Officers a direct reporting relationship
                                                                                  emissions 75 per cent by 2030. And       to the CEO and board, a greater role
                                                                                  Apple, which powers all of its global    in strategy development, and more
                                                                                  facilities with 100 per cent renewable   latitude in governing the firm’s stance
                                                                                  energy, is pushing its environmental     (both internally and externally) on
                                                                                  commitments down its supply chain.       sustainability. ➝

                                                               @odgersberndtson                                                                   OBSERVE 3/19 9
OBSERVE The Odgers Berndtson Global Magazine_ No. 18
Overview

                  The good news                                and their loyalty to the company, while
                  Despite the up-front costs,                  (e) accomplishing the stated goal of
                  corporate sustainability actively            offsetting the negative environmental
                  benefits both the company and its            costs of doing business. Between
                  various stakeholders (shareholders,          2005 and 2018, the world’s 100 most
                  employees, customers, local and              sustainable companies – as listed by
                  global communities). As former New           Forbes – significantly outperformed
                  York City Mayor and sustainability           their less green competitors. Top of
                  advocate Michael Bloomberg put it            the list in 2018 was Dassault Systemes,
                  when talking about cities: “Parks and        a French firm that designs engineering
                  trees make cities more beautiful, and        software that assists organisations in
                  they also suck carbon and soot out           waste reduction.
                  of the air. Energy efficiency reduces           I don’t want to understate how
                  emissions while cleaning the air and         important this is – for the planet, for
                  saving money. Bike lanes and mass            branding, for employee engagement,
                  transit make it easier to get around         and for talent attraction. The younger
                  town while also shrinking city carbon        third of the US workforce, for instance,
                  footprints.” And all of this helps “cities   is demonstrably values-driven. Despite
                  attract new residents and businesses”.       widespread student debt, the rising
                     Businesses, like cities, can now          cost of living, and the fact that they
                  accrue significant financial and             possess on average 40 per cent less
                                                                                 than their parents
                                                                                 did at their age, a
                                                                                 significant majority
                                                                                 of Americans under
                                                                                 the age of 40 will still
the good news                                                                    (a) leave a job for a
                                                                                 lesser-paying one that
                                                                                 more perfectly aligns
                                                                                 with their values,
                                                                                 and (b) pay more
                                                                                 for a product that is
                  brand benefit by offering others the         environmentally sustainable.
                  benefits of sustainability initiatives.      This is important because, in order
                  Companies that institute rigorous            to attract millennial customers
                  corporate sustainability goals can           and millennial talent, companies
                  (a) proclaim themselves as forward-          have to pursue the kinds of social
                  thinking and social-minded, which (b)        and environmental initiatives that
                  makes people feel good about buying          this generation cares about, which
                  their products or services and (c)           generally means doing real good for
                  makes its employees feel like they’re        the environment and for the human
                  accomplishing more than simply lining        stakeholders (both in the US and
                  the company’s coffers, which (d)             abroad) who are affected by the act
                  increases their engagement at work           of doing business.

10 OBSERVE 3/19                                                                   odgersberndtson.com
Overview
                   Jim Thompson is Head
                   of Odgers Berndtson’s
                   US Sustainability
                   Practice

                   The bad news                                   profits for shareholders).
                   The bad news is that our current                  Given the fact that corporations, like
                   sustainability efforts fall far short of the   their human leaders, are programmed
                   systemic environmental changes now             to focus their energies on tangible
                   required of us.                                short- and middle-range goals rather
                     Even while companies like Toyota,            than vague shapes in the far distance,
                   Apple, Microsoft, Neste, Merck, Delta          how should – indeed, how can –
                   Air Lines, Shinhan Financial Group,            businesses take the next step to act on
                   and thousands of others take what              what the numbers seem to require?
                   seem like drastic environmental steps,            I do not, of course, have all of the
                   atmospheric C02 levels continue                answers; but I have hopes. I hope
                   their meteoric rise. The numbers are           that corporate boards, tasked with
                   truly terrifying. In 2013 atmospheric          overseeing their organisations’ medium
                   CO2 levels punched above 400 parts             and long term viability, can intensify
                   per million for the first time in three        their efforts to combat society-sized
                   million years. In 2019 we hit 413 ppm.         problems like climate change. I hope
                   To put this in perspective, back in            that those companies with board-level
                   1970 atmospheric CO2 was at 323                sustainability expertise, board-led
                   ppm; and from the last ice age to the          committees devoted to sustainability
                   mid 18th century, when large scale             and corporate responsibility, and
                   industrialisation kicked off, C02 levels       actively enabled Chief Sustainability
                   remained more or less flat-lined around        Officers will serve as examples
                   280 ppm. If still more drastic measures        for others. I hope that executives,
                   are not taken – by companies, by               consumers, and employees will
                   nations and by consumers – global              continue to act on their values, putting
                   temperatures are expected to increase          competitive pressure on businesses
the bad news       by some three degrees Fahrenheit by            to increase their environmental and
                   2050 and seven degrees by 2100, a              social commitments and therefore
                   process which will radically transform         generating market-based solutions to
                   the world as we know it.                       climate change. I hope that businesses
                     But how can companies take more              will find it in their interest to pressure
                   active measures? The corporate                 governments around the world to
                   world has never yet faced a problem            implement sweeping environmental
                   on the scale of climate change and             policies – to do, in other words, what
                   the corporate model seems poorly               the international business community
                   suited to finding a solution. The costs        has done quite successfully with issues
                   of inaction are at once difficult to           like equality, civil rights, voting rights,
                   measure or predict and will be doled           poverty, and ozone depletion over the
                   out with relative equanimity across the        last century.
                   corporate spectrum; and so, though                Lastly, I hope that by taking
                   there are competitive advantages to            a leadership role in addressing
                   be gained by engaging in operational           environmental demands, businesses
                   greening initiatives, there is little          around the world can help restore
                   obvious advantage to taking more               some of the public’s faith in corporate
                   severe measures — nor is it clear how          values, reigniting the old notion that
                   such measures might align with that            businesses are agents of progress and
                   third pillar of corporate sustainability       vessels of societal good, not simply
                   and responsibility: economics (i.e.            manufacturers of undispersed profit. ■

@odgersberndtson                                                                         OBSERVE 3/19 11
Boardroom
ROGER CHOUINARD / IKON IMAGES

                                            All aboard?
              12 OBSERVE 3/19                         odgersberndtson.com
Boardroom

Is your board really playing its part in helping tackle
  some of the environmental and climate problems
   we now face? If not, then it’s time to act – now!

