How CEOs Can Reframe Sustainability As Vital To Business

Forbes

5 hours ago

The principles of environmental sustainability are taking a beating in the United States. Since taking office in January, President Donald Trump has withdrawn from the Paris Agreement to cut greenhouse gas emissions, canceled subsidies and added more permitting hurdles for wind and solar power, relaxed restrictions on coal mining, and moved to repeal scientific findings that allow the federal government to regulate emissions.
Still, sustainability remains of utmost importance to companies. A recent report from EcoVadis found that only 7% of companies have actively cut back on their sustainability efforts this year. The vast majority—87%—have increased or maintained their investment in sustainability since the beginning of the year. Nearly a third say they're spending more on sustainability measures this year, but talking about what they're doing less.
These companies are committed to sustainability because it's good business. More than half of company executives and vice presidents say it helps attract and retain customers. Nearly two-thirds said that supply chain sustainability is a competitive advantage. And Forbes Research found that seven out of 10 executives say investor expectations drive their sustainability efforts, with 63% of them saying they are confident in sustainability's positive impact on the economy as a whole.
How can executives continue to promote sustainability in their companies while external forces are attacking its foundational principles? Today's edition of Forbes CEO centers on that question. I talked to Mark Cutifani, a member of the Council on Sustainability Transformation, about how to walk that tightrope. He told me it's a matter of framing: Sustainability ensures the future of your business and can deliver financial results.
The Council on Sustainability Transformation is a relatively new group. It was launched in January by ERM, the international sustainability advisory firm, and is made up of current and former top leaders across industries and governments. The goal of this group is to work with C-suite executives and board members of companies large and small, providing them practical knowledge to operationalize sustainability principles.
The council puts together white papers targeted at top executives. Earlier this summer, they published one that details how to continue delivering sustainability as the world—and leaders' attitudes—change toward sustainability. The overriding message: Don't give up, just reframe the way that you present it.
The leaders who are on the Council on Sustainability Transformation are used to reframing the way sustainability is presented. While they include experts on sustainability, including former EU commissioner for climate action Connie Hedegaard, some—like Cutifani—come from industries that are not traditionally aligned with sustainability. Cutifani spent his career in mining, spending nine years as CEO of global mining company Anglo American.
'We're trying to put the sustainability concept in that broader business framework, but it's about delivering results,' Cutifani said. 'When we talk about climate change and other issues, these are the threats that we see coming at us.' A BROADER DISCUSSION
Mark Cutifani, former CEO of Anglo American. Council on Sustainability Transformation
One of the biggest problems about the entire discussion around sustainability, Cutifani said, is that it tends to get narrowed down to a single issue. Instead of talking about the role that businesses should play in the greater society—which is where Cutifani said the talk should be—it's about components, like carbon emissions or water pollution. It's important for business leaders to be able to reset the discussion to the big picture.
Cutifani recalls one time that an investor crudely asked him why Anglo American was engaged in ESG—the acronym commonly referring to environmental stewardship, social responsibility and corporate governance. Cutifani broke it down in terms of ROI. Through ESG initiatives, the company focused on safety, and had dramatically reduced the number of worker fatalities. They were avoiding costly financial penalties and potential litigation by keeping the areas in which they were working clean, causing minimal harm to surrounding communities. These initiatives not only protected communities and land near the mines, but they didn't draw protesters—and, he noted, picketers tend to draw unwanted and international attention. And all of this is keeping operating costs down, Cutifani said, which is important in a volatile industry such as mining.
With that explanation, the investor agreed that everything Anglo American was doing should continue, and remarked that no one had ever explained sustainability and ESG like that. Cutifani responded that it was an industry mistake.
'I've not had anybody who's had a problem with the word 'sustainability' when I put it in that context,' Cutifani said. OUT OF CONTEXT
One of the problems, Cutifani said, is people don't understand how business works—or they take it all out of context. Cutifani said he tells people who didn't know what industry he works in that he is with one that has the most significant net positive net environmental footprint on earth. And when those people guessed which industry that might be, Cutifani said no one has ever said mining.
But, he said, mining actually fits the bill. Minerals obtained through mining are used for fertilizers, which helps grow the food to feed the planet. Reservoirs are created for mining, and the industry creates methods to filter out contaminants so the water can be used for drinking and other purposes. Pipes that carry that water are made from metal that is mined, and the full infrastructure relies on metal—or plastic, which comes from petroleum that is also mined.
Cutifani knows that the mining industry isn't perfect. There are many ways it can improve its environmental footprint, become more efficient, create less pollution and use less energy. But, he said, there are positive contributions they are making to the environment, and industry leaders shouldn't be afraid to talk about them.
'What we're trying to do is encourage people not to hide from the debate. Because if you hide from the debate, then it … becomes a self-fulfilling prophecy,' Cutifani said. 'If somebody says, 'These things are no good,' … we're going to go backwards in areas that ultimately have a very high cost to society.' ENGAGEMENT IS KEY
Cutifani said that company leaders need to take charge. That often means doing things that might be uncomfortable and that some might not like, but it's vital.
The newest white paper from the Council on Sustainability Transformation looks at how the current political situation might make some companies take more of a wait-and-see approach to environmental initiatives—and why they shouldn't. Businesses that are holding back could undermine their growth potential. The white paper points out that nearly 90% of individual investors around the globe are interested in putting their funds toward sustainable assets. Additionally, there's a thriving consumer market for sustainable items. For CPGs, the annual growth rate for more sustainable products is a third higher than their counterparts.
There also could be opportunities to strategically bring together long-term sustainability goals with business and geopolitical ones. The study points out that these kinds of solutions are often overlooked because they require deep systems-level thinking. But some of these types of initiatives—like diversifying energy sources, altering supply chains or rethinking packaging—could save money, make a company more resilient in times of geopolitical or economic upheaval, and increase profitability.
Engaging with everyone is important, Cutifani said, as is keeping your eyes on the long-term strategy of your company. Regardless of which politicians are in power and their viewpoints on sustainability matters, Cutifani said it is the CEO's responsibility to explain how the company creates value—and why company decisions relating to sustainability contribute to that value.
'You have to be the spokesperson for both your company and the industry, or you risk having the wrong debates threaten the survival of your company,' Cutifani said.
'And for those leaders that don't believe they've got to engage, they can scrub the word 'leader' from their name, because they're not,' Cutifani continued. 'That is the role of a leader: To ensure that we're in the debates and we're taking on the conversations to make sure we promote the value that we create, and secondly, we explain how we're going to do better on those things that we need to improve on.' COMINGS + GOINGS Wholesale food distributor United Natural Foods hired David Best as president and chief executive officer of retail, effective August 17. Best previously served as president and chief operating officer of Coborn's Inc., and has also held leadership roles at General Mills and Target.
hired as president and chief executive officer of retail, effective August 17. Best previously served as president and chief operating officer of Coborn's Inc., and has also held leadership roles at General Mills and Target. Motorcycle manufacturer Harley-Davidson appointed Artie Starrs as president and chief executive officer, effective October 1. Starrs most recently worked as CEO of Topgolf International, and he will succeed Jochen Zeitz, who is transitioning into a senior advisor role.
appointed as president and chief executive officer, effective October 1. Starrs most recently worked as CEO of Topgolf International, and he will succeed Jochen Zeitz, who is transitioning into a senior advisor role. Communications infrastructure firm Crown Castle selected Christian Hillabrant as its next president and chief executive officer, effective September 15. Hillabrant previously worked as the CEO and chairman of the Management Board at Vantage Towers AG.
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