This interview was originally published in SAFETY AT WORK magazine Issue 3-15, May 2002
Paul Gilding is the CEO of Ecos Corporation, an international organisation that advises top corporations on how to achieve sustainability. He talks exclusively with safety AT WORK about their latest work in the field of workplace safety and culture.
SAW: Could you give us an outline of the origin and operation of Ecos?
PG: The business was formed 7 years ago based around the belief that there were a whole bunch of social and environmental issues that were being addressed through traditional activist networks that could be equally addressed through market forces. It was also a belief that a lot could be achieved by understanding how businesses act and getting business to address sustainability at the same time as benefiting the business.
That was the original idea at a time when that was a pretty radical idea. Now it seems obvious. At the time it seemed a strange thing for someone to go from a background in Greenpeace to be working as an adviser to large corporations. There were the usual question marks about selling out that go with such a move.
What we have learnt through that process has reinforced our original thought that what businesses are struggling with are the practical applications and introduction of sustainable processes. What can I do on Monday morning that can actually make a difference? The concepts sound right, of course in the long run it’s good for everyone, but what do I do to make this a reality?
SAW: It must be nice to see your company riding the wave of “triple bottom line”, Kyoto protocol pressures. Is there a large amount of interest in Ecos at the moment?
PG: Obviously it comes and goes with the economic cycle, depending on which company you are talking about. We are seeing two things, one is that the volume of work is just increasing, but more importantly to us is that the types of inquiries we are getting are more fundamental to the business. In our early years we had a lot of work from companies that were getting into trouble, getting exposed to doing something wrong, or asking how do we handle the issues. Now people are saying that they can see that this is the future of their business and they ask for help in reframing and rethinking our role in society as a corporation. The scale of the work and the seriousness in terms of the business strategy has become much more important.
SAW: You advise corporations but you don’t have a hands-on….
PG: No it is about strategy. Effectively we provide support to corporations with a particular focus on sustainability but not just as narrow strategy but as a framework for that overall strategy. It is increasingly hard for us to separate what we do in a sustainability framework from what we might do as a normal business strategy. For instance, is connecting with your stakeholders a response to the sustainability issue or actually connecting with your market place? How deeply are you connected to society? How do you provide value to society and not just your shareholders?
SAW: How can a company check that the sustainable strategy they put in place is working?
PG: One of the things we have come up against in many ways is the negative side of the triple bottom line. The good thing is that it makes you think about the impacts of the operations of your company in a broad way. The downside is that it tends to separate financial value creation from the social value and the environmental impacts. We would argue that it is a different way of doing business but not that different and it is still about creating value for your shareholders.
The best way to measure the success of your sustainability strategy is, in fact, to measure the financial results from it.
We have an increasing focus on identifying, with our clients, the financial value of their sustainability strategy. This focus is driven by two issues. Firstly, we know that our clients will take it more seriously because that is their language and the way they think about the issues. Secondly, as advocates of sustainability, we believe that we can achieve more social change that way. The more we can prove that there is a financial advantage in sustainability, the more change we will see.
SAW: A major motivation for change seems to be shareholder activity. Are most corporations reacting to shareholder pressure or anticipating shareholder pressure?
PG: I think they are anticipating. I don’t think most shareholders yet see these issues as being fundamental to the business. There is a growth in the proportion of shareholders who are concerned with what is being done with their money but, more significantly in this area, business managers are recognising the risk. Case studies like Monsanto and GMOs, BHP and Ok Tedi, Nike and human rights…there are a lot of examples now of where companies have got it wrong, they have lost value. So the business managers are saying that they don’t want to be the next one to get into trouble.
SAW: Your recent paper that has been circulated focuses on occupational safety. How can sustainability be linked to workplace safety?
PG: This is a real fascination for us. We first came across workplace safety as a major issue for one of our clients, DuPont, where safety culture is so embedded in their business that you can’t walk into their offices without picking it up. We realised that, as sustainability experts, we had hardly ever come across that issue. The people who talk about sustainability also talk about corporate social responsibility, human rights in developing countries, climate change, biotechnology, ethics, every issue you could think of but they very rarely, except in a token way, talk about workplace safety.
We first thought why should this be a sustainability issue and then we thought why wouldn’t it be? We’re talking about the way corporations behave, the effect they have on society, the effect they have on the community they work in, yet we’re not talking about the fact that they are killing and hurting their own people. This is a surprising omission when it is so fundamental to sustainability.
SAW: This may be because there are relatively small financial penalties unless the incident is a large-scale disaster.