L
           ast year Deloitte published a report titled:   the long term strategic threats and opportunities
           Sustainability and the board: What do          facing the business, to ensure a company continues
           directors need to know in 2018? One of         to evolve and remains adaptable for changing
           its central arguments was this: “Although      times.” Critically, Bingham adds: “Sustainability
           it might not be the first boardroom            and a response to climate change are central to a
topic you think of, sustainability is now central         company’s long-term survival and success, making
to corporate competitiveness and a company’s              it a vital topic for boards. In the past, many boards
continued ability to operate. Traditionally               and companies adopted cheap and easy fixes – a
encompassing topics as varied as environmental            generous donation to a relevant charity, or a glossy
disasters, labor relations, safety incidents, or          brochure. Today, that is insufficient.”
scandals, sustainability affects all sectors and
challenges even the most progressive companies            The pivot to purpose
and the most thoughtful directors.”                       For Vancouver-based Coro Strandberg, an expert
   Deloitte envisaged sustainability securing more        on sustainability leadership and transformational
time at and in between board meetings, in part            business practices and relationships, the
because there is “no single, standardized approach        insufficiency to which Bingham refers is part
to incorporating ESG [Environmental, Social               of a much wider and more fundamental board
and Governance] into boardroom discussions                discussion. Says Strandberg: “In the future we will
on business strategy and risk. The stakes are             move towards redefining ‘what is the purpose
high, and directors need to act now to recognize          of the corporation?’; which is a question of key
sustainability as a fundamental element of their          concern for any board.” Strandberg calls it the ‘apex
stewardship and fiduciary role”.                          question’ that must be answered by shareholders,
   Fundamental indeed. If we cannot rely on boards        owners and management alike. “I call it ‘the pivot to
to play their part in resolving some of the burning       purpose’,” she adds. “I wouldn’t start by saying ‘now
(literal and metaphorical) environmental issues,          you’re on the board what about sustainability?’.
then things are indeed bleak.                             I would say you’re on this board and what’s the
                                                          purpose of the company and how does the board
Board responsibility                                      have oversight of the company’s purpose?”
Boards that neglect – or are simply ignorant                 And that, says Strandberg, means a call to
of – the clear benefits of deploying a strong             action for boards to “get a humanitarian or societal
sustainability programme, Deloitte’s report went          purpose”, one that even goes beyond profits and
on, “do so at their own peril. There is a growing         shareholder returns and having good customer
body of evidence indicating that sustainability           relations - although it shouldn’t, of course, abandon
factors influence financial returns and present an        these crucial areas. This overarching fundamental
opportunity to drive long-term value.”                    approach to what a company is, and what it stands
  We discuss elsewhere in this issue the financial        for, has been brought into sharp relief by the crises
and investment upside of an active sustainability         we all now face. The role board directors must play
programme but here the focus is on what one               in this unfolding drama cannot be overstated.
might call board behaviour.                                  Tony Gaffney, Managing Partner, Board and CEO
  Kit Bingham, Partner in the Board Practice              Services at Odgers Berndtson in Canada, echoes
at Odgers Berndtson in London and Head of                 this sentiment: “Boards have a duty to consider
the Chair & Non-Executive Director Practice, is           how their company and its sustainability measures
unequivocal: “The role of the board of directors          up against emerging ESG standards and to ensure
has been described as ‘creating tomorrow’s                that their business plan ensures adherence to
company out of today’s’. It follows that boards are       those standards. Sustainability considerations vary
responsible for considering and scenario-planning         across industry sectors. However, it is essential that ➝

  @odgersberndtson                                                                          OBSERVE 3/19 13
Boardroom
                                companies consider sustainability from       the indicators related to the company’s
                                all perspectives including those of their    overall climate impact, for example its
                                customers, investors, employees and          carbon handprint, are regularly reported
                                other stakeholders.”                         and reviewed also at the board level.
                                   There are rising societal expectations,   The board has annual discussions
                                believes Strandberg, with all                on business-related operational
                                stakeholders looking for businesses          sustainability matters. The sustainability
                                to play more of a role in society. It can    function is organised directly under
                                mean the board should revisit the very       Neste’s CEO which also ensures the
        Kit Bingham, Odgers     essence of the company – why does the        visibility of sustainability issues to
        Berndtson, London:      company exist? Which in turn is linked       the board.”
        “Sustainability and a   to a general public decline in trust (of
        response to climate
        change are central      governments, organisations, companies        Maintaining focus
        to a company’s long-    and so on); investors calling for more,      Kähkönen expresses an important
        term survival and       consumers braying for action.                sentiment that other boards would do
        success...”
                                   For Strandberg and Bingham the            well to follow: “Translating sustainability
                                avoidance of tokenism is key. Strandberg     targets into operational targets is a very
                                believes that being a director on a          company-specific issue. Our experience
                                board where you are, perhaps, the            is that a proper materiality analysis

