In a world increasingly vulnerable to climate risk, organizations need to put sustainability front and center. What is the role of the CMO in driving sustainability strategy, and how can CMOs work across their organizations to deliver and showcase results?
In our most recent roundtable, Bec Heinrich, Managing Director of Deloitte Greenhouse, discussed these urgent questions with two leading CMOs in the sustainability sector. Phil Clement is the Global CMO of Johnson Controls, a global leader in smart, healthy, and sustainable buildings. Shonodeep Modak is the CMO of Energy Management at Schneider Electric, which focuses on global energy and automation for digital solutions.
Sustainability isn’t a nice-to-have—it’s an imperative
For the last few years, the pandemic and economic turbulence have put sustainability on the back burner, but the tide is changing. Both our panelists expressed they see a rising sense of urgency for sustainability across the corporate landscape. “There’s a shift from being defensive to being proactive and seeing sustainability as a critical competitive advantage,” said Bec.
Shonodeep adds: “From a corporate strategy standpoint, sustainability has gone from a nice-to-have to a front-and-center, urgent issue. It’s driving the agenda, access to capital, access to customers, and recruiting colleagues.”
“Our customers are being required [to emphasize sustainability] by investors and regulators. The SEC requires companies to report their scope 1-3 emissions. They’re demanding [product environmental profiles] in their bids for all their filings. It’s not an added benefit. It’s a way of doing business.”Focusing on sustainability can also lead to new business growth opportunities and make recruitment easier. “People are going to want to work at the companies leading in this, and customers are going to choose the companies that can help them,” Phil said. “There’s a huge mystery for most companies about how they’re going to achieve [their sustainability goals]. So if you have an opportunity to address that gap, expect a pretty strong growth market.”
How should CMOs engage with leaders to influence sustainability strategy?
CMOs should feel ownership in driving sustainability initiatives at their organizations and collaborating with CSOs and other departments. “If people aren’t knocking on your CEO’s door on this topic,” Phil said, “you should be.”
Executing on sustainability strategy may involve reporting and analyzing carbon footprints, which are beyond the scope of a marketing department. “But communicating strategy, gathering people, and making sure your customers understand—that’s all about marketing,” Phil said.
As a CMO, you can ensure your company has a sustainability marketing plan and establish proof of performance. Make sure your proof of performance is visible across your product’s branding, both internally and externally. Reach out to customers to learn about their sustainability goals and think about areas for collaboration.
How to avoid greenwashing: “walking the walk” instead of just “talking the talk”
Many organizations pay lip service to sustainability, but reporting, analyzing, and adapting to imperatives is hard work. If your organization’s engagement with sustainability ends with talk, you risk losing credibility. We asked our panelists for their advice for CMOs who want to enact concrete action at their companies.
Make it easy for customers to understand what your organization is doing to be more sustainable
Breaking down your company’s accomplishments in a way that is easy for customers to understand is extremely important. Shonodeep suggests creating a methodology document that shows what your proof of performance is based on. “L’Oreal talks about their carbon intensity on a per-dose basis. Ford does a fantastic job showing the sustainability footprint of one of their hybrid vehicles versus a reference.”
Reach out to press and policymakers
The world is excited to see companies taking tangible action on these issues. As Phil said, “We both have CEOs that are meeting regularly with the White House…There’s a global heads of state conversation going on that marketers are capable of plugging their organizations into. We’re great at understanding things that are complicated, making them easy to understand, and inspiring action.”
Consider amplifying your partners’ efforts
Sometimes the best way to make an impact is by taking a leadership role and partnering outside your organization. Schneider Electric, for example, has launched a new awards program to inspire their supply chain, customers, and partners to achieve more and be recognized for their sustainability best practices.
Look into environmental certifications, including LEED and ISO standards
Certifications and standards help make sure the work organizations are doing is actually effective and not “greenwashing.” Phill suggests looking into LEED and ISO. “In a world of complete ambiguity and complexity, everybody will start to rely on certifications because there’s just too many versions of reality.”
Start investigating alternative energy for sustainable buildings
Consider how your organization can start reducing its carbon footprint through clean energy and more efficiency in its buildings.
From Phil: “40% of the world’s carbon problem is in our buildings.” Between office spaces, manufacturing spaces, and retail spaces, organizations of all types are managing large amounts of real estate that requires enormous amounts of energy. “Within five years, you’re not going to be able to buy your way out of the situation [with carbon offsets].”
Recruiting your future workforce using a sustainability focus
Showing a mission-driven focus on sustainability is key for organizations looking to recruit and retain talent.
“Whether people want to be part of a company and stay at that company is quintessentially [related to]: what is our identity in the marketplace? And what do we stand for?” Phil said.
Shonodeep added, “We’re trying to brand ourselves as being sustainable, making sure people feel like they have a meaning to come and work here. Sustainability is just one element of ESG—every dimension is important for our recruitment.”
How is your organization defining and addressing its sustainability goals? We’d love to hear your questions and comments.