David Tulauskas, Director of Sustainability, General Motors, will kick off ELEMCON 2018 with Sustainability’s Role in Strengthening Your Business. We asked him to preview his session.
Q: What is the relationship that exists for or should exist between sustainability professionals and C-level executives?
A. Priorities are set at the C level and that establishes the long-term strategies for the company. Critical ones are customers; but then also shareholders. And then you have communities, employees, suppliers, distributors, and so forth. From there we get the vision and the strategy—basically a promise to stakeholders.
People working in operations—energy, environmental, and health and safety professionals—really sit at a critical juncture in a company to help meet that long-term promise. As you think about the ways to drive value and align with those strategies, you can do it by driving incremental revenue or top-line growth; you can do it by improving bottom-line cost-savings and cost avoidance; and you can do it by reducing company risk. At an operational level, that’s a unique nexus between the company and the community in which it operates. To customers, it’s a clear promise to operate responsibly. And so there is great value at an operational level to generating bottom-line savings that are aligned with long-term business strategy and to keep the promises to stakeholders. Energy efficiency is an obvious savings. Every time a company operates more efficiently, it’s saving money, obviously; but it’s also reducing long-term risks related to energy cost volatility. And all those things can be translated and communicated to shareholder value, to customer value, and to other stakeholders, and also to continued support or social license to operate in the communities in which the company operates.
Q: What’s the most important thing a practitioner can do to make sure sustainability is integrated into the company?
A. Assuming that they know what the business plan is, I think there are five key aspects to aligning and achieving value.
One, they have to set goals. They must have a governance process in place, whether that’s at a specific plant, or across an entire manufacturing organization. There’s got to be a governance system where decisions are brought to, debated, decided on. Then, management systems need to be in place to ensure that the goals and the governance get driven across the organization. And then you need to track performance, and the key enabler to communicating up and communicating out is disclosure. So it’s really important to track and measure performance and then disclose or be transparent about it. You know the adage: you can’t manage what you don’t measure. Setting goals and having a governance with the right decision-makers in the process; having a system in place to embed it across operations—the facility or the function—and then to track performance towards the goal and talk about it, disclose it, be transparent about it, are all fundamental.
Q: What can energy, environmental and sustainability professionals do to make sure other employees in the company are engaged in their work?
A. First and foremost, on a day-to-day basis, any company needs to ensure it’s operating in a responsible manner, and that includes complying with laws and other requirements. So energy, environmental and sustainability professionals, again, have a key responsibility within the company to manage risk. Compliance is just something we’ve got to do every single day—and we’ve got to do it right. You can’t take your eyes off the ball. If you do that well and consistently over and over, and when you set these bigger, broader, bolder goals and then meet them, you build goodwill, enable growth, and enhance the corporate reputation. But you screw up just once or just for a second on compliance, all that good work can take a big, backwards step.
So, assuming that solid compliance and effective day-to-day management are in place, the establishment of the bigger, bolder goals of the initiative can be used to inspire and compel and empower employees in other parts of the organization to think out of the box. The great thing about environmental sustainability is that the business case for it is so well understood. It’s so clear that there are benefits to a company’s bottom line that it can be used effectively to inspire, empower and engage employees in other parts of the organization to think in a similar way.
Q: What is the one idea you want to be sure your audience at ELEMCON gets?
I’ve got two messages for folks.
One is that everything they do, every single day, matters, whether it’s from the perspective of compliance, energy savings, or waste reduction. They’re having an impact at a local level, at a state level, at a national level, and at a global level. Everything they do matters, and so it’s really important to do it well. The other thing is that all this can be leveraged to position the company in a way that drives additional value; that investors care about this; and that it’s become more and more obvious that investors want to know how companies are doing at the plant-floor level in the ESG space—environment, social and governance. Investors care more and more. Customers, obviously care, too. In this globalized world, if growing your business is important, ensuring that communities respect and trust you is really critical. It’s that social license to operate. Energy managers, environmental engineers, and sustainability professionals sit at the nexus between operations and the outside communities.
Then, I have a message from a more practical perspective. General Motors has had a lot of success renewable energy—it’s an integrated strategy across our business. If folks in the audience are not looking at renewable energy, they are missing a huge opportunity, not just from a bottom-line savings perspective but also from the perspective of top-line opportunity and reduced risk.
Q: What do you believe is the greatest value people will be able to take away from ELEMCON?
A. I think the conference provides a great opportunity in a couple of different areas.
One is leadership. Environmental sustainability is a key area for businesses to show leadership, and it’s more critical than ever, given the world we live in today. It’s a topic that’s being discussed again with investors, with governments, with communities, with old customers, and new customers coming into the market. And environmental leadership is really important to attracting the world’s best talent. Everyone’s fighting for great talent, and I’ll tell you that we’ve been seeing our environmental performance to be one of the key factors prospective employees take into consideration when deciding whether or not to work for our company. I suspect it’s the same for all the folks in the audience. So, they’re going to be learning some really great ways to be a leader and to engage employees as well as their stakeholders in this really important space.
The other area is this: setting targets, metrics, and prioritizing. Everybody is so busy: what do we work on? There are so many differing opinions about what should be worked on. The idea of materiality—going through and comparing what you’re doing, the impact it has, what’s possible and what your stakeholders expect—I think is going to be really useful. It may be a new term, maybe a new process, but it’s going to be really beneficial to folks coming to the conference.