                                                                                                                           STRANDBERG CONSULTING
                                sole sustainability expert is simply not     is necessary. Neste’s overall business
                                good enough. “It’s not about having          performance is closely linked to the
                                one person on a board! You get labeled       company’s sustainability targets.”
                                as ‘that sustainability person’! I have a       In Africa, Lauren van Halderen,
                                solution for tokenism: board education       Joint Managing Director of Odgers
NESTE

                                on the relevant sustainability topics        Berndtson’s Sub-Saharan Africa
                                material to your company. Plus, you          business, believes that boards and
        Matti Kähkönen,
        Chair of Finnish        need to have a very skilled Chair and        leadership teams in her region must
        energy company          other directors who are exposed to and       similarly “maintain an ongoing focus
        Neste:                  readily accept diversity of thought.”        on balancing competing stakeholder
        “Neste’s overall
        business                                                             interests to ensure sustainable growth of
        performance is          Boardroom action                             the organisations they steward”.
        closely linked to       It is encouraging to note that some             Valli Moosa, a South African politician,
        our sustainability
                                boards really have upped their game.         Chairperson of the WWF South Africa
        targets.”
                                For example, take Finnish energy             Board and Independent Non-Executive
                                company Neste, one of the top three          Chairman at AngloAmerican Platinum,
                                companies on the Corporate Knights           told Observe that: “Business existence
                                2019 Global 100 list of the Most             is characterised by rapidly evolving
                                Sustainable Corporations in the world.       customer needs, shifting regulatory and
                                   Neste, which posted revenues of EUR       investor requirements and escalating
                                13.2 billion in 2017, is also the number     environmental concerns.
                                one ranked energy company in the world          “In one organisations where I
                                thanks to its industry-leading exposure      chair the Sustainability Committee,
                                to clean revenues, top quintile resource     we are responding to a variety of
        Lauren van Halderen,    productivity for energy, carbon, water,      trends including artificial intelligence,
        Joint MD Odgers         NOx and particulate matter combined          transparent supply chains, demographic
        Berndtson Sub-          with excellent innovation capacity, and      shifts, ethical fashion, resource scarcity,
        Saharan Africa:
        “Boards must            gender diversity on its board.               anti-plastic sentiment and climate
        maintain an                Talking to Observe, Neste’s Chair Matti   change. While these trends represent
        ongoing focus on        Kähkönen declared: “Sustainability is at     risks, they are also opportunities
        balancing competing
                                the core of Neste’s business model and       to which we need to respond with
        stakeholder interests
        to ensure sustainable   an integral part of Neste’s strategy that    determination and commitment.”
        growth...”              the board approves.                             Van Halderen adds that businesses
                                   “As the company’s business is focused     in her region “need to find new,
                                on providing renewable and circular          innovative ways to achieve sustainable
                                solutions to combat climate change,          value creation, growth, greater social

        14 OBSERVE 3/19                                                                         odgersberndtson.com
Boardroom

      ❝
      ...You need to have a
      very skilled Chair and
      other directors who are
      exposed to and readily
      accept diversity of
      thought

      ❞
      Coro Strandberg,
      Vancouver-based
      sustainability
      leadership expert

                                 equity, promoting a sustainable,            Boardroom action
                                 thriving planet to provide solutions        Boards unsure of how to accelerate
                                 for future generations. Stakeholders        their sustainability programme would do
                                 should support the development of           well to take note of Neste’s approach.
                                 commercially and environmentally            As Kähkönen states: “The company is
                                 sustainable solutions for the company as    developing its portfolio of renewable
                                 well as enhancing sustainable long-term     and circular solutions to reduce
                                 shareholder returns.”                       global dependence on fossil oil and
WWF

                                   Still, as Strandberg rightly points       to contribute to improving recycling
      Valli Moosa,               out, educating board directors to know      of plastic waste in society. Neste is
      Chairperson of
                                 how to change things in favour of           committed to progressing towards
      the WWF South
      Africa Board and           greater sustainability must come from       reaching its corporate-wide climate
      Independent Non-           actively wanting to do it. “Boards have     targets, while supply chain management
      Executive Chairman         professional development objectives         remains high on the agenda.”
      at AngloAmerican
      Platinum:                  for their directors and every year the        Adds Kähkönen: “Neste is
      “We are responding         governance committee is responsible for     committed to transparency in our
      to a variety of            making sure that there is a programme       operations and performance. We
      trends including
      artificial intelligence,
                                 of education to equip boards with the       communicate promptly, consistently
      transparent supply         knowledge that they need. But it’s not      and accurately, and provide a sufficient
      chains, demographic        happening as rapidly as I would like.       level of information to ensure that all
      shifts, ethical
                                   “Well-governed boards have an annual      stakeholders can form a true and fair
      fashion, resource
      scarcity, anti-plastic     evaluation of the board’s performance.      view of Neste and its current and future
      sentiment and              You should have questions in there          operations simultaneously and equally.”
      climate change.            on how knowledgeable the board is             Every day that goes past without
      While these trends
      represent risks,           on sustainability matters. If directors     a coherent and implementable
      they are also              rank themselves low it’s then for the       sustainability strategy is a day lost
      opportunities to           governance committee to decide what         to the inexorable rise of climate and
      which we need to
                                 kind of education is needed. Not just the   environmental change. It’s time for
      respond...”
                                 board overall but also its committees.”     boards to act now! ■

         @odgersberndtson                                                                          OBSERVE 3/19 15
#RBSEU

 Responsible Business Summit Europe is back in June 2020!

