Sustainable business practices aren’t just about an organization’s responsibility to support the environment. In fact, the benefits of sustainable business practices extend well beyond what you might think.
In this episode of the SunPower Business Broadcast, SunPower’s head of sustainability, Marissa Yao, explains the concept of sustainability in simple terms—and lets us know how being sustainable can help an organization in many ways... from saving money to attracting and retaining top talent.
Jeff Allen: Hello, everyone. Welcome to this edition of the SunPower Business Broadcast. My name is Jeff Allen. So good to have you back in. Chances are you’ve heard the term sustainability or you probably wouldn’t be listening to this podcast if you hadn’t. What you may not know is that being sustainable not only helps businesses help make the world a better place; it can also benefit the businesses themselves as well. How? Well, that’s what we’re going to find out today on the program. I’d like to introduce to you Marissa Yao. She heads up Sustainability at SunPower and knows this topic inside and out and that’s what I like about having her on the program. She’s been nice enough to donate some of her valuable time to help us all better understand how being sustainable can not only benefit the environment but also can benefit your organization as well. Marissa, it’s nice to have you on the program. Welcome.
Marissa Yao: Thank you, Jeff. It’s nice to be here.
Jeff Allen: Marissa, this idea of sustainability – this is a term, for me anyway, that I think about it, has become so politicized and it’s really almost become part of a polarizing discussion that we sometimes have in our country today. Sustainability – I’d like you to shed some light on the real meaning of sustainability as we’re kind of focused on talking about it today in this conversation.
Marissa Yao: Sure. I know, Jeff, it’s a great point. I think with recent events, we do see an increasing polarization of this concept of sustainability. It’s almost as if you need to be a climate change believer to be a proponent of sustainability. I would argue that it’s not the case at all. Sustainability, rather, should be coupled with the idea of efficiency, and for manufacturing companies, for lean manufacturing because, at the end of the day, sustainability is about efficiency and about maximizing benefit on three levels – on the environmental level, social level, and to a company’s financial bottom line.
Jeff Allen: Can you give us some examples of what you mean, maybe by each of those – financially speaking, environmentally, and socially speaking?
Marissa Yao: Sure.
Jeff Allen: So that it kind of helps to crystallize the point here.
Marissa Yao: Sure. I think the biggest challenge to corporate sustainability practitioners is defining what it is. That’s why I would encourage practitioners, sustainability champions within corporations, to really change the language to one that is familiar to organizations; hence, the earlier mention of lean manufacturing… of efficiency. In a nutshell, the goal of corporate sustainability is to have equitable profits, environmental stewardship, and also social responsibility. How does a company go about achieving these three goals? A myriad of ways. Let’s start with the environmental, which is most often what people associate sustainability with. Environmentally, this is really about, again, efficiency. It’s not about whether you – whatever your political leanings are, environmental sustainability is simply focused on operating more efficiently. By this, I mean it encompasses everything from the product design, the manufacture, the sourcing of the materials; to the distribution of products and services; to the eventual disposal and end-of-life management of products. Environmentally, what this simply means is, let’s use less. Let’s use less materials; use less resources. By using less, usually what tends to happen is, you waste less and you’ll have to pay for less and pay for less materials that then need to be disposed of. Environmentally, it should be, again, clear how environmental sustainability is closely coupled with a lean manufacturer’s goals, which is to design out waste. Financially, again, the benefits are part and parcel with that. If you have to purchase less and then spend less on disposal and transportation, that clearly affects one’s bottom line. Then, on a social front, here again, it’s being mindful of the users, of the employees, of the suppliers, of the customers, who then use that product or service. Here, this dimension requires a company to think about, “How do I benefit these people who come into contact with my product?” For a company, this could mean responsible sourcing programs. This would entail having policies and programs’ requirements for your supply chain. One example of this is the electronics industry’s code of conduct. What this code of conduct defines are basic fundamental requirements related to environmental health, safety, labor, ethics for a supply chain—with the goal of, again, not only protecting the environment but also ensuring the sustained health and safety and treatment of workers and employees. Again, all of these elements, when we break it down, are much easier to understand, but when we bucket it and, under the term ‘corporate sustainability’, it can be overwhelming. Hopefully, by providing these tangible examples, it can help listeners to this podcast find ways they can implement their own initiatives within their companies.
Jeff Allen: It’s not just a feel-good thing but you’re actually, in fact, engaging in activities that really do good; that create new and useful beneficial behaviors. You touched on very briefly – I don’t know why I kind of keyed in on this but I thought it was particularly important – when you’re talking about the employees or staff members in a company that is engaged in sustainable activities. Talk a little bit more to that point, if you don’t mind, about how being sustainable can help a business in terms of the people who work there. Is it something that can benefit employees and the human resources department for an organization as well?
