September 22, 2021
In August, the world’s top relevant scientists published another report endorsed by all 193 countries involved in the UN’s Intergovernmental Panel on Climate Change (IPCC). According to UN Secretary General Antonio Guterres, the report indicates: “Code Red for humanity”. Meanwhile, sustainability professionals are helping thousands of communities and enterprises chart paths to Net Zero greenhouse gas (GHG) emissions wherein countries, communities and enterprises commit to removing as much carbon from the atmosphere as they place into it. This work is being done even as some highlight the abuses of the “Net Zero” framework that was developed in the years preceding the IPCC’s 2015 Paris Climate Agreement that focused world attention on the need for global Net Zero Emissions by 2050. What all agree on is that much more has to be done much more urgently than simply committing to plan to reduce net emissions to zero nearly thirty years from now.
Fortunately, Sustainability Roundtable, Inc. (SR Inc) Member-Clients, including Biogen and Intuit, continue to demonstrate breakthrough leadership. They provide compelling examples of how scaling global businesses can become powerful platforms for painfully needed change while increasing returns for all their stakeholders. They also specifically demonstrate multiple different ways companies can move beyond the needed but not sufficient efforts towards Scope 3 emission reductions and be prepared to contribute to “Scope 4” impacts (i.e. impact on climate public policy). This can be understood as “charismatic” enterprise leadership that is established by demonstrating a commitment to intrinsic values shared by their most sought-after customers, talent, investors, and host communities. In taking this approach, Biogen and Intuit are developing a repeatable model for science-inspired companies to: (1) reframe their response to the climate crisis as extending beyond responsibility for their own operations; (2) go beyond Net Zero across Scopes 1 and 2; and (3) help drive margin and share value growth.
“Code Red for Humanity”
Today, all around the world, thousands of sustainability-focused private sector professionals, public servants and academics are grappling with the deep challenge provided by the UN IPCC Sixth Assessment report “Climate Change: The Physical Science Basis” released in August. They are also preparing for the impact of the 26th Conference of Parties (COP26) in Glasgow, Scotland. Working Group 1’s contribution to the Sixth Assessment Physical Science Basis report has been described as “Code Red” for humanity, and with less than 60 days until COP26, there has never been a better moment for bold leadership. In accordance with the IPCC 2015 Paris Agreement, the 193 countries that have agreed on the report should provide their Nationally Determined Contribution to global emission reductions. They will be joined by thousands of enterprises and communities committing to their own voluntary reductions. Notably, some the world’s largest and fasting growing companies will offer their boldest commitments yet to explode the overall “business-as-usual” trend. Companies operating under business-as-usual conditions continue to ignore the IPCC’s 2018 Special Report on 1.5 C, actions UN Secretary Antonio Guterres called “immoral” and “suicidal.”
The SR Inc team looks forward to what several SR Inc Member-Clients will do in conjunction with COP26 to help “change the game” by including but moving far beyond careful GHG emission reduction efforts, accounting, and reporting. Clearly, what has been done to date has been woefully inadequate in terms of getting the world economy on the path to nearly halving global emissions by 2030 to avoid making the most catastrophic effects of climate change – including the threat of self-accelerating, irreversible, ecological collapse – likely. What is required is for the world’s most sophisticated and fast-growing companies to evolve new business strategies and models that help regenerate environmental value and ultimately reverse human-caused climate breakdown.
SR Inc Member-Clients Embrace Transformational Leadership
That is a tall order, but for more than a decade leading SR Inc Member-Client executives and companies have offered that type of leadership. Others have questioned how executives in for-profit companies focus so much time and effort on environmental, social, and governance (ESG) considerations that do not directly drive revenue or savings. Each time, however, first dozens and then hundreds of companies follow the bold sustainability leaders’ example. Those initial leaders then propose even bolder “multiple bottom-line” strategies and work to realize them profitably. This occurred with financial sector leaders like Michael Bloomberg; software leaders like Mark Benioff, founder of Salesforce; and life science leaders like Martin Madaus, former CEO & Chairman of Millipore. Since this sort of visionary, catalytic leadership is needed now more than ever before, it is right to ask: how can some executives and companies across different industries repeatedly be so far ahead of their peers in multi-stakeholder value creation that has proven more sustainable in complex globally scaling businesses?
