.

“What would you say to companies that see improving even one piece of their supply chains as too expensive?” I asked.

Joe Sibilia had just shared one method to help companies become more sustainable: take one ingredient in the supply chain and use it to create a social benefit. This is what he had done with Ben & Jerry’s through the aptly named 1 Ingredient program.

Partnering with Greyston Bakery, Ben & Jerry’s uses one ingredient in its products, brownies, to create jobs for the chronically unemployed–former convicts and addicts. Greyston Bakery provides its Brownie Artisans with living wages and skills training and invests all profits into the Greyston Foundation to support job development, healthcare, childcare and housing.

By re-imagining the production and sourcing of just one item, Ben & Jerry’s has supported the rehabilitation and growth of thousands of society’s most marginalized people over the past 23 years.

But not all companies are Ben & Jerry’s. Anticipating that most companies think differently (or not at all) about their impact on society, I asked Joe how he would coach companies to see the financial value in creating something that benefited society. He gave an exasperated grunt.

“I’d Say to the company, ‘If  you’re valuing your supply chain on the narrow scope of cost-effectiveness and you really wanted a cost-effective approach, you’d use slaves, child labor and put up with unsanitary working conditions.’”

Joe’s right, of course. We all care about more than just cost and profit. But we use money as a false restriction, assuming there’s a trade-off between money and doing the right thing. Ben & Jerry’s didn’t take 5% of Chocolate Fudge Brownie sales and donate it to workforce development. Instead the company used market systems and creativity to deepen its impact at no additional cost.

A long-time social entrepreneur, Joe Sibilia’s ventures include CSRWire, the social investment bank Meadowbrook Lane Capital and the Gasoline Alley Foundation, which incubates socially responsible businesses in inner city neighborhoods.

I spoke to Joe in preparation for a session I’m leading on integrating social responsibility into your brand at Sustainable Brands.  If you’re interested in attending the conference (June 7-10 in Monterey, CA) email me for a 20% discount. This will be my second year attending; it’s an absolute playground for people interested in using business as a force for change.



But McDonald’s has been systematically planting a garden of social responsibility. And the first blooms are here, from oil recycling programs (more than half of American McDonald’s participate) to electronics recycling in Chile.

McDonald’s is using a three-leg framework to engage employees, suppliers and owners in profitable sustainability worldwide. The effort required to transform systems and expectations from Iowa to Mumbai to Stockholm to Beijing is tremendous, particularly when 70% of the locations are independently operated. Absolutely, there is still much to be done, but praise is a great motivator for future action, so let’s begin.

A new portal shares success stories and tactics for environmental and supplier sustainability, meant to encourage replication by other owners, suppliers and operators.  The “Sustainable Supply Vision” covers seven topics including animal welfare, employee wellness and waste, while “Best of Green” has nine best practice categories from anti-littering to sustainable food. McDonald’s has committed to update these resources as new practices become available.

While many of the examples mentioned are still single occurences or pocketed within a region (50 McDonald’s in Germany are using a new tracking software to manage and reduce waste), the strategy is–or should be–to string these regional successes together to demand greater responsibility from suppliers, employees, owners and consumers.

The small act of naming the individuals on the Global Environmental Council and Sustainable Supply Steering Committee is significant, particularly for a large (often defensively crouched) company like McDonald’s. Score one for transparency and accountability.

A closing note. I had a moment of moral wrestling before writing this article. I’m a lifelong vegetarian who’s seldom set foot in a McDonald’s (when I was young I ordered the safest bet on the menu, a salad. Alas, it was a Chef’s Salad, topped with ham…). As I wrote above, I think McDonald’s (like Coke, Pepsi, KFC and Philip Morris) has a responsibility for what it sells. But I’m also an optimist and a disciple of positive reinforcement.

McDonald’s, you’ve taken some great steps. Do you feel the momentum building behind you?

McDonald’s Going Green credit: VentureBeat

Sometimes, as social entrepreneurs, we’re reluctant to show our passion for the social side or our business. We get caught up in trying to appear soundly strategic or business-minded or we over think our messaging, “Will this look like cause-washing? Can customers get behind this? How will we measure and track our results?” There’s merit to the above questions, but there’s more merit in leading with passion (even more so when our business is driven by a social mission). I invited Caroline Duell to Cause Capitalism to talk about how she is growing Elemental Herbs from her dual passions for herbal healing and the outdoors and how she deals with the dilemmas accompany a conscience-driven business.

Listen to our conversation (about 45 minutes) by clicking on the player below. Prefer MP3? Just right-click and save. I’ve highlighted some points below, but Caroline conveys her enthusiasm, passion and fun with her company better than I do in the notes below.

