Sustainability Panel

Panel Members:

John Elkington, Founder, SustainAbility
Anne Kelly, Ceres
Trip Jobe, Neenah Paper
Neel Bradham, VP, Interface
Moderator: Jay Whitehead, CEO, The CRO

INT: I’d like to welcome every body back to the CRO Conference, and to now our Sustainability Panel – our superstar Sustainability Panel, where we tried to grab the two most vehement and vocal and successful sustainability advocates here, represented in humans, but also representing their organizations, and two very important corporate sustainable – representatives of corporations who have made sustainability a major part of their business. Let’s introduce our panelists this morning. I want to introduce starting here on your right is Anne Kelly, who is the Director of Governance Programs at Ceres – C-e-r-e-s – the top coalition of investor and environmental leaders working to improve corporate environmental and social governance practices, that’s right off their Web site. I read it directly. (Laughter.) Anne here -- Mindy Lubber, the President of Ceres was unfortunately called away. Her 80-year-old mother is in the hospital, but we hear she’s doing better. So, Anne answered the call and got up early this morning and came down from Boston. And so Anne and Ceres just wrapped up their biggest ever Ceres conference in Boston with about 650 attendees, and was very successful. Prior to Ceres, Anne headed the Massachusetts Environmental Strike Force of the Attorney General’s Office. In addition to a law degree, Anne has a master’s in Public Administration from Harvard’s J.F. Kennedy School, so a strike force representative here of Ceres.

John Elkington to Anne’s right, founded SustainAbility – Sustain with an A in the middle; that’s kind of cute -- SustainAbility, and more councils and committees on sustainability than you can name, and he’s also the author of 16 books, now working on his seventeenth, I hear, including bestsellers, The Green Consumer Guide, which sold – what? – a million copies, John? About a million copies, and a book provocatively called Cannibals with Forks. Business Week called John Elkington the Dean of the Corporate Responsibility Movement for more than three decades. So, Anne and John represent the advocacy side of this equation, and then to John’s right is Neel Bradham, and Neel Bradham heads Carpet and Textile Manufacture Interface Group’s Global Sustainability Strategy Group, and its new venture, Interface Raise – Interface R-a-i-s-e, who gives technical help to Interface’s some 20-some business units on environmental and sustainability initiatives, and of course, Interface Group’s founder is Ray Anderson, one of the father’s of the sustainability movement, and one of the companies who really architected his company to work as – to go cradle to cradle, if you will, and think of the products that they sell not as products, but as services that have a life of – that serves the life of their customers. If you’ve never heard Ray Anderson, it’s a fantastic talk.

Trip Jobe to Neel’s right, leads the Fine Paper Business for Neenah Paper, the products of which are sitting in your programs, and on the card on your desk there. I have to make sure that I thank Trip and his team for their 100 percent post-consumer content paper, a PC100 white environmental brand sheet that saved five trees and 422 pounds of greenhouse gases. That alone is what from having that program on recycled paper, the Neenah print that’s made by Trip’s company. So, you’ve got Trip, Neel, John, and Anne here. And let’s go right to our questions. Now, this is for all panelists, and we’re going to start with you, Anne. As an opener, let’s – we’re going to ask all of our panelists to name their all-time idol or mentor in the sustainability movement, and what makes you name that person. Anne? We’ll start with you.

Anne Kelly: Thank you. First of all, it’s an honor to be here, and I’m very sorry that Mindy Lubber couldn’t make it. I’ll do my best to fill her very large shoes. My hero, having thought about lots of different nominees, and thought about many people in the modern age, I really have to say is Rachel Carson. Not only – she didn’t get to talk about sustainability issues in an elegant hotel with recycled paper and wonderful food. She was in the muck; she was in the dirt. She did that in the Silent Spring, and most importantly, 50 years ago in 1957, when she wrote The Sea Around Us, she had a chapter called “The Global Thermostat.” She predicted it. She knew it. She broke gender and political barriers, and I’m grateful to her.

INT: John Elkington, your hero or mentor?

John Elkington: Well, it’s interesting to remember that Rachel Carson was hounded for years by the chemical industry and so on, and she certainly would have been on my list of an extraordinarily champion of all this, but when I think about people that influenced me, one person stands out. He died in 2003. He was 98 at the time. His name is Max Nicholson. He founded the first statutory nature conservancy agency anywhere in the world in 1949, the year that I was born. But he also co-founded WWF, IECN, a bunch of other organizations, but the key thing that makes me name him was in 1978, and I set up a company to focus on what business was doing in the environmental, and to a degree sustainability space. And what he said at that time was business in the financial markets for the remaining dark continent in terms of getting real progress, and his real strength was he had this capacity to move between government – between the civil society movement, and at very senior levels in business. And I think that’s a skill that is increasingly we’re going to need.

INT: Great. Neel Bradham, your goal – or your mentor?

Neel Bradham: Can everyone hear me? Good. I would probably be remiss and out of a job if I didn’t say Ray. (Laughter.) But I will say in reality what you’re talking about, I think, with Ray Anderson was a person who was held accountable to Wall Street for profit. He’s held accountable to shareholders for value, but also had the belief in the virtues of environmental and social – the movement to be very vocal about it, and forthright. He also had the belief that it was a better business model, and really belief in his people that they could make these change and transition. So, I think he would probably be – he along with what we call our “Dream Team,” Paul Hawken and Janine Benyus. Those are real thought leaders, and most recently Michael Bertolucci, but those thought leaders have really, I think, led the movement with Interface, and also within industry. And I think he would – he would be the person I would mention.

INT: Trip Jobe, your mentor?

Trip Jobe: I have also worked with so many great people, but I have a little different tact. I would choose a woman named Gerry Rector, who actually worked for me. I learned a tremendous amount from Gerry. She worked as a technical manager in our mill early on, and then brought her into marketing, and through the ten years I’ve known her, she’s fought the tough battles in the mill with our customers, with the marketing sales teams, and she really was the guiding light for the initiatives that we’re making today. And throughout it all she learned the details, the technical issues with environmental, whether it’s recycling, whether it’s green energy, whether it’s sustainable forest. But the other thing, she focused on customers, and that every customer – the people out here – you each have a different issue, and that as so important for us. And it’s really what I learned from her that everyone has their own focus, and their own key issue. And we need to be cognizant of those.

