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green@work : Magazine : Back Issues : July/Aug 2002 : From Safety to Sustainability

Feature Article

From Safety to Sustainability
DuPont consultant Paul Gilding talks about the company's leadership and its journey toward sustainability.

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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