Demonstrate leadership
in 2020 at #RBSEU

                    SAVE THE DATE
                              LONDON
                             27-28 May

                          2020
        Announce new strategies, engage key
         stakeholders or meet new partners.
Join 600+ CEOs, heads of business and investors
  and shape the future of sustainable business
                 www.ethicalcorp.com/rbs

Contact sponsorship@ethicalcorp.com for sponsor and speaker opportunities
Food
                                                                                                      Sector focus

We are what we eat. Food is currently the largest
reason for the energy imbalance on earth. The
statistics are terrifying – yet there is cause for hope

                                                                                                                 Four (of many)
                                                                                                                 reasons for hope:

                                                                                                                 1
                                                                                                                     Emerging
                                                                                                                     technologies,
                                                                                                                     incorporating
                                                                                                                 data and AI, as well
                                                                                                                 as artificial ‘meats’
                                                                                                                 are at an early stage,
                                                                                                                 offering visions of
                                                                                                                 ‘vertical’ urban farms,
                                                                                                                 soil-less growing,
                                                                                                                 and replacement of
                                                                                                                 intensive meat raising.
                                                                                                                 The question is: can
                                                                                                                 these scale quickly to
                                                                                                                 make a global impact?

                                                                                                                 2
                                                                                                                       High-Pressure
                                                                                                                       Processing could
                                                                                                                       extend the shelf
                                                                                                                 life of food by 10
                                                                                                                 times. The technique
                                                                                                                 effectively inactivates
                                                                                                                 micro-organisms to
                                                                                                                 guarantee food safety.
                                                                                                                 This combination of
                                                                                                                 high pressure and
                                                                                                                 low-temperature
                                                                                                      UNSPLASH

                                                                                                                 environment safely
                                                                                                                 maintains the taste,
                                                                                                                 food, appearance,
                                                                                                                 texture and nutritional
It’s the single largest source of greenhouse     resilient, sustainable and efficient ways. This
                                                                                                                 value of food.
gases, with 31 per cent attributable to food     means reducing emissions and pollution,

                                                                                                                 3
and its associated distribution chain. Food      minimising waste and improving our soil.                             Kickstarter
is also the single largest consumer of fresh                                                                          companies
water, the largest user of land and the single   Drought could also be a more fundamental                             like Exo are
largest cause of biodiversity loss and soil      problem for food producers. At two degrees                      hoping to make
nutrient depletion.                              of warming, a highly likely scenario given the                  insect protein bars
                                                 current rate of carbon emissions, droughts                      commonplace in
But just as the current food system is           will decimate the Mediterranean and much                        our diets. Insect
draining the earth of resources at an            of India. At three degrees, Central America,                    protein tends to
unsustainable rate and driving climate           Pakistan, western US, and Australia will be                     contain about 60 per
warming, it will have to cope with the           almost permanently drought-stricken.                            cent protein, is packed
challenges of the coming climate.                                                                                with vitamin B12 and
                                                 Turning to the oceans, the source of fully one                  has more calcium
For example, globally, grains account for        fifth of all animal protein we eat, acidification,              than milk.

                                                                                                                 4
about 40 per cent of the human diet. Add         warming, oxygen starvation and pollution have
                                                                                                                        Lab-grown
soybeans and corn, and you’re up to two-         undermined this source of food. Many have
                                                                                                                        meat, otherwise
thirds of all human calories.                    described a mass extinction of species. Off                            known as in
                                                 Australia, for example, fish populations have                   vitro animals or ‘clean
The UN estimates we will need nearly twice       plummeted by 32 per cent in just a decade.                      meat’ could be on
as much food like that in 2050 as today. But,                                                                    sale very soon. It
just as we need to grow more grains and          Can we face this challenge to our most                          could also make meat
other related foodstuffs, for every degree of    fundamental daily need? Is there such a thing                   production a new
warming yields decline by a startling 10 per     as a sustainable food system? We have less                      form of sustainable
cent. So we need to produce food in more         than a decade to act, and find out.                             engineering.

  @odgersberndtson                                                                                               OBSERVE 3/19 17
Fashion

               FASHION’S
            GREEN CHALLENGE

            F
                   ashion and sustainability does not      the business was an issue. Together,
                   on the face of it seem a natural fit.   these findings indicate that it has
                   By its very nature, fashion demands     never been more important for fashion
            that we constantly engage with the             brands to have a credible, workable
            new, encouraged to make multiple               sustainability policy. This requires a
            purchases through a throwaway culture          robust leadership team that understands
            often founded on low prices and quick          that sustainability issues impact every
            delivery or through the psychological          area of a business, from ensuring ethical
            obsolescence of this season’s ‘must            production methods and minimising
            have’ item.                                    plastic use through to auditing every link
               To put it in context, global clothing       in the supply chain to ensure the most is
            production doubled between 2000 and            made from the least.
            2014. In five large developing countries          Catherine Broome, who leads
            – Brazil, China, India, Mexico and Russia      executive search assignments within
            – apparel sales grew eight times faster        Odgers Berndtson’s global consumer
            than in Canada, Germany, the UK and            practice in London, specialising in
            the US.                                        senior and C-suite mandates within the
                  Slowly, however, the world of            Fashion and Luxury industries, believes
                   fashion is changing and consumers       the drive for sustainability must come
                     are looking for more from the         from the top. She says: “The two
                      brands they engage with,             key traits to look for when choosing
                      aspiring to buy from companies       someone to head up a brand’s
                      that can help them make a            sustainability team are courage and
                      meaningful difference.               vision. Vision usually comes first from
                         In a 2018 survey carried          a top leadership perspective. When
                     out on behalf of sustainability       you are looking for someone to lead
                  consultancy and creative agency          that change through an organisation,
               Futerra, 88 per cent of UK and US           courage is so important.
Catherine   consumers said they wanted brands                 “There will need to be initiatives and
Broome,
            to help them be more environmentally           actions that don’t make immediate
Odgers
Berndtson   friendly and ethical in their daily lives.     sense in terms of revenue. It’s not just
               In a June 2019 survey for the fashion       fashion – in any business where you          Amy
            industry bible, Drapers, 91 per cent of        propose something to reduce profits          Powney,
                                                                                                        Mother of
            brands and retailers reported that their       it’s counterintuitive, so that’s where       Pearl
            customers were showing a growing               courage comes in really strongly.”
            interest in environmental issues, while           Amy Powney, Creative Director
            just 42 per cent said they themselves          of London-based contemporary
            offered a sustainable product range.           womenswear brand Mother of
               When asked about the barriers to            Pearl, is an advocate of leading
            sustainability, 34 per cent said lack of       from the top. She has said:
            the required knowledge and skills within       “There’s no handbook on how to