INT: Let’s turn now to our advocates, John and Anne, here, and let’s put our advocates on the spot. And both your organizations, John in your SustainAbility, and Anne in Ceres, you’ve both been recipients of $1 million in backing from the famous engine of social entrepreneurship, Jeffrey Skoll’s Skoll Foundation. For those of you who don’t know, and who live in an ice cave, Jeff Skoll was the first CEO of eBay, and made about – oh, a gazillion dollars, and put it into the Skoll – put a large portion of it into the Skoll Foundation, and one of his initiatives is the social entrepreneurship initiative that both Ceres and SustainAbility have taken advantage of. And he was also the financial backer of An Inconvenient Truth with Al Gore, just for those of you who don’t know. The funding is unique, because Ceres is not for profit, and SustainAbility is for profit. So, first Anne, then John, tell us what the Skoll money means to you, and what it should mean, if anything, to CR – their corporate responsibility practitioners?

Anne Kelly: Well, it’s a great honor to receive Skoll funding, and as you may know, what Jeffrey Skoll attempts to do is to fund entrepreneurs who are doing something truly different, who are really pursuing a paradigm shift, and he funds you in a way that is a partnership. It isn’t we give you the funds, and you do an itemized receipt, as lots of funders need that kind of specificity and piecemeal accountability. Jeffrey Skoll really bonds with you as a partner, and says we’re on this journey together, and that’s what he’s done with Ceres. And it’s just been a tremendous year together. I’m interested to hear what John has to say, because I think his experience was similar. He’s absolutely behind the core values that we’re pursuing around sustainable prosperity. They look long and hard and deeply at the organization; they come and move in. They’ve come and done a video on us. They’re very much integrated in our work, and we’re very grateful, and so again, we’re honored; we’re thrilled; we’re going to maintain the partnership. Jay’s question: What does it mean for CR practitioners? Well, it’s a good question. I would guess for innovative CR practitioners, particularly because the Skoll Foundation is willing to fund for profit entities, I would be open to new ways of doing things. The problems we’re facing call for exceptionally creative outside the box solutions, and it turns out those may, in fact, be fundable through the Skoll Foundation.

INT: So, John, what’s our take on this money? What should we think about this? What should you think about it, and what should the audience think about it?

Anne Kelly: I don’t know what they should think about it. I was shocked, I have to say, because I mean, as you said, we set up SustainAbility exactly 20 years ago as a for profit; we’ve never gone to foundations. We don’t want to compete with not for profits, and so on. This money came looking for us, and what they – Jeff Skoll and his colleagues – and I was with them just a couple of days ago – said to us that they wanted from us what we spent 20 years engaging very closely with major companies, particularly Ford-level; they want to make those connections, but I have to say it’s not an easy connection to make. When we first announced a year ago that we were in receipt of this three-year grant, and we were going to start looking in much more detail, and working with social and environmental entrepreneurs. A small handful of our major corporate clients said – and I paraphrase – well, we’re really sorry. I mean, we really liked working with you when you were in the business – the territory we know, but now you’re going into the (outer) darkness, and working with these peculiar entrepreneurs; we just don’t know what to do with you. (Laughter.) So, we’ve now got a challenge to bridge that gap, and I hope (outside) you will find the first survey report that we’ve done based on two things: One is the quantitative survey of these entrepreneurs around the world, but secondly, conversations with leading companies on where the connections can be forged. I very much encourage you to take a copy away, and if you have questions or comments on that to come back to us. Thank you.

INT: Good. John, you’ve been a bit of a firebrand in your day; you’ve been sort of a rabble-rouser. You’ve stirred it up a bit, and you said that CSR – corporate social responsibility is tired; it’s seen better days; it’s handled wrong, and it’s too palliative. I’m paraphrasing here, of course. Can you put those comments in historical perspective for us, and tell us what you think these corporate responsibility officers in all their various flavors and titles will have to do to help drive us now and into the future, and sort of away from whatever you think is tired and palliative.

John Elkington: Well, let’s say everyone in this room is despite their – regardless of color and title, and so on, is doing great work, no question about that, and it’s a privilege to be on this panel with companies like Neenah and Interface, but let me just give you an historical perspective. I’ve worked in this field for well over 30 years now, and once you do that you start to measure some of the underlying patents. I think there have been three big waves of societal pressure on government and business to date.

The first one peaked ’69 to ’73, very much around compliance; forced business onto defensive. Business didn’t want to do the stuff it was being asked to do by EPA and others, but had to. The second wave peaked ’89 to ’91; quite different. This time the focus was initially on a little bit of competition. You mentioned The Green Consumer Guide. That just came right into that period where companies are starting to play with green to some degree, but the full setting, and what followed was pretty much corporate citizenship. Now, I don’t mind corporate citizenship, but if you look at a company that we worked with, like Microsoft, corporate citizenship very often to them – I’m going to be crude – but would be screw and crush the competition, like Netscape, or whatever; make a bundle of money, and at some stage go out and buy bits of your reputation back.

Now, I think that’s been done reasonably successfully through Bill Gates, but really – (laughter) – I mean, it’s not going to get us to sustainable development, absolutely not. And I think we then had a third way, which kicked off in the streets of Seattle in ’99, absolutely truncated by what happened on 9/11 in the city and elsewhere. That weight is starting to come back; now, I don’t know whether this is the truncated third way coming back, or whether it’s a fourth, but it’s very, very different. The third way was about globalization and globalization and governance. Two forms: global and corporate governance; Enron, World Com, all of that sort of stuff played into that agenda.

