How General Mills Executes its Sustainability Strategy
We talk a lot about what goes into a successful energy strategy. We even developed a framework, the Unified Approach to Energy Transformation, in tandem with PwC that breaks down the emerging leading practices behind some of the most successful enterprise energy strategies in the world.
So it’s always great to see when these practices are put to use.
In a recent interview with GreenBiz, General Mills Chief Sustainability Officer Jerry Lynch and Sustainability Director of Worldwide Sourcing Kevin O’Donnell dove into the organization's efforts to deliver on their aggressive commitment to cut greenhouse gas emissions by 28% by 2025. Considering the organization slashed the emissions rate in its manufacturing operations by 23% from 2005 to 2015, some insight into their management practices is valuable.
The Importance of Setting Science-Based Goals
In our research for the Unified Approach to Energy Transformation, we found that many successful strategies are based on science-based targets for sustainability progress. In the interview, Lynch explained some of the logic behind their enterprise-wide goals for emissions reduction.
"We wanted to make sure that we were setting meaningful targets that would drive action," Lynch said.
This approach is becoming increasingly common among large enterprises. Making a public commitment is important not only important to show your customers and investors that you are serious about sustainability, but to make it clear internally that how the organization performs towards these goals is becoming a real expectation. Backed by an objective, science-based target for progress, this commitment gives you a benchmark that can spur motivation across the organization.
"And they're stress targets, no doubt," O’Donnell told GreenBiz. "They're not going to be easy to reach. They're going to push us hard."
Establishing a C-Level Mandate to Drive Progress
Earlier this year, Enel X Chairman and CEO Tim Healy co-authored an article for Harvard Business Review that discussed the importance of the "C-level mandate" to create accountability to deliver on these goals throughout the organization.
This is going to be handled differently at every organization, but involves appointing one executive or senior leader as the champion of the organization’s energy strategy. While different organizations will appoint different executives for this role, the key aspect is that this champion gathers other leaders from around the organization who will ensure that the strategy is carried out in their respective area of the business.
"An energy strategy will be hard to implement without explicit engagement from the CEO and a clear governance structure," the HBR article reads. "Laggard companies in our study identified the lack of this organization as their biggest obstacle to progress."
At General Mills, this approach is manifested in what Lynched called a "sustainability governance committee." In the interview with GreenBiz, Lynch said the committee is comprised of six members from the CEO's leadership team who meet throughout the year to set targets and policies for sustainability progress. Additionally, a broader team that focuses on functions oversees how the organization is executing the company-wide vision in other areas, such as the supply chain and manufacturing environment.
How exactly this sort of top-down accountability is established will vary depending on your organization's structure and needs, but can play an important role in creating the kind of accountability needed to deliver results.
Extending the Strategy to the Supply Chain
O’Donnell told GreenBiz that General Mills works closely with suppliers to make sure they align with their sustainability goals.
"We are looking at more direct financial incentives over time to help us go from pilot to scale more quickly. It's a combination of shared value, and then also we're looking at elevating sustainability to be more on par with cost, quality and delivery," he said in the interview. "I think suppliers that perform well in the sustainability space are getting rewarded accordingly. It's something we're paying more attention to in terms of retaining and growing business with suppliers."
This is an emerging dynamic that affects businesses on either end of the supply chain spectrum. As businesses find themselves under increasing pressure from investors and customers to show progress on sustainability efforts, they’ll need to extend their strategy from their own organization to their suppliers. This includes everything from sharing best practices to align with sustainability goals to restricting the supply chain to those that align with the strategy.
At the same time, this means sustainability is becoming a competitive differentiator for businesses looking to attract and retain customers. As expectations for sustainability among suppliers evolve, your ability to show progress in energy management could have a direct impact on your ability to create revenue.
General Mills’ sustainability concerns extend far beyond energy, and the interview with GreenBiz is worth a read to see the extent of their sustainability strategy. And, of course, it is important to determine how your sustainability practices align with your business. But when it comes to executing a strategy, we could learn a lot from their example.