PG: Well, it does and it doesn’t. Obviously, events like the Longford gas explosion and the Exxon Valdez have a big impact and you’re right about it as being a small percentage but most companies are looking for every dollar they can save through efficiencies and workplace safety is a legitimate area. In the United States, numbers of $60 billion are bandied around as being the direct costs of workplace accidents. That is a lot of money lying on the table.
It is not a large proportion of a companies’ bottom line in most industries but it is easy to act upon those risks if there is the corporate commitment to do so.
The reason we wrote that paper is that we recognised that the real business value came not from improving a particular workplace’s accident record but from changing the culture of the business.
SAW: The paper and your website mention DuPont a lot. It seems that the DuPont philosophy is integral to Ecos’ processes and applications.
PG: It certainly has been our learning laboratory around safety and we are strong advocates of DuPont as they are a major client of ours and that is because we like working with them so much.
We tried to understand why it is that DuPont, at a cultural level, gets sustainability in a more profound way than other companies. We believe that it is because of the safety culture. They have safety as a core value that they deeply believe in as a company. In their case that has translated into a major business product and service.
SAW: Can the DuPont philosophy be applied only in large, well-resourced corporations or in a Western cultural context?
PG: I think it can. Is it a question of finding out what the core value is and then leveraging that to sustainability, or is it about safety in particular? Our conclusion is that safety, security etc. is actually a broad range of human beliefs and values that go closely to the core of our being. Therefore it is a principle that can be applied more broadly.
Peoples’ responses to September 11, for example, were about insecurity and the reason there is a focus on law and order in society is about insecurity, it is not about rationality. People wouldn’t drive their cars if they were rational about risk assessment. Protecting yourself, protecting your families, protecting your community is really vitally important. Climate change may be a difficult concept to grasp but having your kids safe, having your workmates safe is something we can all understand.
SAW: Do you think that the first step to cultural change is to address those perceptions of risk?
PG: No, acting on things changes the culture. The traditional approach has been one of engineering solutions in most corporations – what are the real risks and how can we act on them. In many ways it is more significant to get people to think about avoiding risk in different ways.
The reason we think that workplace safety is a powerful entry point is because it helps us to think about the culture of looking after each other.
SAW: A lot of companies transfer their occupational risk by moving production to the Third World or the Majority World. How can Ecos have an effect on that type of company practice?
PG: This is where we’d ask: “Are you managing your risks or are you expressing who you are?” If keeping your own people safe and contributing to society in a constructive way is who you are, then where you do it is irrelevant. Paul O’Neill, who is now the Secretary of the Treasury in the US and was head of Alcoa for 13 years, is passionate about this. He says it is not about safety, it is about leadership and saying who we are as a company.
SAW: How can Ecos help companies that have developed from within a non- Western culture?
PG: We have worked with Western companies who have in turn worked with other companies in the Philippines, Indonesia, Papua New Guinea and in a variety of Asian locations. It is our view that sustainability would apply differently. For example, safety and security in a hill tribe of the Philippines are placed in a very different context to downtown Port Moresby. The needs are different but the principle is the same – are you looking after your people? Do you start from the assumption that no damage is acceptable? That is a philosophy that can apply equally everywhere but is certainly applied in different ways in different places.
SAW: A major motivator for workplace safety is government regulations. What involvement does Ecos have with governments around the world?
PG: We tend not to deal with governments but rather with our clients. We work with our clients to meet and pre-empt new regulations. We do believe that regulations will always a have a crucial role in framing the market but we believe in relation to sustainability, regulation is going to equalise and mop up the people who are following rather than carving out leadership. We believe that leadership won’t be driven by regulation but will lead regulation.
SAW: Nobody seems to be able to define “World’s Best Practice” but everyone seems to be running towards it. What is your take on that concept or phrase?
PG: Sustainability is such a broad issue that it is almost impossible to use that phrase in this context. There are so many aspects to it. Some companies are very good at workplace safety, some are good at the vision for their business, and others are good at implementation. There is such a wide range of issues that it is very hard to pin it down so we refer to this area as a framework for action, as a way of thinking about the issue and to determine the best action for your company in that particular context. From that you can learn a great deal from other companies’ experience and we would advocate watching and learning from that other company to determine what does and doesn’t work.
Unless you are talking about something that is clearly and numerically defined like workplace injury rates then you can talk about World’s Best Practice but if you talk about anything broader, you can’t apply it.
© safety AT WORK magazine 2002