But what’s coming at us now is quite different, as I say, and it’s about creativity; it’s about innovation; it’s about scalable entrepreneurial solutions to the big problems that we face. That’s a very different agenda to the one that many corporate citizenship people define as their agenda. And final point: Luckily now, it’s not just people like me saying this. Michael Porter and Mark Kramer on the staff and in the Harvard Business Review last October, said exactly the same thing. We put much of this corporate responsibility stuff in the wrong places in our companies, and I think Tim was saying that this morning. This is an agenda for everyone, but it’s not just risk, it’s about that opportunity space, as well.

INT: Well, you’ve used the word creative destruction to characterize this most recent phase, yes? Can you comment on that, this creative destruction concept?

John Elkington: Well, as you all know, Joseph Schumpeter, the economist, talks about creative destruction. That’s not new. I mean, periodically, our economy goes through these periods of meltdown. In effect, I think we’ve started one of those. I think climate change and a bunch of other drivers will be profoundly important in accelerating those processes, and I think a series of industries, a series of major brands, a series of major value change that we’ve got used to being part of the economic landscape will simply discombobulate, or disappear before our eyes. I think we can come back to which those might be and why later on --

INT: We will come back to that.

John Elkington: -- but I think that’s the context.

INT: We will come back to that. Of all the comments that – when we talked prior to the conference, all the comments that I heard you mention that were sort of the most alarming and created the greatest sense of urgency, seemed to be that creative destruction phase that we’re in now, which is a very important concept for this conference, and for all of us in this room. So, now let’s go to you, Anne. We’re heading into a presidential campaign year. Now, Mindy Lubber, with whom Anne works is one of the few of us who’s actually managed a presidential campaign; she managed the presidential campaign for Michael Dukakis several years back. And what role, Anne, do you believe sustainability will have in climate change – the debate – will have in this presidential election coming up?

Anne Kelly: I want to answer that, but I want to highlight two things John said that are very important. By the way, it’s always difficult to be on the panel with somebody from the UK, because they’re so articulate it’s a hard act to follow no matter what. I have to – you know, that accent and all. (Laughter.) So, in my inelegant way, I will say John highlighted the three waves, and I’m very interested in that. I was part of that first wave, the (inaudible words), I was a criminal prosecutor, so I very much remember that sort of (confusion) about bang-bang (inaudible words) on environmental crime, but those fun days of screwing all the big companies. And the second wave and the third wave.

I guess what I would argue now is that rather than those being siloed and discrete, what I actually see is that we need the panoply of responses at this point, so there’s still a need for very – tremendous activism. There’s still a need for litigation and in tough criminal and civil enforcement; there’s a need for boycotts; there’s a need for shareholder activism; there’s a need for dialogue; there’s a need for international activism. And of course, the issues in various parts of the world are different. So, I’m interested in the elements of the wave – of all three of those waves that exist now on a scale as you suggest that it’s unlike anything we have ever seen with this monumental moral challenge of climate change.

The second thing John said that I really do want to highlight is that, unfortunately, too often, these issues have been placed in a niche of the EH&S Department or a Corporate Responsibility Department, and all of you are the heroes and the vanguards that keep this movement going. You absolutely – you all need to be heard at the highest levels of the corporation, at the Board of Directors, and that’s why our governance program is all about getting the Board on board. To answer Jay’s question: I did not manage Michael Dukakis’ campaign. Mindy was doing that, and I left her a voicemail this morning, hoping should would give me the answer the this question. So, she did not – she’s tied up, so I’ll give you my answer, having had this discussion at Ceres many times – will climate change have an impact on this presidential election? And I mean, our view is absolutely. I mean, there’s just no question about it. And I say climate change sort of as a – through the lens of climate, I think we see the broader issues of sustainability, as you all know -- water scarcity, infectious disease, labor shortage – so, I don’t think there’s any question that in 2008, a candidate’s position on climate will have a huge impact on whether or not they are electable.

INT: And just to add to that: The rumor mill is going around that Michael Bloomberg -- who is the Mayor of New York, of course, who is worth $5 billion on his own – it is rumored that Vanity Fair had a big feature on – this issue that’s on the newsstands right now – that Michael Bloomberg will, indeed declare, as an independent candidate for President, and will actually win, based on a climate change agenda. There’s some grist for your mill, there. Go out and try to verify that rumor. (Laughter.) There you go. So, let’s go back to all panelists. We’re going to start over here with you, Trip. Trip Jobe, I believe that Al Gore’s Academy Award for An Inconvenient Truth, the movie, and for those of you who haven’t seen it – gosh, get a life! – has resulted in the largest ever change in US business and investment behavior toward designing sustainable products and services. Agree or disagree? Trip?

Trip Jobe: I’ll have to disagree. I think it’s very important. I think to reference what John said – John mentioned the second wave, 1989 to 1991, was the Green Movement. I can really only speak to the forest and paper industry, but before that time in the paper industry, there was not recycled products. There wasn’t an infrastructure to have recycled paper. There were virgin trees, virgin pulp, and virgin paper, whether it was your copier paper, your letterhead, etc. About that time – actually, a little before that time – we start to have the issue with landfills, and the Green Movement. And we focused on the infrastructure in the industry to have recycling programs to put the inking plants in, to improve manufacturing processes, and allowed companies to get into that. Neenah Paper in 1990 introduced environment papers, the first 100 recycled paper at that time. So, from that standpoint, the industry really went from zero to 50 or 60 miles an hour, because it wasn’t existing before. Since then, there’s been a lot of fantastic things, including climate change, sustainable forest initiatives, etc. Those are taking us from 50 miles an hour to 60, and to 70 to 80. But without that infrastructure that was put forward in that second wave John mentioned, we wouldn’t be as far along, and I think that’s a greater change.

INT: So, what about you, Neel Braham from Interface, am I just a media guy who’s overblowing this movie thing? Is this more important than I’m making it?

Neel Bradham: It’s a good question, actually. When I saw your copy I was wondering if you really believe that, or if whether it was just for discussion, because I don’t know the answer that everyone’s going to give, but I would disagree and cite a couple of things, and if you look at some of the media that’s come out, you know, investment and clean tech has jumped over semiconductors as number three out there. You see the things from Goldman, and some of the big investments they’re making. Right now the environmental commodities market just made over $1 trillion, which would include Kyoto and the voluntary carbon exchanges that we have here in the States. If you look at our industry, the lead building mechanism really is driven in industry towards this mantra over the last couple of years.

