A recent report from Harvard Business School found that more investors than ever before are incorporating sustainability data into their capital allocation decisions. And according to a 2014 PwC survey, 74% of CEOs believe measuring and reporting their total financial and non-financial environmental and social governance (ESG) impact contributes to long term success.
It's clear that sustainability reporting is becoming an essential element of good business, yet it's an area most companies are still mastering. That's why I was especially grateful for the opportunity to sit down with Peggy Ward, the Sustainability Strategy Leader for Kimberly-Clark’s North American Consumer Tissue Division.
Kimberly-Clark is well known for its significant investment in developing sustainable products and for its outstanding commitment to corporate sustainability. During her time on the Enterprise Global Sustainability Team, prior to her current role, Peggy led the report-writing process for the company’s first eleven sustainability reports.
Kimberly-Clark recently released its 12th report, providing a comprehensive overview of sustainability efforts and focusing on case studies that highlight social and environmental progress throughout the company’s global operations.
Sarah McAuley: Can you tell me a little bit about how you got to the role you're in now, as Sustainability Strategy Leader for Kimberly-Clark’s North America Consumer Tissue Division?
Peggy Ward: It’s definitely been an interesting journey. I’ve been with Kimberly-Clark for 18 years now, and along the way, I’ve always picked up roles that were a little bit less traditional.
Back when I was just getting started in my career, there weren’t too many defined roles dealing with the environment, corporate social responsibility, or sustainability, but the company definitely recognized that this was an area of opportunity.
I’ve always had great mentors that understood this, and about nine years ago, one of them suggested that with my scientific background, coupled with the fact that I was generally comfortable in roles that weren’t rigidly defined, that I would be a good fit to figure out what we needed to do beyond our traditional Environmental Health and Safety initiatives.
SM: And one of your first big projects in that role was authoring Kimberly-Clark’s first sustainability report?
PW: Yes. We had written environmental reports before, but we set out to write a comprehensive sustainability report, focusing on three pillars of sustainability: People, Planet, and Products. I learned more about our company from writing that first report than anything else I could have done.
We recently published our 12th report. I didn’t lead the writing of it, but if you go back and look at that first one, you would just chuckle. We’ve definitely come a long way.
(You can find them all here. For what it’s worth, I didn’t chuckle. I was actually very impressed.)
SM: Tell me about that first report and the process of writing it? What did you expect to come out of it?
PW: We went into it with an “it doesn’t have to look pretty” attitude, because we knew it wasn’t going to. We started by asking ourselves, “What would be important to the kinds of folks who would be interested in reading this report?” We didn’t go through a formal stakeholder analysis or materiality assessment—it was more of a way for us to benchmark ourselves.
We were pleasantly surprised by some of the things we were already doing, and we identified a few things that we thought we ought to be doing. It was a huge learning curve those first couple of years.
SM: What was the biggest challenge?
PW: Figuring out how to compile all the information. And as people started to read the reports, we started to learn what external expectations were. Every year we would make a goal of improving the report from the year prior. With that approach, we went from using Global Reporting Initiative (GRI) as guidelines to saying that we were reporting at a B+, then an A+ level in the old GR3.1 and now to the new GR4 guidelines.
SM: What advice do you have for a company that’s just starting down the path of sustainability reporting, or for that newly minted owner of this project?
PW: Just do it the first time and know you can only go up from there. Honestly, just report the information that you have, and from there figure out what policies and programs you can pull together.
Once you’ve got a couple reports under your belt, figure out who your key stakeholders are, what's most relevant to them, and push for as much transparency as you can. The more you’re able to put out there, the more trust you build with the folks that are reading it.
SM: I read a report by PwC that cited Kellie McElhaney, Director at the Center for Responsible Business at Haas, saying “For today’s millennials entering the workforce, engagement in sustainability is a must-have, not a nice to have.” Do you agree?
PW: Definitely. We think about our employees as one of the key stakeholder groups when authoring our reports. Our employees are engaged and motivated by our sustainability performance, perhaps even more than other stakeholders. They want to know all the ins and outs about what’s going on at the company, and again, that transparency helps build trust.
What I've learned in the time I've been in a sustainability role is that any time that I speak to the progress in our programs, folks come up to me and say, "Wow, I'm so glad to hear the things that we're doing. It really is encouraging to me, and what else can I do?”
SM: I noticed that Andrew Winston, author of The Big Pivot, is also a member of Kimberly-Clark’s Sustainability Advisory Board. He highlights transparency as one of the global megatrends that’s driving an increased focus on reporting and compliance. Has a focus on transparency always been a part of Kimberly-Clark’s culture?
PW: Yes, though I think as it relates to sustainability reporting, it’s been a gradual process. Kimberly-Clark has been around for 143 years. As we keep growing, we know expectations for us will keep growing too. We are making progress, but it’s more of the “slow and steady” pace.
We’ve really made great progress in social compliance, in our procurement of raw materials with our fiber sourcing, our own internal manufacturing processes and how efficient we've become. Our employees are very proud of that.
SM: Do you find that your team is in a position where you have to manage by influence versus direct lines of accountability?
PW: I think managing by influence is a huge part of how a lot of sustainability initiatives can get done. Just as in any function, you really have to network, you have to learn how to negotiate, setting and selling your vision is critical. I've learned over the many years in sustainability to have thick skin because many times you can run up against what may seem like a brick wall. It's trying to get others to really understand both the business and sustainability relevance for the initiatives.
SM: You report in compliance with GRI standards, but GRI isn’t the only way to go. Do you think the proliferation of different standards and compliance requirements is a big challenge for businesses?
PW: I can only speak for myself, and I agree it would be nice to have some standards in place that help provide guidance as to what kinds of issues or information should be reported. But I do think you have to blend it with your own company culture, ask who your stakeholders are and what else you think you should be reporting on or need to report on.
We care about a diverse range of stakeholders, from customers and consumers, to suppliers, socially responsible investors and employees. We think about what their views are and strive to balance financial or compliance-based information with material that’s also compelling. And for us, that involves telling engaging stories about our sustainability efforts in addition to providing charts and graphs. It's a balancing act.
