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Paul Gilding has a
most unusual resumé for a corporate consultant, coming from
an activist background that includes a stint as executive director
of Greenpeace International. In 1995, he established Ecos Corporation,
with headquarters in his home country of Australia, and since then
has advised many leading international corporations on sustainability,
including SC Johnson, the Ford Motor Co., Suncor Energy and DuPont,
which he and his Ecos colleagues have worked closely with since
1997. In that same year, he received the prestigious Tomorrow Magazine
Environmental Leadership Award, given annually to a leading player
in the world of corporate sustainability. Senior columnist Carl
Frankel recently spoke with Gilding about DuPont’s sustainability
trajectory.
What made you decide to work with corporations rather than campaign
against them?
Gilding: I’d always argued, including while at Greenpeace,
that while attacking laggards was a necessary and useful activist
activity, there was scope to work cooperatively with leading corporations
to take them further out front. When I left Greenpeace I was no
longer constrained by the image and history of that organization
and, therefore, had an opportunity to test this theory to its fullest.
I did not argue then, nor do I now, that cooperating with corporations
is the only way to drive change. Other approaches can be effective,
including peaceful confrontation by activists. I believe we’re
most likely to get change by using all these approaches in combination.
Tell me a bit about the history of sustainability at DuPont.
Gilding: DuPont’s leadership position originated with
Ed Woolard, CEO in the 1980s and early ‘90s. Since then, the
sustainability agenda has been significantly further developed and
consistently driven by CEO Chad Holliday and Paul Tebo, the company’s
senior sustainability officer. Under Chad’s leadership, the
“catch-cry” has moved from corporate environmentalism
to sustainable growth. Chad is a genuine believer in sustainability
as a truly integrated business growth strategy. Chad headed up DuPont’s
operations in the Asia Pacific prior to becoming CEO, and this sharpened
his insights into—and commitment to—the imperative of
sustainability, especially in developing countries.
As for Tebo, he’s been the critical link to the business units
when it comes to actually institutionalizing sustainability. His
consistent pressure and creativity in getting other DuPont business
leaders to pick up these ideas has been instrumental in forging
the company’s leadership position.
What was your take on the company coming into the relationship?
And how has that view changed over the years?
Gilding: I was always impressed with the DuPont internal
culture, particularly the company’s general decency. It already
had an impressive record on safety and on dramatically reducing
environmental emissions (admittedly from a very high base!). This
struck me as very significant—that I was talking to a company
that had addressed the basics and was talking about what to do next,
as opposed to where it should start, as is the case with most of
our clients. As the relationship developed over the years, I’ve
felt the original impressions were correct, but I learned more about
the realities of transforming a very large, old corporation. It’s
just hard work, but in my view still good work.
What were you hoping to accomplish? To what extent did your goals
dovetail with those of Tebo and others in the DuPont leadership?
Gilding: Our interest at Ecos was two-fold. First, to understand
the workings and culture of a very large global corporation. Second,
to drive change—and our main goal with regard to that is to
help create examples of large multinational companies that have
successfully made the transition toward sustainability. Our goals
dovetailed with DuPont’s with regard to the first goal, in
the sense that it was seeking understanding, too. It wanted insight
into the culture and beliefs of the activist community, not in order
to oppose them but to gain new insights into issues and sometimes
to find ways to collaborate together. I was an activist seeking
to understand the thought process of a corporate leader, and Tebo
was a corporate leader reaching into the mind of an activist.
Chad Holliday was appointed CEO after I started working with Tebo,
who is the person I’ve worked most closely with at DuPont.
The “Chad” leadership team formulated its sustainability
goals while I was there, so I think it would be fair to say, given
the depth of the relationship Ecos developed with DuPont, that we
helped co-create DuPont’s sustainability agenda. Ecos wanted
to help build a commercially successful sustainability leadership
company, and DuPont’s management was similarly inclined—especially
with regard to the “commercially” bit!
Now, five years later, how far along do you think you, Tebo and
Holliday have come toward accomplishing your goals? In what areas
has the most—and least—progress been made? If you were
asked to highlight one or two main accomplishments, what would they
be?
Gilding: We’ve come an amazingly long way in some areas
and made almost no progress whatsoever in others. It’s in the
subtler areas of culture and attitude—the ones that I think
are most critical for sustainable change—where the most progress
has occurred. DuPont is 200 years old, and that means there are
200 years of momentum behind the current culture. Given all that
history, I think we’ve come a long way in a relatively short
time. It’s very hard to turn such a big battleship around and
we’ve made substantial progress culturally.
Another major step forward is that DuPont increasingly and deeply
“feels” the idea that its purpose is to make the world
a better place, and that doing so to the best of its ability is
going to be the best way to build value for shareholders. The company
used to see its challenge as being how to go about its business
while reducing the negative impacts that these activities caused.
Now it increasingly sees itself as building business value by reducing
the negative impacts that our industrial economy, seen as a whole,
has on society. For example, the company now has a whole platform
of businesses working on safety and protection—making people
and operations throughout the world safer through the application
of DuPont knowledge and technology. There alone, you have 8,200
people and over 3.5 billion dollars of revenue with a clear social
focus. This is a real breakthrough in the mindset of a corporation.
In addition, groups at DuPont are focusing on poverty and on how
they can alleviate it while building new markets. This is pretty
unusual behavior for a major U.S. corporation.
