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good afternoon I'm sandy hunt managing director of the wharton and social impact initiative and i'm delighted to
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welcome you to our conversation today with cv Bhattacharya CB is the H J's offer chair of sustainability ethics at
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the University of Pittsburgh's Katz Graduate School of Business and the author of the great new book small
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actions big difference welcome to Wharton CB thank you for having me so you have a rich career in
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this space tell us a little bit about how you got interested in this topic well I'm actually back at my alma mater
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so my PhD was from Wharton and it was in marketing which doesn't have a direct
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link to what I do today but as I was an assistant professor back in the day at Emory University during that time I met
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a gentleman by the name of Ben Cohen and he was the CEO of this company called Ben & Jerry's so he was the Ben of Ben &
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Jerry's and he asked me kind of an interesting question he said you know we do a lot for the environment and we do a
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lot for society can you help me understand if what we do for the environment and for society does it help
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us sell ice cream and I found that to be a fascinating question and this is the mid-1990s mind you I found it a
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fascinating question on multiple fronts first he was talking about sales and how
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to increase sales and as marketing people we are always talking about how to increase sales on the other hand he
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was talking about environmental attributes and social attributes of a product kind of driving sales and nobody
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was looking at that at that point in time and so I said ok I don't know the answer to this question but I'm gonna
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you know think about it and so that really started my transition to the field of what we now call corporate
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social responsibility or our CSR and that proved to be kind of the turning point for my for my career and then one
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thing led to another you know there were several articles to be to be written several questions to be explored and I
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started down that path and as I was searching for my last book leveraging corporate responsibility I made an
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interesting observation and the observation was that these corporate responsibility managers or
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sustainability managers in companies companies like P&G General Mills Timberland I you know research all these
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companies they were all very smart very good people but they were kind of lonely
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and what I mean by that is that they did not have a seat at the strategy table of
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the company and to me this truck as as odd and not something good for the field because in my research I had found that
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it's only when CSR is treated as a strategy only then does it benefit the firm and benefit society and so on and
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so forth so I started thinking about my next book which now comes out as small actions big difference means how can we
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you know on board the entire organization into this journey of making our companies more more sustainable so
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that in short is kind of how I get here excellent and before we go into the solutions the book outlines let's talk
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about the problem you say this isn't working at companies for two reasons one
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is that bosses delegate the task to a single unit rather than integrating it throughout the entire corporate strategy
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and two is that boards believe unsustainable practices can be solved by a change in management let's talk about
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how those show up and and and really illustrate those problems what does it look like in the first case how do you
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how would you know gosh that's that's my company we need to change right so there
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is this mistaken conception in the field in in large parts of the corporate field
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I would say that sustainability the well-being of our planet and its people is the next iteration of CSR or
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corporate social responsibility in fact I'm going to India next week to speak at
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a conference which is called CSR 3.0 so it's it's like you know goes higher
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and higher now this is this is wrong because sustainability has to do with the survival of the company and as such
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it deals with every organizational function you know starting from procurement where do our materials come
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from to disposal kind of where do our products kind of end up and as you can imagine every part of the organization
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is touched by the concept and actions that have to do with sustainability so the lens yeah so that's why I call
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conducting business through the sustainability lens so everybody has to be on board and just relegating it to
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one unit so that you produce a sustainability report in which you just kind of note what all you've done as a
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company in insuring yourself as a good corporate citizen is necessary but nearly not sufficient so when a company
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is doing it right is there someone in each division or sector that is sort of a part of the sustainability team how do
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you make sure it's not siloed yes that that happens first of all oftentimes there are no sustainability teams as
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such because sustainability is fully integrated into product development in you know into into R&D into branding
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into human resource management into procurement all of that and any team that you will find is we has what's
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called sustainability generalists multiple people working in that who may not have a very deep knowledge of the