So, there’s a lot – you know, there are a lot of example, and not to mention insurance companies who are – you get very fearful of things that are – as a result of climate change, like what happened with Katrina. So, there’s a movement that has been happening. Would I – and if you ask what is the big impetus around investment, I think it’s really right now -- and some of the momentum that’s been created by – and if you talk to the people that are out there, the service providers, like yourself, ERS is the ring here, and even the associates from Interface Raise, they will tell you that it’s really the big industry players. They’re looking at their value chain, and understanding how sustainability affects their value chain, like a Wal-Mart, like a BP, who have big constituents that are really driving a lot of this investment.

Now, what I do think about “The Inconvenient Truth” is that the timing was very convenient. (Laughter.) Yes, I do believe that. Now, and also – I mean, to be fair, I think what it might have done, and what it will – and it’s a great production, don’t get me wrong, but what I think it has done is maybe bring this conversation around climate change into the mainstream, and to the consumer, and that’s benefiting all of the industry players, like us, that have offerings that can go out to the consumers that are – you know, like a climate-(neutral) product, so that I do believe has happened. I don’t believe it was the impetus, but it has accelerated the movement.

INT: That’s great. What about you, John? Put this in historical perspective for us, this movie.

John Elkington: Well, I actually wrote my first report on climate change in 1978 Herman Kahn, some of you may remember the mutually assured destruction strategy, which the US practiced at that time. He really did not like that report, and so I’ve paid a certain amount of attention over the years, and I think there have been a series of things that have set into this. I think – you know, John Brown of BP is being absolutely torn to shreds at the moment. It’s not a pretty site to watch. He’s largely to blame for what’s happening, but if you think back to ’97, when at Stanford in Berlin he stood up and completely against his industry’s sense of self-interest started to talk about climate change.

I went to Houston about three weeks after he made this Stanford speech, and normally I would have been torn to shreds, but he just fought Amoco and a bunch of other things, and people were confused. And I think that he was important. I think behind the scenes you’ve got the reinsurers, the insurers who are picking up on some of this natural disaster-related losses problems they increasingly face, and I think what was so cunning about “An Inconvenient Truth” – it gets caught in the moment, and it wasn’t accidental. I actually remember listening to Jeff Skoll and Al Gore, just under a year before that report – that film came out, just saying we’re got this idea. And they brought that film to market so fast, and that’s one of the reasons why the entrepreneurial side is going to be so important, that you’re going to see a bunch of other people coming into that space, not just people we know.

INT: Anne Kelly, what about the movie?

Anne Kelly: Well, I’m fresh off of three days with Al Gore and Tipper in Nashville, getting the download on the slides. He’s training 1,000 people around the country, and he sort of straps you to a chair and lectures at you for eight hours about the slides, and how it’s all supposed to be done. So, in his presence one could certainly agree with Jay, and feel like here is someone who has clearly changed the world on this, but in truth, I think I agree with my follow panelists. I think that if the movie hadn’t come out, that all of you would still be doing the good work you’re doing, and you’d all be in this room today, and there’s a lot of wonderful sustainability work going on.

Where I think Jay’s right is I don’t think this magazine would have come absent An Inconvenient Truth, you know, The Global Warming Survival Guide: 51 Things You Can Do. What the movie did was popularize the issue, and I think it brought it to a level – you were all at a professional tier – I think it brought it to a – I don’t want to be pejorative here – it brought it to a level among consumers that might not have otherwise considered it. It brought it to a movie-going audience, an Academy Award show-watching audience, who saw that the thing was green, and that Al got the award, and then Melissa Etheridge thanked her wife for doing it. That felt like a paradigm shift, when I saw the award show, I have to say. (Laughter.)

I don’t always watch, but we watched for Al. So, no question it’s had a tremendous impact, but I think it – but it had it at a certain level, and now because Al realized that he’s not always the best messenger, lots of people don’t want to hear it from him; they’d rather hear it from the Rotary Club or the garden club, or the book club, or the gun club. I do mean that. He’s trained these 1,000 people who are now going out and we’ve each committed to giving 10 presentations a year, and so that will have a tremendous impact, as well.

INT: Now, since you’ve just been with Al Gore, we’ve got to ask all – we’re all what curious minds want to know – is he on the treadmill? Is he training to be running for President? Is he losing weight? (Laughter.)

Anne Kelly: It’s funny you say that. I caught him at a barbecue line, and as he picked up his paper plate, I thought that was a good moment to see his proportions, and I chatted with him, and actually, I did think that he looked a little more trim to tell you the honest truth.

INT: There you have it, ladies and gentlemen, the scoop. Run right to the phone, and call the paper, Al’s running because he didn’t eat the big barbecue rib. (Laughter.) Okay, let’s go to Trip Jobe of Neenah Paper. Now, Trip, our member Don Carli from the Institute for Sustainable Communications – Don, are you here? Don’s not? Well, okay -- gives us some mind-boggling numbers about paper, such that Americans use 745 pounds per capita each year, and that America’s single-largest solid waste export is waste paper, or actually single-largest solid export is waste paper. Now, can you tell us, Trip, the three most important things that corporate leaders here can do to have a positive impact on their corporate – on their company’s paper usage?

Trip Jobe: Number one, purchase Neenah paper. (Laughter.)

INT: We’ve got to expect a commercial.

Trip Jobe: Thank you for the appointment. No. Seriously, I think the first thing is really understanding your needs – your customer needs, your stakeholder need, your employee needs. As I mentioned before, every company in this room has different interests. Some may be in recyclability; some may be in climate issues, green energy; some may be in sustainable forests. There’s many different issues – chlorine has been mentioned at times, too.

First you have to understand what your customers’ focus is, what’s important to your company, and start there, and if you do that, then it was mentioned earlier – I think Tim mentioned it; know the facts; get into the facts, look at what you’re about; dig into the details, and decide how you want to go about it. And again, it can be sustainable forest; it can be recycled content, etc.

