June 2013’s NWSBQ: The sustainability specialist – the conscience of the business?

homer conscience
Yet another successful event under our belts. The food was good, the view was as stunning as ever, the crowd friendly and the talks stimulating and challenging. What more could you want of an evening?

Last Thursday we welcomed Verity Lawson from British American Tobacco (BAT) and Eileen Donnelly, who recently joined the John Lewis Partnership and is on the GACSO board. They both presented fascinating and engaging talks under the title ‘The Sustainability Specialist – The Conscience of the Business?’ The main points of the talks, along with the subsequent Q&A session are summarised below.

Verity Lawson, BAT
– you can see Verity’s presentation slides here.

Verity began her talk by discussing how although many of us may see controversial companies, like BAT, as not having a conscience because of the nature of the products that they create. She went on to argue, however, that most companies do have a conscience, and sustainability is especially important in companies like these. The problem, however, is that the majority of these companies don’t know what to do about this or how to go about it.

In the 1990s, BAT was an industry ‘under siege’ as a result of continued allegations and hostility from society. Verity described how as a result of this, the company became defensive, and thus their motivations were greatly misconstrued. The need for CSR was becoming increasingly apparent and so BAT worked to establish a robust approach, such as through expert advice from the Institute of Business Ethics, as one way of moving towards a more sustainable business and looking at standards within the business. The vast benefits of CSR were clear and so something that BAT tried to embrace.

Verity then went on to discuss how the move from CSR to sustainability demonstrates just how quickly the sustainability world can move and change. The challenge then lies in business evolving the approach they take to this in line with the changes – it is at this stage that the sustainability specialist comes into play. They do, however, face a challenge as businesses are more often than not, resistant to change.

In 2006/7, BAT began the transition from CSR to sustainability, whereby the reporting process in BAT changed, the sustainability reporting was much more focused to ensure that the important issues were covered and not drowned out by the vast materiality in the previous reports. Stakeholder dialogue also played an important role, and this allowed the company to look at how they could co-design solutions with stakeholders.

Sustainability then, Verity discussed, is about continuous improvement. She uses a simple diagram to explain this. The diagram shows how information is gathered, through stakeholder dialogue end engagement, it’s then taken into the business where areas that need to be focused on are identified and integrated into the corporate strategy. The final stage of the diagram shows the interface between the outside world and the business, this is how information is passed on and where stakeholder engagement is reported.

Verity ends her talk by referring back to the original question – ‘the sustainability specialist – the conscience of the business? – leaving us with the idea that rather than the sustainability specialist being the conscience of the business, they are the people equipped with the knowledge and tools to help the business to act upon their conscious.

Eileen Donnelly, John Lewis Partnership and GACSO
– you can see Eileen’s presentation slides here.

Eileen began her talk by using the example of the film ‘The Purge’ and posing the following question – if everything was legal for 12 hours, what would you do?

She discussed how this question is more than simply what is legal or not, but about conscience – both short and long term. She uses an example (that I think most of us could relate to!) of chocolate cake. In the short term, eating this cake would make you happy, but in the long term, guilt would inevitably creep up on you.

Conscience then, is about distinguishing right from wrong, and as Eileen pointed out, is a greatly subjective term. Individuals distinguish what is right and wrong because of the values they hold, and importantly, it is these individuals with these values that make up businesses.

Many businesses look at short term value rather than long term values, short term value for example could be achieved through the employment of short term labour or unsustainable fishing, for example. Eileen discussed this ‘value VS values’ concept using examples of Google, Amazon and Starbucks, all of which have been involved with the recent tax avoidance scandals to increase their short term value. In the long term, however, this will undoubtedly damage their reputation.

Eileen emphasized the importance of long term values, as it is these that underpin a business’ culture, a culture that comes from the top and needs to be embedded throughout an organisation. Eileen used an effective image with the quote ‘culture eats strategy for breakfast’, outlining how culture must go in line with strategy – a strategy will not work if it does not fit with the culture of the business and the values the individuals hold within the business.

Eileen then finished her talk, by emphasizing the depth of sustainability, and the fact that it goes much deeper than purely the conscience of a business. She states that rather than the conscience of a business, it is the compass, and sustainability specialists thus help these businesses find their way. The definition of what is right and what is wrong changes over time, and so rather than being the absolute conscience of a business, sustainability should be embedded within the business at all levels.

Q&A Session

Q: When it transpires that the individuals who died in the factory were manufacturing your product, who is answerable?
E: The supply chain is the biggest risk. There is a lot of attention on doing audits on product lines, JL/Waitrose carry out audits on the ethical side of the business. We also need to ask the question – ‘what can we do so we have visibility of that?’
V: The companies have responsibility of the supply chain. BAT buy from 200,000 farmers, and have good control of the supply chain and are very integrated. Surveying a building, for example, would not however be included in checks. Businesses wouldn’t just purposely ignore something though, there are lots of challenges here.

Q: How do the personal morals stand up against corporate morals and values in regards to whistle blowing?

V: In regards to a tobacco company, people think hard before they would join. The values of the employees are thus in line with the values of the company. BAT for example has strong values, and is honest and open. If an individual’s values are not aligned with a particular company, perhaps they are not the right person for the job.
E: Sometimes your values may be compromised, but you may be making a difference in other sectors and can find a reason why it is good to stay – sometimes you have to compromise.

Q: How do you present the same thing in different countries because people’s morals are different in different places?
E: In her experience in an international company, different country operations reacted to and tackled challenges in different ways, according to their culture and what was important to their direct stakeholders. In regards to climate change it was about describing the issues in a way that a particular country was going to understand – they go through learning processes that we had been through before elsewhere, at different speeds. It is about going through at the right pace, you can’t take what worked in one country and apply to another.
V: How you operate internally can be standardised, it is how you communicate this that is different – you need to understand local needs.

Q: As corporate sustainability professionals, would you be supporting regulation by the state and EU?
E: People sometimes have black and white views that we should or should not have regulation. I don’t think it is as simple as this – it is wrong to wait for regulation, but we do need to advocate more regulation. Although I don’t think it will come quickly enough.
V: BAT is not consumer facing as a corporate, it faces shareholder pressure (as well as consumer pressure). Regulation is important, although a lot of it focuses on reporting – not actually generating action, which is what we need.

Q: How do you encourage suppliers to improve sustainability?
V: For the tobacco leaf supply chain for example, social responsibility forms a great part and involves audits and assessments. For the supply chains for the other materials (such as paper) we have our own audit process. ISO standards do form a part of this, but are not the only element.
E: Waitrose work on an individual basis in their short supply chains, John Lewis works in collaboration. It depends what supplier you are talking about.
Q: Can you imagine your business ‘dropping’ sustainability given the benefits it generates?
E: It depends whether the board has short term goals. John Lewis would never drop it, it is embedded in their culture. I believe some businesses would drop it if they could though.
V: It depends what you mean by sustainability. For BAT, the biggest aspect of sustainability is harm reduction. If BAT only continues to produce cigarettes, the company won’t exist in 50 years, one reason being because of the increasing popularity in E-cigarettes. You need sustainable products.
Q: BAT have always been honest about their impacts, what discussions do you have about where you draw the line with the information you give out?
V: Before 2000 BAT were a very closed industry, there was too much information and it was hard to focus and see what was important. To produce sustainability reports materiality was reduced to find what is relevant, BAT are better at openness now. We could be more open – there is still a lot to learn.
Q: A recent study showed that sustainability within a business often came from a particular individual who had an epiphany, has this been true in your experiences?
E: It is an absolute dream to have someone at the top who has had an enlightenment about sustainability, from values or business opportunities.

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