What does it take to be an eco-visionary? You don’t need to reinvent the wheel and you don’t have to work at a Fortune 500 company—though Sarah Severn just happens to. As Nike’s Director of Mobilization for Sustainable Business and Innovation, Severn is constantly weighing the details of sustainability with the bigger picture of climate change and global consequence. In our interview she tells us what keeps her going in the face of adversity, what Nike’s plans are for creating a better closed loop system and why sharing technology is good for business.
GG: What keeps you going when you experience either internal or external setbacks in achieving your vision?
SS: Doing this kind of work, you have expect there will be setbacks. You don’t expect it to be a smooth pathway. Partly, that’s because we’re trying to create a different culture. Particularly if you’re working in a company, it’s about working within your existing culture, but still encouraging people to adopt a certain perspective, behaviors and mindsets.
Once that’s done—and I would say we’re largely done with that part of it at Nike from a leadership and senior level standpoint—there will always be the individual cases where new people come in who may need to be brought along. And it’s not about coercion or anything of that nature. It’s about making sure the people in your company have a shared vision.
Externally, I think what happens is that you’ve got the same issue, except there are many more cultures you’re working with, many different points of view—some of which are extremely valid. The task is to find common ground and a pathway forward even if it’s not necessarily what your initial vision was. We’ve learnt that there is always give and take, and there has to be some compromise to get to a certain level.
That being said, you can find that if you compromise at one point that later down the line you have to re-address the issue. It’s all about dealing with human relationships. When you get down to it, it’s messy. Sometimes rational, objective arguments aren’t effective. A lot of times it comes down to how people emotionally react to things.Understanding that and coming to terms with it, as well as remembering that you’re going to need a lot of patience, is how I keep going. The ultimate object is sustainable development, so you have to stay focused on that.
GG: We know that you went to Copenhagen in December for the UN Summit. Seeing that governments and organizations like the UN Summit have been working for decades to come up with a global agreement on solutions to the effects of industrialization, what role does the private sector need to play to help create this change?
SS: The private sector has an increasingly important role. It’s actually leading in a lot of places and doing the most in terms of moving the economy. Now, that’s not everyone in the private sector, but there certainly is a great deal of leadership in this area. There are clearly many companies that have business opportunities there and that’s part of why they’re present—new technology and new energy entrepreneurs especially.
The private sector is a large part of what will bring investment that required. Until you have a level playing field where you have caps in place or a price on carbon, it’s still very difficult for those investments to be made. There’s just still too much uncertainty. People want to know whether they should be putting their money into a nuclear power station or in new fuel cell technology.
If you’ve spent a lot of time on the issue and you understand it well, you can do a decent job explaining issues and what business thinks they are to the politicians who may not have had the opportunity to think things through. They’re having to think through issues that they haven’t had to address in the past plus regulations and policy in the U.S.,which has just introduced legislation on a lot of this for the first time ever.
Prior to that, very few of these politicians were thinking about climate change legislation. And all of a sudden they have to create a level of expertise about a subject that’s very very complex. I think the business sector has a role in helping them understand this issues, as do the scientists, but many of the businesses have been doing work in these industries for a long time and are in the best place to explain it. It runs the gamut from education right through to investment.
GG: Can the private sector alone push governments to action?
SS: It’s not just about the private sector, it’s also scientists and civil society pushing. If we can get a combination of civil society and business working on this, we are going to see a shift. Interesting is whether or not most of that work is going to start happening at the national and sub-national levels—which has been the pathway so far. Or whether we’re actually going to be able to get some sort of global agreement.
It’s very difficult. The U.S. political process is probably not built well for the way we are right now. I believe it’s going to be very challenging to get that accomplished, but it’s something we have to strive for.
GG: Nike’s recently pushed for sharing more intellectual property and new technologies in the name of sustainability through the GreenXChange Program. What’s the purpose and hope behind this initiative?
SS: With GreenXChange, we’ve been out there saying that trying to innovate on our own and finding solutions to some of the most pressing problems in sustainable development was not working. There’s a huge gap in knowledge and expertise. And there are also a lot of companies trying to solve the same problems—we’re all reinventing the wheel. All of these things can be viewed in isolation without any sort of real effect on the system.
To us there are two main benefits. One, we need solutions to some of our problems and we think there are companies out there that might have those solutions buried away. Secondly, the pace and scale of change that we need is currently not happening right now. Those two things were the initiating points. We partnered with Creative Commons because they had already tested this out in the area of culture and art and figured out the terms of licensing copyrights.
The interesting thing is that there are two approaches. You can take your knowledge and say that anyone can access it, but the trouble with that is if you don’t track it, you can’t see where it’s being used. Knowing that can help you measure the bigger impact and the GreenXChange will enable people to share IT—and in some cases they may want to give that away to everyone. In other cases they may say that they’re happy to let companies outside of their sector use it, but that they aren’t comfortable with our direct competitors using them.
With the GreenXChange system, you can write an agreement to license the patent on that basis. You can also provide free access for academics. One of the things that we do at Nike is to free up any of the patents to automatically go through for academic purposes. That unleashes a hastened scale of innovation, but you’re also able to track them. Your technology isn’t just out there being used in ways you won’t ever know about.
