Steve Howard on 'Going All In'

Monday, February 02, 2015

18:00 - 20:30

On February 2nd we gave our stage to IKEA’s Steve Howard, one of the global heavyweights in corporate sustainability. Through a speech and an interview with Jo Confino, we explored what Steve means by “Going All In”, and his personal views on the challenges facing society.

As Founder and CEO of The Climate Group, Steve had considerable influence over the global response to climate change. When he was offered the role of Chief Sustainability Officer by the CEO of the IKEA Group in 2011, his response was “If you're interested in being incrementally less bad, I'm the wrong guy. If you're interested in transformational, I'm in."

Steve is three years into this role, and the transformational change is evident. IKEA probably has the most ambitions carbon targets of any major multinational company, committing to produce as much energy from renewable sources as it consumes globally by 2020. IKEA has already invested €1.5bn in renewable energy.

The ultimate mission for IKEA’s People & Planet Positive programme is to make sustainability affordable to the many, which is not without its complexities. These are some of the areas we explored with Steve;

  • How can an individual transform an organisation?
  • What does it mean to maximise your personal impact?
  • How can you win over those who are resistant to change?
  • What’s the business case for 100% renewable energy?
  • Why doesn’t IKEA commit to 100% certified resources?
  • Why are 100% targets are easier that 90 or 50%?
  • Is sustainable mass consumption an oxymoron?
  • How does influence change with the move from an NGO to a multinational?

 

Speakers

Jo Confino Guardian

See bio

Steve Howard IKEA Group

See bio
Round Tables

"Going All in"

This table will digest Steve Howard’s “Going All In” approach to corporate sustainability. In particular, his call for well-chosen 100% commitments such as becoming energy independent or only selling LED lights, rather than relying on incremental reductions. Is this approach too distant from a business case, or it is the most effective way of achieving transformational change?

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This table will digest Steve Howard’s “Going All In” approach to corporate sustainability. In particular, his call for well-chosen 100% commitments such as becoming energy independent or only selling LED lights, rather than relying on incremental reductions. Is this approach too distant from a business case, or it is the most effective way of achieving transformational change?

‘Going All In’ v Incremental Targets
- The two approaches aren’t mutually exclusive; the ‘All In’ ambition is required to set the course along which an organisation will progress via incremental steps
‘If you stay on the path you’re on, sooner or later you’ll get to where you’re heading’
- Without the ‘All In’ ambition, targets might deliberately be kept under-ambitious and achievable..
o This may be necessary because missed-targets cause loss of credibility
o This may be disadvantageous because investors are looking for clear, bold ambition to differentiate one organisation from the next
- Consensus; There’s a sense of defeat when a target is pitched and all stakeholders around the board table agree. The ideal is to pitch a target that sparks heated debate about timescales and risk and opportunity, because such a target has successfully captured interest and will demand engagement

Key Characteristics of the ‘All In’ ambition
1. Materiality. Begin by assessing long-term trends and then selecting the issues that are key to the organisation. Focus on these and build a concise list of relevant, business-critical indicators. These issues and respective indicators must then be woven into the commercial underpinning of the business
E.g. IKEA is now largest retailer of LED lighting
E.g. McDonalds demanded 147 million free range eggs, but only 2 million were available at first. The market responded; market responds to demands
2. Simplicity.
3. Long-term focus.
E.g. Boots would need to take into account the way that the age pyramid is changing & the way that consumer patterns are changing in order to define a strategy that interacts optimally
4. Leadership.
‘The purpose of leadership is to remind people of their purpose’. Do so respectfully and in the voice of the business.

Brands with purpose
- ‘Emotionalising the brand will help to win the hearts of a greater market share’. It’s in the interest of a brand to hold a sustainable vision and to communicate this to the consumer
- E.g. IKEA’s purpose is to ‘create a better everyday life for the many people’.
- E.g. Are car manufacturers in the business of mobility or of luxury experience? Companies are increasingly recognising the latter and consumers are increasingly open to innovative business models. A car sharing app, for example, may undermine the traditional vision (to sell more cars) but becomes viable when the manufacturer’s purpose is to create a better, more sustainable shared experience
- Driven by consumer demands.. but the consumers are demanding affordability rather than change.
- The role of the brand in reframing the questions and choice-editing on the consumer’s behalf. Certain sectors will find ‘All In’ more feasible than others. If unable to drive the transformational change then a sector needs to collaborate to shift the market together

Human rights risk

Is your company aware of its human rights risk? As supply chains get increasingly complex and transparency levels increase, so does the risk of major reputational damage. Tesco, Coca Cola and Nestle are some of the companies that have suffered reputational damage recently. This table will discuss the key elements of a contemporary human rights policy.

