This week I am at the GreenBiz Conference, an annual meeting of leaders in sustainable business, many from the world’s top companies. One of the discussion topics that keeps coming up is values—specifically, the need to align company operations with their corporate values around sustainability. But what does this mean in practice?
CVS Stops Sale of Cigarettes
Increasingly, we’re seeing companies consider this issue and take action. The most notable recent example has been CVS. In an unexpected move this month, the pharmacy and convenience store giant announced it would stop selling tobacco products. To be clear, many companies have stepped back from tobacco affiliations—investors have divested from tobacco companies and media outlets have chosen to ban tobacco advertising. But for a store like CVS, tobacco is considered a cash cow. So why would the company voluntarily give up this reliable profit?
CVS president and chief executive Larry Merlo explained, “Cigarettes and tobacco products have no place in a setting where health care is delivered. This is the right thing to do.” In other words: values. As Merlo claims, the company believes that having financial interest in a product that makes you less healthy is incompatible with their health-focused brand.
Aligning Company Values on Sustainability
This got me thinking about companies whose brands include sustainability. When a company values sustainability, what does it mean to align company actions with this value?
A responsible company that values sustainability accepts the science of climate change and acknowledges the need to address it. So what happens to a company’s “sustainable” brand when it also invests in areas that work against this position, such as funding organizations that deny climate science or work to fight policies that would address it? Are such affiliations incompatible? At least some companies seem to think so. NIKE, for example, publicly left the board of the U.S. Chamber of Commerce, citing that the Chamber’s actions (The U.S. Chamber has long denied climate science and fought policies to address it) were “inconsistent with our view that climate change is an issue in need of urgent action.”
Trade Group and Company Disagreements on Climate Change
But many companies who are members of such climate-science-denying groups have been less bold in their statements and actions around the issue. A recent UCS report found that few companies choose to be transparent about their board membership in such groups. And even fewer companies acknowledge any disagreement with such trade groups on climate change. In fact, our analysis found that for the U.S. Chamber of Commerce, only a single board-member company, UPS, acknowledged that it did not agree with the Chamber’s position on climate change.
One reason why these rates of reporting are so low may be the uncomfortable position it puts a company in. To admit it belongs to a trade group that doesn’t align with its values on climate change is a challenging thing to acknowledge for companies interested in maintaining a brand that values sustainability. NIKE took a bold step and left the Chamber board, but many companies may not choose this path. There are, after all, many reasons a company has board memberships on trade associations. The groups provide many benefits and climate change is likely only a piece of the work that they do.
Companies for which leaving climate-denying trade groups is not an option can help maintain their climate-conscious brand by publicly stating their differences and they can try to influence their associations’ positions from within. Alcoa Inc, for example, maintains its board memberships on the U.S. Chamber of Commerce and the National Association of Manufacturers, but has maintained their climate-science-friendly brand by acknowledging this disagreement. Alcoa Vice President and Chief Sustainability Officer Kevin Anton explains, “Alcoa clearly does not always agree with every position trade associations take but we intend to continue our membership since the key to sound policy formulation is broad engagement and open dialogue.”
The Importance of Company Consistency on Climate Change
This acknowledgement of disagreement is important. It allows companies to maintain consistency on climate change and it undermines the ability of trade groups to deny climate science with the alleged backing of all their member companies.
Ultimately, we need to create a space where companies can feel comfortable expressing such disagreements with their trade associations, and more generally, to make decisions that align with company values on sustainability and climate change. Perhaps companies like CVS, NIKE, UPS, and Alcoa are helping to pave the way. Claire Sommer of Sustainable Brands commented that CVS’ move creates “new, safe middle ground” for companies to make business decisions based on social and environmental impacts. I hope that continued conversations at GreenBiz this week will explore how we can build this momentum.