Catherine Gray on sustainable business

Jennifer Leonard: What is your main focus at The Natural Step?
Catherine Gray: Using a scientific framework, it is our mission to move society towards sustainability. To do this, we focus primarily on large multinational companies because they have the leverage and the ability to significantly impact ecosystems, as well as their supply chain. Large retail brands have one foot firmly in ecosystem services and one foot firmly in a brand that is very well known with consumers.

JL: How do you typically work with the Fortune 500 companies?
CG: We work in partnership with senior teams of companies to help them understand the science beneath sustainability and how to build an integrated approach deep into their strategy and operation. We use a combination of basic education and awareness building combined with business analysis, from a sustainability perspective, so that they understand where their biggest impacts are, where their biggest risks are, and where their biggest opportunities are. Once they have that picture, we help them build a vision and a strategy to begin to move in a more sustainable direction. All of this is informed by their business context, what’s important to them, what’s happening in their company at the point that we enter, and how we can begin to help them get a bigger return on their bottom line.

JL: You must have on your team of researchers and experts then, both scientists and strategists from business?
CG: That’s correct. The Natural Step is both a scientific think tank and business consulting group. We have Ph.D. biophysicists and social scientists combined with people who’ve come right out of leading management consulting groups.

JL: How would the world change if more companies were to incorporate the principles of The Natural Step into their practices?
CG: At a fundamental level, our industrial system was built without sustainability in mind. It just wasn’t an imperative like it is today. Nature was considered limitless and waste was a non-issue. But we’re now at a point in our evolution where we understand these issues to be critical. So if every company began to build this awareness into their systems, we’d have a very different world. Right now, every single life-supporting system on our planet is in decline: fresh air, clean water, rich topsoil, and productive forests. The real game on the planet right now is working toward reversing this trend and moving toward sustainability.

JL: What are the barriers to corporate sustainability?
CG: There are a number. We’re still in the very early days of this, and if you look at our current economic and political context, sustainability is not incentivized. In fact, the reward system currently in place supports unsustainable business practices. So it’s an uphill battle, especially if you’re a big multinational company and the kind of change you’re talking about is deep and long term. In a culture of quarterly profits, we’re looking at how we can get the short-term wins as well as hold that long-term vision in place. It’s a tricky balance.

JL: How extensive is the Natural Step’s global network?
CG: We have offices in twelve countries now, with about sixty people working full-time, and hundreds of academic partners and scientists. In each country that we have an office, while we have a core methodology, it’s rolling out very differently because the issues are different in each context. In our South African office, for example, there’s a heavy focus on the social side of sustainability. In Japan, there’s a heavy focus on persistent chemicals and compounds. In the United States, the focus has been on large companies. In New Zealand, the focus is on smaller companies.

JL: What significant changes has The Home Depot made since working with you?
CG: A few years ago, The Home Depot began to take a hard look at a number of issues around sustainability, especially old growth timber. Arthur Blank, the CEO at the time, was very concerned and astute around environmental issues and did not want to leave a legacy of environmental destruction behind. The Home Depot was also under attack by a number of activist groups for its wood purchasing policies. So it began to look at where it was sourcing its wood and sought out certified woods. We did a two-year thorough analysis with The Home Depot and began educating its senior team, merchants, and key staff in this framework of sustainability. We developed a roadmap for the company to move forward, taking into account everything from its paints to its plastics to its garden supplies.

JL: Nike is always a hot target for public scrutiny. How have you helped?
CG: Nike entered the conversation of sustainability over ten years ago. Like The Home Depot, it had a campaign aimed at it with respect to its labor practices. But it already had in place a team focused on environmental and social issues. Nike has huge impacts, both environmental and social, down the supply chain, and recognizes this. We helped 75 of Nike’s top designers and senior representatives innovate around sustainability. As a result, Nike has come up with a whole host of new designs. The company has taken a hard look at the persistent compounds and heavy metals in its products.

JL: What about Ikea?
CG: We worked with Ikea in Sweden in the early days of our organization. The CEO woke up one morning with the unfortunate situation of reporters at his front door asking what he was going to do about the off-gassing of the formaldehyde in their bookcases. The CEO had no idea what to do and asked The Natural Step to come in and help educate him and his staff in sustainability and give them a framework to help them make better decisions. We analyzed their systems and looked at everything from the formaldehyde in their bookcases to their paints, to their wood, and on and on. As a result, Ikea is a leading company in the field of sustainability and has been a key driver in the realm of endangered forests working with significant noprofits, like the World Wildlife Fund.

JL: And Starbucks?
CG: We were asked to come in and help them understand their environmental footprint. Working side by side with their team, we analyzed their system from a sustainability perspective, looking at everything from the pesticides that are used to grow coffee to some of the fair trade practices and social conditions that surround the coffee industry, to transportation and energy. From there, we developed the metrics for them to begin to measure their impact and improvement over the course of the year.

JL: You also work with McDonald’s, don’t you?
CG: We started very early on with McDonald’s in Sweden. Ten years ago, McDonald’s was one of the most loathed brands in Sweden. The CEO at the time thought this was unacceptable and wanted to do something about it. So he brought us in and we trained the employees in sustainability in The Natural Step framework. If you go into a McDonald’s in Sweden today, you’ll find 100% organic dairy products, as much organic beef as the market can supply, as many organic vegetables as the market can supply, and no genetically modified organisms in the food. Many of its stores are powered by renewable energy, solar as well as wind and some natural gas. It took a hard look at its transportation and moved to transporting its goods by train and biofuel cars. It has incentive programs for its employees to car pool. They’ve achieved a great deal in terms of cost savings and waste savings and employee morale. Over three years, McDonald’s went from one of the most loathed brands in Sweden to the third most popular brand in the country. Today we are working with McDonald’s globally to help it build an integrated approach to sustainability.

JL: Tell me about Ants, Galileo, and Gandhi.
CG: This is a book that was inspired by one of our conferences on sustainability. It’s a wonderful resource that highlights what’s happening across various sectors today, from start-up companies to multinationals. The title says it all. When you think about sustainability, it’s going to take the coordination of ants, the scientific vision of Galileo, and the conviction and compassion of Gandhi for us to head in this direction as a society.

Catherine Gray is the president of The Natural Step, an international research and advisory group.