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How hard is it to engage governments? What are your thoughts on government regulation, positive or negative?
• More regulation is welcome! Business is looking for clarity, and to define explicitly so there is less settling for minimum standards

Does the anti-slavery bill go too far?
• No, there are some people that put it forward as an issue, but it does not go too far.
• The areas where they have lies issues are the ones with a more definitive rule of law and a greater set of standards.
• Enforcement is also important. You could have a huge amount of laws on the books but if you don’t enforce you are still at square one.
• Business likes clarity and consistency, and to apply it across jurisdictions. Try to uphold standards, however, it’s hard for a multinational to go against a local law
o EX: anti-homosexuality laws at the local level going directly against a business’s code of ethics and bylaws.
• Companies forget that human rights risk appears below the radar. Even if you have strict guidelines, there can be illegal subcontracting. Sweatshops are even prevalent in the UK; need to look on your own doorstep.

Access to remedy is very ill-defined, how does a multinational have access to remedy? What does a company do?
• It’s difficult, where do you pin responsibility when you have no jurisdiction for the issue?
• Most risks are with 3rd party clients
• Terminate the supplier relationship
• Big companies are the easiest thing to target even if they are just the “face”, and not actually fully responsible
• Garment Unions in the countries affected are using whistle blowing, and hotlines to target the problem
How do you enable unions or employers to negotiate themselves?
• Brands are coming together to support unions, and using leverage of multiple companies.
• Human rights should not be used in the competitive agenda

Things do go wrong, what will you do about it?
• Need to think ahead. Pre plan the “what ifs” so it something happens you can act quickly and efficiently
o Retail company at table had a plan in action when Rana Plaza occurred, 14 million dollars and aid was issued






Is climate change a human right from a business perspective?
• It is interlinked. There is damage caused by climate change that affects humans
o EX: Floods affect the business
• There is varied understanding on human rights. “I don’t think that business goes beyond the narrow view of human rights, rather than how the environment impacts broad human rights.
• Mass migration is both a climate change issue and human rights
• Companies need to be careful not to define human rights too narrowly. Climate change do affect human rights, the key impact areas are
o Safety
o Workforce welfare
o livelihoods

Water as a competitive advantage

If 63% of the world’s population will be living with significant water stress by 2025 (as suggested by the Stockholm Environment Institute), companies with active water strategies will have a competitive advantage. This table will pool its knowledge and draw up 5 activities that leading companies are doing today, which will increasingly pay dividends in an era of water scarcity.

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FIVE LEADING ACTIVITIES
• Shifting business models – extracting maximum value from water, for example mining companies treating waste water and selling it as a resource. Finding new opportunities to address water scarcity – e.g. dry shampoos, waterless dyeing, clothes that don’t need washing.
• Access to water is good for business – exploiting the internal business impacts of improving access to water, for example better access means that women don’t have to walk miles every day, creating a more productive workforce. Companies become a preferred employer/supplier.
• Boosting community health – for businesses to be successful, the communities they operate in need to function well. Length of payback time affects whether this is considered philanthropic, but there is often a strong case that there are clear business impacts.
• Ensuring security of supply – for example agricultural irrigation projects. Projects must be scalable if they are to bring a true competitive advantage (otherwise just reputational). Low value of water increases payback times. This is about reducing the risk of water scarcity.
• Brand differentiation – do consumers care about a company’s water efficiency? If the product is water, then telling a strong story around social responsibility (e.g. well-building) can be a good differentiator. But water is low on most people’s agenda. Products like no-wash jeans don’t shout about the water benefits, they appeal to consumers’ other values.

SHOULD WATER REALLY BE ABOUT COMPETITION?
• Shouldn’t it be more about collaboration, since water is a basic human need? The nature of water means that what a factory does can affect a farmer downstream, so there must be collaboration on all levels. Should companies share best practice on water management ideas at all levels of the value chain and in particular work together on understanding and influencing customer behaviour when it comes the water use associated with the end product?
• But competition breeds progress. Using products that save water can be a great marketing tool – like IKEA’s water-saving taps, for example.