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science of sustainability or whatever but who know enough so as to make those business decisions with that lens of
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sustainability priority and they're making sure that it's just that it's
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always integrated into every business decision made from the mailroom to the boardroom
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that's that's how it happens in certain companies in other companies you're
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absolutely right I mean there will be somebody from marketing somebody from HR somebody from procurement and they will
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be kind of the ambassadors if you will to the overall kind of corporate sustainability leadership leadership
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team and then they in turn kind of cascade stuff through their respective departments so
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I have seen both of those happening so that's the first way you see it not working and a little bit on the solution
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the second challenge you raise is that it's not about a change in management or
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change management it's really about changing how a company philosophically thinks about sustainability tell me more
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in our field in the corporate world we have this belief that change management can pretty much fix everything so the
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lean manufacturing and all those change management you know quality move consulting so and that's the bread and
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butter of consultants so I have seen several organizations who will say well we can get in a McKinsey or an Accenture
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to kind of you know launch our sustainability program it that's all very good except sustainability speaks
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to the very philosophy of business and to the philosophy of the corporation and change management does not do that so
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traditional change management initiatives are still focused on how to increase profit whereas when it comes to
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sustainability the first thing we're saying is that we have to go beyond profit to think about purpose what is
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the purpose of the organization and the purpose of the organization really is to
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play a role in society and and to be helpful towards the environment to serve customers so it's a multi-stakeholder
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kind of a concept and as you know the Business Roundtable recently came out and said that you know we need to go
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beyond profits Larry Fink has been writing his letters and so on so it's when we think that you know a chain
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management exercise can fix sustainability again I think we are kind of ignoring some very important
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underpinnings of the concept particularly when it comes to kind of convincing your employee basis that this
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is something worthwhile kind of engaging in rather than kind of being being being
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bystanders so so rather than change in management I would just cut out the end it was more about kind of thinking that
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change management is gonna be able to fix it and that's wrong it won't excellent for companies that don't have
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the expertise in-house you're speaking to why bringing someone in from the outside may
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not be the solution what would your advice be if they are looking into to bring in insight or some valuable
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perspectives about how to be a more sustainable company yeah so I'm not saying don't bring someone from the
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outside I mean if you don't know what to do you need you need help and there are
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you know commercial consulting organizations there are also people like myself and others who work in the field
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who might be able to help so that's all fine and good but I think what is important is for whoever kind of comes
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in to help to understand this concept of kind of it's it's just different from
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it's somewhat sustainability is a different kind of an animal and and let's try to understand kind of you know
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go take a step back and see why business exists in the first place and why is it
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important that's really important because if we don't ask that question why do we do what we do as an energy
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company I mean my job literally is not to sell electricity but it is to keep people comfortably warm or cold or help
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them do whatever they want to do with electricity and that's a huge mindset shift and when you when you define your
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purpose any company they will always find that sustainability kind of is inherently built-in into that definition
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and so anyone who comes in to help you out help any company out as long as they have the right kind of perspective on
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what sustainability entails and what it would take to change an organization to transition its business model to be more
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sustainable I think you're fine excellent let's get into the solutions because I bet viewers are watching this
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and saying gosh this seems like a hard nut to crack so your book outlines three steps can you summarize them for us sure
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yeah so the three steps are incubate we're by and large it's the leadership
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team and who gets together to define that all-important purpose that I talked about what's the company's purpose and
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then they come up with of concrete goals so the issues that are material for their company because a
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cement company could be very different from kind of a a consulting company or a financial services company or what have
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you everybody doesn't have to solve all the problems in the world so the second
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phase is launch and that's when we kind of unfold that program for the employee