And then I think the next thing is to try to be innovative. You may choose recycling programs; you may choose other ways that your company can reduce their use of paper. At Neenah Paper one of the things we did, not with paper, but we focused on recycling our paper mill sludge, and it’s an interesting, innovative process that no one else is doing, but we take the sludge, send it to a company. It gets incinerated; we buy the steam back from them, and we’ve reduced our natural gas consumption 80 percent. So, it was actually put on The History Channel’s Modern Marvels in January; it’s something different. It’s outside the norm, but I think companies can look at ways to be innovative and do that.

INT: Yes. I’d watch a TV show about sludge, yes, myself. (Laughter.)

Trip Jobe: The last thing – and actually usage, again, is whatever the company wants to do, but one of the things that we all focus on these days, we’ve got to have it, we’ve got to have it tomorrow, over night, etc., if you think about the way business is transformed, if you’ve got to get a hard copy to something, think about if it’s sent in a parcel, in a package and the amount of paper that’s used, and think about how we used to do it. How much paper is in a number 10 envelope? And does it need to be there tomorrow morning, tomorrow afternoon? Does it need to be in a parcel or a package? There are innovative ways, such as that, potentially, to get back to the way business used to be that may also reduce the amount of paper used in transactions.

INT: Yes. We’ve seen some companies who are encouraging people to print out their e-mails now, and we’ve started a little – I think Jonathan Campbell on our team actually started a little habit. We’ve got a little bug at the bottom of the e-mails that, “Please think twice before printing out this e-mail.” Is that – do you feel – do you see some of this?

Trip Jobe: Absolutely. I mean, I think you’ve got corporations that have gone to electronic forms of annual reports, and things like that going live. There’s any number of ways. Again, we could go back to what key to the corporation; what’s key to their customers and their stakeholders? There’s any number of ways to be innovative in doing that.

INT: Let’s go to you, Neel Bradham at Interface Group. Famous architect William McDonough uses your company’s founder, Ray Anderson, as the best example of a person who designed his business model to be sustainable from the outset. You sell carpets not as a product, but as a service that you maintain throughout the product’s lifecycle, through to recycling them when they need to be replaced. Now, can you give us an example of how your business model works in real life? Give us a customer example, or an example that comes to mind. We want to give the audience a story of how this might work, and how they might be able to apply it to their business.

NEEL BRADHAM: First, I’d like to maybe clarify the first part of that. Interface was started in 1973. It was a hardcore manufacturer; it still is, very much a plunderer; very raw material dependent – virgin. Ray’s real epiphany as he calls it, happened around ’93-’95. So, there was not a business model that was built to be sustainable. It was just like all manufacturing back in that age. It was built to manufacture center-cut goods as raw materials, and come out with the least waste as possible, so you can get the value out of the product. And I say that – the reason I mention that is because it’s important to recognize there was a transition that had to happen with Interface and the business model, and how you integrate sustainability, but also to say to the people out there in the room that it is possible. Any company, whether you’re a hard-core manufacturer or a service provider, it is possible to integrate the virtues and elements around sustainability in your business model. So, that’s the reason I mention that.

So, from the outset it really wasn’t the case. As far as the way our business model works, at Interface we talk about this. We have this term we call “Mission Zero,” and that really means that all the decisions that we make as a company, whether it be in product development, business innovation, process, people, etc., are all geared towards eliminating our impact on the environment. And we put a target out there at 2020, and where that’s important is when we’re starting to make decisions around investment, assets, people, and projects, etc., we look not only at ROI, but we look at environmental measures, like LCA, and other things, which I heard some of the people talk about today. And a good example of that is what we’ve called “Cool Blue” process, which is – it’s the ability for us to take recycled goods – so, the carpet back – and we have made it a big communication out there that we’re going to take responsibility for all the floor covering and fabric that we put out there in the world, and also, by the way, our competitors’ and everyone else’s, and we’ll take it back, and we use it as a waste – as food. And what this machine does – the beauty of this machine is – its process is that habitually in manufacturing people look for center-cut goods.

You want your supplier to provide you with the best goods possible so that your system has the least amount of flexibility in it, and this operation allows us to have a lot of flexibility, because you have to when you’re thinking about waste, and spit out a product that is not only compatible to our virgin products, but also has a better environmental story. So, that’s probably an example of the business model. It’s about a closed-loop process; it’s about waste as food, and it’s about flexibility in our manufacturing system.

INT: In pricing, is the pricing different for that type of a product or a service than for the other? Can you talk to that real briefly?

Neel Bradham: That’s interesting. We just made an announcement this year that all of our products coming out of our Americas business will be climate neutral. And we did not raise prices; it’s an attribute within the product. I will tell you that – you know, Interface is a high-designed fashion leader, so we’re at the high end of the scale already. Our margin is 15 plus on the EBIT line, and I would say that we’re probably getting – we’re probably getting 8 points there. There’s a pretty large percentage of that that would have something to do with our environmental message within our product. So, no, we’re not necessarily price –

INT: You’re making an investment in it?

Neel Bradham: Yes. There’s an investment there. We’re not necessarily pricing it more, but if you look at even the Cool Blue process, I mean, it’s a process where a typical raw material would cost that, whereas now, recycled raw material, we could take your BlackBerry, your phone, or whatever else, and through it into this process, so we’re creating a competitive – (it varies) to our competitors, and it’s costing us less. That’s the real ROI, (like I said).

INT: Well, let’s go to you, John Elkington. You know, John, we’ve got our two willing corporate victims, here, and we’re going to ask you to give two – one or two constructive suggestions to each of our corporate participants -- Neel Bradham from Interface, and Trip Jobe from Neenah – two – one or two constructive suggestions on how they can improve their sustainable practices.

John Elkington: The first thing I should say is these two companies have done a great deal already, and congratulations from both. So, in a sense, can I not be constructive? I mean, and so try and be a little bit – sort of jump out of the frame, because I’ve just come back from San Francisco, and –

INT: Get after it –

John Elkington: I spent a couple of days with (IDO), and one of the things that we’re trying to do in our twenty-first year is to try and work out how we make sustainability speak – perhaps even sing – to different audiences. And in a sense, look at this carpet. I mean, this carpet does not speak to me. It doesn’t sing to me. It doesn’t tell me what it’s made of, or what its history was, or what its sort of environmental footprint might be. Now, this probably never will – (laughter).