2015: The year natural capital took off?

This table will begin with an overview of all of the initiatives that are going on around Natural Capital, from the sector guides being developed by the Natural Capital Coalition, to the A4S’s work with CFOs. What are the key ingredients that will define whether these methodologies are just another “nice to have”, or a lens that could change the way that business is done?

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• Natural Capital Protocol: harmonised guidance on natural capital reporting (using IP from the big four), including sector guides on fashion and food & beverage. Large brands will then undertake pilot studies, the results of which will be compiled into a report.
• Natural Capital Accounting: the process of assigning value to environmental impacts and resources. Taking standard environmental metrics e.g. water in m3 and tonnes of GHG and monetising these - representing the "cost to society" and presenting these is a common metric.
• A4S work: CFO involvement to link natural capital stewardship to profitability and accelerate change in business.

Benefits
• Counterfactual: ecosystems are valued at zero and are not factored into decision making
• Encourages restoration of degraded stocks e.g. if fish stocks are degraded then they are not delivering their full value
• Puts a price on pollution: we begin to understand the cost to society of externalities
• Backcasting from future natural capital scenarios helps show the degree of change needed today
• Natural capital valuation can help give governments the mandate for regulation and business incentives e.g. what is the natural capital deficit of the UK?
• Forecasting can project what the future natural capital risks and opportunities are, driving long term decision making by businesses
E.g. Ecolab’s water risk monetizer: gives shadow pricing for water
E.g. Zurich Commercial on flooding risk: communicating to companies that they will have to pay a premium in the future or won’t be covered at all creates behavioural change
• Good communications tool as gives real-world meaning to bland measurements.

Challenges
• Robust methodology for valuation is very difficult
• Reduction to financial terms is controversial e.g. how do you value irreplaceable ancient woodland or sacred sites?
• Can be abused -> Critical Natural Capital needs to be identified and protected

Opportunities for business (must have this positive narrative)
1) Tool to enable better decision making through understanding the intimate link between business and natural capital
Example: Sustainable Clothing Action Plan (SCAP) analysis produced waste, carbon, water figures etc.; more recently these metrics have been revisited and valued in their specific local contexts -> produces very different results for where to prioritise.
2) Adds important dimensions, such as risk and resilience, to purely financial analysis -> better business models. i.e. prompts the question: how can you derive the most value with the least money?
Example: Decisions on where to build a factory may be very different when just looking at financial metrics vs. additionally valuing the natural capital risks and opportunities for the business
3) Can help to drive sales as consumers look for real value and better quality products
Note: 84% of millennials think it is their generation’s duty to change the world through what they do and who they work for (according to a Deloitte report)

Building on standards and certification schemes

Environmental standards and certification schemes have played an important role in helping companies improve their stewardship of natural commodities. How can companies use these mechanisms to accelerate attempts to transform supply chains globally and at scale? Are they going far enough? Should the focus shift towards managing risks facing biodiversity across wider geographical landscapes?

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Benefits of standards and certifications

• Standards are generally improving and becoming more robust
• Vehicles for change - social and environmental benefits
• The data infrastructure works well and standards and certifications can be built on e.g. FSC is robust, seafood is following on
• Supply chain certifications (e.g. seafood) can be built up through scales like “russian dolls”
• Simplistic brand-led iconographics communicate well
• Some level of reassurance can be offered to customers, e.g. through 3rd party verification
• Create demand from client
• Encourage open debate with stakeholders
• Can provide an important methodology to maintain sustainable international supply chains
• Provide channels to communicate improvements
• Certification can be especially useful for small businesses if it is accessible
• Having multiple similar standards forces them all to constantly improve
• Jobs for auditors

