Sunday, April 29, 2007

Starting CSR from Scratch?

I have been fortunate to have made connections with many people involved in sustainable business and socially responsible investing over the past few years, especially here in the Boston area. Instead of starting my effort to create a "sustainability" office in my current employer from scratch, I have the knowledge and experience of these professional friends and acquaintances to help guide my activities.

One of those people is Timothy Smith of Walden Asset Management. I had the pleasure of meeting Tim early in my investigation of socially responsible business and sustainability, at one of my first RBA meetings back in 2001/2002. Despite the fact that he is insanely busy with his own efforts to leverage investors' capital to influence corporate behavior, he has always taken the time to reply to my inquisitive e-mails and phone calls with information I can use and learn from. His work and his willingness to help me keeps me motivated to stay the course that I believe is important.

Most recently, as I thought about how to create a position for yours truly internally, he referred me to Medtronic's Sustainability Report Resolution and The Roberts Environmental Center article on Baxter's continued leadership in sustainability in the medical device sector. Medtronic and Baxter operate and compete in the same sector. Is it possible that investors seeing Baxter's prominent and consistent sustainability reporting and noting their strong performance (talking stock price here) over the last few years would like to see the same results from Medtronic?

It was appropriate that I received Tim's note on Baxter and Medtronic as Baxter was recently touted as the first ever two-time winner of the Shingo Prize, named for the Toyota engineering firebrand Shigeo Shingo that helped bring Lean Manufacturing to the United States. What does Lean Manufacturing have to do with sustainability? A lot. Lean's goal is to identify and eliminate waste. Isn't that one of the core thoughts when it comes to thinking about sustainable business? I also found it interesting is that the article I read appeared in Pharmaceutical Manufacturing, a publication serving an industry my company counts as an important customer segment. This made me think about the high level connections between suppliers and customers. If a company is dedicated to sustainable business, and integrates it into their corporate DNA, does a supplier that also embraces sustainable business have an advantage? In the case of companies creating tight relationships with suppliers, I believe the answer is "yes".

In other words, if industry players that embrace sustainable business are customers of my company, will it help make the case for us to embrace sustainable practices as well?

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