I recently had the pleasure of speaking at three very different conferences. In each case, I was asked to speak about sustainability topics such as why this should be an area of focus for businesses, what are the things organizations should be doing and what are Hitachi Ltd. and Hitachi Consulting doing related to our internal sustainability efforts. The three conferences were very different from each other – one was was an enterprise software vendor conference (SAP’s SAPPHIRE conference), another was a gathering of chief financial officers in the chemicals industry sponsored by Chemical Week magazine, and the third was a conference focused on supply chain business processes run by AMR.
When I first agreed to participate in these events, I must admit that I was a little apprehensive, because I wasn’t sure how receptive the audiences would be to the message. I knew SAPPHIRE had a special track on sustainability topics so I wasn’t as worried about that one; for the other two conferences, I really thought I’d be out on a limb. I often suspect that many people think the ideas around sustainability are only of interest to “tree huggers” trying to save the planet and that valid business reasons to pursue a strategy that incorporates sustainability concepts don’t actually exist. This is the attitude I feared I’d facing at these conferences.
I’m happy to admit that I couldn’t have been more wrong!
At the SAPPHIRE conference, the sustainability track had more than 70 sessions throughout the week. They had former Vice President Al Gore as keynote speaker, who, as expected, stressed sustainability as being very important to businesses. What was unexpected was that Sir Richard Branson, the U.K. billionaire, addressed the same topic. He said that “the enemy is carbon” and then described how he started a group called the Carbon War Room, which is focused on (as stated on their website) “harnessing the power of entrepreneurs to implement market solutions to climate change.” He said the goal of this group of business and public sector people was to remove “gigatons of carbon out of industry.”
He also talked about how IT has a role in this and noted that IT equipment is now responsible for more greenhouse gas emissions than air travel and other transportation. After the conference, I did some research on Branson and discovered that he’s been focused on this problem for several years and has even offered a prize of $25 million to the first person or organization that creates a way to scrub greenhouse gases out of the atmosphere. This is called the Virgin Earth Challenge.
Other presentations at SAPPHIRE that were very interesting were:
- Andrew Winston talked about creative things companies are doing to reduce their environmental footprint while encouraging their suppliers to do the same.
- SAP Chief Sustainability Officer Peter Graf delivered a fascinating presentation on what SAP is doing to manage their environmental footprint using their own sustainability-focused tools. Graf also showed their 2009 Sustainability Report, which is one of the most informative and interactive sustainability reports I have seen. I think they set a bar that other companies will try to meet. He also highlighted the business benefits of their efforts to reduce their environmental footprint, stating that they saved more than $90 million by reducing energy consumption and employee travel.
- A series of client case studies revealed significant benefits seen as a result of sustainability actions.
Chemical Week CFO Conference
The next week, I was in New York at the Chemical Week CFO conference. I really didn’t know what to expect but was pleasantly surprised when the keynote speaker, Kurt Bock, CFO of BASF SE, started the ball rolling by giving his perspective on sustainability. He said that “a focus on sustainability is a key to BASF’s success.” He also said that “climate change is one of the greatest challenges society faces” and “chemical companies need to be part of the solution.” I almost fell out of my chair when I heard this, because I hadn’t expected such passion on this issue at this conference. Keep in mind that this isn’t coming from some “hippy freak” – this is the CFO of the largest chemical company on the planet that has been in business for 145 years. That same CFO won the Chemical Week’s CFO of the Year award later that evening.
Four out of the next eight presentations (including mine) at the conference addressed sustainability-related topics:
- A.T. Kearney talked about the major risks chemical companies need to manage. This discussion highlighted sustainability and climate change prominently.
- A PricewaterhouseCoopers tax specialist and a tax director from Georgia Gulf discussed the tax implications at the state, federal and international levels related to investments in green technology and reducing carbon footprint.
- The last presentation was from the CEO of a company that wants to go public and is producing a biologically based pesticide that’s supposed to be better for the environment compared to alternative chemical pesticides. He talked about securing funding in tight credit markets.
AMR Supply Chain Executive Conference
The following week, I was in Phoenix at the AMR Supply Chain Executive Conference, a gathering of hundreds of supply chain executives from companies around the world. This conference got started with two very sustainability-focused presentations.
The keynote was T. Boone Pickens talking about his “Pickens Plan,” a two-part plan to eliminate our country’s dependence on oil. In his vision, fleet vehicles (such as trucks and delivery vehicles) would run on natural gas from U.S.-based sources and buildings and houses would get a much larger percentage of their power from wind sources. He believes that reducing dependence on foreign oil is one of the most important challenges facing the U.S. because it is at the intersection of three critical issues: economy, environment and national security.
The next speaker in the general conference session was the senior vice president of global supply chain at BASF and he again talked about how a focus on sustainability was core to all of their supply chain operations. In his case, he was talking about environmental as well as the social aspects of sustainability.
The enlightening thing for me about this series of conferences is that the core concepts of environmental sustainability – a focus on reducing energy use and greenhouse gas pollution, reducing use of water and harmful chemicals, reducing waste and increasing recycling – are now being recognized as imperative to the success of businesses. These three very different conferences with very different attendees demonstrated to me that these concepts are not just considered a fringe idea any more. Rather, executive leaders at major companies as a key see them as key to remaining profitable and differentiating themselves from the competition.
Additionally, leading companies are not just waiting to take action. They are recognizing the bottom-line benefits of moving ahead of competitors and regulations now and are also capitalizing on market opportunities to provide innovative products and services that enable their customers to be more sustainable. These companies are changing their business processes and implementing the information systems needed to measure and track sustainability-related activities such as environmental impact reporting with sustainability scorecards, managing energy usage with energy intelligence systems and green IT, and solutions to improve the sustainability of their supply chain.