By Claudia H. Deutsch
New York (July 3, 2007)- The corporate roster of “chiefs” used to be pretty short: chief executive, chief financial officer and, maybe, chief operating officer. Then came the chief marketing and technology officers. Now, the so-called C-Level Suite is swelling again- this time, with chief sustainability officers. These are not simply environmental watchdogs, there to keep operations safe and regulators at bay. The new environmental chiefs are helping companies profit from the push to go green.
“Environmental vice presidents usually spend company money, but this new breed is helping companies make money,” said Eileen Claussen, president of the Pew Center on Global Climate Change. The upshot, said Geoffrey Heal, a business professor at the Columbia Business School, is that “what started out as a compliance job has evolved into one that guards the value of the brand.”
The titles vary, mixing and matching “chief” and “vice president,” “sustainability” and “environmental,” making it impossible to track how many people fill the role. But whatever they are called, the new environmental chiefs- many of them named in the last two years- wield extraordinary power. They are exploring partnerships with vendors and customers to create green products – and they have the power to close the deal. They are also getting a vote- often, the deciding vote- on product research and advertising campaigns.
Since he became Dow Chemical’s first chief sustainability officer in March, David E. Kepler has been talking to Dow’s technology, manufacturing and finance people about alternative fuels and green products. “We usually agree,” Mr. Kepler said. “But if a critical environmental issue is in dispute, I’ll prevail.”
Linda J. Fisher, the chief sustainability officer at DuPont, scuttled the purchase of a company that was not in a “sustainable” business. “We’re building sustainability into the acquisition criteria,” she said.
And when two business chiefs at General Electric blanched at the cost of developing green products, Jeffrey R. Immelt, G.E.’s chairman, gave Lorraine Bolsinger, vice president of G.E.’s Ecomagination business, the research money. “I have an open door to get projects funded,” she said.
The evolution was probably inevitable. Corporations are facing demands from all quarters to reduce their greenhouse gas emissions, and to buy and produce green products. So, many chief executives are urging their managers to “figure out what products they should sell in a warming world,” said Jonathan Lash, president of the World Resources Institute. Still, few corporate chiefs want to micromanage the changes. That means they are appointing environmental surrogates to do it for them.
The environmental chiefs hail from widely disparate backgrounds. Owens Corning plucked its chief from research, while Home Depot dipped into its merchandising ranks. Ms. Fisher of DuPont once worked for the Environmental Protection Agency, while Francis Sullivan, deputy head of group sustainable development for the HSBC Group, came from the World Wildlife Fund.
“I was already advising HSBC about the environmental impact of their activities, so now I’m making sure that their brand stands for sustainability,” Mr. Sullivan said. Two people share that job at G.E. Ms. Bolsinger is responsible for green products; Stephen Ramsey, the vice president for corporate environmental programs, oversees compliance and external relations. Both are corporate officers. “Jeff will tell the staff to do something,” Ms. Bolsinger said. “We tell them how.”
Other companies have rolled two jobs into one. Ernest Wooden Jr., executive vice president for brands for the Hilton Hotels Corporation, is overseeing Hilton’s efforts to reduce the carbon footprint of its nearly 3,000 hotels. He already sets the standards for everything from architecture to shampoo, so purchasing agents and suppliers are accustomed to heeding his recommendations.
“Our C.E.O. decided I was the most powerful hammer to get things done,” Mr. Wooden said.
The “powerful hammer” thought certainly motivated Home Depot and Owens Corning. Since October, when he became Home Depot’s vice president for environmental innovation, Ron Jarvis has led efforts to sell green products, run green stores and educate customers about sustainability. He is also responsible for buying and selling lumber products. “The other merchandising people know I’m from their world, and understand what will or won’t work,” Mr. Jarvis said.
Owens-Corning, meanwhile, named Frank O’Brien-Bernini, its research chief since 2001, to the post of chief research and development and sustainability officer. He now uses what he calls the “lens of sustainability” to prioritize research.
One recent example is a machine that makes it easier to insulate attics. Owens Corning developed it after research showed that drafty attics are prime culprits in greenhouse gas emissions, but that the “hassle factor” kept homeowners from addressing the situation. “I drive innovation around products and processes,” Mr. O’Brien-Bernini said. “And I make sure that our claims are backed by deep, deep science.”
Ensuring credibility is also a priority for Elizabeth A. Lowery, vice president for environment, energy and safety policy at General Motors. Before G.M. introduced the Chevy Volt, its electric car, in January, Ms. Lowery helped to brief reporters, shareholders and environmentalists on how the car worked. She looked over the green-themed speech that Rick Wagoner, G.M.’s chairman, gave at the Los Angeles Auto Show in November, making it less “technically focused” and more in line with “how various constituencies think about green issues,” she said.
And she said that she “added facts, and toned down broad brush statements and claims” before G.M. introduced its “Live Green Go Yellow” ethanol campaign last year. “G.M. is marketing its reputation, not just its cars,” Ms. Lowery said.
Ms. Fisher presides over DuPont’s green name as well. The big chemical company already produces many green products, like plastics made from crops. And Ms. Fisher is helping to develop a scorecard that researchers can use to “evaluate whether their work will produce environmentally smart products.” But she said she was also making sure that DuPont never overstates the “greenness” of items. “I don’t want us accused of greenwashing because marketing made too much of a small improvement,” she said.
Many marketers, in fact, welcome the oversight. Kevin Martin, who heads customer marketing for HSBC Bank USA, worked closely with Mr. Sullivan on HSBC Bank’s current promotion. Together, they forged a plan to give customers who sign up for an electronic bill paying service – which HSBC promotes as saving trees – a “green” kit that includes items like energy-efficient light bulbs.
“There hasn’t been any disharmony,” Mr. Martin said. “Environmental involvement is a credential of our brand. Francis is our conscience.” Environmentalists, perhaps unsurprisingly, are divided on whether the rise of the powerful sustainability chief bodes well or ill.
“In the best of all worlds, we wouldn’t need a separate person to link strategy and sustainability,” said Gwen Ruta, director of corporate partnerships for Environmental Defense. A utopian world would not need ethics officers either, countered Eugene Linden, a frequent author on climate change.
“Chief sustainability officer sounds all crunchy granola and squishy,” he said. “But their rise shows that companies finally realize that sustainability and efficiency go hand in hand.”
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