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base of the company and potentially other stakeholders as well like you know community members supply chain members
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even customers and so on and the third phase is called entrench where you undertake a set of practices that makes
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acting sustainably are doing business so that lens of sustainable sustainability
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kind of like second nature you know and and there we talk about kind of you know
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providing feedback on progress you know through metrics and KPIs we talked about creating this vibrant
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culture of sustainability in the organization so that it's kept fresh and it doesn't become another flavor of the
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month and then I talked about expanding your sense of kind of ownership so that it's not just about me anymore my
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company but it's about the planet and that's where we see traditional competitors collaborating you know to
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solve what I call the tragedy of the Commons problems like kind of deforestation or we eat waste
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that no one company can solve by itself so those incubate launch and entrench are the three steps of my model
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excellent let's dig in a little bit on the incubation step you're setting that
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mission that purpose is that unique for each company or do you see companies within a particular sector all sort of
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having the same mission and purpose I'm asking as I think about leaders who are
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going to watch this interview read your book by and read your book and then sit down at the right board and say how do I
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know I've landed at the the real purpose statement or mission statement of this
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company right so it's a two-fold answer to that any purpose I believe would have
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to have some kind of a normative component so I'm not just doing or defining the purpose of the four
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so that it resonates with my stakeholders it also has to be is this really what we are trying to trying to
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accomplish or or or not what comes from our hearts and minds as leaders and and a leadership team and then I can check
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to see is this something that that gets buy-in from my employees first and foremost but out of all the stakeholder
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groups that I have if it does if employees seem to understand that this is what we are trying to do it should be
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reasonably easy to communicate otherwise purpose gets gets very very can get lost
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and then you know it's defeated but if it if it is something that's true to who
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you are as a company and this is what you're really trying to do and you know
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it it has buy-in your employees say yes I mean this is this is a good goal for us you know this is this is indeed why
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we exist as a company then then I think you're you're alright and every company
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does not have to even within the same industry every company does not have to have the same exact same purpose I mean
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so the purpose of all car companies might be to provide mobility which is in fact the basic purpose the reason I
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think that they're trying to do this but that does not mean that somebody cannot
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add comfort to it or somebody else cannot add you know speed or the experience or you know or a rush or
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whatever you call it so there are definitely ways to kind of you know change your purpose to to give it a
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certain uniqueness relative to others you talked about checking it with your employees as the first stakeholder group
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what does that process look like so you come up with a purpose statement and you
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want to see if it resonates with your employees that's a way to test if it's
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the right statement for your company what do you do you can do a town hall meeting you know so we're you it's an
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open forum where employees come and you know you can just have a Q&A session
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I've seen CEOs lead this kind of a process and it can be quite energizing for for the employees employees can
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provide feedback it can also be done kind of the departmental kind of level so if the
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CEO and his or her leadership team have defined the purpose they can you know you have these different ambassadors who
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can go out to their respective kind of reports and can find out what what what people are thinking about it
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the main thing is that it has to have buy-in both externally and internally and by gauging the energy or the
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resonance with what you're talking about kind of you know that's the surest way
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to know if you if you're on the right path or not so that one's a little R in
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a little science or a lot of it is a little art a little science excellent so let's go into the second step where
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you're making your goals more concrete sort of how I you know took that away
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when it comes to social impact issues sometimes you have blurry edges we'll go
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back to your car example you know it's to get people places is it to get them
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there safely is it to do it with the smallest you know environmental footprint is it to do so building
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community is it to do so safely for children pets so on and so on how do you know how do companies draw the right
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line around those sort of specific dimensions of impact so that they aren't trying to boil the ocean and target 100
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impact dimensions because it can get really tricky to know when to say when sure that's a great question so what
