Dialogue: Activating sustainability

Last Tuesday, Boston College's Leadership for Change gathered students, faculty, members of corporations, and prominent European and American corporate activists for dialogue on corporate implementation of sustainable practices and their power to stop global warming. Rebecca Rowley, director of Leadership for Change, a Carroll School of Management program for graduate students focused on learning responsible and sustainable professional leadership, moderated the two-hour event designed to facilitate discussion among the concerned audience and panelists through small-group discussion periods and question-and-answer time. Panelists included Giampaolo Russo, director of public and regulatory affairs at the second-largest Italian energy company, Edison Spa; Richard W. Pearl, vice president and corporate social responsibility officer of State Street, a New England-based institutional investment bank; and Charles Derber, professor in the sociology department. The interaction tapped into the panelists' expertise in sustainable leadership.

Panelists were confronted with a number of questions about corporate greening. They discussed how companies can decrease their environmental impact and the differences that exist between American and European companies in implementing them. The panelists also discussed how corporations are economically affected by the decision to go green.

Russo spoke first, speaking from a European perspective. Russo described sustainable corporate practices in his country as real and a result of the scarcity of natural resources in Europe. To explain why Italians consume 40 percent less energy per capita than Americans, he said, "Europe has been facing the threat of loss of oil since the shock in the 1970s. The fact is that the United States didn't face that until now." Russo said that the government must play a part in convincing the people to conserve. He cited government regulations, taxes, and sanctions as guiding Italians to sustainability. As an energy company director, Russo recognized that it is his trade to sell energy, not conserve it, but said, "We understand we can't just face these short-term revenue problems. We have to think of the long-term mission of the company." This attitude has led Edison Spa to create a campaign that teaches 2,000 Italian schools how to measure consumption and to stage a sustainability competition among the schools. Edison Spa has also urged its peers to implement a sustainability code of conduct.

Pearl recommended a more indirect approach to corporate leadership in sustainability. The company's environmental impact starts with its portfolio. The company practices socially responsible asset management by investing in green companies, including those creating new sustainable technologies. In addition, Ronald E. Logue, State Street CEO, formed three executive vice president positions all touching on the combination of environment, society, and governance. The executive-led departments put into action sustainable initiatives such as office water conservation and energy-efficient travel plans. State Street recently invested approximately $1.3 billion for energy and recycling initiatives. Pearl said, "By making that investment there is considerable ROI [return on investment]." He compared company conservation to cheaper energy bills when you turn down the heat at home. Pearl said the most important corporate sustainability practice is transparency, which includes reporting on emissions and consumption, and tracing where money is invested. He said, "Transparency is critical to finding out who's part of the solution and who's part of the problem." State Street's environmental department is currently audited by a third-party firm. When asked about impact measurement of these practices, he said that ROI will increase in years to come. As for immediate measurement, he said, "It's blown me away the positive feedback from people [on online forums] on these investments."

Derber talked about the sociological undercurrents of activating sustainability in American corporations. Derber sees the nation as in two unprecedented emergencies, the first of which is the Wall Street financial crisis, which he called a short-term emergency; and the other is global warming, which he said is a long-term emergency. Derber said, "Our survival will depend on people understanding that global warming is as a short-term emergency as the financial crisis." In response to a question on the tug of war between global warming and the economy, he said, "The tug of war is very serious. There's a lot of talk in Congress and corporations that many environmental initiatives are too expensive." He said people need to reevaluate the necessity of global warming. "Things people would see as coercive are actual survival tactics," he said. Derber supports presidential candidate Barack Obama's belief that the best way to get out of this economic climate is a bailout that includes investment in renewable energy sources. This, he said, would produce many new jobs in America.

In response to Derber's plan for investing in renewable resources, Russo said, "Renewable resources are absolutely unpredictable. For example, in Germany, they relied on wind energy ... [but] who's going to pay for support when the wind is down?" The best governmental practice in Russo's mind is a tax on carbon dioxide to reduce our carbon footprint. For corporations, he said the focus should be on carbon dioxide reduction and increased efficiency. In light of the financial crisis, though, he said European companies have less incentive to pay thousands to make Europe more sustainable if other countries, such as the United States and China, are not. He said there needs to be a level playing field.

The session was closed by Giovanni Moro, president of FONDACA, a transatlantic active citizenship foundation. This session was the second held at BC sponsored by Leadership for Change and FONDACA, following last spring's "Activating Democracy" panel discussion.