Three Factors Driving World Leading Sustainable Brands
My contention is that their leadership success is premised on three factors. First, like the famed hockey player Wayne Gretzky skating to where the puck would be, they have a superior understanding of strategic context. They would all likely agree that professors David Lubin and Dan Esty were correct in 2010 when they wrote in the Harvard Business Review that “sustainability is a megatrend” that creates a “strategic imperative” in a manner similar to the IT and Quality revolutions. Second, these executives and companies have chosen to lead in industries that are free of large negative externalities and are aligned with world-wide efforts towards greater public health, which makes efficient their drive to build globally recognized “sustainable brands.” Third, these leaders seem to demonstrate a primary focus on the competition for talent they must win to scale globally. This encourages them to offer what might be well described as “charismatic” enterprise leadership that extends beyond commercial considerations to resonate with the most important values of their firm’s most sought-after talent, customers, investors, and host communities.
Since the first factor is about recognizing the strategic imperative created by the sustainability megatrend and the second factor is about recognizing the benefit of operating in industries without large negative externalities, it is this third factor – the commitment to creating a firm that offers “charismatic” leadership – that requires an explanation. Which requires a few sentences on the nature of both leadership and “charisma.”
Since current challenges and accelerating change require leaders to be bold, it can be helpful to acknowledge, as many have, that leadership is somewhat lonely. If a leader has developed a plan to triumph through a complex and daunting challenge, it is reasonable to assume she will, at least initially, be too little understood to enjoy a sense of shared purpose with the others the leader serves. The leader can, however, establish a connection on the level of enduring values if she can demonstrate she shares them with those she seeks to lead. This connection on the level of personal, intrinsic values can be understood as a “charismatic” connection. Charles Lindholm, a leadership scholar at Boston University, described “charisma” in his 1990 book entitled Charisma as “primarily about a relationship that included the inter-mingling of the inner life of the leader and the followers.” In this way, even a naturally understated person or regularly unpretentious enterprise that doesn’t ostensibly possess “charisma” as it is popularly understood (Merriam-Webster defines “Charisma” as a “personal magic of leadership arousing special popular loyalty or enthusiasm for a public figure”) can articulate goals and demonstrate a commitment to values that resonate with the values that help shape the inner life of the talent, customers, investors and host communities a person or enterprise might seek to lead. This inclines those served by a “charismatic” leader to provide her time and the benefit of the doubt as she works to partner with them to create new and innovative value. In this way, the forging of a “charismatic” connection can have impressive commercial consequences as it increases recruiting, retention and engagement of talent that reduces net operating costs even as it improves the “speed to trust” with customers and investors, precisely because it is, by definition, about more than commercial concerns.
Charismatic Enterprise Leadership Requires Authenticity
Especially in an increasingly chaotic world, an enduring connection between the leadership of an enterprise and its key stakeholders might best be based on shared intrinsic values. An enterprise seeking to offer this type of leadership must demonstrate (as opposed to simply articulating) a commitment to intrinsic values it shares with its key stakeholders. The SR Inc team is persuaded that Member-Clients Biogen and Intuit provide an example of this type of “charismatic leadership” to a new, better, and surprising shared outcome. Both globally scaling companies have articulated corporate missions and values but, even more important, they have both demonstrated those values in pursuing breakthrough contributions to the mounting existential challenge created by human-caused climate breakdown. The teams at both Biogen and Intuit recognize that reducing their own operational carbon footprint is necessary but is no way sufficient in light of what influential, globally scaling companies can do to help make a difference in responding to the mounting existential challenge created by human-caused climate breakdown. Both Biogen and Intuit appear to recognize that globally scaling, science-inspired companies can be important platforms to demonstrate catalytic leadership towards an effective corporate response to our shared existential challenge.