Marissa Yao: Indeed, yes. We’ve had these conversations actually here at SunPower about sustainability, beyond its application and our manufacturing sites, but also in terms of our recruitment and retention. I think our experience is no different from perhaps what other companies are seeing. In previous discussions, our department has brought up a few studies that show that more and more people are really seeking meaning and purpose in their occupations, not just within millennials, although definitely there is a strong trend within millennials, wanting or desiring an occupation that gives them meaning, gives them purpose, a feeling of contributing positively. I don’t think any of us are different in that respect, regardless of what generation we were born into.
Jeff Allen: That’s right.
Marissa Yao: But here, within SunPower, for example – and I think we’re similar to every company – in that we have a nice cross-section of employees comprised of different cultures, different demographics, etc. But at the same time, I think we all agree that we want to contribute positively. I don’t think anyone ever wakes up in the morning saying, “I don’t want to do good” or “I want to intentionally harm people or the environment.” So I think it’s intrinsically part of our nature to want to contribute in a positive way. I think that’s one of the benefits of sustainability is that it allows a company to formulate and communicate these programs to actively engage employees. While that may be qualitative and may feel more like an employee engagement tactic, I’m going to go back to my earlier point, which is, it’s essential to engage all parts of the company to work on these “sustainability initiatives” because they are part and parcel and the same as the efficiency programs that are already being worked on within a company. Some examples – I’ll use an environmental sustainability example; one that I think most people have run across is zero waste. I think this is a growing trend within manufacturing companies – Subaru, Toyota, other companies – have really touted their efforts, SunPower included within that group, of being responsible manufacturers by having zero waste factories. While this may seem like a program that is limited to the factories, it actually includes several parts of the organization that may not even step foot inside a factory. Some of these organizations include your product designers, your finance and supply chain teams. In zero waste programs, again, these teams need to be involved because, one, you need to first understand what materials and services are being brought onto your sites. Here, this is where your supply chain team can come in and see, ‘Are we getting the right volumes from the right vendors?’ etc. ‘Are we getting it at the right price?’ Similarly, you need your product designers involved. ‘Are we purchasing the appropriate amounts of these materials?’ For example, are materials being sized correctly for the products? Is there excess material that’s then being disposed of? Could we then work with our suppliers to better size materials for the finished goods so that not only will the supplier have to produce less and spend less to ship it to the customer but, as the customer ourselves, it would be again less waste for us to then dispose of? So you can see how product designers, supply chain, and finance teams need to work together to really achieve this zero waste goal. Some other examples include energy efficiency projects. I think most Fortune 500 companies have goals related to energy efficiency, perhaps renewable energy use. Here, this isn’t a project or a goal that can be achieved simply by the facilities teams within a company. It includes, again, your finance teams to be able to decide what is the appropriate option – is it onsite PV (photovoltaic solar panels) generation? Is it a PPA (power purchase agreement)? Is it wind? Etc. So you need to include your finance teams and then you need to also include, once again, your supply chain teams, your procurement teams, who will conduct those negotiations and hopefully find the most cost-effective model for a company to achieve that energy efficiency goal. Just with these two very simple examples, hopefully, one can see that, again, any sustainability program within a company needs to be one that is led by multiple organizations. It can’t be done simply by sustainability practitioners.
Jeff Allen: I think, right there, Marissa, just jumping in where we can see the short-term cost will be outweighed by the long-term cost benefits associated through a well-conceived sustainability program. Your points are right-on. I really do appreciate it. Marissa Yao is the sustainability expert with SunPower and you’re listening to her on the SunPower Business Broadcast. My name is Jeff Allen. We’ve talked about so many advantages here. We’ve really kind of boiled things down to a way, I think, that many business owners themselves can understand. Marissa, I really appreciate that. One area that I’d like you to talk about right now is really the end result – the powerful benefit it can have on the very image of that organization’s brand.
