Noel joined Stora Enso in 2015, and is Executive Vice President for Sustainability. Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets. Noel’s previous positions include Senior Vice President Sustainability & Green Support at Skanska AB in Sweden, Group Environmental Director for RMC, the world’s largest producer of ready mixed concrete, as well as senior roles at Imperial Chemical Industries, the UK National Environmental Technology Centre and NGO Business in the Community.
GlobeScan Director Caroline Holme recently interviewed Noel to find out how the business case for the sustainability agenda has evolved and what this means for Stora Enso’s recently published Sustainability Report and Annual Report.
Published 28 February 2017
I have worked on what I call the interface between sustainability and business for about 30 years now, most of that in large corporations. The biggest shift I have seen is a better understanding of sustainability and the triple bottom line, and the shift from environmental responsibility to a larger social agenda.
When I was working at Business in the Community in the 1990s, my job was to develop the business case for sustainability because back then it was still not really understood or practiced. If you are going to drive sustainability – whether it be environmental responsibility or social responsibility (or both) – you had better have a business case because that is what keeps you in business when times are bad. If it is all just philanthropy, an awful lot of companies throw it out because it is the first thing that goes out of the basket when the balloon starts to run out of gas. My biggest learning has been that when times are tough, the business case demonstrates why operating sustainably will help the overall business succeed in the long term.
The biggest change that I have seen over time is in knowing who your stakeholders are. Today with social media, hyper transparency and operating 24/7, 365 days of the year, it is hard to tell who your stakeholders actually are. There are a lot of people whose opinions and actions can impact corporations, but the question really is, are they all legitimate?
I think the important thing that I have learned is that you can do materiality to a level of granularity where every single person on the planet is a unique stakeholder. That’s not very helpful in a large corporation. You can analyse your products under 50 different variables which would drive your sustainability agenda, but that is not implementable in a big company. So you have got to boil it all down to the absolute essence of what you are trying to do at a corporate level.
If you boil everything down and you apply common sense to the things that you have to do to respect society, that’s it. That to me is the simplest model for delivering the sustainability agenda based on my experiences and having used various different frameworks that are out there in the marketplace. If you disaggregate each of those key things into a number of different actions (which may vary depending on what industry you are in and what part of the world you are in), the balance may be different but the trick here for me is simplicity.
Our sustainability agenda focuses on the ten things we’ve absolutely got to get right everywhere all the time. How do you communicate human rights, CO2 and trees, energy efficiency, safety, etc. in a consistent way? My learning is that there are four things that informed people want to see.
At a strategic corporate level, the first thing that people want to see is that you can describe your externalities. Do you understand the world in which you are operating? Some of those externalities are your friends and some of them are your enemies.
Once you have described your externalities you need to communicate what policies and strategies you have to address those externalities. Then what people want to see is how you operationalise these policies and strategies. Have you got recognisable systems, processes and procedures in place to operationalise the policies and strategies? And then the fourth level is evidence, and evidence only comes in two forms – quantitative and qualitative. The qualitative evidence is the case study examples – the stories behind the numbers that add “colour.” Qualitative and quantitative evidence and insights are also gathered via stakeholder consultations such as the one that GlobeScan is currently working on with us.
So the entire structure, not just in our sustainability report, but everything we do now in Stora Enso is structured around this four-tier model. Describe your externality for human rights. Describe the policies and strategies. Tell us how you have operationalised. Show us the evidence and so on for each of the ten elements of our Sustainability Agenda.
First of all you need to understand the cultural component – is it implicit or explicit within an organisation? Then after that you start with simple things. You need to set up a governance process that is based on a degree of consensus. Consensus is not about driving for the lowest common denominator, because consensus can get you to that point very fast. It has to be consensus which drives a high level of ambition. The way I have done that is to start with a small central team and then gradually widen the circle. It is all about creating networks within networks. It is not about hierarchy.
You have to prioritise your stakeholders. I think it is extremely important to work out strategically who are the most important stakeholders, then layer it from there. There is no substitute for person-to-person contact. You have to be focused and really understand the significance of different stakeholder groups, different individual organisations and different individuals within those organisations. It is all about relationships, but you need to have agreement on who the most important stakeholders are. We look at two generic stakeholder groups, those that have an economic relationship with us and those that do not. The latter are the most challenging because they are there whether you like it or not, e.g., media, NGOs, regulators, etc. You ignore them at your peril.