Sustainability Conference: The Larger Meaning of Business
Companies that want to attract top managers will have to elevate concern for long-term sustainability to a core value that drives strategy. And students of the highest caliber won't be attracted to schools that don't take issues of sustainability seriously and integrate it in their programs.
Those key conclusions came from the second annual Business Sustainability Initiative conference, organized jointly by students from Dartmouth's Tuck School of Business and Thayer School of Engineering, and held at Tuck on February 27, 2004. The conference, one of the largest student-organized events at Tuck, attracted nearly 200 participants, including business and technology leaders and members from the Dartmouth community and other schools, such as Middlebury and Yale.
With assistance from the Allwin Initiative for Corporate Citizenship at Tuck, students convened panels of experts on the three components of the "triple bottom line" of sustainability: environmental, economic, and social consequences. Panelists also examined obstacles standing in the way of greater attention to sustainability, and the viability of partnerships with nonprofit nongovernmental organizations.
Kicking off the conference, Tuck Dean Paul Danos said the event epitomized the hopes of Edward Tuck, the school's founder, who intended Tuck to address "the larger meaning of business." Praising the conference as an outstanding instance of student leadership, Danos noted that "Leadership is what Tuck is all about."
William Latko, senior dean of academic affairs at Thayer, pointed out that the physical environment, which is "important to the whole planet," is also the key to business sustainability.
Steve Percy, chairman and CEO of BP America, Inc., from 1996 to 1999, set the tone for the conference in his keynote talk on the lessons BP learned by acknowledging the significance of global warming and seizing leadership in that arena. In 1997, despite some internal turmoil, BP recognized climate change as a legitimate issue. "The science wasn't perfect, but a consensus was growing," Percy said.
BP decided there was every reason to step out ahead in the area of sustainability. "There is no value in being second," Percy said. Rather, being first "raises the bar and increases the cost of doing business for the marginal competitor in your industry. It's not about being altruistic. It's about developing the greatest long-term source of value."
When changing direction, BP also hoped that the best and most creative managers who had viewed the company as part of a staid and boring industry would forsake the lure of dotcoms and join BP. "That was borne out by experience. It showed the value of creating long-term value for your shareholders," Percy said.
"Be thinking about hedging your bets," he added. "Don't be stuck in the old world."
The key question, Percy said, is "how to maintain our quality of life while bringing more than one billion people out of abject poverty, without destroying the carrying capacity of our natural systems?" If we continue operating as we are, he said, "we will have to increase the material flows in the world by a factor of 20 to meet the aspirations of the world's people. That's scary."
In response, he predicted, "We will need to find satisfaction in less material ways," through means such as experiences, acquisition of knowledge, relationships, and enjoyment of leisure time.
Moderating a panel on "Greening the Supply Chain," Tuck Professor M. Eric Johnson asked panelists how far along the supply chain a company's responsibility extends.
Linda Darveau, a member of the Environmental Protection Agency (EPA)'s New England Environmental Assistance Team, said major customers can have much greater influence on small producers of components than can the EPA.
Nevertheless, other panelists warned, it can be very difficult to impose standards on suppliers, especially foreign ones, when supply chains are as dynamic as they are. Even domestic companies are slow to change, noted Paul Ligon T'03, who founded the Business Sustainability Initiative as a Tuck student. He is now manager of business development at Waste Management Inc. "We often guarantee to save more than our cost," Ligon said, but it still can take 12 to 18 months to close a deal.
Additional panels discussed micro finance, challenges to implementing sustainable development, and sustainable partnerships.
Panelists included experts from the Conservation Fund, Environmental Protection Agency, Ford Motor Company, GreenBlue, Harvard University, Investor Responsibility Research Center, International Finance Corporation, International Paper, Prisma MicroFinance, Pegasus Venture Capital, PricewaterhouseCoopers, Tellus Institute, The Wall Street Journal, Waste Management Inc., and the World Resources Institute.
"This event is great for Tuck and Thayer, because this topic is not something that is going to die," commented Anthony Llano T'04, chairman of the 2004 Business Sustainability Initiative. "A lot of our prospective students want to know what we are doing to promote corporate responsibility."
For more information about the Business Sustainability Initiative, visit www.tuckbsi.org.
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