Challenges related to current and future standards and certifications

• RTRS, BCI etc. are complex and require multi-lateral, multi-stakeholder collaboration e.g. for RSPO - NGSs, businesses, re-competitive agreements for companies to come together
• As a result the certification starts at a low common standard, but it can advance from there
• There is a natural conflict as resources become scarce, hence organisations don’t want to share sourcing information, but increasing levels of transparency are demanded
• Multiple certifications may be relevant to a particular product, this complexity is difficult to communicate to customers (b2c) or even within organisations or b2b where the level of related skills and understanding may be higher
• What customers really want is to trust the whole brand, e.g. thinking “everything I buy from Unilever is ok” rather than looking at individual certifications, which can be confusing.
• Customers may recognise icons, but may not understand fully e.g. whether Rainforest Alliance covers social issues
• The binary have/don’t have means that once a company has a certification it is difficult to improve further and communicate this
• Companies also have to pay for certifications such as Fairtrade, making them competitors of their own certification schemes
• Cost burden of multiple similar standards as slightly different conditions must be demonstrated for each, e.g. 30 national and international standards for seafood
• Markets would consolidate through acquisitions, but uncertain whether this would work for standards and certifications. Lack of customers’ understanding means they can’t be rationalised
• Can be difficult to demonstrate link between certifications and actual improvements (though noted without standards and certification issues might not be considered - for instance to enable producers to pay living wage productivity and efficiency improvements must be made. Certification can’t do that but it starts the conversation.
• Key challenge is moving from political boundaries which define limits of current schemes, to geographical boundaries needed to extend to biome scale. Whilst certification is voluntary, working at country scale or larger becomes regulation.

The value of quality energy data

Most energy / carbon leaders argue that data quality plays a critical role in their strategy. This table will look at how companies can use data as an accelerator, including where they access data for predictions, tracking the performance of existing investments and tracking changes in returns for different technologies. Which data is the most critical to success?

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Obstacles
• Data collection is challenging
• What are the best data strategies?
• What about imperfect data – how much is too much?
• Using data to address the performance gap
• Needing the time to analyse data
• How do we make it easily accessible?
• How can it be used to reduce risk on projects?
• Avoid analysis paralysis
• Data can be used to target and influence stake holders
• How can it be simplified e.g. for board presentations.
Summary
How do we know the data is good enough? There were a number of questions regarding how much data is required and how accurate does it need to be. Some organisations were considering smart metering, others who had already implemented this were considering drilling down further – but to what purpose.
The big question is what do you need the data for? Answers included the following:
• Making business case for investment decisions
• Understanding how energy is used across a portfolio or building to target behaviour change campaigns
• Communication to other areas of the business – e.g. boards and colleagues to encourage them to engage more.
Ultimately the big task is to find out what you are trying to do with the data. If you are building an investment case and you know that your CFO has a 3 year payback requirement then it doesn’t make sense to focus on longer payback items. What does it take to move forward?
The ability to drill down into the data is important – and to either know how to or work with professionals who are able to do this in order to simplify and communicate the results.
Data can be used to make things a story and to create engagement, but you need to have the right people looking at it and be able to understand it. Competitions are a great way to get people to engage with the data.
It is important that data can be all thing to all men. Used simply to communicate to the board there will always be more people who want more detail and more analysis, the point is to know when this is enough. Often it can be delivered far too technically and will cause disengagement. You need people who can understand the data.
Data can be used to decide when to go all in. It can be used for trials/ pilots to ‘dip you toe in’ for example on a LED lighting trial on a few stores. An example of a leading London uni was presented where the FD was tired of signing off lots of small projects, so data was used to build a business case for a £16 million investment. It can be used to create a strategy or roadmap.
Final Thoughts on Data
• Data is social – use it to keep improving
• Recognise where you are coming from (baseline)
• Quote from Tescos – “Dream a bit more”
• Understand how accurate it needs to be
• Data and Vision is important – you need both
• Communication is key – data is useless unless it is actually used

Re-thinking "low hanging fruit"

After saving $54m in IKEA’s warehouse energy efficiency programs since 2010, Steve Howard argues that new opportunities keep coming due to the declining costs of technologies. This table will debate whether it is a myth that many companies have now taken the low hanging fruit, and discuss the best ways they can continuously refresh their energy programmes.

