Q&A with the Chief Sustainability Officer
Roberta Bowman was named Duke Energy’s first chief sustainability officer five years ago. In the following Q&A, she reflects on the company’s sustainability progress and the outlook for the future.
In the company’s first sustainability report in 2007, you said that “sustainability is a journey, not a destination.” What progress has Duke Energy made on this journey?
A: I think we’ve made good progress building the framework for sustainability at Duke Energy. We have a common language and plan that aligns our various divisions and businesses, and unifies our employees. And, we’ve recruited and trained a group of creative and committed sustainability leaders throughout the company. Combine this sustainability “infrastructure” with Jim Rogers’ personal leadership and commitment — and we’ve built a strong foundation for success. Even more exciting — we are starting to see employee-led innovations that are making a real difference — increasing efficiency, reducing waste and saving money. You’ll read about some of them in this report.
What are some of your “lessons learned” from Duke Energy’s experience with sustainability?
A: First, the motivating power of bold goals. We’ve had healthy debate over how much “stretch” to put in our goals. Clearly, incremental improvements are important. But, we’ve found that breakthrough ideas and performance come from stretch goals. For example, in 2007 we set a safety goal of moving the Total Incident Case Rate (TICR) for our employees from second quartile to top decile by 2012. Some of our managers and safety professionals didn’t think it could be done. And yet, we’re on track to achieve that goal, ending 2010 with our best-ever TICR results.
And second, it’s the outcome — not the noun — that matters. It doesn’t matter whether people call it “sustainability,” “corporate responsibility,” “lean six sigma,” “life-cycle accounting,” “externalities,” “social impact” or what have you. What’s important is improving our decisions and operations by considering a broad range of costs and impacts.
Has your thinking about sustainability changed over the past five years? If so, how?
A: I used to think that there were two kinds of companies — those that committed to sustainability and those that didn’t. Today, I don’t believe companies have a real choice.
We are seeing more and more interest in measures of sustainability performance by the financial community and other key stakeholders. They see these measures as predictors of management quality and overall company performance.
Sustainability is also important in the global competition for talent. Employees entering the workforce today “get” sustainability, and they want to work for companies that share that core value.
And third, sustainability is about risks and opportunities. With the world’s population expected to exceed 9 billion by 2050 and the constraints of finite natural resources, companies need to improve their efficiency in order to stay in business.
What do you foresee as the company’s greatest sustainability challenges going forward?
A: Our sustainability challenges are our business challenges. Balancing the need for affordable, reliable and clean energy is central to our mission, but the business environment and external events influence our decisions and timing. In the aftermath of the cascading disasters in Japan, we don’t yet know how those events will affect the economic recovery or our future energy options.
Environmental policy and the availability of natural resources also have an impact on our business. Global climate change has grabbed the headlines, but other issues — including water quality and scarcity — are influencing our operations.
An important point to recognize is that many of the issues we face today are interconnected. Energy. Water. Food. Security. Sustainability helps us see these connections, and develop integrated solutions.
What do you see as the emerging skills and competencies of the future?
A: I think collaboration is becoming a core competency. Some of the most interesting and workable solutions are coming from public/private partnerships. Business has historically been an engine of innovation. But, to be successful, we need clear policy signals from government and the “pull” of the consumer. Working with stakeholders will continue to be an important skill for the future.
And, it wouldn’t hurt to know how to play chess. Chess requires you to think three and four steps ahead, to play offense and defense, and to develop new strategies if you find one avenue blocked.
I think the business model of the future is going to be much more like chess than checkers.
What sustainability achievement are you most proud of? What has been your greatest disappointment?
A: We were very proud that Duke Energy earned a spot on the Dow Jones Sustainability World Index this year — one of only 15 electric companies worldwide to have earned that distinction. This was based on a comprehensive independent review of our operations and performance in everything from environmental emissions to community support. This recognition reflects the resolve and good work of our employees companywide.
As for the greatest disappointment — I’ll again point to safety. While we’ve made terrific progress in employee safety, five contractors injured on the job in 2010 lost their lives. We need to understand what’s driving this disparity in safety performance and apply our best thinking, planning and follow-through to the issue of contractor safety.
How successful has Duke Energy been in incorporating sustainability into its strategic and everyday business decisions?
A: Duke is a large and complex company, and our various businesses, departments and locations are beginning their sustainability journey from different places. Some of our departments are expert in considering sustainability criteria; others are just getting started.
One of the more interesting “ahas” from our work is this: Utility regulators are also having to become experts in sustainability. They have to balance the interests of sometimes-competing stakeholders — environmental groups, industrial customers that compete worldwide, local communities that depend on our employees and tax base, etc. And, like our customers, regulators want an energy supply that is affordable, reliable and clean. To the degree our own planning processes consider the various trade-offs in energy options — environmental, social and economic — we should achieve better outcomes.