 18 OBSERVE 3/19                                                                         odgersberndtson.com
Fashion

                      LAURA JAMES on the steps fashion brands
                      are taking to improve their sustainability
                         credentials in response to growing
                                 consumer demand

              make a brand sustainable, but I wanted                                      Eileen
                                                                                          Fisher’s
              to know from start to finish where our
                                                                                          Waste
              product was grown or derived, who was                                       No More:
              making it and the social impacts along                                      recycling
              the way. I’ve journeyed to find the best                                    clothing
              factories, suppliers and farmers who
              care about the planet and its inhabitants
              as much as we do.”
                 In April 2019 Odgers Berndtson               Eileen Fisher’s Waste No More
              staged a roundtable event to discuss          programme is equally clear: consumers
              sustainability and its impact. It invited     can bring back items from the brand’s
              senior figures representing leading           range they no longer wear and get
              brands, retailers, e-tailers and global       vouchers in return. The clothing is
              platforms within fashion and luxury. A key    then cleaned and resold through the
              finding was the importance of a selective     company’s Renew programme.
              approach over, for example, a strategy          French luxury conglemorate LVMH
              that tries to cover off too many topics.      – which brings together brands such
                 Companies do well when they                Fendi, Dior and Givenchy – has
              demonstrably stand for something              entered into a five-year partnership
              selective in sustainability, such as a        with UNESCO to safeguard biodiversity
              commitment to eliminating plastic,            across the planet. Board member
              boycotting animal products, using organic     Antoine Arnault said of the initiative:
              cotton or reducing synthetic materials.       “This partnership marks a significant
              Conversely, firms that try to cover too       step forward along the path on which
              many bases, risk not standing for any.        the LVMH group has already embarked
                 This clarity of vision works well for      to safeguard biodiversity. We are
              brands such as Stella McCartney,              delighted to have this opportunity to
              whose products are all vegan, meaning         work closely with UNESCO on these
Vegan         consumers can be certain that not only        essential issues.”
clothing
              are there no skins, fur, angora or feathers     It is often, however, smaller brands
from Stella
McCartney     in the collection, but also that the glues    with hands-on founders which lead
              used in bags and shoes are not derived        the way when it comes to end-to-
              from animal origins and none of the           end sustainability – ensuring ethical
              brand’s cosmetics have been tested            decision-making from source to shelf.
              on animals.                                   A desire to create products that have
                 Another example is Toms, the               minimal impact on the                     Veja
              California-based ethical shoe brand,          environment is often                      sneakers
              which has given away 60 million pairs of      one of the key reasons
              shoes to children through humanitarian        these brands were
              organisations while ensuring much of its      launched.
              range is vegan.                                 French company ➝

   @odgersberndtson                                                                         OBSERVE 3/19 19
WWW.MANUFACTURINGEVENT.CO.UK

                                                    LEADING
                                                    MANUFACTURING
                                                    TOWARDS A
                                                    SUSTAINABLE
                                                    FUTURE.
                                        ARENA MK, MILTON KEYNES 1st JULY 2020
   Join us at the 2020 National Manufacturing & Supply Chain Expo in the Arena MK, Milton Keynes
     on the 1st of July to hear from an impressive line-up of manufacturing leaders, academics and
    government agencies who will engage in a stimulating blend of key note addresses and debates.

                KEY TOPICS INCLUDED:                                     SECTORS COVERED:
   • PROCUREMENT • LEAN MANUFACTURING • CONTROL &             • FOOD & DRINK • CHEMICALS & PHARMACEUTICALS
 AUTOMATION • SUPPLY CHAIN OPTIMISATION • INFORMATION            • LIFE SCIENCES • RUBBER, PLASTICS & NON-
TECHNOLOGY LOGISTICS • ENERGY MANAGEMENT • FACILITIES            METALLIC MINERALS • METALS • ELECTRONICS
 MANAGEMENT • SUSTAINABILITY • PROJECT MANAGEMENT •                 • ELECTRICAL EQUIPMENT • PRECISION
 HEALTH & SAFETY • WAREHOUSE MANAGEMENT • MATERIALS              ENGINEERING • 3D PRINTING • MACHINERY •
         HANDLING • ROBOTICS • AND MANY MORE                         TRANSPORT • OTHER MANUFACTURING

               ...ALSO IN BELFAST                                        ...AND IN DUBLIN
      NORTHERN IRELAND

      Titanic Exhibition Centre, Belfast, 27th Feb 2020          CITYWEST, 29TH & 30TH JANUARY 2020

        www.northernirelandmanufacturing.co.uk                             www.manufacturingevent.com

