[NJHEPS] "CFO's & Sustainability"...
tmm at adm.NJIT.EDU
Mon Oct 30 08:18:28 EST 2006
Dear NJHEPS members and friends;
I saw this news article copied below last week, and really thought that it
hit the nail on the head regarding sustainability. I particularly like
Andrew Savitz' s comment that "... Sustainability without a real business
case is mere philanthropy; without measurement, mere whimsy; without
meaningful reporting to shareholders, mere public relations. Today‚s
best-run companies ˆ and smartest investors ˆ are seeing sustainability for
what it truly is: a strategic business driver that will separate the winners
from the losers in the next decade."
Everywhere Andrew says "company", we can substitute "college" or
"university", and where he says "shareholders" substitute "stakeholders"- so
it is time we start thinking this way at institutions of higher education,
and stop talking about sustainability, and start doing, measuring and
reporting annually on our progress. Then New Jersey's higher education
system will have a strategic competitive advantage over other state's
educational systems over the coming decade.
John L. Cusack
New Jersey Higher Education Partnership for Sustainability (NJHEPS)
138 Warren Street
Newark NJ 07102
Cell Phone: 914-527-3085 (easiest way to reach me)
NJHPS Phones: 973-642-4881 (mine) or -7848 (Terra Meierdierck, senior
email: johnlcusack at att.net
NJHEPS website: www.njheps.org
Consulting website: www.giffordpark.net
CFOs can give us straight talk on sustainability
By Andrew Savitz
Published: October 25 2006 16:06 | The Financial Times
Corporate sustainability ˆ the idea that profits can and should go hand in
hand with social and environmental responsibility ˆ has been around for a
long time. Now, though, it has reached a tipping point.
Nearly 70 per cent of chief executives of mid-sized to large companies
that sustainability is vital to their profitability, and more than
say it will remain a high priority, according to recent global surveys by
Many companies are already practising sustainable business with success.
Electric has doubled its investment in clean technology, recognising that
addressing climate change can be great business. Unilever is training
developing-world villagers to market and sell single-use sachets of soap,
creating profits, economic growth and public health benefits. And Toyota has
the jackpot with its electric hybrid, the Prius.
Yet many chief financial officers do not see the value that sustainability
offers their companies. They simply shake their heads, saying „No, no, no‰,
whenever internal advocates try to propose sustainable business initiatives.
CFOs are trained to be sceptical and analytical: these are sterling
that help them to avoid getting swept up in corporate fads. But rather than
fighting a rearguard action against a sustainability movement that is here
stay, CFOs should apply their analytic rigour to testing and strengthening
businesses‚ sustainability programmes. Here are three ways they can
to the effort and dramatically bolster their companies‚ long-term
in the process.
Substantiate the business case for sustainability. Gary Pfeiffer, CFO at
described one of his roles as „sweeping up after the elephant parade‰. His
executive, Charles Holliday, has made a mantra of sustainability, pushing
idea that DuPont should shift from making petroleum to biotechnology-based
products, for example. Mr Pfeiffer‚s job is to apply a financial reality
to this and any other visionary ideas about sustainability.
Sustainability is not philanthropy; if there is no profit payback, your
company should rethink its commitment. CFOs
such as Mr Pfeiffer play an important role in making sure their companies‚
investments in sustainability produce results.
Measure the results from sustainability initiatives in financial terms. In
role as chairman and chief executive at PepsiCo, Steve Reinemund has shown
commitment to diversity. But diversity is not just a public relations
or merely an ethical choice: it brings competitive advantages to PepsiCo in
creation of new products, penetration of growing markets, and access to the
employee talent. The company measures the financial benefits of diversity
has pegged them at more than $100m.
Now PepsiCo‚s senior vice-president for finance, Matt McKenna, has helped to
develop a CapEx Sustainability model whereby capital investments of more
$10m are systematically screened and measured for environmental, social and
financial results. This powerful „triple bottom line‰ analysis ensures every
big project the company undertakes is sustainable as well as profitable.
Communicate the value of sustainability to shareholders. The CFO can play an
important role in educating investors about the benefits of sustainability.
Schwartz, of Bear Stearns, the securities and investment banking group, said
a conference on sustainability in Washington in 2004 that companies should
present sustainability goals the same way Warren Buffett presents Berkshire
Hathaway‚s annual business objectives: here‚s what we are going to do,
how we‚ll measure it and here‚s how you can evaluate our performance this
next year. The CFO is uniquely positioned to explain the logic of
to investors with this kind of straight talk.
Sustainability without a real business case is mere philanthropy; without
measurement, mere whimsy; without meaningful reporting to shareholders, mere
public relations. Today‚s best-run companies ˆ and smartest investors ˆ are
seeing sustainability for what it truly is: a strategic business driver that
will separate the winners from the losers in the next
decade. Companies seeking to establish strong, successful sustainability
programmes will need the active participation of their CFOs.
?The writer is author of The Triple Bottom Line ˆ How Today‚s Best-Run
are Achieving Economic, Social and Environmental Success and How You Can Too
[and former lead partner of PWC's Sustainability Practices Group]
Copyright The Financial Times Limited 2006
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