An example of this relates to the procurement of renewable energy for mitigating scope 2 emissions (i.e. emissions from purchased electricity). The World Resource Institute’s GHG Protocol permits the use of Renewable Energy Certificates (RECs) from long-existing renewable energy plants to be used in mitigating Scope 2 emissions. However, Biogen and Intuit also seek to create new renewable energy capacity to complement existing renewable energy portfolios. These companies invest considerable management time to create “purchaser-caused” RECs by participating in aggregated procurements through Virtual Power Purchase Agreements (VPPAs) that help developers selected by the aggregated buyers to finance new renewable energy projects. Moreover, both Biogen and Intuit are exploring how they can help their suppliers and customers benefit from buyer aggregated VPPAs in a manner that reduces supplier/customer Scope 2 emissions (and therefore Biogen and Intuit’s Scope 3).
Beyond The Race to Zero
Few, if any, global companies have joined Biogen in committing to eliminate all fossil fuel use in their global operations. Nonetheless, several informed commentators have argued that is exactly what all developed world companies and communities should be doing instead of committing to the more complicated, vastly easier goal of Net Zero Emissions in 2050. These critics of the Net Zero Emission framework contend that it enables fossil fuel companies to argue for the continued use of fossil fuels with carbon capture for decades. There is merit in this argument, so it is critical to make it clear that: (a) burning fossil fuels is the primary driver of human-caused climate breakdown; (b) burning fossil fuels should be eliminated to help human health and reduce global warming as soon as possible; and (c) a 2050 goal, after everyone working today has retired, cannot drive the urgency needed.
However, Net Zero has gained enough support and momentum to make it worth supporting – for now. More than 3,300 companies and hundreds of investment funds, cities, and universities have committed to Net Zero Emissions by 2050, and the COP26 global conference is expected to establish Net Zero as the de facto goal for most communities and organizations at every level, everywhere in the world. The fact that Biogen is almost alone in committing to fully eliminate its use of fossil fuels indicates a reticence to go that far among even the top companies in the world. Although the conversation does need to evolve to eventually be about becoming “Fossil Fuel Free,” insisting on that framing right now for most communities and enterprises might stall forward progress in the global sustainability movement.
Consequently, it is great to see the recently changed emphasis of the UN Race to Zero initiative. Over the last three months, the thousands of organizations now participating in the Race to Zero (i.e. zero emissions by 2050) are now publicly on record as having committed to the interim goal of 50% emission reductions by 2030. This commitment is consistent with the IPCC Special Report on 1.5C that required a global 45% emission reduction by 2030 to put the world on a path to Net Zero Emissions by 2050. Moreover, it has been outstanding to witness the growth (that SR Inc has been pleased to repeatedly assist) of the Science-Based Targets initiative (SBTi), an organization which now includes 844 corporations with emission reduction targets to be achieved without offsetting. The SBTi stands out for its rigor and has newly announced that official targets must be aligned with the 1.5 degrees Celsius pathway rather than the “well below 2 degrees” pathway.
Member-Clients Offer What Is Needed: Leadership
As mentioned above, two SR Inc Member-Clients stand out in particular for demonstrating a commitment that goes well beyond Net Zero Emissions across Scopes 1 and 2. Both Biogen and Intuit are helping to change the corporate responsibility paradigm. In their actions, these two globally scaling companies in very different – but both science-inspired – industries are inspiring others to go farther, push harder, and act with the urgency that this crisis demands.
Biogen’s Fossil Fuel Free commitment reframes corporate climate responsibility. Biogen is a global life science leader, exemplifying the leadership in ESG high performance that SR Inc exists to assist, define, promote and help implement at increasing scale across an increasing number of businesses. Biogen’s focus is science, and their leaders recognize the powerful, consequential interconnectedness of climate and public health. Biogen’s bold Healthy Climate, Healthy Lives initiative, developed and implemented by Director of Global EHS and Sustainability Jennifer Wright and Head of Corporate Sustainability Johanna Jobin, will dedicate $250 million towards closed-loop recycling, fleet electrification, the incorporation of ESG into employees’ retirement portfolios, and most importantly, the elimination of fossil fuel emissions by 2040.
This represents a seismic shift in corporate climate commitments. Instead of reducing and/or offsetting emissions across their value chain, the source of ~ 70% of a company’s carbon footprint, Biogen’s climate change mitigation is focused on eliminating the burning of fossil fuels as soon as possible and no later than 2040 – globally. Extrapolating this throughout the value chain – with partners of all sizes – establishes a simple, if demanding, roadmap for reducing Scope 3 complexity. By providing support for suppliers in procuring 100% renewable electricity and setting Science-Based Targets, Biogen uses corporate power to create impact far beyond their campus.
