by Bob Massie
7) ENVIRONMENTAL RESTORATION
We will promptly and responsibly correct conditions we have caused that endanger health, safety, or the environment. To the extent feasible, we will redress injuries we have caused to persons or damage we have caused to the environment and will restore the environment.
8) INFORMING THE PUBLIC
We will inform in a timely manner everyone who may be affected by conditions caused by our company that might endanger health, safety, or the environment. We will regularly seek advice and counsel through dialogue with persons in communities near our facilities. We will not take any action against employees for reporting dangerous incidents or conditions to management or to appropriate authorities.
9) MANAGEMENT COMMITMENT
We will implement these Principles and sustain a process that ensures that the Board of Directors and Chief Executive Officer are fully informed about pertinent environmental issues and are fully responsible for environmental policy. In selecting our Board of Directors, we will consider demonstrated environmental commitment as a factor.
10) AUDITS AND REPORTS
We will conduct an annual self-evaluation of our progress in implementing these Principles. We will support the timely creation of generally accepted environmental audit procedures. We will annually complete the Ceres Report, which will be made available to the public.
Before I had arrived, Joan Bavaria and some of the large shareholders had sat down with a few companies to talk about whether they might endorse the Ceres Principles. Some companies began to move in our direction. Robert Campbell, the CEO of Sunoco, an oil-refining firm, came up to Joan after one meeting and told her that he might be the head of an oil-refining and marketing company, but he shared many of her goals. And he didn’t think that there was anything wrong with a company setting targets and trying to meet them. “That’s how we do everything else in the firm,” he told Bavaria. “We pick a target, we decide how we are going to measure our performance against that target, and then we pursue it. This is pretty much the same.”
Joan was delighted to hear this. She had quickly learned that “we manage what we measure” was one of the most powerful mantras in modern business. Two things became clear from this simple phrase. If we could persuade a firm to measure and disclose its performance, we tapped into one of the most powerful internal mechanisms for lasting change within the corporation. However, the reverse was also true: if something was not measured, it often was impossible to manage. This fit with everything I had learned since I was a boy about the relationship between sight and sound and words. If a person—or in this case an entire collection of people—had a specific word or measurement that he or she could systematically apply across a vast amount of behavior, then one could both see and change that practice. If not, the actions and consequences were invisible, even to insiders, and especially to anyone outside the organization. So creating change and agreement required developing the ability to imagine how one’s apparent opponents saw (or didn’t see) parts of the world. Sometimes this meant learning their vocabulary and using it in a way they could understand. Sometimes it meant teaching them a vocabulary that was new to them.
As the board of Ceres realized the power of the idea of measurement, we built our strategy around three steps that we believed could actually move corporate America on to a more environmentally sustainable path. Our process was straightforward. We asked senior executives at a corporation to commit to continuous environmental improvement in partnership with Ceres. Most corporations, in fact, believed in this. What executives fear is abrupt change: a sudden shift in the market, a major disruption in supply or technology, or the random imposition of a new regulation that would change their business model. In the phrase “continuous improvement,” we found words that they could embrace.
We then urged them, as a condition of their participation, to set up measurements, following the ten Ceres Principles, to see whether they were making progress. After many years of negotiating with executives I learned that their initial reluctance to take on new challenges is often due not to a lack of energy or courage; instead, they want to take on only those challenges at which they have a reasonable chance of succeeding.
Corporate life is built around selecting a strategy, picking the right indicators, and then aggressively pursuing their targets. One of the problems with integrating the environment was that these ideas had no place in the vast scheme of company strategies, targets, tactics, internal investments, and compensation. If we could graft this new information and these new approaches onto the hugely powerful and effective corporate system for getting things done on an enormous scale, we knew we would have tapped an immense force.
Finally, it was important to ask companies not just to set targets and to measure their performance but to release that information to the public. We assumed that being required to show whether they had improved or slipped would prompt corporate leaders to pursue better results over the years. By releasing the information, the corporation was driving a deeper stake into the ground, not only with outside groups like the activists and investors who made up Ceres but also with the press, with their competitors, and, perhaps most important of all, with their boards of directors and their employees. We also believed that they would gain from the exercise by saving money through eliminating waste, by pushing themselves to innovate into new technologies, by winning new customers and developing new product lines. Environmental improvements also inspired employees, who wanted to believe that they were going to work every day for a reason larger than their own personal paychecks. The positive experience would then strengthen their desire to intensify their efforts and their commitments.
