Meg Schneider is a junior at Penn majoring in Environmental Studies, with a concentration in Sustainability and Environmental Management. She is currently researching behavioral solutions to environmental problems with Professor Dana of Penn Psychology for her thesis.
“Altruism is the enemy of sustainability,” was one of the opening remarks of Eric Lowitt at the Penn Institute for Environmental Studies/Initiative for Global Environmental Leadership Seminar Series March 21st. Lowitt is a graduate of Wharton and a sustainability consultant and author of “The Future of Value.” Although though the term sustainability has a wide variety of meanings, from eco-efficiency to the triple bottom line, Lowitt sees sustainability most of all as a business opportunity. While altruism may be the spark that leads to sustainability initiatives for a company, he said, altruism alone cannot sustain a flame that continues investment in this area.
He began his talk with a chilling example about the deadly effects in Kenya of Kumi Kumi beer, a cheap and deadly liquor made with anti-freeze and batter acid. The beer popular with day laborers who couldn’t afford the highly taxed international beers. Diageo, the global company behind Johnnie Walker and Guinness, saw an opportunity to do good and created a new, locally sourced and distributed beer called “Senator beer”. Senator beer was a success because it created a new revenue stream for Diageo not just because it solved a problem.
Lowitt also gave some advice to the students and industry in the audience who are hoping to become Chief Sustainability Officers: “you’re going to feel squeezed like an orange” because depending on the structure of the company, you may not have direct responsibility or ownership over anything but are supposed to change everything. In a world of many environmental opportunities, businesses need a laser-like precision on what sustainable means for them and their strategy. He also warned that, as of now, most companies have devoted little to no budget to their sustainability projects, which makes the job that much more difficult.
For the remaining part of his speech, Lowitt focused on the hallmarks of sustainable market leadership, a topic he covers in more depth in his book, “The Future of Value: How Companies are Creating Competitive Advantage via Sustainability”. He said that investors and job-seekers should look for companies using sustainability as a corporate strategy, not altruism, and looking for new ways to improve what already works, such as Johnson Controls. Other hallmarks included stakeholder engagement and aligning employee incentives with sustainable behavior. He used the example of National Grid where 10% of every bonus for managers is based not only on typical financial budgets but also carbon budgets.
When asked by the audience about how to apply resources effectively with a multitude of opportunities, Lowitt clarified that he thinks businesses should only invest in projects should have a positive return on investment. While not every sustainable project will have as high returns as other potentials, corporations can employ resources strategically and value sustainability as a feature of a project. In all, Mr. Lowitt’s talk certainly gave new insight and understanding to sustainability in the business sector.
Lowitt left the audience with a “CLEAR” takeaway:
Craft your strategy
Leadership from CEO
Execute your plan
and Renew sustainable efforts.