By Susan Hunt Stevens, Founder & CEO of WeSpire
Last week was Climate Week in New York City. Timed to coincide with the UN General Assembly, it is a series of events to, as the organization describes it, “showcase amazing climate action and discusses how to do more”. Over 140 different events occurred in categories including clean transportation, retail, investments and finance, sustainable travel and food, the SDGs, climate policy and studies and science.
One of the most interesting sessions I attended was hosted by JP Morgan Chase and the Center for Climate and Energy Solutions, called “Disrupting Climate Change: Financing the Energy Transition”. The panelists represented giant global businesses including Bjorn Otto Sverdrup, head of sustainability for Equinor, Norway’s largest energy company; Dawn Rittenhouse, director of sustainable development for DuPont and Neal Kemkar, Senior Counsel and Director of Environmental Policy from GE.
Now the MBA in me is always fascinated by where and how the money works in the climate debate. To the extent there is money to be made, I do believe the market will react and seize these opportunities. Where money and resulting power might be lost, there will massive pushback. Kemkar, for example, highlighted GE’s success with Ecomagination, where they’ve invested 20B over the last 12 years and that now drives over $270B in revenue.
However given WeSpire’s focus on employee engagement, it was a comment made by Sverdrup that piqued my interest the most. When he described the benefits of Equinor embracing and leading a transition to clean energy, one of the biggest benefits he cited was the positive impact on the culture of the company, making it more innovative and more energized.
This leads to question: what level of investment in clean energy or sustainability could be justified just on the culture benefits? Let’s assume that Equinor’s aforementioned positive culture change led to a 5% increase in engagement scores. Aon-Hewitt has done the research to show that a 5% improvement in engagement leads to a 3% increase in revenue in the following year. Equinor revenues were $61B dollars in 2017. A 3% increase would be $1.8 BILLION dollars, that repeats year after year (assuming you can maintain high engagement). The last time I was in corporate America, we looked for less than 3 year paybacks. So at Equinor’s size, you could justify $5B in investment in sustainability, just on the expected growth from improved culture and engagement.
We do find that employees are often mentioned as a key reason to tackle climate change, but the dollar value of improved engagement is rarely part of the ROI analysis or tracked after the fact effectively. Our ability to do this tracking is turning into one of the core benefits of WeSpire. Yes, our technology makes life simpler for anyone trying to run an employee engagement program and yes, it drives up participation and impact thanks to our behavior-based approach. But most importantly, we help do the math to demonstrate the impact that participating in purpose based initiatives is having on business outcomes. What that data continues to prove is that engaging employees in your impact initiative is not just the right thing to do, it’s the smart thing to do.