Additionally, by focusing on climate as a critical determinant of health—and improving health outcomes for vulnerable populations—Biogen is utilizing its sector sphere of influence to drive policy. Biogen has partnered with the Harvard T.H. Chan School and MIT to measure health impacts from climate change and influence policy to protect those most vulnerable to climate-related health effects. When considering the potential cross-sector impact of the company’s Fossil Fuel Free pronouncement and Science-Based Target requirement for suppliers, it is clear Biogen has set a new standard for corporate climate responsibility. This standard moves beyond the mitigation and offset of fossil fuels for a Net Zero pledge to focus on moving beyond fossil fuels entirely – a new paradigm of Net Positive.
Intuit’s climate-related efforts have been expansive—unmatched in innovation and vision for a company of its size. A beacon for other SR Inc Member-Clients, Intuit has been steadily moving the ball down the field. The company took the lead in SR Inc’s Net Zero Consortium for Buyers (NZCB), which gives small to medium enterprises power purchase agreement access in greater scale and negotiating power. Intuit’s Purely Green Program elevates corporate social responsibility to the next level, supplying renewable energy to Texas-based energy customers at reduced rates. The decarbonization of Texans’ residential electricity supply is representative of Intuit’s corporate social responsibility ethos: “powering prosperity.” The company’s climate-positive commitment touches all lines of business—TurboTax, QuickBooks, ProConnect and Mint—and ensures that Intuit’s influence is far-reaching.
Most impressively, Intuit has established a climate-positive target: reducing carbon emissions by 50 times greater than its 2018 carbon footprint by 2030, equal to reducing carbon emissions by 2 million metric tons globally. This is a game-changing, bar-raising corporate action, the effects of which can multiply exponentially as other companies follow Intuit’s lead—corporate peer pressure for the collective good. Intuit’s goal will be achieved by engaging employees, customers, and communities to reduce emissions at home and at work. However, rather than simply providing encouragement, Intuit offers actionable guidance and financial support to help them decarbonize. Employees can use wellness benefits for home electrification, customers can use Intuit’s tools to find emissions reduction opportunities, and communities in Intuit Prosperity Hubs are being engaged to improve environmental and social well-being. Intuit also seeks to use its position to empower small businesses, which are often left out of climate decisions, to join the fight against climate change. As a new partner with the UK’s Together for our Planet initiative, Intuit will provide resources for UK small to medium enterprises (SMEs) to reduce emissions by half by 2030 in line with climate science as part of the UN’s Race to Zero campaign. Considering that small businesses make up about 90% of businesses worldwide, Intuit is doing critical work to decarbonize a key sector. SR Inc looks forward to Intuit’s Global Sustainability Leader, Sean Kinghorn, continuing to drive Intuit’s climate vision over time.
Authentic corporate climate responsibility requires considering all spheres of influence and creating plans that marry messaging and action. Ideally, Scope 3 accounting and reporting will help socialize corporate leadership to what InfluenceMap has identified as Scope 4: Carbon Policy Impact. A deliberate approach to Scope 4 impacts is required by the lack of transparency, corporate silos, and political inertia that plagues our collective response to human-caused climate breakdown. This impact of this influence can be far more consequential than reducing emissions at a single company. Meticulous Scope 1, 2, and 3 data collection and well-produced sustainability reports ring hollow if corporations are simultaneously engaged in supporting public policy action that works against climate science. One example of this dissonance is General Electric, a leading wind turbine manufacturer which has historically supported fossil fuels in policy efforts. Their InfluenceMap grade of D+ would be improved by active engagement with positive climate policy, making them a greater force for sustainability beyond their products. Another example is the examination of Exxon’s think tank relationships and the ways in which access influences research, which, in turn, shapes policy. Note that Exxon is currently considering a net-zero pledge.