Another strong point is DuPont’s commitment to reducing emissions.
The company’s climate change goals are the world’s most
ambitious—DuPont has committed not only to substantially reducing
its own emissions, but also to procuring 10 percent of all its energy
from renewable sources by 2010. That’s a very significant pledge,
and it will help create a market for renewable energy solutions.
Of course, there are frustrations, too. That’s inevitable whenever
one has ambitious goals—and steering multinational companies
toward sustainability is certainly ambitious! Where DuPont has lagged
has been in changing the structure and products of its business.
Any large corporation always falls back on what’s most comfortable,
and in the DuPont culture that translates into large plants producing
lots of stuff. So the transformation of the business at this level—on
the ground, so to speak—is slow and plodding. It takes a long
time for a culture shift, which I do see emerging, to translate
into changes in production processes and product development. DuPont
is doing some very impressive work in exciting and relatively sustainable
new areas (many of which happen to be its highest-growth businesses!),
but the sheer quantity of the company’s “stuff” businesses
still makes up most of the present-day reality. In the last few
months some significant restructuring of this side of the business
has begun—including the formation of one business platform
focused on safety and protection and another on agriculture and
nutrition. How this development plays out in terms of business success
will be critical to the company’s success with regard to sustainability.
What were the main positives at DuPont in terms of supporting
progress toward your goals?
Gilding: The company’s size, global reach and historical
commitment to safety makes it an ideal partner for a group like
ours that is seeking to build robust examples of transformation
towards sustainability. I can’t overstate the significance
of its safety culture in terms of DuPont’s understanding of
sustainability. There is no doubt in my mind that without its historical
commitment to, and performance in, workplace safety, DuPont would
be a long way further back on sustainable growth.
The other key positive has been the leadership. Chad Holliday is
one of the few CEOs I’ve worked with who has a genuinely integrated
view of sustainability and building shareholder value. I think some
of the failures in sustainability have been caused by CEOs who take
their eye off the ball on shareholder value and become too caught
up in the social challenge. Chad’s never done that and it’s
been arguably the critical factor in DuPont’s success.
What have been the main obstacles and how best can they be overcome?
Gilding: One problem at DuPont stems from the fact that it’s
primarily an engineering culture, and this sort of culture tends
to seek its own solutions rather than reach out to and engage stakeholders
early in the process. While this focus on finding the answer is
a strength on the chemistry and engineering side, it’s a real
obstacle when it comes to operating inside a complex economy and
social structure where healthy partnerships are critical to success.
The main obstacles have been outside DuPont, though. There’s
not much market pull for sustainability-oriented solutions, and
that makes it a hard thing to push internally.
Are there any ways in which you and Tebo might have gone about things
differently? What are the key lessons learned from your DuPont experience—about
DuPont specifically and about operationalizing sustainability generally?
Gilding: I don’t think I’d do anything very differently.
This is because the key lesson with regard to creating fundamental
corporate change, when it’s not being driven by a crisis but
by a strategic intent, is that it’s bloody slow! I think things
will move much more quickly for the next generation of sustainability
leadership companies, but things are slow for today’s. In fact,
for them it’s arguably good to go slow! Companies that try
to do it too fast have faltered. This territory is totally new.
Making real progress takes time. That irritates and frustrates me
as an activist—I see the urgency in the decline in ecosystem
quality—but I don’t see a way around that at the moment.
Where does DuPont go from here in terms of operationalizing sustainability?
Gilding: The key challenge is to systematically drive it
through the organization. In any large organization, the real financial
value comes from making an idea an accepted business practice so
that its tenets are applied consistently.
To what extent is it possible for publicly-held corporations
to become sustainable? How severe are the institutional constraints?
What strategies lend themselves to addressing (or “routing
around”) these constraints best?
Gilding: There are no institutional constraints, unless you
believe capitalism itself is the problem, which happens not to be
my view. I think there is room inside our current market structure
for corporations to be sustainable, or at least to be on an accelerated
path toward sustainability.
Generally speaking, I think two things are required. There needs
to be a plausible value case; that is, a compelling argument that
a weak sustainability commitment decreases value and a strong commitment
increases it. That case is clear but there is still some resistance
to it among corporate executives. This is partly because they tend
to be gun-shy of anything that’s relatively untested, and partly
because sustainability is such a difficult term! Precisely what
it means, and how to implement it, is unclear. So the second thing
we need, in my opinion, is a “way in” to the subject that
won’t produce resistance. At Ecos, we’ve decided that
safety may provide that door into the corporate conversation about
sustainability. After all, safety and sustainability are in many
ways synonymous. They’re both about reducing the dangers to
human health and safety—sustainability just happens to be focusing
on a grander scale. And there are other reasons to believe safety
can be a useful pathway into getting companies to operationalize
sustainability, too. Safety is understandable. It’s actionable.
It’s scalable—you can keep expanding outward, from safe
plants and communities to safe products, and from there to a “safe
planet.” And, of course, these days it’s also top-of-mind.
How does DuPont fit into this analysis?
Gilding: DuPont is the safety company par excellence. Its
record in that area is unparalleled. And, in fact, it has transitioned
from a commitment to safety, conventionally understood, to a commitment
to sustainability. It has climbed up the funnel, so to speak, to
a more encompassing notion of safety that includes things like social
equity and the health of the planet. It’s a real trendsetter
here, in my opinion, and an example to be followed.
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