• Caroline started with a healing plan, not a business plan. Her business making organic and locally-sourced hand balm, lip balm and sunscreen started with a balm she concocted from medicinal herbs to heal her hands when she was working as a rock-climbing guide.
• Elemental Herbs’ social mission is born out through the bio-diesel trucks employees drive, the organic herbs used in all products, the  company’s marketing partnerships, the team of athletic outdoor activists the company sponsors and the recycled packaging and printing options it chooses. Elemental Herbs donates 1% of gross sales to environmental organizations as part of the 1% for the Planet coalition and recently earned B Corporation certification.
• Some decisions to maintain a responsible and sustainable business cost Elemental Herbs more, while some save the company money. Buying bio-diesel trucks was more expensive than gas-run vehicles, but the additional costs have been recouped many times over by savings on gas. Choosing sustainable printing and inks, however, is more expensive than standard printing and materials, but fits with Caroline’s personal values.Another area where Caroline’s saved financially and found strong business partnerships is through the sustainable business networks she belongs to.  A fellow B Corporation extended an incredible discount for a service because the two companies’ social goals were aligned. Elemental Herbs marketing partnership with Patagonia Footwear came from a shared membership in another network.
• Caroline says the biggest challenge to running a sustainable business is the extra organization it takes.  She can’t run to Kinko’s for printing additional labels at the last minute because she’s committed to printing on 100% post-consumer waste paper. “It’s the planning that’s the extra little piece in running a responsible business,” she says.
• Caroline decided to work toward B Corporation certification because “Becoming a B Corp is a clear way of expressing my core values in business. It’s a simple way to communicate what I care about.”
• Elemental Herbs conducts at-will supply chain audits for each product. They referenced B Corporation, Cradle to Cradle and CarbonFootprint.com for the audit questions, which look at employee incentives for alternate vehicles and power and energy sources, among other things. Opening this dialogue with suppliers often sparks new growth in the company’s suppliers’ sustainability efforts.
• I asked Caroline if it was tiresome to not only adhere to your own moral compass when running a business, but to feel responsible for other businesses’ actions in the sense that if they aren’t ethical, yet offer great terms, she’ll stop working with them.  Her answer was that sometimes it can be tough, but she adds that “Whenever I dig deeper, I find a new treasure.”
• Half of Elemental Herbs’ genesis lies in outdoor sports. Caroline and her partners decided to engage this part of their lives and interests by sponsoring Activist Athletes, a team of individuals who excel at a sport and are dedicated to conservation. It’s a “really fun way for us to combine our interests and values.”
• Caroline offers this advice to other entrepreneurs: “Listen to your gut. We can spend a lot of time running the numbers, but we know what the right decision is.”  Like one of our shared role models, Patagonia’s Yvon Chouinard, Caroline believes that socially responsible decisions and profit are mutually occurring.

1.  Engage your stakeholders

Relationships with stakeholders should be strategic. Effective stakeholder engagement will become a source of market research and help reduce risk and build a company’s brand. Stakeholders’ views should shape a company’s CSR priorities. Well-structured stakeholder engagement can become a competitive advantage.

2.  Look at new business models

Companies should look for ways to more broadly impact local communities and serve the environment. CSR initiatives, in addition to being central to a company’s business strategy, need to be included in long-term planning. Everyone in the organization should to recognize her own role in advancing CSR and management should facilitate this.

3.  Tweak management’s mindset

Organizations’ social and environmental contributions will become more valued, and in turn, will encourage even more responsible models of business.  The emphasis will move from short-term profit making to long-term competitiveness, particularly as resources become scarce.

4.   Be a leader in capacity building

Employees will be increasingly recruited for their understanding that social and environmental responsibility is a business imperative.  An organization’s commitment to CSR will be partly judged by the resources it allocates to the job.

5.  Add value to human resources

Job descriptions and employee evaluations should include employee responsibilities and expectations around CSR. Employees should be seen as key partners in executing CSR.

6.  Act on climate change

It’s becoming progressively important to understand the business risks and opportunities associate with climate change. Companies should measure and disclose their own greenhouse gas emissions and demonstrate how they are working to curb their environmental impact. More importantly, organizations should actively support environmental initiatives in their communities.

7.  Become an expert on corporate governance

Demand for transparency and accountability will only increase. Strong anti-bribery and anti-corruption policies will be necessary. International standards and guidelines should be appropriately adopted.

8.  Know your supply chain

It will be critical for a company to fully understand its supply chain (a potential area for lax product safety and human rights abuses). Supply chain standards should also include environmental considerations.

9.  Invest in your community

Invest in your community rather than acting as a community philanthropist. This emphasis on investment over giving can help organizations target resources that will benefit both the company and the community.  Companies can demonstrate their commitment to long-term development by partnering with local community groups and NGOs on local and international imperatives. Measure the impact on the community.

10.  Reporting and disclosure

Call for increased transparency necessitates better reporting and information disclosure. Reporting methods are starting to come of age–growing up from annual bound tomes to dynamic, online platforms that also engage stakeholders.

A number of the report’s findings are already (or should be) best practices for CSR programs (transparency, buy-in, data collection, reporting, investment in your community). Yet these recommendations tease out greater expectations on a company and its employees. Consequentially, they also call for improved consumer behavior. With greater transparency, effectiveness and selection of responsible companies, consumers will be accountable for the impact their purchases have on their communities and the environment.

You can download the CSR Asia’s full report, which also includes a ranking of institutions influencing CSR in 2008 and 2009. Consumers hold tight as the #5 influencer in both years.