Every negotiation with every company followed its own course. Some jumped on the idea. Some took years to persuade. Some worried that a commitment would mean too much time, energy, and expense. Some thought that they wouldn’t really be expected to do very much and could get the public relations benefit of signing without the need for follow-up action. Through dozens of presentations, meetings, and meals, either at Ceres or in conference rooms around the country, we systematically made our case. We reviewed sectors of the economy, chose the most likely corporate participants, and then analyzed each team of executives to understand the arguments they would present and the benefits they could obtain. We asked leaders who had already joined in our effort to speak to those who had not. We acknowledged that some members of the Ceres coalition had different values and objectives from those of these huge firms, but we pointed out why it was to everyone’s advantage for us to be in conversation. Over time, more and more executives listened—and signed up.
Through listening to the men and women who represented the companies in our discussions, I realized that though they initially came across as fierce advocates for their corporation’s position, they were often relatively weak within their organizations, without the line or budget authority that would give them real clout. Some of the executives we engaged were, ironically, seen as leftist environmental advocates within their own firms. Some of those who argued against us in public were advocating for us in private. Gradually we learned the subtle truth that a person who appears to be an opponent can sometimes be a hidden ally.
Measurement and accounting are strange worlds, somewhat like engineering. To outsiders they seem like hopelessly technical and boring fields. To insiders, however, these details determine whether an entire system succeeds or collapses. Much like an engineer knowing the exact degree of lift and thrust necessary to put a massive airliner into the sky, so accounting experts need the specific application of measurement. We realized that even though the technical details might seem obscure, their overall effect could be immense. We learned to speak the corporate language so that we could persuade companies to make adjustments that would alter their interactions with the world. I understood that change was about more than glossy speeches and the affirmation of values, as important as those could often be; it was also about the hard work of pro
posing the exact, detailed modifications that would cause corporations to behave differently.
After listening to squabbling among different activist and environmental organizations about whose measurement system was best, I asked the heads of ten key groups to meet me at a conference center outside Washington, D.C., to forge a common approach to working with companies. We were spending too much time and energy pointing out small differences between our approaches, I said. There were plenty of times when I appeared before a program officer at a foundation, was asked about all the different proposals for environmental measurement, and found myself saying, “Theirs is good but ours is better.” Instead, I suggested, we needed to talk about each other’s strengths and find a way to work together. We had to act more like a movement and less like competitors.
In late 1996 and early 1997 I was traveling all around the country as the new head of Ceres, and I asked people what they thought most needed to happen in the field. I spoke to business leaders, environmental activists, investors, academics, and many others. They usually talked about some tactical improvement they wanted to see—a small change in this approach or that questionnaire.
“No, that’s not what I’m looking for,” I said to dozens of people. “I am asking: What would you like to happen in the field of environmental reporting if you could have anything? What is our ultimate goal?”
Business executives said they were tired of being deluged with queries and that they wanted to be able to fill out a single questionnaire that would be accepted by multiple activist groups. Activists, for their part, deeply distrusted the current information that companies released, believing that they would report only on the things that made them look good. And investors pointed to the uselessness of corporate data that could not be compared from company to company.
The disagreements were sharp, but when I asked about the best solution, I discovered to my surprise that there was strong agreement. Every party wanted to develop a single tool for disclosure that would simultaneously meet the needs of executives, activists, and investors. This was, after all, what happened in the financial markets. There had been a time when companies reported their financial results any way they wanted to, but this had contributed to several market collapses. Today companies accept—and the government requires—a single standard. Known as Generally Accepted Accounting Principles (GAAP), these rules allow for measurement and comparison that make sense and thus enable all of American business to function smoothly.
As I listened, an idea became clearer in my head. If creating a standard for finance helped everyone both inside and outside business, why not a standard for measuring all the pieces of sustainability, everything from labor and human rights to energy and the environment? When I suggested this to people, they agreed that this would represent a major advance for business in the world. But no one believed it could happen. There was no group that was willing to lead on this, and governments could never successfully take it on.
I have never been inclined to accept the impossibility of a great idea, so I started to plan how we could create what everyone said they wanted. I arranged for a workshop to explore the topic at our next small Ceres annual conference in Chicago in the fall of 1996. The conference went well but the workshop was a bust. To my memory just three people showed up: me, my dear friend and colleague Allen White (a distinguished social scientist at the Tellus Institute), and one other person, who left after it became clear that the workshop was not going to take place.
I was tired after a long day, and I proposed to Allen that we just stay and get a beer in the hotel and use that time to do some forward planning. I told him about the common reaction that I was getting from my queries, and he told me that the research that he was doing on environmental reporting showed that the groups were really not far apart.