Marissa Yao: Absolutely. I think this can be best explained by the growing field of corporate sustainability. I think, fourteen years ago when I started, there were very few dedicated roles focused on sustainability within a corporate environment. Now if you look at various companies, you have Directors of Sustainability, VPs of Sustainability. I think this is an illustration of the importance that sustainability has taken on for corporations. I’ll reference an Environmental Leader article in which a survey of more than 53,000 US consumers found that 58% – which is a fairly significant number – 58% of consumers do consider a company’s sustainability performance in their purchasing decisions. That’s a pretty interesting and hopefully encouraging data point for all of us to take back to our own companies that customers do care about this. For a product and service such as ours here at SunPower, it’s even more of an imperative so the very nature of our business is to change the way our world is powered; to move hopefully our customers and our world towards a more sustainable one through the use of renewable energy. So just the very nature of our product, at least for SunPower, has required us to, again, follow that up by being a sustainable and responsible manufacturer, designer, installer of solar. Again, you don’t need to be a sustainable product or service like SunPower to have your brand benefit through your sustainability programs.
Jeff Allen: Interesting, Marissa, and somewhat surprising, but when you think about it, it really does in fact make sense. Before we go – and we are running a little bit out of time – I’d like you to just kind of duck back in, Marissa, with anything else that maybe we haven’t discussed that you can touch on that you feel might be of benefit to organizations who are considering adopting more sustainable practices.
Marissa Yao: Sure thing. Yeah, I think there are a few key takeaways that I would share through our experience here. The first – and I think I’ve mentioned this earlier – is to not get hung up over the term sustainability. There are challenges with it in terms of tactical execution so I would encourage practitioners, solar champions, for example, to reframe the discussion; maybe even go so far as to move away from the term ‘sustainability’ and really marry it to ‘lean manufacturing’. I think that’s a nice way to start the conversation. Often times, if you bring up sustainability, it tends to have a reaction from different folks of unfamiliarity, perhaps anxiety, or reluctance. Again, I would encourage folks to really be able to communicate with sustainability and use the terms that are familiar within your organization. Again, for manufacturers, lean manufacturing is the same thing; it’s sustainability applied. For service organizations, sustainability can be implemented through how you operate your facilities. One misconception is that sustainability is just for manufacturers when, really, it’s not; it’s for any corporation. For service organizations, this could be implemented through how you operate your facilities, whether they’re owned or leased. How do you procure the supplies, the products that your employees use, through employee travel. There are elements for every type of corporation that they can build their sustainability program with. Other things that I’ve touched upon earlier that I think are key for people to take away is, once again, this can’t be done by a sustainability team alone. It really does need to be a concerted, coordinated effort within a corporation. That includes, again, your finance teams, your supply chain, facilities, designers, manufacturing engineers. Even though that may appear daunting, I would encourage folks to also think of it as promising and encouraging in the sense that it’s a way to engage; it’s a way for each part of the company to work together. Look at the glass as half full in the sense that sustainability programs are a nice way for corporations to unite their organizations with one common goal, which is to, again, further, first of all, the financial bottom line, but also challenge and encourage those teams to go beyond the financial benefit but also glean social and environmental benefits as well. Again, include your different organizations and I think what you’ll see is a nice synergy and complementary skill sets, expertise coming together to really bring about some nice benefits for a corporation. Related to that – a last point – is, by including more of your organization, hopefully it opens the door to creativity. Through the examples that I’ve mentioned briefly and through examples that I’m sure many of us can find online, successful sustainability programs have really been brought about by creativity and innovation. Even though at the onset, it’s very ambiguous and perhaps overwhelming, I think if a corporation really does embark on a sustainability journey, what they’ll find is that it really does foster creativity. My earlier example of our zero waste programs – again, there was a misconception that sustainability programs would be a cost adder. As we went through this exercise, what we found was engagement from, again, our supply chain, finance, manufacturing, facilities teams. The second learning or discovery that we had was that zero waste was not actually a cost adder. Contrary to what we all thought, actually it resulted in significant cost savings – up to 50% in some of our sites. The principle of it is one in which you can galvanize your workforce and hopefully encourage them to be creative and be innovative and contribute well to programs that perhaps they would have never thought about just working in silos. I think that’s really where the opportunity of corporate sustainability lies.
Jeff Allen: You talk about galvanizing an organization. We’re talking about cost savings. We’re talking about elevating the brand, if you would, of an organization and as a good steward of the community. Just a terrific discussion – great dialogue today. I really do appreciate your time. Thank you so much for being on the program. I hope that we can talk to you again.
Marissa Yao: Thanks so much, Jeff.
Jeff Allen: That’s Marissa Yao. She is a specialist and really kind of the person in charge of the sustainability initiatives and dialogue that we’ve just been talking about with SunPower. We want to thank her again for her time in joining us on our program today. For more information on sustainability, renewable energy, and the solar industry, visit the SunPower business feed at BusinessFeed.SunPower.com. I’m Jeff Allen. Until next time, we invite you to join us in helping to change the way our world is powered. So long for now.