Yalmaz Siddiqui, Office Depot’s Director of Environmental Strategy, shares his glass-half-full view of environmental policy, calls for a new definition of “green” and talks about the legacy he’d like to leave.

Siddiqui joined Office Depot in 2006. He’s since developed programs that improve the environmental standards of Office Depot’s supply chain, its internal operations and the consumer market.

What is Office Depot’s approach to environmental responsibility?

We have a very comprehensive approach, which we articulate as Buy Green, Be Green and Sell Green. We have a series of purchasing approaches—both for products we resell or products we use ourselves—that encourage the purchasing of products with green attributes and certifications.

“Be Green” means actively working to reduce waste, fuel and energy and associated carbon emissions on an absolute basis, and then to find innovative ways to engage our customer base in purchasing greener options. That’s our broad approach, which is really centered on business—making economic decisions that are also environmental decisions.

What is your goal with Office Depot? Did you begin the Buy Green, Be Green, Sell Green initiative?

I established the framework and helped create a clear set of quantifiable metrics that we used to evaluate the success of our implementation.

Office Depot hired its first director of environmental affairs in 2003 and I joined in 2006.  [The inaugural director] focused on Office Depot’s most material and environmental impact, paper, which, was a concern of our customers and stakeholders.  There was a demand for us to provide more sustainable options and look at sourcing from forests.

Now, as we’ve built up our Buy, Be, Sell approach we have two business goals, which both lead to environmental performance improvement. The first is to find ways to cut costs over the long run—material efficiency, fuel efficiency and energy efficiency, and the second is to drive differentiation for Office Depot and win customers.

Office Depot’s environmental strategy is not disconnected from its business strategy; as we achieve successful sales of green products and successful execution of efficiency programs, the environment will benefit and our business will improve.

Several years ago Office Depot spent more than $20 million in lighting retrofits, energy system upgrades, and delivery truck fleet conversion. How did the company justify such a large upfront investment?

It was part of a broad program to improve operational efficiency. We analyzed our return on investments and found that our fleet transitions, store retrofits, energy management system and other upgrades would pay back within three years. In this current economic climate, it’s a bit more complex. The environmental improvements really have to pass economic tests as well. [Office Depot saved $6.2 million in electricity costs in one year by retrofitting store lighting to T5 Energy-Efficient Lighting and installing energy management systems across its chain of more than 1,200 stores.]

One thing I want to highlight is that large businesses are going to be compelled to “go green” if their customers ask and if it’s in their operational best interests. In some respect, the environmental community has not looked at things that are economically beneficial as “good enough.” It’s almost this feeling that you have to pay to be green.  And we feel that it’s much more sustainable to focus on things that are actually economically beneficial as part of an environmental program.

Where should businesses looking to engage in environmental programs start?

It’s important to look at environmental initiatives as you do other elements of the business. It’s an investment you make, similar to investing in marketing to get a return.

First begin with your customers. Ask, “What do our customers care about?” vis à vis which products and services you could be selling.  It can be as simple as having conversations with your customers. But before converting customer feedback into new products and services, you need to analyze your own material and environmental impact. You don’t need to look at all of your footprints, but look at the most significant environmental impact and find no-cost or low cost ways the environmental end can help reduce system or operational costs.  Then it’s important to quantify how much is being saved after the investments and programs have been implemented. You can gather these savings in a separate budget line item and use them to fund other upgrades or programs that invariably will cost something.

So the customer comes first, then internal cost-saving opportunities and finally more long-term operational efficiency programs. Once you have a baseline story that expresses that you’re walking the talk and going green yourself, then do a push outward to meet the customer needs you learned about.

You work as one part of a very large company. Do you get frustrated that you can’t be more aggressive with your environmental initiatives?

The notion of environmental improvement affects absolutely everything that a company does. Someone in an environmental role could see the volume of things that need to get done and be concerned that the company is not doing even one-quarter of what needs to be done.  Well that’s the half-empty view. The half-full view would look at all that a company has done and is continuing to do and try and find ways to encourage—through carrots, through business casing, through internal and external business recognition programs—to do more. There’ll always be more to do. No one is perfectly green. Everyone is on a continuum of shades of green.

I’m encouraged by what Office Depot is doing and by what other companies are doing and I’d like my company to do more and others to do more, but I cannot sit and get frustrated based on what we’re not doing. I’d rather focus on what we are doing and encourage more progress in these areas.

And this is one of the changes I’d like to see from the environmental community as well; there’s a tendency to focus on what companies are not doing and looking at the situation negatively, rather than looking at what companies are doing, supporting them and promoting their initiatives.

What percent of Office Depot stores are outfitted with energy saving fixtures and equipment?

More than 90%.

What’s the legacy you’d like to leave?

I’d like to see a full, robust range of ‘light green’ and ‘dark green’ products that are packaged in one, consistent package and are available globally. That would be the great achievement on the product side.

On the operations side, I’d like to see a continued absolute reduction in CO2, meeting or exceeding the goals set out by Copenhagen.

On the customer side, I’d love to see dedicated green sections in our stores and greater evidence that customers are choosing Office Depot because of our comprehensive, and hopefully well regarded, environmental program. If customers choose to buy from us because of our strong environmental programs, that would be success.