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Management in Practice

How Do Leaders Advance Sustainability in Complex Organizations?

Sustainability leaders often have to interact with a wide range of stakeholders with varied interests and incentives. They need to figure out the best way to engage, communicate, prioritize, and implement—in other words, to persuade. According to a panel of sustainability executives, that can mean sidestepping the language and baggage of sustainability entirely.

  • Marian R. Chertow
    Associate Professor of Industrial Environmental Management, Director of the Program on Solid Waste Policy & Director of the Industrial Environmental Management Program
  • Shawn Heath
    Vice President and Chief Sustainability Officer, Duke Energy
  • Rich Kidd
    Deputy Assistant Secretary of the Army, Energy & Sustainability
  • Manuel Gomez Pena
    Vice President of Sustainability, Walmart

The executive tasked with advancing sustainability in a large company or organization has a mandate that encompasses the whole organization and often reaches external stakeholders, such as suppliers. That means that continually making the case for advancing a sustainability agenda to different audiences is a critical part of the job.

Sustainability leaders from three large organizations discussed the challenges and opportunities they face in a June 19 online discussion moderated by Marian Chertow ’81, associate professor of industrial environmental management at the Yale School of Forestry and Environmental Studies. The panelists were Shawn Heath ’99, vice president and chief sustainability officer at Duke Energy; Richard Kidd ’93, deputy assistant secretary of the Army for energy and sustainability; and Manuel Gomez Pena ’95, vice president of sustainability at Walmart.

Prompted by a question from Chertow about how to embed sustainability within an organization, the panelists agreed that strategy and priorities need to grow out of the specifics of the organization. For a top-down organization like the Army, a critical step was to write sustainability into the strategic plan, since purchasing, design, daily practice, and culture change all flow from that.

On the other hand, Walmart’s biggest chances for sustainability improvements flow up from improving the supply chain. That means guiding and incentivizing suppliers, using scientifically based lifecycle analysis, and making sure that the results of pilot programs are shared globally.

While the challenges they face vary, all three panelists emphasized the importance of effectively communicating with different audiences. Duke Energy’s Heath said, “I’m always thinking about, how does this particular functional area or this particular stakeholder connect to this very broad topic of sustainability?” For example, he noted, some stakeholders will bristle at the word “sustainability,” but they are likely to be open to improving reliability and efficiency, managing costs, and upgrading safety.

Walmart’s Gomez Pena explained it this way: “The chief sustainability officer is the chief translation officer.” In conversations with Walmart’s CFO, he said, he talks about capital expenditure, optics impact, depreciation of assets, return on investment, and payback. When talking with someone managing the supply chain, he’s emphasizing the benefit of transparency from suppliers and the potential to churn the productivity loop. With consumers, the focus is improving and making preferred products more effective without adding a price premium. With all audiences, sustainability must be presented in the context of the organization’s mission to “save people money so they can live better.”

Kidd echoed this idea. “You have to frame issues of sustainability in a way that is valued by the organization and fits in with the organization’s culture,” he said. The military plans years, even decades, in advance, so he presents sustainability issues this way: “The Army of today has to make decisions so that the Army of tomorrow has choice.” It is hard to argue with preserving choice over time through more efficient use of resources, especially if that makes the Army more capable of delivering what the nation asks of it.

This webinar was a collaboration with the Yale Center for Business and the Environment, the Yale SOM MBA for Executives program, and the Yale SOM Office of Alumni Relations.