Becoming deliberate about Scope 4 impacts can help a company become more transparent and enable a demand for trade association alignment. Additionally, it can enable a company to leverage the fact it has been “walking the walk” in credibly decarbonizing its own operations to be better heard when it “talks the talk” by demanding science-based climate policy. Moreover, the reality is that complex global value chains will never be able to decarbonize with the urgency required in the absence of science-based public policy on climate.
InfluenceMap has identified the ultimate best practice: when companies’ sustainability initiatives and emissions reduction goals align with their advocacy in the public, private, and nonprofit sectors. This means withdrawing support from politicians, foundations, and lobbyists with anti-climate ties, exiting climate-skeptic trade organizations, and using science-based advocacy. This means insisting upon climate responsibility from all stakeholders, in all sectors. This means developing and deploying influence strategies, as exemplified by Biogen and Intuit. For all SR Inc. Member-Clients, the meticulous work of Scope 3 appropriately lays the foundation for becoming deliberate and effective in their decisively important “Scope 4” impact.
Not long ago, commitments to Net Zero Emissions by 2050 were groundbreaking. They replaced Carbon Neutral as the most ambitious way to contribute to the fight against human-caused climate breakdown. However, as reports from scientists have become more dire and companies realize the implications of their actions, Net Zero by 2050 may become the minimum action required to maintain a social license to operate. As the adoption of corporate sustainability as a superior approach to business advances, practitioners should look to pioneering companies – those who were the first to pledge they would achieve Net Zero Emissions by 2050 – to innovate the next wave of action. In the end, these companies don’t look to solve this problem by doing the minimum. These companies, like Biogen and Intuit, look to see how they can help solve the problem, period. Innovative commitments like Healthy Climate, Healthy Lives and the Climate-Positive Commitment show how leading enterprise can build and use needed influence. Whether that is advancing innovative technology to help eliminate fossil fuels, incorporating customers into corporate climate programs, or advocating for policies which reduce health impacts on communities. SR Inc is proud to work with companies like Biogen and Intuit and points to them as an example that all companies should consider following if they recognize the need for leadership and the multiple bottom-line opportunity that creates for them.
Jim Boyle is the CEO & Founder of Sustainability Roundtable, Inc. For more than a dozen years, Jim has led full-time teams of diverse experts to assist nearly 100 Fortune 500 and growth companies in their move to more sustainable high-performance. Specifically, SR Inc has helped world-leading corporations, real estate owners, and federal agencies to set goals, drive progress, and report results in their move to greater Corporate Sustainability. Mr. Boyle led in the creation of SR Inc’s Renewable Energy Procurement Services (REPS), which advises and represents Fortune 500 and fast growth companies across the U.S. and internationally in the development of renewable energy strategies and the procurement of both on and off-site advanced energy solutions. Before founding SR Inc, Mr. Boyle co-led Trammell Crow Company Corporate Advisory Services in San Francisco and returned to his native Boston and Trammell Crow Company’s market leading team in Greater Boston where he received the Commercial Brokers Association’s Platinum Award for the highest level of commercial real estate transactions. Earlier, he advised companies on real estate and environmental matters as an attorney at a large law firm based in Boston. Jim is a graduate of Middlebury College, where he co-captained the football team, and Boston College Law School. Early in his career, he served as a federal law clerk, an aide to John F. Kerry in the U. S. Senate, and on Vice President Al Gore’s campaign for President. Jim lives in Concord, MA with his wife and kids a half mile across the street from Emerson’s house and museum on the route to Walden Pond.
As an Analyst at SR Inc, Julia Rothfield supports Member-Clients with outsourced program assistance and creates original research to help clients drive industry best practice in areas ranging from emissions reduction and ESG reporting to innovative renewable energy procurements.
Before working at SR Inc, Julia worked as a Sustainability Consultant for footwear distributor Weyco Group, creating a GHG inventory aligned with the globally recognized GHG Protocol and working to reduce impact in their supply chain. She has additional experience providing sustainability support services from working with consulting firm Scott Echols Group, LLC and interning at TerraCycle. Julia graduated with a B.S. in Environmental Science from Brown University. There, she worked with the Brown Office of Sustainability for three years, helping Brown reduce waste to landfill, measure Scope 3 emissions, and institute a campus-wide Sustainability Plan.