But I’m not entirely joking. When I was in San Francisco, I went to see a venture capital outfit, which is just got a huge slug of money from Unilever, and I sit on its advisory board, and one of the investments that we are now making is into a company, which within a year will have a cell phone-based system with a scanner built into it, where you just go into any superstore, and can read the bar codes, and get a bunch of stuff about the product. That’s not carpet; it’s not necessarily paper, but it very likely will be products that have paper packaging, and so on.

It’s not just that bar code reader that you would use in Wal-Mart, or whatever. It’s a system that transfers very readily onto your PC or your home – your domestic computer. Once we’ve started to go through some of this stuff with this open (vent) potentially, it is phenomenal. I mean, I – it’s 20 years since we did The Green Consumer Guide. Putting that sort of information into people’s hands made quite a difference for a period of time, but what this is opening up is huge. So, the question is – so, this is not constructive advice.

It’s hopefully a constructive question -- is how can we all better communicate what we mean by sustainability, but particularly how it links back to what people’s personal ambitions might be? And it’s great that we save five trees with the paper, and 424 pounds of greenhouse gases, or whatever, but that doesn’t speak to me. Back to the global thermometer and Rachel Carson. We’ve got to come up with something or things that communicate to people as clearly as the thermometer does, and is as meaningful to people. A huge challenge. So, I think that’s a task for us all, a good point.

INT: So, let’s go to you, Anne. Now Ceres is unique in how deeply it works with its corporate participants to build profitably sustainable solutions. So, can you give us Ceres’ sustainable success story that the audience can take home that particularly stands out?

Anne Kelly: Yes. And building on John’s comment, once again, I think that kind of point of sale information is really critically important, and is someone from Timberland here, by the way? I know they’re getting an award. Yes. I don’t know if you were able to talk about this, but Timberland has this wonderful new thing about putting the labels on the shoes about what went into the shoes and the amount of energy and the amount of content, and so that when you buy it – I mean, I think you’re really onto something; that’s what needs to happen. So, that would be – that’s a small success story that we can’t take credit for, even though Timberland is a Ceres’ company, and your top ten winners are four Ceres’ companies attempting to say something about the all-time winner,. Green Mountain Coffee, but we can’t really take credit for what they’ve done, either.

The example I’d like to talk about, actually, is American Electric Power, which may come as a surprise. Why would we highlight the largest emitter of greenhouse gases in North America? Is AEP here today? No, they’re not. Well, one way – you know, when Ceres began – well, let’s not go there – we are working with American Electric Power; they’re not actually a Ceres’ company, but as one of the largest emitters – the largest emitter in North America – we came to the conclusion that – and I know you all have done this analysis probably – you can work with just the very, very green companies, and the real superstars, like the two on this panel, and that’s wonderful. You can get a certain place. Not working with some of the largest offenders and emitters, obviously creates some limitations, so for a variety of reasons we started discussions with AEP, and they asked Ceres to set up a stakeholder group for them, and we did that, a 17-member stakeholder group made up of religious investors, and pension funds, and labor funds, and academics, and several environmental groups both at the national and the local level.

And that group put them through the ringer in terms of their policy positions, their somewhat recalcitrant position on federal regulation of carbon; all of their environmental and social parameters, and they put out their very first sustainability report, using the GRI Index, Application Level B, and it’s really impressive, and they have set goals and targets, and they have really moved themselves from where they were, and are now relaxing their stance on federal regulation of carbon. Are the perfect? Absolutely not. Are they where they need to be? No. Do I think that if stakeholders are pushing them in a candid, but confidential way that they can go a lot further? Yes. And I think that that’s a model that I would call a success story.

INT: As an alumnus of the Environmental Strike Force, do you feel like you’re in some sort of a time warp, or some sort of a reality-bending event when you hear electronic power or electric power guys advocating regulation of their own industry? Does that make you like feel like you’ve just gone to Mars or something?

Anne Kelly: Well, we remember the evolution of the Clean Air Act, and the Clean Water Act when what happened for – those of you who may recall – when you have multiple – when you have path in regulatory system, what industry often does is ask for certainty, so it’s not entirely unpredictable that many industries would come out and say, look, we have to have certainly at the federal level. It just makes sense, regulatorily. Where I thought you were going is I once had a conversation with Jan Schlichtmann, who’s the fellow who brought The Civil Action – not John Travolta, but the real lawyer, who actually brought that case in Woburn, and when I was a young green attorney I said Jan, you know, you’re a hero, you brought this important case. If you had it to do again, would you do it over? And it was about five years after the Woburn case, and he said, “No, I wouldn’t. I really wouldn’t do it the same way.” And I was shocked.

And he said, you know, you actually can get a lot further these days sitting around the table. So, I thought where Jay was going was to say criminal hammer versus conversation with 17 stakeholders? As I said earlier, all methods are needed, but the power of a public discussion among stakeholders, I think, is more compelling then I would have realized at the time that I was putting people behind bars.

INT: (Laughter.) Good to know. Good to know. Check your ankle bracelets at the door. We’re going to start over here with Trip – Trip Jobe. Trip Jobe from Neenah. Now, we’re going to – let’s see, we’re going to – I want to each give you – both you and Neel. I want to give you one minute – two minutes – to actually turn the tables here on our advocates, and I want you to give a couple of concrete suggestions on how our advocates here could be more effective in working with corporations like yours. Let’s start with you, Trip.

Trip Jobe: I think, first off, just this type of dialogue I think is fantastic, and I appreciate John and Anne’s comments. I think that – it was mentioned this morning, delve into the facts, don’t necessarily listen to the PR machine. And I think the organizations do that. I mean, you’re really focused on learning the facts about whether it be recyclable; whether it be sustainable forest issues, climate issues, and really focusing on that, and not necessarily just hearing the PR message, because there’s a lot of companies – there are smaller companies like myself and Neel that we’re trying to do things to move forward, but we may not have the PR muscle to get that out. So, I think that probably is number one, and I think that is your focus, and we do want to work with you.

