Episode 19: Sustainability in the C-Suite with Colin Dyer (JLL)

Businesses-Going-Green-C-Suite-Sustainability-Image

Who knew a Fortune-500 CEO could be so friendly and approachable? We lucked out with the opportunity to interview Colin Dyer, the former CEO and current board member of JLL. JLL is the global real estate services company where Jay actually works! Colin joined us to talk Sustainability in the C-Suite, highlighting the lessons he's learned as CEO in turning big companies into sustainable corporate citizens. Fortunately, none of Jay's jokes were bad enough to cost him his job. BONUS: Colin's charming British accent. 

Learn how more businesses are going green here!

Episode Intro Notes

WHAT WE’ll COVER

  • What is a CEO? What does the CEO do, exactly?

  • Why should CEOs care about sustainability?

  • Do CEOs actually care about sustainability?

  • How can CEOs implement sustainable practices?

  • Sustainability at JLL and Colin Dyer

What Does the CEO Do, Exactly?

CEO stands for Chief Executive Officer. The CEO sits in the C-Suite (aka team of other “chief” officers) alongside the Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Investment Officer (CIO), and others.

They are responsible for the overall operation of a business and are usually elected by shareholders and the board of directors. In smaller companies, CEOs are typically involved in day-to-day operation of the business, but in larger companies, their role is mostly one of leadership, policy and motivation, governing company standards and overall growth plans.

They set the tone and vision for their organization, and as the face of their organization, can often rise to fame like Mark Zuckerberg or Steve Jobs. Or Scott Breen and Jay Siegel.

Investopedia has a great football-team analogy for how to think of the CEO with respect to the company structure. 

  • We can think of a company’s board of directors and shareholders as the owners of the football team. They are the ones who appoint the CEO, set expectations for the company, and decide whether the CEO stays or goes based on performance.

  • The CEO acts as the coach of the football team, deciding how to organize the company and placing key executives in the areas that will best help the company achieve its goals.

  • The company's employees act as the players on the football team, who deal with the day-to-day operation of the firm and drive the company based on the specific strategies decided by the CEO.

Why Should CEOs Care about Sustainability?

From Dan Probst, also of JLL (Chairman of Energy and Sustainability Services)

  1. They’ve already gone on record. 80% of CEOs believe it’s important to measure and try to reduce their environmental footprint, and 75% say that satisfying societal needs beyond those of investors, customers, and employees, and protecting the interests of future generations is important. 

  2. Recruitment and Retention. 73% of millennials seek meaningful work at an organization with a mission they support, and 77% of them say culture is more important than salary and benefits. Therefore, actively demonstrating a commitment to sustainability shows employees that the company is mission-driven and can be a force for good. Scott, we’re both millennials, and we will readily admit to eating this stuff up!

  3. Customers and Clients Have Their Own Sustainability Goals. For service providers, demonstrating commitment to sustainability can help win clients with similar goals. For those selling direct-to-consumer, a sustainability commitment and products made in a way that doesn’t harm and also helps the environment appeals to the LOHAS market. LOHAS means Lifestyle of Health and Sustainability. LOHAS is comprised of upscale, belief-driven consumers who are committed to ethical spending on products meeting its value equation and who don’t switch brands to save money. It’s estimated to be a $300 billion market that is composed of 30% of U.S. consumers.

  4. Sustainability Adds Muscle to Mergers and Acquisitions (M&A). In M&A, a robust commitment to sustainability can help retain employees. Conversely, sustainability commitments can help attract acquirers.

  5. Shareholders are Paying Attention. The impact investment community is growing fast. More than one out of every five dollars under professional management in the U.S. is invested according to sustainable, responsible, and impact investing principles; that’s equal to close to $9 trillion. These and other shareholders are putting their money in sustainable-minded companies and also challenging companies to be more sustainable.  For example, Average support for shareholder resolutions calling for disclosure on climate change risks surged to 26 percent in 2016, up from only 16 percent last year.

All of this goes to show that the myth of corporations being the big bad guys is by no means true. While there are certainly some big companies out there that are contributing to the problem, forward thinking corporations stand to make an enormous beneficial impact on global sustainability. This is especially true with a new administration that may not be as proactive on climate as we’d hope.

Ok, But Do CEOs Actually Care about Sustainability?

Some interesting stats from PWC’s 17th Annual Global CEO Survey

CEOs recognize that large, global trends have repercussions for their businesses and that they’ll need to do something about them. The report highlights the most common CEOs concerns:

  • 63% highlight availability of key skills

  • 56% - high or volatile energy and raw material costs

  • 52% - shifts in consumer spending and behavior

  • 41% - supply chain disruption

46% of CEOs put resource scarcity and climate change in their top three megatrends. Also, of the forces beyond the CEO’s control that are challenging and reshaping business specifically, 76% highlight energy as a key risk. This parallels nicely with some work that Andrew Winston (of episode 12) is doing with CEOs and their energy policies around the world. For example, in his recent Harvard Business Review article, he cites the example of Microsoft recognizing that volatile energy prices and global carbon management posed a significant risk to the company. In response, Microsoft has “has increased renewables in its energy mix and improved energy efficiency. It now charges business units a fee for their carbon emissions, reinvesting the funds in its energy programs. It recently announced plans to source 50% of the energy for its data centers from wind, solar, and hydroelectric power by 2018, and 60% by early in the next decade.”

CEOs recognize that these big issues have repercussions for their businesses and that they’ll need to do something about them. CEOs concerns:

  • 63% highlight availability of key skills

  • 56% - high or volatile energy and raw material costs

  • 52% - shifts in consumer spending and behavior

  • 41% - supply chain disruption

From Accenture and the UN’s CEO study (done every three years)

  • 59% of CEOs say they can quantify the business value of their sustainability initiatives, which is up from 38% in 2013. 

  • 89% say that sustainability commitments are translating into a real impact in their industry.

  • More than two thirds (67%) believe that business is making sufficient efforts to address global challenges, up from just 32% in 2013.

How Can CEOs Implement Sustainable Practices?

  • Start the dialogue - don’t overlook the first step!

  • Create metrics and track them

  • Engage value chain members, including suppliers and NGOs

  • Create organizational structures that support sustainability, like chief officers of sustainability

Sustainability at JLL

JLL is an international real estate services company. We provide corporations and owners with services around their buildings. We might find, construct, refit, manage, lease, buy, and sell the real estate you use in your business. We also have a real estate investment management business, with about $60 billion of assets around the world. JLL has 62,000 employees, 280 offices in 80 countries and is a Fortune 500 company. So, yeah, it’s not small! Over 1,500 of these employees are LEED-certified, the most accredited professionals of any company in the world

On top of helping clients lower their own energy usage and use their space more efficiently, JLL has implemented an entire internal framework to drive sustainability within the company. Some of these measures include:

  • Setting internal GHG and energy reduction goals

  • Offering free classes through its internal training system

  • Created employee recognition systems and health incentives

  • Community volunteering events

  • Enhanced internal governance by creating a Global Corporate Sustainability Board

Colin Dyer

Colin is currently a member of the Board of Directors at JLL. Colin served as the company’s CEO from September 2004 through September 2016. Under his leadership, JLL’s revenues grew more than five times (to over $6 billion) through organic growth, over 80 acquisitions of other companies around the world, and the addition of more than 100 offices and 30 new countries to JLL’s geographic footprint. He has an MBA from INSEAD in Fontainebleau, France, and a bachelor’s degree in mechanical engineering from Imperial College in London. He spearheaded the sustainability movement in JLL globally, so we’re pumped to talk to him!