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Insights 5 Oct 2017

The Dynamics of Corporate Sustainability Leadership Over Two Decades: Insights from Dow’s Neil Hawkins

By Eric Whan

This blog is part of the GlobeScan/SustainAbility Leaders Survey 20th anniversary project being conducted by GlobeScan and SustainAbility in partnership with Interface.

Since 1997, GlobeScan has been asking a global panel of sustainability experts who exemplifies and what defines leadership on sustainable development.

While asking the same questions for 20 years might sound a little too close to Einstein’s definition of insanity, in truth it has been fascinating, both for the constants in the process and for the huge changes in responses we have revealed.

Our original statement of purpose for the survey was to explore expert opinion on sustainability to inform “organizations that need to keep abreast of the sustainable development trends affecting their mandate or their business interests.” In other words, anyone reading this. And over much of that time, national governments have proven to be hemmed in by relatively short mandates, intergovernmental processes have been disrupted by resistance to change or procedurally slowed while seeking consensus, and NGOs have been under-resourced. Meanwhile, a handful of global companies excelled, but they are few and far between.

Over time, the role of the private sector in accelerating leadership on sustainable development has thus become more and more central to the survey. This corporate focus is the main reason SustainAbility became our partner in the process a decade ago. Since then, it has been known as the GlobeScan SustainAbility Leaders Survey, or GSS.

One of the main interests of the GSS and our two organizations is to catalyze corporate sustainability leadership by asking which companies experts think do the best job integrating sustainability into their business strategies. As we assess two decades of opinion on this matter, we are looking especially closely at the performance of Interface, the one company that has appeared in the top echelon of recognized sustainability leaders every single year.

Apart from Interface, the list of corporate sustainability leaders has changed strikingly over time. In 1997, the top-ranked companies were Dow Chemical, followed by Monsanto, 3M, DuPont and Shell. This year, Unilever leads the rankings for the seventh consecutive year, followed by Patagonia, Interface, IKEA and M&S. Quite a different mix of businesses indeed. Most obvious is the shift from industrial B2B companies with intensive manufacturing facilities to B2C companies with complex supply chains.

My colleague Chris Coulter has posted his incisive take on how the agenda has evolved from one that prioritized risk management to one that embraces sustainable growth and engagement. For another perspective, I rang up Neil Hawkins, Dow’s Chief Sustainability Officer and a 29-year veteran of the company, to discuss how Dow’s own sustainability efforts have evolved since the launch of the industry’s Responsible Care principles – in which Dow was instrumental – and Dow’s own early endorsement of the concept of the Triple Bottom Line. Neil has been a participant observer of the sustainability agenda for longer than we have been surveying about it.

I came into that conversation rooted in our learning from two (but not three) decades of engaging with experts on this subject. That is, that recognition for sustainability leadership – along with the ability to get things done – requires three sets of ingredients. These include (1) having an ambitious vision with goals driven by the executive and embraced by an integrated team, (2) demonstrating meaningful and effective progress toward them, and (3) engaging stakeholders on successes, failures and lessons learned. We often express these ingredients as Purpose, Performance, and Participation – perhaps a more eloquent troika.

Neil reaffirmed the importance of vision, goals, purpose and performance. “It’s extremely important to have a few goals that will lead a company to have a truly positive impact, but also to stick to those goals and align everyone around them,” he says. “These are hugely important for culture, identity, recruiting and retention. They need to be simple and easy to understand, helping the company to stay focused… It’s about constancy of purpose; you want to instill this into the culture.” It starts on the inside, and without engrained commitment, alignment and clarity (Purpose), Performance and Participation will be lacking.

“It’s extremely important to have a few goals that will lead a company to have a truly positive impact, but also to stick to those goals and align everyone around them.” – Neil Hawkins, Dow Chemical

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Dow, he recounts, relentlessly pursued substantive improvement and quantified results. It learned how to collaborate early, and it welcomed external input via its multi-sectoral, independent Sustainability External Advisory Council. Through the Council, Dow gets “third-party input into what we needed to do more of, and do less of.”

Neil credits Dow’s first sustainability executive, an early colleague of his, for inserting sustainability into the company’s DNA. Dave Buzzelli established the advisory council and also led Bill Clinton’s formative President’s Advisory Council on Sustainable Development, along with Jonathan Lash (WRI) and Ray Anderson (Interface). Dave “had a national public policy dimension to his work. He was transforming the company from the inside out, while transforming America from the outside in. He was a key shaper of Dow.”

To achieve alignment, Neil has advice for new employees who join companies as aspiring sustainability champions. “Learn the business first, then demonstrate how sustainability adds value all around.” This approach is more likely to result in improvements to sustainability performance.

The Question of Communications

So with Dow as the model company at the time, ranked first in our survey in 1997 but far lower in 2017, it is no surprise that the chemical industry’s sustainability performance was seen by our panel as tops among the major industrial sectors for the later part of the 1990s.

Now Neil’s sense is that companies that are cited by our panel as leaders today have become much more sophisticated over the past two decades with their communications than were our pioneers in the 1990s.

Instead of allocating a large spend on PR and advertising, Dow has become one of the largest buyers of renewable energy, has greatly reduced its greenhouse gas emissions and is into the third of its medium-term series of sustainability targets for 2025 with a collaborative “blueprint that integrates public policy solutions, science and technology, and value chain innovation to facilitate the transition to a sustainable planet and society.”

Neil Hawkins again: “In 1997, the perception [reflected by] the survey was almost solely one of substance, and we have relentlessly improved our performance and positive impacts over the last 20 years. We haven’t really changed our approach. What has changed is that perception is now also augmented by PR, communications and advertising. Current leading companies are true sustainable business trendsetters with relatively large advertising, collaboration, and communications budgets. The combination is powerful. B2B companies like Dow have far less resources in these areas. Our programs and collaborations must speak for themselves, and we are proud of what are accomplishing.”

Perhaps it is no coincidence, then, that when we asked our same panel of experts back in 1998 to rate the performance of companies in communicating sustainability topics to external audiences, 51 percent of them said performance was poor, 33 percent said it was moderate, and only 15 percent said performance was excellent. In 1999, they rated consulting with stakeholders as most important among several ways to earn stakeholders’ trust, and this only increased for the next few years. Dow began early.

Consultation, engagement and collaboration were already clearly seen differently than public relations at the time. When asked to evaluate the importance of various elements of communications for earning stakeholder trust in 1998, the top-rated capabilities related to corporate vision, policy, goals and targets (the Purpose part of our troika). Public relations and advertising ranked distantly last.

In today’s hyper-communicative world that craves relief in simplicity and brevity, it is worth debating the role of communications and PR in getting recognized for good leadership. On the surface, it is easy to think that volume speaks volumes. Instead, though, we may ponder whether communications is only one first part of an equation in which internal and external engagement, relationship building, knowledge sharing and collaboration lead not only to recognition, but also to the trust that is required to act as a leader. I believe few would question whether today’s recognized leaders, each with major engagement strategies, are doing some of the other things well too.

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