Katie Kross: The challenge is measuring the intangible

Posted: September 8, 2014 by jennroig in English, Interviews
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This is the original, unedited English version of my interview to Katie Kross, published on AméricaEconomía on September 1st.

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Katie Kross, author, academic and professor

Katie Kross is the Managing Director of the Center for Energy, Development and the Global Environment (EDGE) at Duke University’s Fuqua School of Business. She is the author of Profession and Purpose: A Resource Guide for MBA Careers in Sustainability (Greenleaf Publishing, 2014).

Could you introduce the goals of EDGE to AméricaEconomía’s readership?

As the world’s population continues to rise and become increasingly urbanized and industrialized, one of the biggest business questions of our time will be: how are we going to sustainably provide the energy and natural resources needed to meet that demand? The ability to access and use resources efficiently is an opportunity for competitive advantage not just in the energy sector but in nearly every industry.

At EDGE, we help current and future business leaders understand how energy and environmental challenges present both risks and opportunities for businesses. We offer education programs for MBA students, convene thought leaders, and pursue research on topics at the intersection of business, energy, and environmental issues. Fundamentally, these are issues of corporate strategy and competition that are going to be paramount for business leaders in the next few decades.

For a news consumer, it would seem that today every effort to foster sustainability is against business profits. What’s your main argument when convincing students and influencers about the need and benefits of implementing sustainable business practices?

There are different ways that sustainability practices return value to businesses. Some are direct – for instance, energy and waste reductions may lead directly to operational cost savings. But often, sustainability practices yield intangible benefits, like improved brand reputation, worker productivity, or employee attraction and retention. For example, retailers who have implemented green lighting strategies in their stores have yielded not just energy savings but also increased sales in those stores because the new lighting makes for more appealing merchandising.

When speaking with MBA students, I encourage them to understand how to make the “business case” for sustainability. That means understanding how sustainability is linked to these intangible benefits and then quantifying them in terms that can stand up to shareholder scrutiny. The business case will vary by company and by industry. But sustainability will never survive as a business strategy purely because it is “the right thing to do”; it must also be the profitable thing to do.

– In the long run, what would you suggest to MBA students and candidates in terms of career choices that bet for sustainability as a center piece of their activity?

For students who are interested in sustainable business, there are opportunities to work in the corporate sustainability or corporate social responsibility (CSR) departments at big corporations. There are also opportunities to work in sustainability consulting. But there are also ways for MBAs to apply their passion for environmental and energy strategies in many other roles. They might work in a traditional MBA role – in marketing, finance, or operations – but incorporate sustainability principles into how they think about those roles. They might also choose to work in business development or operations for a company that is working directly on cleantech or energy technologies.

In my book, Profession and Purpose, I try to illustrate that there are many possible paths for MBA graduates who are interested in putting their passion for sustainability into practice—whether that is as a sustainability program manager for Facebook, a green product marketer for Johnson & Johnson, a portfolio manager in the “impact investing” industry, or any number of other options.

– To what extent the private and public sector is prepared to offer such careers to students? To what extent the role of entrepreneurship can be of relevance in pushing forward sustainable business models, ideas, innovations, and practices?

Most of the world’s largest companies have established corporate sustainability or CSR departments. But sustainability is still a relatively new business practice, so the jobs within those departments are evolving as companies become more sophisticated in their approaches. The sustainability jobs that will exist 5 years from now may not exist right now. So, job seekers who are interested in these roles have to be entrepreneurial in their approach to the job search, often writing their own job descriptions.

There is also the need and opportunity for entrepreneurs who are inventing new approaches to the world’s energy and sustainability challenges. We have seen tremendous growth in energy industry hiring, and I expect we will continue to see exciting innovation opportunities for the entrepreneurs who want to address energy and environmental challenges with new solutions.

– What do you think are the biggest challenges that corporate America faces when adopting more sustainable business practices? And how do you see these challenges can be different from other regions in the world, such as Latin America?

One of the challenges that corporate America faces when adopting sustainable business practices is the challenge of measuring and quantifying the “business case” for sustainability. As I mentioned earlier, sustainability can yield substantial intangible benefits for companies, but it can be hard to measure, monetize, and report on those benefits to shareholders. Organizations like the Sustainability Accounting Standards Board are working with industry to bring standardization to sustainability disclosures, but there is still much work to be done.

Another challenge is that many corporations that have an established sustainability program have already captured much of the “low-hanging fruit” when it comes to operational efficiencies. They are now moving onto address sustainability issues that are more complex, involve more stakeholders, and require more systematic change. For instance, achieving a goal of zero waste, which Walmart has set, or assessing the sustainability of all of your products’ materials, like Nike is doing, can be more complicated challenges to tackle.

– As a female leader who advocates sustainability in business, one could argue you have to face a twofold resistance. Is that so? What do you say is the biggest resistance you must overcome?

I am proud and inspired to see many female executives leading in the sustainable business realm. Some of the women whose leadership I take inspiration from, for instance, are Linda Fisher, Chief Sustainability Officer (CSO) at DuPont; Bea Perez, CSO of The Coca-Cola Company; Diane Holdorf, CSO at Kellogg Company; Trisa Thompsen, VP of corporate social responsibility at Dell; Hannah Jones, VP of Sustainable Business & Innovation at Nike; and author Christine Bader, among others. I’ve also found groups like the Women’s Network for a Sustainable Future to be useful for making connections with female mentors and collaborators.

There is, in general, a strong collegiality among sustainable business practitioners. Further, sustainability is a business disciplines that benefits from diverse perspectives and stakeholder inclusion. The sustainability challenges that businesses and society face require ingenuity, creativity, and collaboration from all corners of the world, from men and women alike.

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