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INSIGHTS
• There is no re-thinking of low-hanging fruit (“LHF”); there will always be LHF because businesses and technologies evolve, focus changes, etc. It also has a lot to do with quantity – if you have 6,000+ sites it takes a long time to implement LHF across the board
• One challenge actually lies with deciding whether to hold off and wait for the new cycle of LHF to arrive or just to give the current one a go. For example, initiating involvement with every innovation that comes along may be counter-productive e.g. LEDs
• Short-termism is a real issue: Typical Opex payback rate is 1.5 years, Capex payback is 3 years. Everything that’s above the level of LHF has more than 3 years payback rate. This is a problem when you are trying to be transformational. To overcome this, some companies have started to change the payback rules. For example, BT now operates at 2 year hurdle rate but for some projects it has pushed this up to half the lifetime of the asset
• Related to short termism is rapidly changing business environment: if you frequently change markets and sites how can you invest in the long term?
• As operations evolve the efficiencies generated from LHF are built into the business model
• Change is also ultimately behavioural issue
• Building the business case: It’s easy to find savings but not easy to maintain them. Solution: setting up a fund to collect the savings and re-invest them in whatever projects can regenerate the highest savings.
CASE STUDIES
• BT is currently implementing the 6th phase of its building controls management system with around 3,500 out of 6,000 buildings are already connected on a single network to control temperatures and share data, building management responsibilities, etc. This is one of the final steps as the remaining buildings cannot be connected. This work has continued through to 6th phase because the associated costs have halved over the last few years. Also, the controls installed give more data which when analysed, shows more opportunity. One of the keys to going through a continuous cycle of LHF is data. The next stage is the building fabric: insulation, construction, etc.
• Schneider Electric has 30 sites connected on a monitoring platform around the world, sharing practices and 11m EUR of energy savings has been generated already. As a business, they provide assistance by funding capex that is then repaid by opex savings

The business case for renewable energy

Whilst returns for renewable energy exceed most approval thresholds, programmes are building at IKEA, Sainsbury’s and JLR. This table will ask two participants to make the case for renewables and two to argue against, whilst also considering third party investments. Can the table reach a conclusion on whether renewables are a suitable investment for most major companies?

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I. Arguments FOR
• Market supply. An abundant supply of affordable green energy is available in the market.
• Investment diversity. There are different levels of investment in renewable energy. For example, a company may purchase renewably-sourced energy on a secondary market or it could invest in building a renewable source of energy.
• Investment mechanisms. A number of different mechanisms are available to support renewable energy investment, such as green bonds, government subsidies and tariffs, and the proposed ‘green ISA’.
• Country targets. The UK has targets to meet in terms of renewable energy generation.
• Secondary market. Purchasing energy on the secondary market also supports investment in new renewable energy projects. Companies can come to an agreement, for example, to purchase energy from a particular supplier for a fixed period of years, which in turn supports the construction of a new project.
• Shareholder preferences. Activist shareholders including fund managers have succeeded in gaining Shell’s support for a resolution at its upcoming AGM to review its future operations against certain limits and thereby mitigate environmental impacts.
• Stranded assets. Solar energy has reach parity in many countries, increasing investment interest. As strong returns are consistently demonstrated pension funds will increasingly divest from fossil fuels and invest in renewables.
• Energy diversification. Increasingly, business energy solutions are taking a number of forms. For example, Jaguar Land Rover installed solar panels at a plant to meet 30% of the plant’s energy needs. It has a strong financial case and provides a good introduction to renewables for the company.
• Financial models. Payback models are helping to overcome differences between theory and practice, whilst creating a solid case for investment.
• Progress with research. Research is occurring across a number of energy segments and could offer game-changing innovations. For example, Tesla’s Gigafactory’s research on lithium ion batteries or DECC’s funding into a number of pilot projects.
II. Arguments AGAINST
• Lack of consistent regulation across all markets. Large multinational corporations operate in numerous countries, some with local requirements, though many countries have no such regulation, reducing the supply and therefore the ability to source energy from renewable sources.
• CSR low priority. Companies tend to invest based on financial, strategic, technological and other high priority indicators, with CSR considerations usually ranking much lower on a priority list.
• Arbitrage opportunities. Oil prices are typically volatile, which provides an arbitrage opportunity for savvy companies.
• Art versus science. Green is fluffy and often cannot as easily be backed up by ROI. Directors need to show the commercial benefits to pursue investments.
• Pace of technology change. Technology advances in this sector rapidly. A company can find an investment in a technology that was intended to last for 5 years is out of date after only a year. The makes any ROI less appealing and deciding when to invest much more complex.
• Track record. Renewable energy has a reputation of being undependable due to intermittency issues in supply and without a long term life expectancy.
• Inherent mistrust in numbers. Trustees feel comfortable with tried and tested investments and are more likely to invest in the known. Further, language surrounding this market can be confusing.
• Risk factor. To be 100% hedged in renewables is too dramatic of a risk.
• Poor aesthetic. Renewable energy installations, such as wind farms, can be controversial with regard to their impact on the landscape.
• Practice versus theory. Historically there has been a gap between practice and theory, which requires a lot of hard work and stakeholder involvement to overcome.
• Capital requirements. High risk can be involved in start-up capital where assessments, grid connection and strategy are explored. (Although there is less risk after this stage, when capital is required for construction).
III. Conclusions
• A case has not only been argued for and against renewable energy investment, but a lot of considerations in between have been raised. With multinationals, it may be feasible to start investment transitions with their material markets where renewables are present and viable, and transition in other, less developed markets, at a later stage.
• Energy prices are lower down on the list of costs for some businesses, which puts significant shifts to established procurement practices down the priority list. Consequently, slow incremental change is a typical outcome. TBL decision-making is touted by many companies, though even with this process in place decisions ultimately lie with the CEO and can change at the final hurdle.
• Energy is becoming a very topical area for certain companies and this will continue to increase, paving the way for further interest in renewables. There has been a sea change over last few years with a move away from government subsidies and tariffs and towards investing in projects that enable renewables. Although in general, it is still a relatively new option and will need to move into the mainstream before it becomes widely used and trusted.