I think the other thing – just the idea that was just mentioned about how do we get product, and how do we label it, and how do we get that message out? You really help get the message out. We have to take on the initiative to be able to label it, and much like carpet, paper sometimes is a difficult one to be able to label. How do you say on that sheet of paper you’re selling it has 50 percent recycled content, or 100 percent recycled content, or as far as Stewardship Council product? We’re looking for ways to figure out how to do that; you can print it on the annual report, and you can print it on the brochure, and make that known to the end use customer. I think that’s great. I think the one area we’re hoping will catch on is we now have products that have the Forest Stewardship Council logo in the watermark, so when you actually hold it up, you see the FSC watermark, and we’re the only company that’s been able to work through that issue, so that when someone pulls that stationary out, they see the FSC logo. Now, the key is working together. How do we make sure consumers or children – other people know what the FSC logo stands for? And that’s a good thing, because you can only get so much in that sheet of paper. We really want to work with you to get that message across, and be able to drive that home.

INT: Neel Bradham, same quest ion: How could these advocates really do a better job to help?

Neel Bradham: I would say the first thing, and I don’t know that these are necessarily in first or second order, but the communication’s really important. We really struggle, and you mentioned that we struggle with how do we communicate with our stakeholders about our sustainable messaging? And because they’re so diverse. You have Wall Street; you have Joe’s Six-Pack down the street; you have architect and design community; you have the dealer; you have the general consumer with the residential product, so – and they’re different messages for each, and I think consumer knowledge is so important right now, because you have a lot of companies coming out with messaging that is maybe not the most appropriate, because it doesn’t necessarily have the level of authenticity that it should, and that’s probably my second point, and that is that – you know, it’s really important for companies like us who have been going down this movement, and have gotten past the value realization box of risk mitigation and process improvement, and really are focusing on this value creation concept of driving growth; you know, sustainability is a growth platform for Interface, and I’m sure it is for you guys, as well.

So, we’re past that; we’re past environmental liability, and the bad stuff, as you’d call it, the defensive mode. So, helping us to be able to have a platform to stand on by you driving the need for authenticity from companies is extremely important. And not allowing companies their green wash, and even if call it – you know, put us on the carpet to use a term. (Laughter.) So, you know, make companies be very authentic, and I think the way you do that is transparency.

John Elkington: Can I just come back, Jay?

INT: Please go.

John Elkington: Because I think one of the problems with companies is they say that, and I’m not saying this against Interface, but then they don’t tell people like us or anyone else who the problem players are in their sector, and I think we’re increasingly getting to the point where some of that market intelligence is going to have to be got out, whether it is directly by companies standing up and speaking in public, or whether they feed it out to different networks, that’s a fundamental test of whether companies are serious or not.

INT: The 100 worst corporate citizens? Is that what you’re looking for, is the list of –

John Elkington: Could be, yes. No. But just take a look at company X, Y, or Z. And this is isn’t –

Anne Kelly: Yes. I really agree with John, again. I mean, we say the sector. In the old days it was hard to get companies to rat on one another. We used to say but that levels the playing field. If you’re doing things well, it isn’t fair that someone else isn’t obeying the law, and I think suggestion is similar. What Neel is saying – within a sector, it’s so difficult now. If companies could – but I realize this is very difficult within a sector, because you probably feel you have peers. If you could say – I did have one company say to me recently, you know, this other company, you think that they are doing really good things, but in fact, here’s the holes in their argument, and here’s what we’re doing. And it was legitimate, and it was useful. And I don’t know how to encourage that among companies, but I really support your suggestion that we really have to be out there, eliminated a green wash, and really highlighting the heroes, as your 100 list –

INT: Well, let’s play on that theme then, Anne. Let’s stay with you, and let’s go across – and we’re going to talk to both you and John. Before we get to our final question, I want to ask you both this: If you had one minute to make a specific appeal to an organization – any company on planet Earth that should and could do a much better job in their sustainable business practices, who would it be, and why? Let’s just start with you, Anne.

Anne Kelly: You said organization? But the entity I would go after would be Wall Street, because I would like to get Wall Street to get over the short-termism, a small request.

INT: Good luck. (Laughter.)

Anne Kelly: We want to – Ceres is very much committed to unburdening companies in the short-term pressure. You all are trying to invest in the long-term. Investing for sustainability means long-term investment. We all know that. I won’t mention a particular company that keep doing really well in its quarterly earnings, and yet we know it’s highly unsustainable. I won’t even mention their initials, but we very much need to start sending the right market signal to each of award companies who invest in the long-term, and for people who are pursuing long-term solutions to climate change, these are not going to be short-term gains. And we really somehow have to figure out a way to get that message to Wall Street. So, that’s the entity that we would want to change.

INT: It wasn’t TXU, was it? No. (Laughter.) Now, John Elkington, same question. Same question. Now, one minute to sort of give an appeal to one organization that you really want to change?

John Elkington: Well, just quickly on the TXU point, congratulations to Ceres, and fellow travelers, and just getting that level of change, and getting into the private equity world in the way that you did, but just to build on what Anne said, I’ve just come back from seeing a bunch of venture capital people, and I’m excited by that field, and they’re excited about clean tech, and that whole space, and bio fuels, and so on, but you’re seeing a bunch of people piling into a space which they don’t totally understand. So, if you talk to Kleiner Perkins Caufield & Byers, there’s some really good people in there who understand the space, but there is a wall of money coming into some of these clean tech and related areas where people do not understand the space. I think a bunch of that money is going to be wasted. So, my encouragement would be let’s try and bring venture capitalists into the conversation, and help them understand some of the issues they’re going to slam head on into unless they work this out in time.