  Contact Gareth at garreth@prempub.ie or on 353 1 6120880 for more information
Fashion
      Veja’s sneakers are designed in France          Marta Ortega – daughter of Amancio
      and made in Brazil from recycled plastic     Ortega, founder of Zara’s parent
      bottles, organic cotton and natural          company Inditex, and a member of
      rubber. Founders Sébastien Kopp and          the Zara women’s design team – said:
      François-Ghislain Morillion worked in        “It’s something that we all feel really
      investment banks for a short while           passionately about as individuals, as well
      after graduating college before              as in a work capacity. [We are] always
      starting an NGO which audited French         looking for ways in which we can do
      companies’ supply chains, looking            better: working on new technologies,
      primarily at environmental and socio-        new ways to work with recycled
      economic issues.                             materials, and helping create new
         Based on what they saw, then              fabrics that our designers, as well as
      they launched Veja and the brand             others in the industry, can work with
      has become massively on-trend,               in the future. It’s the right thing to do.
      synonymous with sustainable fashion          It’s an approach that we’re absolutely
      and incredibly successful, which is          committed to.”
      doubly impressive as the brand has              UK brand Toast does things
      never advertised. Speaking to the            differently in an effort to counter
      fashion website Make it Last, Kopp           the throwaway culture, encouraging
      said: “Veja’s secret to transparency         sustained long-term use of pieces
      and sustainability is to go into the field   from its clothing range. It even runs
      – to know what we’re talking about.          regular mending workshops for
      Sustainability is not a Powerpoint, it is    customers keen to avoid making
      more the mud of the Amazonian forest,        further unnecessary purchases.
      understanding the problems of reality.”         With consumers increasingly
         Catherine Broome believes larger          demanding more sustainable clothing
      brands have much to learn from the           within a greener supply chain, getting
      likes of Veja. “Smaller brands,” she says,   the leadership structure working well        Toast
      “definitely have the agility to react more   will be vital to future business success.    encourages
                                                                                                long-term
      quickly to hot topics or areas of concern.   Governments, consumers and brands            clothing use
      Larger brands are not structured in that     themselves are increasingly demanding        by running
      way and so are slower to react.              that fashion takes a firmer stance on        mending
                                                                                                workshops
         “The key is direct communication with     environmental issues and responsible
      consumers. Often, very small brands will     sustainability policies look set to become
      say, ‘we’ve noticed this and this is what    a key driver to staying on-trend.
      we are doing about it’. Larger brands           Catherine Broome believes the
      will be slower to process changes in         structure of sustainability teams will
      consumer feeling, in world events, in        be key to making these changes. She
      hot topics. What they can learn from         says: “All teams are made of three key
      smaller brands is that direct and honest     elements and the leadership of that
                             communication         team needs to be visionary.
                             with the consumer        “They have to be a very resilient
                             is key.”              diplomat, who can create buy-in
                                But even within    and have enough gravitas to enforce
                             fast fashion things   strategies. Underneath that you need a
                             are gradually         strategist, who can work out how the
                             changing.             implementation is possible in line with
         Spanish company Zara, the largest         the current organisation or, if changes
      fast fashion retailer in the world,          need to be made, how that will be
      produces 450 million garments and            possible and what impact it will have on
      20,000 new designs every year.               the rest of the company.
      However, the company recently pledged           “Then, at the grass roots level of the
      that all its cotton, linen and polyester     team, you need innovators who need to
      will be organic, sustainable or recycled     be protected so as to allow them to be
      by 2025.                                     as creative as possible.” ■

@odgersberndtson                                                                      OBSERVE 3/19 21
Insight & data

10 facts to ALARM you
              Every round-trip plane
              ticket from NY to LDN
                  costs the Arctic                                                        By 2060, the cost of inaction on

                    3m          2                                                         climate change is predicted to reach

                     of ice
                                                                                          $44         trillion,
                                                                                          with the highest anticipated GDP
                   [SOURCE: SCIENCE.                                                      losses in the Middle-East, Northern,
                   SCIENCEMAG.ORG]                                                        and Sub-Saharan Africa, and South
                                                                                          and Southeast Asia
                                                                                          [SOURCE: OECD & CITIGPS]

                                                 2in3
      (
      ((
(
((

                                               extreme weather
                                              events in the last 20
     ¼   of the plant
     and animal species
                                             years were influenced
                                                  by humans
                                                                                          Since 1950 humans have
                                                                                          created approximately
     assessed in a recent
     UN-backed report face
                                                  [SOURCE: CARBON BRIEF]
                                                                                          6,300,000,000
     extinction, many within
     decades, unless urgent                                                               metric tons
     action is taken                                                                      of plastic waste of which
     [SOURCE: DW.COM]                                                                     only 9% has been recycled
                                                                                          [SOURCE: VISUALCAPITALIST.COM]
                                         The average number
                                         of people exposed
                                         to HEATWAVES
                                         has increased by
                                         approximately
                                         125 million
                                         since the beginning of
                                         the century
                                         [SOURCE: UN NEWS]
     A swath of
     rainforest the size of
     40 football
     [soccer] fields
     disappears each minute
     [SOURCE: RAINFOREST-ALLIANCE.ORG]

                                                                               Nearly

                                                                           90%
                                                                      of China’s population
                                                                       is exposed to triple
                                                                         the safe limit of
                                                                      particle matter in the
                                                                         air they breathe
                                                                           [SOURCE: IG.FT.COM]

         If concrete was a nation it would be the
         third-largest emitter of carbon in the world                                      One washload of polyester clothes
         [SOURCE: BBC.CO.UK]                                                               can release 700,000 microplastic
                                                                                           fibres into the environment. It
                                                                                           is estimated that half a million
                                                                                           tonnes of these microfibres end
                                                                                           up in our oceans each year
                                                                                           [SOURCE: THEGUARDIAN.COM]