“Why don’t we just try to do what everyone really wants?” I asked Allen. “People are all saying the same thing, even when they are from very different backgrounds and have very different interests. That ought to give us the starting point to build a new cooperative agreement.”
“It’s worth a try,” said the ever-genial and thoughtful White.
So right then and there we decided to redirect the focus of Ceres, in cooperation with the Tellus Institute, toward developing a common framework for reporting. A key step would be to enlist a steering committee made up of representatives of all the groups who wanted to see the same thing.
To allay people’s fears, I set out some principles and rules from the beginning. Ceres would act as an honest broker, with a commitment to include virtually anyone who felt a desire to contribute. We would share information and documents widely on the Internet, which was just starting to become a tool in people’s daily work lives. Finally, we committed to spin the new standard-setting body off from Ceres if our efforts succeeded. This last guarantee turned out to be the most critical, because it helped people commit time and resources without the suspicion that they might be handing over a key initiative to a rival.
We struggled with what to call this new project. ITT Industries had pointed out to us that the Ceres questionnaire was very much on U.S. data and U.S. questions. Since ITT was a global company that did more than two-thirds of its business outside the United States, it wanted us to consider developing a “global report” that would apply internationally. My Ceres colleague Judy Kuczewski and I kicked around several names, including “Global Report Initiative,” but that seemed too static. We wanted something more dynamic. “Let’s try ‘Global Reporting Initiative,’ ” one of us said, and the name stuck. And it quickly became known around the country and around the world by its initials, GRI.
The Ceres board agreed to our plan. I then had to raise the money to do it. Around Easter of 1997 I received a message from a college friend of mine, Ralph Taylor, who had been following my efforts for some time and had briefly participated on the board. In his note he said that he would contribute $80,000 of his own money to get us started and that he wanted me to meet his parents, who could potentially contribute more.
At this time in my life I again could not walk; I had slipped on my back steps at home and badly crushed my left knee, the one I had struggled with as a child. My doctors grimly told me that I would never use that joint again. They recommended a total knee replacement, and in early 1997 they took out the knee and replaced it with an artificial joint made of titanium. For several months I had to run Ceres from my home, using the early technology of e-mail to communicate with my staff, board, and network. I continued to negotiate with the executives of major companies on the phone, though I was grateful that we did not yet have video technology, since I was often in my pajamas with my leg extended in bed. To meet Ralph’s parents would require an arduous trip to Florida while the knee was still weak and I was on crutches. I felt the timing was critical, so I went.
I flew to Hobe Sound, one of the wealthiest towns in Florida, and spent two days with Ralph and his family. After twenty-four hours of small talk, his parents took me to their country club for dinner. As we were waiting to be seated, his father, who was sitting across from me on a couch, leaned forward, spun the ice cubes around in his glass, and looked me straight in the eye.
“So you’re telling me that if we give you $100,000, you will change the entire system of environmental accounting—and eventually financial accounting—for every business in the world?”
Put that way, the whole idea sounded crazy, especially for such a small sum. But I knew I could not back down.
I fixed my eyes on him. “Yes,” I said.
A month later we received the check.
One of the early tests of the organization came when Allen White and I went to London so that I could chair an organizing meeting of the GRI in partnership with a key section of the United Nations Environment Programme. The section was headed by a formidable UN division chief, Jacqueline Aloisi de Larderel. We met as the institutional guests of Roger Adams, the director of research for the Association of Certi
fied Chartered Accountants in London. Our meeting took place in a paneled board room with thousand-dollar leather chairs overlooking the spectacular little park called Lincoln’s Inn Fields, the home of many of England’s most distinguished law firms.
At the meeting one of Europe’s greatest visionaries on the relationship between the economy and the environment, John Elkington, wasted no time challenging me and the handful of Americans who had made the trip to state our purpose clearly. In his judgment, the project had to be truly ambitious.
“The United States is generally behind the world on environmental measurement, and we have little confidence that putting our time and effort into such a domestic enterprise would be useful,” he said.
I waited for him to continue.
“If, however, you are interested in tackling the whole question of a standard for sustainability—that is, taking the environment as a key foundation but also looking at human rights, labor practices, community impacts, and all the other ways that corporations and communities interact—then we believe that this could be very exciting.”
I said that this was my intention, and that I would work to win the support of my board. I returned to the United States with a sense of optimism. The logic for building international cooperation was powerful. The United Nations was striving to improve the social impact of businesses in many countries beyond the reach of an American organization like Ceres. At the same time, Ceres had a powerful presence in the United States, the world’s largest economy. It was a creative partnership that both sides decided to embrace.