GG: How does that fit in with Nike’s business model? It seems, at least on the surface, a bit anti-competitive.
SS: If you look at what some companies are doing now in sourcing innovation—they’re going outside the company because they can’t get the technology they need to help them get ahead by just doing R+D within their own four walls. There are some companies doing amazing things with how they pull in entrepreneurs from different places and work with them.
Our viewpoint has been that having a competitive advantage boils down mostly to the area of timing and how long you hold your patents. So you don’t have to put everything out there on the GreenXChange. There are no requirements to put your patents into this system. You can choose what patents you put in, or don’t put in. Many of these patents may have been in existence for quite some time. If you believe they could be used more broadly by non-competitors, but you still don’t want your direct competition using it, you can write the rules that way. Giving the choice to define how IT is used is how you get over the competitive issue.
For instance, if we put out a patent we have on a more environmentally sound rubber, it could be used in many different places other than the footwear industry. At some point we might also say that we’re quite happy for our competitors to use this technology as well, because consumers aren’t making their buying decisions based on how green the rubber is—they’re making their decision based on the design and function of the shoe. This is something that makes that possible and we think it’s beneficial for everybody to be able to do.
GG: This seems like it’s a pretty huge shift in thinking—for companies to be collaborating on various technologies and for corporate focus to be on a triple bottom line. How has your thinking evolved at Nike?
SS: The thing about Nike is that it’s always been headquartered here in Oregon, where people have a really strong environmental ethic. So when I arrived in 1995, the Nike Environmental Action Team—which has since gone through many versions—had already been set up two years earlier. That team was a result of some grassroots efforts of Nike employees back in the late 1980s. It emerged of its own accord. It wasn’t mandated and that’s based on where we are. There has always been that culture and we got into it early. But this is a long road. It’s a long journey. Even when you do start early, sometimes you find that you just don’t have the resources out there.
Over time people have realized that this isn’t just a nice thing to do, but that it’s also a source of growth for a company and of innovation. There’s been a shift from sustainability being something that’s nice to do, and something that is focused on avoiding risk, to being a source of innovation and profitability for companies.
That happened because within the context in which we’re operating, it has become much more apparent to people that we’re in a closed system here on this planet. And we can’t continue to do business as usual when we’re faced with significant resource issues.
GG: Are there times when sustainability comes before profit margins?
SS: There’s always trade-offs. We will always try and make the business case for it. Sometimes you do have to make decisions. Let’s say there’s a bio-based material that you want to use, but there aren’t large enough amounts of it available at a good cost margin. So we would try to balance that cost increase with more efficiency to lower the overall cost. There’s still a very tight control on things like pricing, but at times that decision will be made, when it’s the only solution we’re happy with even though it’s going to be a bit more expensive. We’ll absorb those costs for a short time in order to make that happen.
Other times, the decisions are more about asking whether investing some seemingly large amount of money now is worth it because it will lower our operating costs substantially in three to four years. If you’re doing any facilities renovation, your always looking for a payback period within about three years and in some cases you might push that out if you think it’s a particularly good project.
Companies that aren’t publically held, like Nike is, have a little bit more discretion in how far they go for sustainability’s sake. But we still make a lot of decisions that make more sense on the sustainability side than the financial side. What you have to do is look at it more from a long-term perspective. You have to weigh whether a decision looks like the right one to make considering the here and now, or whether circumstances are going to change in the future that warrant a different path. That’s why you always need to have a forward-looking agenda.
For instance take the issue of oil prices. We’ve seen them go up once, we know they’re going to go up again. We need to be doing things to reduce our dependence on oil in our entire value chains. Investing in something like wind energy, considering we’re going to see higher prices in oil over the next 20 years, makes that most likely a smart investment.
GG: What’s next on your to-do list at Nike?
SS: I’m very focused on climate work, the world of policy and intersections with civil society on that. My goal is to do a lot of work in coalitions and try to see what some of the game changing policies would look like—climate and energy obviously being the key issues at the moment—but there could be others too looking at resources like water and toxins.
For Nike, in general, our ambition is to move into a more closed loop business—where we really reuse materials back into shoes and apparel. We want to keep everything in cycles and prevent waste. We’re also looking to shift from a negative environmental impact to a positive one, where we can do things like return the water we use back to its source in better condition than when we took it out.
Sarah Severn is the Director of Mobilization: Sustainable Business and Innovation at Nike, Inc in Portland, Oregon. Sarah is also a speaker on the Eco-Visionaries Panel at GoGreen ’10 in Seattle, April 21. To learn more about her work and Nike’s sustainable roadmap visit: http://www.nikebiz.com/responsibility/.
GoGreen 2010 Seattle is a full-day sustainability conference geared towards businesses seeking actionable steps to greening their operations. The conference takes place April 21, 2010 at the Olive8 at the Hyatt (LEED certified Silver). Early Bird tickets are on-sale now through April 1, 2010. Tickets are $175 each for single Early Bird Full Day Admission and $150 Early Bird Full Day Admission for Groups of 2 or more. More information can be found at: http://www.seattle.gogreenconference.net/registration/