The intangible debate

Many would agree that simple payback or ROI measures fail to capture the full benefits of corporate sustainability, such as innovation opportunities, risk mitigation, brand enhancement and employee engagement. Finding a solution is complex – should companies seek to quantify the benefits, and if so, how? The table will pool its thinking, and see if it can come to a conclusion.

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Table 9(a)

Obstacles
• Consumers: what and how they can change?
• How do you value employer engagement?
• Coca-Cola set their targets 3 years ago – they hit them and review them now (it means for them: ask yourself again – WHY are we doing that?); low hanging fruits are picked – their solution is going to a consultancy to define ‘what is the value we are measuring?’ What’s the tangible value? Create the broad business case to account for longer ( account back does not work, rather create proposition for the business)
• Employee engagement are always estimated financial figures
• People are afraid of change – you need an interesting business case
• At Ikea we don’t have a global engagement strategy – responsibility lies with the individual countries. But we have mixture of bottom up and top down.
• Prioritisation: which strands had more impact than the other? Do you have too much or too less strands?; Hygiene factors vs push factors, some things are easy but then there are things eg the product itself
• You can’t depend on a sustainability representative in every area (bottle necks)
• Investments
• ‘Getting naked’ create followers
• What companies do for their employees is so intangible – but making that case will make a difference (attempts failed so far though)
• How to measure your impacts? And how useful is it – you need a debate about it.
• The question: why are we doing that and why should we care needs answering first
• Time and resources to measure that are scarce. Especially from the senior mgmt. – they are tired.
• What investors want to see is not long-term and how do you change that? They look at log-term in a sense but focus is on short-term investments and profit generation; It’s not assessed by anyone and is not given same weight
• Coca Cola did Business value report with Cranfield university – thinking beyond the short-term horizon but we haven’t found the tipping point – no consensus. They won’t see it before the tipping point was hit.

Red Flags (warnings)
• Not pretend you have it all under control – risk to business, be humble

Solutions
• See business cases by bringing in experts into the company - they look from the outside in
• Working groups on that topic and trying to make it happen
• Combination of: CSO + CFO
• Buy in from the more critical people
• NGOs are part of companies, being part of companies ( NGOs become a bit more bus and bus a bit more NGO)
• To calculate the value to risk, innovation, brand is possible – but it’s hard where they came from
• Fine line of collaboration with the right people to the right time (studies that prove benefits)
• Reframe questions as Steven Howard – posing it back to investors
• Identify the Cuddly CFOs – face-to-face discussions
• Another audience than sus experts need to talk about it
• New investment incentives
• Futurism as a chance
• Having conversations is important
• Someone needs to start
• Technology and new metrics and sharing it
• The balance: can’t be only philanthropy and make it part of every business unit
• If you don’t do anything you get bad reputation – that’s the best message
• Financial wellbeing is on the HR agenda


Examples
• Business case of Unilever : millennials teaching C-suit on how social media works
• John Lewis: Staff is looked after and you can see it reflects back to consumer - but how to measure that?