22
Insight & data

               10 facts to INSPIRE you                Last year, Portugal generated
                                                      enough renewable energy to
                                                      power the whole country for the
               In October 2018,                       entirety of March. The national grid
               businessman,                           operator said that Portugal’s average
               philanthropist and                     renewable generation exceeded 103%
               conservationist                        consumption, which beat its previous                  People across
                                                      record of 99.2% in 2014. This is the                  Europe demanded
               Hansjörg Wyss                          most amount of renewable energy
               announced that he                      that the European country has
                                                                                                            action to save bees.
               would donate                           generated in 40 years                                 As a result, last year

               $1 billion
                                                                                                            the EU banned
                                                                                                            three bee-harming
               of his fortune over the                                                                      pesticides from
               next decade to “help                                                                         being used outdoors
               accelerate land and
               ocean conservation
               efforts around the
               world, with the goal of                        A United Nations                          On January 18, 2019, the
                                                              report says the ozone,                    European Union voted on
               protecting 30% of the                                                                    and confirmed an agreement
               planet’s surface by                            including the gaping                      to introduce restrictions on the
               2030”                                          hole over Antarctica,                     use of single-use plastics like
                                                              will be fully healed by                   cutlery, plates and straws.
                                                              the 2060s                                 The new regulation could
                                                                                                        potential save the EU

                                                                                                        $24.9         billion
                                                              [SOURCE: PBS.ORG]

                                                                                                        in environmental damage
                                                                                                        by 2030

                                                                        According to the
                                                                        advocacy group E2,
                                                                        clean energy jobs
                      2018 saw the largest                              in 18 major US cities
                      annual increase in                                considerably outnumber
                      global renewable                                  jobs in the fossil fuels
                                                                        sector
                      generation capacity                               [SOURCE: ONETREEPLANTED.ORG]
                      ever, with new solar
                      photovoltaic capacity
                      outstripping additions
                      in coal, natural gas
                      and nuclear power                                                                  A German 20-year-old has spent
                      combined                                                                           just over a decade orchestrating
                      [SOURCE: THECONVERSATION.COM]                                                      hundreds of youth-led initiatives
SHUTTERSTOCK

                                                                                                         to plant trees around the world.
                                                                                                         Since he launched his initiative
                                                                                                         as a nine-year-old, he has
                                                                                                         helped to plant over one million
                                                                                                         trees – and with his new United
                                                                                                         Nations position as leader of its
                                                                                                         Billion Tree Programme he and
                                                                                                         his organisation will be planting
                                                                                                         one trillion more trees
                                                                                                         [SOURCE: GOODNEWSNETWORK.ORG]

               Last year, the world’s second
               largest coral reef, the Belize
               Barrier Reef Reserve System was
               removed from the UNESCO World                                             French tyre maker Michelin has
               Heritage Center list of World                               announced that it will be replacing its tyre’s
               Heritage in Danger after years                          oil-based ingredients with wood chips instead.
               of conservational efforts                              The first tyre is expected to be unveiled in 2020
                                                                                             [SOURCE: GOODNEWSNETWORK.ORG]
               [SOURCE: WHC.UNESCO.ORG]

                                                                                                                                         23
Paul Polman

                  Paul Polman, former CEO of Unilever,
                   talks to Observe about his lifelong
                  commitment to sustainability and his
                   plans for his new venture IMAGINE

24 OBSERVE 3/19                                          odgersberndtson.com
Paul Polman
                         Observe: You spent more than          livelihoods for millions of people.    what would be your immediate
                         10 years as CEO of Unilever              Crucially, this work was            sustainability priorities for the
                         pushing the boundaries of             strongly aligned with the U.N.         initial two-year period?
                         sustainable business. Looking         Sustainable Development Goals,         PP: I think the key consideration
                         back what do you consider             in a bold effort to maximise           for any business is to calibrate
                         to be your most significant           our impact.                            where you can make the biggest
                         achievements?                                                                impact, which naturally will vary
                         PAUL POLMAN : There are               Observe: What can other                according to your sector and
                         two things that come to mind.         organisations – both large and         operational footprint.
                         Firstly, driving a long-term,         small – learn from the Unilever           Every company can leverage
                         multi stakeholder model is            approach and who, in your              their supply chain, partners and
                         ultimately good for shareholders.     opinion, is doing the most             customers to mobilise action that
                         During my time at Unilever we         dynamic work on sustainability         delivers positive change at scale,
                         demonstrated this with a 300          right now (other than Unilever         whether it be more sustainable
                         per cent shareholder return over      of course)?                            practices, enforcing human rights
                         10 years and consistent top and       PP: The most important lesson is       or helping to tackle corruption.
                         bottom-line growth. This helped       that being a responsible business         However, I passionately
                         to showcase the attractiveness        is actually good for business.         believe that the most burning
                         of our model and hopefully               In fact, I believe a multi-         issue we all need to focus on
                         encouraged others to change as        stakeholder model is the only          is climate change. If we do not
                         well; It’s about value and values.    model that will work long-term.        make tangible progress on this
                            And secondly, it’s clear that      The only model that people             issue, then I’m afraid the future
                         the development agenda is an          will accept.                           of civilisation and much of the
                         increasingly attractive business         Society is no longer willing to     natural world is at risk. We are
                         proposition. In fact, it’s probably   tolerate the idea that businesses      truly facing an existential crisis
                         the biggest opportunity we            are somehow run in the interests       the likes of which the world has
                         have globally, and badly needed       of shareholders, or a small group      never seen before. We must
                         if we want to live within our         of billionaires.                       ensure that we collectively stay
                         planetary boundaries now and             Businesses thrive when they         below 1.5 degrees warming,
                         for generations to come.              protect our natural and human          which requires us to be net
                            Indeed, companies that             capital, equal to financial capital,   zero by 2050 according to
                         want to be around long-term           and serve all their stakeholders:      the science.
                         must have a positive impact on        citizens, employees, suppliers,           We also need to make sure
                         society and the planet. Being         partners and those who make up         our growth is more equitable,
                         less negative simply isn’t good       the extended value chain. When         and this requires us to establish
                         enough anymore. That’s why            you make your business relevant        a new social contract, which
                         we developed the ‘Unilever            to the needs of the communities        ensures we leave no one behind.
                         Sustainable Living Plan’, so that     and societies you serve, then          Society and our economies can
                         the company could continue to         everyone benefits, including           be much more successful if we
                         play its part in helping to solve     shareholders.                          promote far greater diversity
                         the challenges the world faces.          Fortunately, we are seeing          and inclusivity.
                         It was a determined effort to         more and more great companies             In the absence of fully
                         decouple the company’s growth         stepping up. A good example            functioning political systems,
                         from its environmental footprint      is Patagonia Inc, an activist          I also believe the private
                         and help improve society’s            company that has a deep                sector needs to step up, both
                         wellbeing. A concerted effort         heritage of giving back and an         individually and collectively. Bold
                         to use its size and scale to drive    ingrained culture of working to        and courageous business leaders
                         transformational change.              protect the environment. Yvon          must work together in deep and
                            And we made great strides.         Chouinard, founder and owner           purposeful partnership to move
SHUTTERSTOCK EDITORIAL