INT: And the venture capital community. We’ll take this to San Francisco, and then everybody – as soon as you say that everybody will leave. Okay? So, now John Elkington speaks – so, we spoke earlier about Joseph Schumpeter’s concept of creative destruction and that we may be in that phase of the sustainability’s history, where entire companies or industries will be obsoleted and consumed by changes that climate change has and will cause. Now, I’m going to put you all on the spot, and I’ll ask you to name your candidate for the industry or company that’s most likely to be crushed like a bug or creatively destroyed by this climate change phenomenon. Let’s –

John Elkington: Can we point to people in the audience?

INT: (Laughter.) You may. You may. They may not be back for lunch, but Trip Jobe, why don’t you talk about this very controversial topic?

Trip Jobe: Well, I know Anne wants us to call out our competitors, but I don’t think I’m going to do that. I think in general you have to look at understanding your customers. What are your customer needs? And creative destruction really is about not listening to your customers, not listening and doing what they’re asking for, and what’s important. And I think that companies who aren’t going to do that are going to be the ones who are going to face the issues. I think that if you look at what customers in our area are asking for is authenticity; it’s independent certification, and that’s what we focused on – third-party independent certifications in the various areas of recycling and forest sustainable issues, process coring tree, green energy, etc. If you listen to your customers, and act on it, I think you’ll be fine. I think if you had to put me on the spot, the industry I think is very, very challenged right now is the automobile industry. And I think the whole thing, whether it’s hybrids and gas (hog), I think it’s going to be interesting. There will be companies that may take a different shape or form in the years to come.

INT: Neel Bradham, same question: Who will die?

Neel Bradham: I don’t know if I would put it necessarily in those terms. I would say, though, that – I mean, Darwin talks about not really the strongest survive, it’s the ones that are most willing to adapt, and you see that in industry everywhere, you know, when e-Commerce came on board and the companies that weren’t readily able to adopt either as a MO or – were kind of put behind the 8-ball, and eventually were purchased or went out of business, etc. But maybe a little bit out of the box; I mean, that obvious answer for an industry that would be affected – you mentioned automobile industry, transportation is pretty obvious; energy is, I think, very obvious. But maybe something a little different would be our landfill management industry. I think there’s a real play there for waste to energy to come out, and they’re going to really find that their revenue streams associated with tipping fees and all the other things will be heightened through waste to energy in mining those landfills for the things that they have; you know, within them.

But also, I’d say probably a function within companies that will be challenged is the cost accountant, because they’re going to – we’re going to really have to understand what’s the full embodied price of profit; you know, when you start talking about cost of carbon offsets, and decreasing your emissions, and then you have to – it’s a different mindset the companies are going to have to take.

INT: Let’s go to you, Anne Kelly. What industries do you think are going to feel the pinch?

Anne Kelly: It’s tempting to identify a particular sector that we might think of as highly unsustainable – coal, for example, but I’m not going to do that. I’m not going to target any particular industry. If you want to – I mean, you can be simplistic, and say, well those that don’t see the light are going to feel the heat, but I do think within sectors there will be winners and losers. So, if you take auto, for example, I mean, I grew up in Detroit, and what we’ve seen in – unfortunately, some real losers there, and we see winners in auto, and I think your comment is exactly right, Neel, who can adapt? The buggy manufacturers had a hard time, too, and then some of them adapted to the horseless carriage, and they did very, very well. So, they’ll be winners and losers in all sectors.

Who – I’m actually a little more interested in who the real winners will be, and it seems like if you look at the latest IPGC report, we know that for climate change the greatest damage is going to happen in emerging economies. So, who’s going to win? It’s going to be those who come up with the solutions for those immediate problems that are going to emerge first. The winners are going to be the people who dig in early, and figure out the creative solutions, and rise to the top within any number of sectors.

INT: As the senior statesman here, John, you get the last word. Who do you think will benefit? Who will be destroyed?

John Elkington: Jay, thank you. I’m going to – it’s come to that, has it? (Laughter.) The up side of creative destruction is creative construction or reconstruction or whatever it happens to be. So, when I look at companies like GE announcing an eco-machination, people tend to see that as green washing, and then you look at the numbers after the first year, and you see – what is it? – $6.2 billion to $10.1 billion, just in 12 months with $17 billion worth of orders in the pipeline; those are real numbers.

Yesterday, I think, Citigroup announced that they’re going to put $50 billion into environmental projects over the next ten years, and a tenfold increase in their spending on climate change. You know, there’s stuff starting to happen. But if you ask me to name sectors, I’m afraid we’ve worked with Ford for seven or eight years now, brought in by Bill Ford -- I’d put Detroit on the list, I think – very large luggage of that recent economy just going down the tubes, and some of it will end up being owned by different people, but I see a life form that is in real danger of extinction there.

The second one -- I’m afraid I’m going to do three very quickly – the second one would be Eco-Chamber Consulting. There are plenty of people moving into this space who are basically saying back to the senior management what those senor management want to hear. I think that won’t go away; I think it’s a very high-risk strategy for companies to do that. But the third one – and this actually plays back to the water points that were just made – I think we’re actually going to see water-intensive agriculture dying far faster than we might imagine. Look at the – what’s happening in Australia at the moment with the Murray Darling Water Catchment Area, where suddenly there is this huge conflict between farmers who got used to a lot of water and now can’t get it, and urban users. The politics of that are going to go off the scale. And if I can just add a fourth one.

INT: This was that rice, cranberries –

John Elkington: Anything that uses large quantities of water, and that – you know, WWF are just launching a campaign later this summer on embedded water, in a bunch of different products. I was shocked to see how many products that I take completely for granted have this water shadow, which I’m never really thought about at all. But just to do the positive side of that Eco-Chamber Consulting, I think companies like Neenah and Interface are showing the way, because what you’re increasingly seeing is companies wrapping around the product that they’re offering; that sort of service or consulting offer, and I think that’s very much a way that we’d like to see more companies go.

INT: That’s great. This, ladies and gentlemen, has been your superstar Sustainability Panel: Anne Kelly from Ceres, John Elkington from SustainAbility, Neel Bradham from Interface, and Trip Jobe from Neenah Paper. Thank you very much to our panelists.