Table 9 (b)

Many would agree that simple payback or ROI measures fail to capture the full benefits of corporate sustainability, such as innovation opportunities, risk mitigation, brand enhancement and employee engagement. Finding a solution is complex – should companies seek to quantify the benefits, and if so, how? The table will pool its thinking, and see if it can come to a conclusion.
§ Yes. Most participants agreed that the intangible benefits should be measured, but it’s no easy task and requires significant time and money.
§ Businesses need to measure the full benefits of sustainability because if you can’t measure them, you can’t build the business case.
§ Measuring the intangibles is a journey and businesses are at different stages. For example, financial services are more advanced in measuring risk because they have to be.
§ We should think about whether intangibles need to be measured financially - financial value most credibly builds the business case but it’s important not to lose sight of what we’re trying to achieve.

Measurement should be a tool to demonstrate impact, but not a sole focus.
§ Transparency is critical and will help drive change – companies want to compare well against their competitors. A global database where people can record and share their specific experience would be a helpful tool.
§ Businesses have a responsibility to work within their sectors to develop common measures of the most relevant intangibles for their sector. This will enable comparisons between businesses as well as lead to better management of intangibles.
§ Simple metrics can be really helpful, for example, the Net Promoter Score (NPS) (used by Metro and Vodafone) or a whistleblowing score, which provides a country by country breakdown of complaints.
§ Measurement is important in the short-term. Longer term, corporate sustainability should be so embedded into the business strategy that the intangible benefits don’t need to be measured.

Transforming supply chains

The tools for developing sustainable supply chains evolve by the day, ranging from insisting on certification, minimum standards in factories, risk auditing, setting supply chain standards, banning materials & more. Pooling its experience, this table will identify the initiatives that hit the sweet spot of building value whilst delivering real social and environmental change.

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Examples
• Blackberry is part of the Electronic Industry Citizenship Coalition and Conflict-Free Sourcing Initiative. Have worked collaboratively to realise standards which has changed conditions and ensures that no conflict minerals are used in products.
• GlaxoSmithKline identify high energy consuming suppliers and pay for upfront costs of energy efficiency improvements. The savings made from these projects are split between the supplier and GlaxoSmithKline, providing a Win-win solution for both parties.
• Graduate training has proved effective at Debenhams, leading to improved welfare and effective HR policies. Embedding culture change through capacity building like “buddy systems”, training and coaching have been shown to improve staff retention. Benefits for Business and Workers (BBW) has been effective
• National Express are looking at liquid-air technology to reduce reliance on oil.

Solutions
• IT solutions have been developed to improve communication with suppliers. This has enabled more clarity across parties and has allowed more specific communication with suppliers. Previously, data was too vague to allow for meaningful communication with supplier while now individuals are now empowered by granularity of data.
• Root cause analysis has been seen to be effective in evaluating how prepared sites are for certain events.

Obstacles
• IT Solutions not fully effective – innovation is still needed in order to improve capabilities
• Budget restraints act as a barrier to delivering environmental and social change
• Not enough collaboration or knowledge sharing in most sectors

Opportunity
• Opportunity to recoup costs where long term relationships with suppliers
• Reduce overheads and environmental impact
• Innovation in IT Tools
• Currently political environments (Sustainable development goals, COP21 & abolition of modern day slavery)

Other
• Starting points for catalysing actions are NGOs, social media, mailing lists and the external network
• Prioritisation of suppliers is dependent on their relative impact on th

Own a stake in the Crowd!

The Crowd is selling new shares in the business as it prepared to launch two new digital platforms that it has been co-creating with its community – The Curve and Crowd Consulting. This table is a chance for those who are interested in buying shares to discuss the future plans for The Crowd, and understand how the crowdfunding process works.

Venue Detail

Bank of America Merrill Lynch: King Edward Hall

King Edward Hall | 2 King Edward Street | London | EC1A 1HQ

Directions

Bank of America's offices are a very short walk from St Paul's tube station (Central Line). Exit the station at Cheapside/Newgate Street. Go past the BT centre, with it on your right-hand side and take the first available right down Edward Street. Continue down this road for 80m and the entrance to the venue is on your left-hand side.

Do not go to the main reception desk at their offices when you arrive. You are looking for an entrance that leads you directly into the King Edward Hall.
Who's Attending