                         In helping to improve the             of Patagonia Inc, deserves huge        at scale and speed, so we can
                         health and well-being of over         credit for his leadership.             reach the tipping points needed.
                         650 million people; reducing
                         Unilever’s environmental              Observe: If you were joining           Observe: Your new venture,
                         footprint throughout the              Unilever today – or another            IMAGINE, plans to work with
                         value chain; and in enhancing         organisation of similar scale –        companies to press ahead ➝

                           @odgersberndtson                                                                          OBSERVE 3/19 25
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France • Singapore • Abu Dhabi
Paul Polman
for greater sustainability. You       to alter our trajectory.             Sustainable Development Goals.
also say that you will invest an         I am however optimistic           The cost of implementing
unspecified amount of your            that we can be successful, as        the global goals has been
own funds in the project. Do          we already have the means            estimated at $3-4 trillion a year.
you not think that it is the role     to realise the U.N. Sustainable      Governments are unable to
of government and business to         Development Goals, de-               provide all this funding – indeed
fund these urgent programmes          carbonise our economies and          all overseas development aid is
rather than leaving it to             drive transformational change.       collectively only around $160
individuals?                             We know what we need to do        billion – meaning business
PP: Given the scale of the            and have the tools to do it. This    and the financial markets
challenges we face – climate          includes driving greater energy      must embrace this agenda.
change, plastics in our seas,         efficiency and use of renewables;    Fortunately, it’s highly attractive
deforestation, the extinction         more sustainable food systems;       and promises a great return, so
crisis and gross inequality – it’s    smarter infrastructure and           it’s in our own self-interest.
evident that everyone must play       city planning; better use of            There are plenty of examples
their part, however big or small.                                          of great companies walking the
  Private sector leaders have                                              talk. Courageous leaders like the
a key role to play. That’s where                                           ‘zeronauts’, who are committing
IMAGINE will focus its time and                                            their businesses to get to net
efforts. We will work with leading                                         zero emissions way ahead of
companies in key sectors and                                               their peers and current policies.
help develop and leverage heroic                                              As well as the 870 global
CEOs that have the ability to                                              companies (with almost $17
drive lasting change, not only                                             trillion in market cap) that have
within their own companies, but                                            made bold climate commitments
also – and more importantly –                                              via the ‘We Mean Business’
as an ambitious group that can                                             platform, the International
harness their cooperation for                                              Chamber of Commerce, The B
maximum impact. It’s up to us –                                            Team and U.N. Global Compact
the “courageous collective” – to      technologies; deployment of          are also very focused on this
make a real difference.               circular models of growth; and       enormous opportunity. Groups
  I believe this will also in turn    moving financial markets to the      like these are forming powerful
encourage braver political            long-term.                           alliances, shaping markets
leadership – which is desperately        We now need to gather our         and sending a clear signal to
needed – and more ambitious           collective willpower, so we can      politicians that they are ready for
public policy. We need to create      simultaneously achieve strong        bolder policy to put our economy
a self-reinforcing “ambition-loop”    economic growth, rapid progress      on track for net-zero by 2050.
between the private and public        towards net zero emissions and
sectors, which drives deliverable,    greater social inclusion.            Observe: You have said that
impactful solutions.                                                       you “ended up in business and
                                      Observe: You say that you            learned that I can help more
Observe: In a recent interview        regard the private sector as the     people here to improve their
you said: “We are carbon              “main engine for change.” What       lives”. Is this still your belief?
junkies, exceeding many               evidence can you provide to          PP: It absolutely is my belief.
planetary boundaries and using        support this belief?                 Especially if you lead a large
resources well beyond the             PP: The private sector has the       organisation that has global
capabilities of this planet to        expertise, creativity, innovation    reach and touches many lives.
recover.” Do you despair about        and talent to deliver positive       My ambitions remain the same –
the future or do you still believe    change. It accounts for the          I want to make the world a better
that we can overcome the              biggest share of GDP globally        place for future generations. With
perilous position we are in?          and has the financial resources to   IMAGINE I will be re-doubling
PP: I think we need to be realistic   reach the tipping points needed.     my efforts in promoting new
about the challenges. We’ve done      In fact, we won’t get there          economic and business models
untold damage to our planet and       without business leadership.         that have a positive impact on
we are in a fight against the clock      Take, for example, the U.N.       society and our planet. ■

  @odgersberndtson                                                                        OBSERVE 3/19 27
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