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companies typically do is something called a materiality analysis which in very simple terms is kind of what do our
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stakeholders think are the most important issues kind of facing the company and what do our managers think
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are the most important issues facing the company and so stakeholders rate all these different issues that you talked
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about kind of you know I've participated as a stakeholder in several companies
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surveys in terms of their materiality surveys and and B just from our knowledge of the industry from the
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knowledge of the company we say ok I know these kinds of things are really important and then the company you know
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chooses a set of employees as well too to rate the same universe of issues in terms of how important is it for the
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company and then the the materiality matrix is simply kind of you know plotting those on a two-dimensional
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access kind of you know and so the importance according to the employees and the importance according to the
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stakeholders and then we choose typically the company will choose those issues which are deemed important not
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only by the company itself but also by the marketplace of of stakeholders and more than three or four issues can make
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it or seven let's say in the case of Unilever it can you know it can get very
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very complicated now the question is why is this step important you don't want to
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boil the ocean because if you if you don't focus on anything this is a quote
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in my book if you don't focus on something then nothing gets done so you know you got to prioritize you've got a
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pick I mean let's talk of carbon carbon is extremely important for let's say
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Lafarge wholesome this large cement the largest cement produce in the world but it is much less important for let's say
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a company like ing financial services you know for whom something like cybersecurity may be much more important
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so it's - materiality is one way that we can boil down and distill our our goals
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and and into into concrete bite-sized kind of chunks and it's easier to disseminate this goals and the
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priorities to kind of the employee base and to the stakeholder base I mean I mean think of companies like La Farge or
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Unilever are IBM they have hundreds of thousands of employees and you know to get into their heads kind of okay these
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are the three things that are important that makes progress much much easier down the road absolutely especially to
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consumers I'm imagining the effort it takes for companies to say this is what
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we care about you want to keep that list yeah mm-hmm not not limitless so then as
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we go to the end you and to the third step you talked a lot about employee ownership really getting this to be
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something that every single employee at the company sees as a part of their job as a priority of theirs
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you talk about the heart and the head both being necessary can you tell us a little bit more about that yeah so so
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ownership is really kind of the centerpiece I think of this whole thing I mean there are companies who are
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giving directives to their to their employees kind of okay we need to be more sustainable we need to do this we
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need to do that but what's happening if you do not go through this process of
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instilling the sense of ownership then it becomes like you know going to the gym because I have to go to the gym and
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and my heart is not in in this thing what ownership does and psychology this is a psychological ownership you're not
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owning something physical but what ownership does it makes the individual employee take responsibility you know
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for sustainability regardless of whether he or she is in the mailroom or whether
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he or she is in the boardroom like everybody can make make a difference and so to to instill that sense of ownership
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I have to make an appeal and I call this enticing employees to kind of on board and it's different strokes for different
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folks so the right thing to do this is the right thing to do it's the right thing to do for our planet it's the
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right thing to do for our children we will be extinct I mean all of these things are are going you know people are
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reading about in the newspapers so several employees will resonate with this right thing to do kind of argument
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the other argument is well this is not only the right thing to do but it's also
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the smart thing to do because this look this is saving you money so I spoke to Lisa Jackson who's the top
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sustainability person at Apple and she said that the most fun part or one of the most fun parts of her job is to
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actually go into businesses and say you know look this is going to not only going to save you
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the amount of metals in you use in these products but it's also saving you money
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at the same time but it's a nicer saving because it's also helping the planet so
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the head and the heart kind of work in tandem you know and therefore you know companies oftentimes will use one or the
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other but very often a mix above yeah let's talk a little bit about that you said
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sustainable investment takes time to pay off you will have to spend money to get
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your house in order but once the returns start coming in then there's no conflict
