Here’s What CEOs Should Do Right Now to Up Their Company’s Environmental Game

I’ve been emphasizing in recent blogs that business leaders can and should do more right now to improve their companies’ environmental initiatives. The timing is right. We need more engagement, help, and leadership from business. And, importantly, investing in sustainability like this will also improve the overall value of companies who do this well.

I’ve been challenged by some CEOs to be more specific about how to do this. The most important thing to do is to have more dialogue with more key constituents on this overall opportunity. Here’s my checklist:

1) Reach out to your employees

The folks on your team want to see their company do more. They want to see their CEO step up and lead. They will have many ideas, suggestions, and maybe criticisms, some of which will likely be very good and will surprise you. And they’ll be thrilled that you value their input enough to ask. There’s no downside here.

Expect input on supply chain management, carbon footprint, new business ideas, ways to gather employee input on a cultural basis. Expect, also, a more engaged workforce.

2) Talk to NGOs

The established environmental non-profits are staffed by very smart people who—like your employees—will have very good input for you. If you are sincere in your inquiry, the NGOs will respond with well-developed suggestions, questions, and challenges, all of which will help you strengthen your sustainability plan. They might even choose to formally partner with you. You’ll learn a lot. (And, to be sure, the NGOs will learn from you, too. It’s a two-way street.) Ask the NGOs to tell you, in very specific terms, how they think you can make a significant difference by addressing environmental challenges, and why it will be good for your bottom-line, too. 

This worked for me personally. Back in 2005, while at Goldman Sachs, I was the partner put in charge of the firm’s new environmental program. My team and I reached out to NGOs, and we were amazed by how much we learned from them. We were overconfident investment bankers who thought we knew everything. You might know the type. But we quickly came to understand that NGOs knew a lot of important stuff we didn’t know. My work at Goldman collaborating with environmental NGOs was an extremely positive experience, and helped the firm hugely. I’ve been a big fan of NGOs ever since.

3) Ask your customers and suppliers for ideas

Most of them are thinking about the same environmental challenges that you are. They’ll see things you miss. And, of course, they will appreciate being asked.

Walmart does this brilliantly with its suppliers, regularly convening Fortune 100 CEOs in Bentonville for deep dives on how to make Walmart’s global supply chain much more sustainable. I’ve been in the room too (Walmart also wisely invites NGOs to the meetings). The discussion and the follow-up action is smart, hugely impactful, and for the most part, win-win stuff. Not only are environmental challenges like climate, deforestation, and nutrient run-off addressed, but Walmart’s state-of-the-art supply chain is further improved as well. You can do this too.

4) Improve your dialogue with policymakers

A lot of progress has occurred here in recent years. For instance, most leading public companies in the US now clearly state their support for tough regulatory policy (say, a carbon tax) to address climate change.

However, when I’ve asked sitting US Senators about this, they say, “Mark, when those same companies show up on the Hill for private meetings with me, the CEO usually doesn’t include climate policy (or other environmental issues) on his or her ask list.” This needs to change. Getting government policy right is by far the most important next step to getting on a better environmental pathway. CEOs need to push harder for the policies they know—and publicly state—we need.

If you’re unsure how best to do this, NGOs and/or coalitions of companies and NGOs are a good place to start.

5) Talk to your shareholders (assertively)

I’m often puzzled by what I hear from CEOs about this checklist. They often say, “Mark, on our earnings calls, investors and analysts never ask about our environment initiatives and commitments. They don’t seem too interested.” I say, “Don’t wait to be asked. Tell them why you believe this is important for your company, and why it makes business sense.”

CEOs and their teams are usually pretty bold and assertive when it comes to championing the core business initiatives they believe should be priorities, even in the face of shareholder pushback. They are not shy. Please do the same when discussing your plans for environmental engagement.

It’s no secret that institutional investors are now spending a lot of time themselves considering environmental risks and opportunities, just as I’m asking you to do. Change is underway. Investors will (mostly) welcome dialogue here. They might also challenge your ideas—which is good. They’ll likely see things you don’t. Your plans will improve as a result.

6) Stay humble, don’t brag, and invite criticism and questions

You don’t have to pretend to know everything here. You can’t. We’re entering uncharted waters as we tackle the enormous environmental challenges that now threaten humankind. An open-minded and modest approach is not only appropriate, it also means you’ll be able to avoid over-promising and/or shutting out good input from outsiders.

7) Lead visibly and be hands-on

No matter how busy you are, the best CEOs make sure their teams and external constituents see them stick their necks out and make personal commitments to lead here. You can, of course, rely on your Chief Sustainability Officer and other key executives for plans and input, but you need to be seen as the one leading the charge.

When I was at TNC, we would only collaborate with companies when their CEOs made this exact personal commitment. Most of them told me later that they appreciated that we insisted on this. Visible CEO leadership unlocks progress, and it galvanizes the entire organization.

8) Ask me for help

If doing the above doesn’t work for you, let me know. I’ll be happy to help or suggest others who can do so. In the 11 years I spent leading TNC, and the 3 years before that spent running Goldman’s environmental effort, I never once came across a company that didn’t have very attractive opportunities to both improve environmental and business outcomes. I’m quite motivated here because I don’t see how we reach our environmental goals without highly-committed and skillful leadership from the private sector.

And remember:

9) The stakes are very high, and the time to act is now 

In my next blog, I’ll try to show why business leaders face significant downside risk if they don’t act now and start getting more done as quickly as possible.

So, let’s get to work now! 

Read the first five blogs in this series: Nature Needs Investment Bankers (March 3, 2020); Raising the Capital to Protect and Restore a Forest (March 10, 2020); Environmentalists, Prepare Now for Opportunities in Fiscal Stimulus Programs (April 10, 2020); How to Support the Environment When You're Stuck Inside During the Pandemic (April 16, 2020); Now Is the Right Moment for Building Inclusive, Diverse, and Non-Partisan Support for Nature (April 23, 2020).

@MarkTercek is an advisor to companies, start-ups, institutional investors and NGOs on environmental strategies, organizational management, and impact investing. He is the former CEO of The Nature Conservancy (July 2008 - June 2019) and former Partner and Managing Director for Goldman Sachs (1984 - 2008). He believes that business can be a force for good and strives to help organizations realize benefits for both the environment and their bottom line.