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between the sustainability and the profitability let's talk a little bit about that timeline because I think this
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is a concept most everyone can get excited about but often what comes into play is how much do I need to invest and
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when will I see those returns returns in terms of profits returns in terms of employee engagement and environmental
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impact can you talk about what you've learned about those timelines sure another great question
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there is not I would start by saying that there is not kind of one timeline and it depends on the kinds of
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initiatives you undertake in almost every organization I've studied it seems
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like there there's low-hanging fruit and the low-hanging fruit really does not
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take long to to fix unless you're overly bureaucratic and the low-hanging fruit oftentimes is as
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well kind of you know things that have high symbolic value high signaling value even if they are not the one that's kind
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of the the most intense sustainability activity that you could undertake what would an example there so an example of
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low-hanging fruit would be to basically say kind of this is this is a plastic freeze you know a single plastic use
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free zone in our office we do not bring single plastic use bottles you know if we each have our respective coffee cups
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or mugs and water water bottles and so on and so forth and that's not that difficult to do but it has a tremendous
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impact on just the employees kind of you know light bulbs going off hey I mean you know my company is taking this
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seriously I mean you know so no more companies go to the next step and say we will not have individual waste paper
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baskets in every office you know you will need to go to the common area and segregate your wastes into you know
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what's recyclable what's compostable etc etc and you know what not having your
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own waste paper basket actually makes you produce less waste really bitter on because a huge behavior driver
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that's that's that's absolutely correct so these initiatives can can literally
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be done kind of you know in that three to six months time visibility quick wins now then though you know if you want to
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change your entire procurement system you want to like install audits at your suppliers which you should be doing
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those take a little bit longer to kind of pay off you want to build a factory which is going to be completely
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modernistic and and up to code and so on that's those those take a little bit
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longer to pay off but it's a journey and the most important thing is to get started you've got to get started with
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something that's noticeable and kind of you know becomes the cooler top you know
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so people congregate around the water cooler and actually start chatting about it but their reusable water bottle you
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know there's the a lot of snowball philosophies and it sounds like what you've seen is that when you do get
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these processes implemented they begin to start to snowball have you seen any cases where companies have had success
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jumping right to big things as their first investment and sort of making a seismic shift and how they do business
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and capturing that transformative energy simultaneously simultaneously yes so once company I studied was was Marks and
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Spencer for example this large retail organization across the world and they took a very deliberate stand by the said
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that kind of you know it should not be that if we are going to open a new retail store that someone has to decide
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individually kind of what kinds of lights to order and what kinds of insulation to have said their plan is
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called plan a because there is no plan B so that's what it says on the thing and
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and in and it's I spoke to the chief sustainability officer there and he told
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me that you know plan a just happens at the push of a button I mean you know it's not that somebody actually has
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default it's the default is the default option so they've tackled some some big
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things in the in in in the in in in those kinds of spaces in the operation spaces where actually you do save a lot
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of energy and you know and save a lot of emissions and so on but they've also at
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the same time kind of worked with their employees to say look we're a retailer
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so if we exist in communities that community is not gonna be happy or satisfied to know that our store is kind
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of you know has the latest technology you sustainable technologies kind of embedded into it the community will
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actually want to see some outreach from the stores to work with them I mean employ disabled people in there in the
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store or kind of you know help out with with some charitable work or something so that in a kind of there is that
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feeling that you are you are one of us so that was that's one example I can give you where they're tackling kind of
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multiple things and and at the same at the same front excellent doing this right
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sounds like a competitive advantage right you are getting high sort of customer engagement high employee
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engagement saving money are you seeing companies share what they've learned about how to be more sustainable or are
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they kind of keeping it a secret sauce because it is a competitive advantage these technologies and these processes I
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mean what I treasure trove of information but it's also it's a competitive landscape so what are you
00:28:22
seeing this that's that's also a very very good question it's again I mean it's it's a it's it's
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a mix what you see out there is a mix I mean there are companies that firmly believe that sustainability needs to be
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put in the pre-competitive space so you know that's not something we we fight
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about let's fight about who's whose product does better in the in the marketplace and so on and so forth but
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they will collaborate on on technologies and they will collaborate on kind you know difficult problems like
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deforestation how to be solved before a station no one company can go it alone when it comes to that so that's where
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again collaboration is necessary Unilever for example you know they had a compressed canned deodorant and they
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made the technology open-source NL which is a very very large Italian electricity
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company they have made much of their technologies kind of also open to to someone else so it depends on on the
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company I know in the chemical industry as well and if there are collaborations that we don't see it's behind the scenes
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in R&D and so on and so forth all with the view to kind to make you know a host
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of companies sustainable at the same time conflict murals issue which came up with this digital devices with the kids
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in the Congo or mining these minerals and they were coming into our phones so there was this plea to kind of you know
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clean up the supply chain a bunch of organizations like Apple and Samsung and Nokia they got together to clean up that
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supply chain so I think I'm sure companies do have secrets and they're keeping some of them to themselves to be
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able to play the competitive advantage game but there's in the in the kind of
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higher consciousness of things it's also emerging that okay I mean you know this
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is germane for us also so let's work on it together excellent well that's good to hear to
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write this book you conducted over 25 interviews with multinational companies over a hundred over hundred individuals
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at those companies and what I thought was interesting is those individuals were sort of across the leadership
00:30:44
spectrum so you said mailroom to boardroom type of thing was there anything that everyone commented on any
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Universal trends no matter the sector role level yes that this is truly important and we must be doing something
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about this and it's high time and all that kind of stuff everybody shares that
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was there anything that surprised from those interviews yes of course you know it's it's it's interesting that
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more than the interviews or the content of the interviews what is surprising is what you learn about organizations and
00:31:26
and how they operate so there are organizations where kind of you know you where they are happy to
00:31:35
have you videotape the interview for example you know and there are organizations where you cannot even
00:31:43
audiotape an interview right now that says something I don't know what it is
00:31:48
but it says that companies operate kind of companies operate differently there's
00:31:53
a company where the CEO might come outside to to greet you and and and and you know kind of sit you down and so on
00:32:02
and there are companies where you might have to go through three or four levels of admin assistants and so on to finally
00:32:09
get into the CEOs room so these are things that you notice and you know that's that you find kind of surprising
00:32:17
as well one thing I learned is that you know the real stories really come out when you move away from the c-suite
00:32:25
which is why I always made sure that I spoke with some middle managers and wherever possible I visited factories
00:32:35
and I spoke with the factory workers and I just went to branch offices and so just to see kind of is this ownership
00:32:41
concept that I'm proposing this buy into sustainability wholesale employee engagement is this real or is this
00:32:48
something that's just kind of you know in the head office because that happens
00:32:53
that head offices are more but there there's some very very interesting kind
00:32:58
of variations as you move across different parts of of a giant of a giant company well as we come to the end of
00:33:08
the interview if someone doesn't read your book or doesn't even have time to
00:33:13
finish watching our interview here today what are in a couple sentences the main
00:33:17
takeaway is that you would like anyone who you know catches this interview reads the blogpost about it what are the
00:33:25
couple things you'd really want them to take away the first thing I would say is
00:33:30
that you know the cost of inaction is higher than the cost of action I think a lot of folks don't realize that not
00:33:40
reading the scientific news that is coming out and the second thing I would say is that you know you just can always
00:33:52
do something whether you work at a company whether you are the CEO of a company whether you aspire to work for a
00:33:59
company all of the even just even leaving the consumer side aside for now just thinking about the workforce and
00:34:09
the numbers we have in the workforce if we can mobilize a significant portion of
00:34:15
that workforce we get something called the million-man effect which is kind of you know together we are stronger so I
00:34:22
want to leave everybody with the sense that you know together we are stronger and that small actions can make a big
00:34:30
difference and that no no no action is small enough you know starting from the mundane off kind of you know putting the
00:34:38
lights out to kind of figuring out perhaps a way to suck carbon out of the air or to kind of you know alternative
00:34:47
to plastic packaging or plant-based burgers or whatever it is whatever is in your realm of influence you have to do
00:34:56
it being a bystander is not an option anymore you've got to lean in and be an
00:35:02
owner yeah well that could I don't think would be a better way to end that call
00:35:07
to action for all of our viewers and listeners that being a bystander is not an option CB bhattacharya thank you for
00:35:13
not being a bystander for putting this book and your work out into the world the book is small actions big difference
00:35:19
and it is available now CB thank you for your time thank you for having me for more insight from knowledge at
00:35:27
Wharton please visit knowledge Wharton UPenn edu [Music]