Championing Sustainability from the Boardroom to the Bottom Line

In Conversation with Lorna Davis: Lessons from a Sustainability Pioneer

by Alexandra Jequier & Andreas von Specht

Lorna Davis , originally from South Africa, has built a remarkable career across seven countries on five continents. With over 20 years of experience as President and CEO of multinational consumer goods companies such as Danone, Kraft, and Mondelez, she has made significant contributions to the field of sustainability. During her six years leading a Danone/Kraft JV in Shanghai, she was instrumental in advancing Danone’s purpose-driven mission. In 2017, as CEO and Chairwoman of Danone North America, she established the 6-billion-dollar entity as a Public Benefit Corporation, achieving B Corp status in 2018 and becoming the largest B Corp in the world.

Lorna has also served on the global boards of Electrolux and BLab Global. She continues to inspire, coach, and challenge leaders to use business as a force for good. Lorna continues to serve on several boards, including the Social Mission Board of Seventh Generation, the Advisory Board of Radicle Impact, and the Volgenau Climate Initiative. Her TED talk on Radical Interdependence has garnered nearly 3 million views, underscoring her influence and dedication to meaningful purpose. We are delighted and proud that she joined our board of AvS Advisors in 2024!

AvS Advisors: How did your sustainability journey start?

Lorna Davis: It had a lot to do with my experience in China. I lived in Shanghai for six years and before that, I was just living a happy and successful life and career. China changes you at a fundamental level. I saw the speed at which the resources of the planet were being converted for the rest of the world to have what Americans always had. If you look at the equilibrium on the planet from an environmental point of view, things were okay when it was only a few ‘rich white people’ who were using all the resources.

Things got more difficult when everyone else wanted a piece of that, and you have billions of people saying ‘I want a car,’ ‘I want to eat meat every day,’ ‘I want to fly to Paris to go shopping.’ It was like watching events unfold in hyper-speed, and I remember thinking the world cannot sustain this and asking myself: What could I do to make a difference? This is how my sustainability journey started.

How did you get in touch with the B Corp movement?

At the time, my former boss Emmanuel Faber had become the CEO of Danone and wanted to take the organization to another level of sustainability. At that time, the B Corp movement was starting to get some credibility. I moved back to Paris to run the process of turning Danone into a publicly sustainable company. We had our own internal metrics around doing the right things, but we did not know how good we were compared to others, and we wanted something that was externally credible. So, we decided to partner with B Corp.

Was there any role model at the time? Was Unilever already on that journey?

Paul Polman, then the CEO of Unilever, had been talking about the sustainable living plan, and he was trying to drive the journey at the strategy end: blending the strategy of the business into a sustainable perspective. Emmanuel Faber was interested in doing it from the metrics and the legal end. One important question is who you get your inspiration from! Patagonia was also a great influence, and when I led the business in the US to become a B Corp, the CEO of Patagonia became the chair of our Advisory Board.

We understand not everything “is just wonderful” and there might also be a few painful situations along the journey. Could you comment on that part?

The first thing I have noticed is that there are always three phases in a change: things go from the unthinkable to the impossible, to the inevitable. A combination of three things generally comes together: first, information (at some point, the data gets so compelling that you can’t ignore it anymore); second, social pressure, and the third is legislation.

One of the things that is true about this journey is that it is a juggle between the short term and the long term. For example, when we were on the B Corp journey, we had hundreds of factories around the world with almost no renewable energy. It was a huge opportunity for us to install solar panels on the roofs, but we could not afford to put that in our capital budget the first year. So, we spread it across the following ten years. In the long run, you will get more points for the B Corp certification, and you will also save money.

I think there is another kind of juggling that happens. I have never, ever, come across a man who is doing the work. People almost always delegate this work to a woman. It is so interesting because you often have the boss of an organization who is visionary, brave, courageous, who is doing things that other people don’t want to do and has a perspective from the top that people trying to climb the ladder do not have. They want to change the world and almost always, they have people below them who are conservative. They are often angry they are not the CEO and think the organization is not going to be able to succeed without them. I call them the “permafrost layer”. Then underneath are frequently women in their thirties or early forties who are doing the work.

I always tell people if they want to get on the sustainability journey, they should take the smallest legal entity they have in their company, one that they do not care about that much and do the certification there. That way, they will find out all the little tricky bits and solve them before they apply to the bigger entities.

How important is it to have a B Corp Champion on the Board of an organization?

This question doesn’t have an absolute answer. The notion that change happens from the top is simply not true. It actually happens from the bottom up, so you often have a visionary CEO who delegates, but then actually the change mobilizes from the bottom, and it also mobilizes from the outside in.

For example, I was working with a bank that has a lot of very high-profile clients. At least two of their five most significant clients were incredibly outspoken about human rights and environmental issues. I asked them: “If another competitor came along and said my bank is much more ethical because they do not invest in fossil fuels and make sure that everybody gets the appropriate amount of money, et cetera – how do you think they would respond?” If your customers ask you for something, you do it. So, the best way to change is to get your customers on the same page as you, because they will put pressure on the management, and it is amazing when customers change organizations’ minds.

What about talent?

Young people that you want to have working for you will not work for a company that is not doing the right things. A very junior person in an organization can have a lot of power. The senior people cannot afford not to change because their employees will leave and go somewhere else. The senior people have the money, but the juniors are the ones with the power. The question for everybody is: Where can they influence? Where can they make a difference?

This triggers the question of titles and compensation. What role does that play?

There are two issues here. First, I think you lead from wherever you are. If you are the CEO of your company, use this power to make a difference in the world and for your kids to be proud of you. Second, young people also have a lot of power, they can try and change the organization and if they can’t, they can go somewhere else where they can make a change.

The question of titles and compensation is, nevertheless, very interesting. I just spoke with a CEO who resigned from her job. She is clearly highly talented, a mover and shaker. She said she did not want to live like this anymore. She was running an organization turning over 500 million dollars and is now going to run a 100-million-dollar business because she has three kids, and she wants to be able to work from home. Some people said she was crazy. She replied she knows where her values are, and she had enough money to live. Powerful, talented people are saying they have enough money.

I was also talking to somebody who was selling his business. He was not going to sell it to the highest bidder but to someone who will do the right thing with this organization. He smiled and he said: “I hang with a lot of people who have a lot of money, but I’ve got one thing that most of them don’t have: I’ve got enough.” It is a beautiful sentence. The only people who are really playing the hierarchy compensation game are the old fossils who have lost the plot.

We are an international boutique firm that just obtained the B Corp certification, and we want to continue with what we do in a way that is appropriate to the B Corp standards while adhering to our values. What would you want to see from a small firm like ours in order to make a difference?

I will give you an example of power: I am drinking from a bottle of water; if I put half a teaspoon of sugar inside, I completely transform this bottle. So, a little thing can make a huge difference no matter where you are.

There is a big movement in the world called the decarbonization of cash. The most powerful thing you can do is decide where you get your money from, and what you do with it. One of the things that you could do is choose to only do work for people who are doing what you consider to be the right thing.

There is another big point about where you put your money. I saw a really interesting chart that had the footprint of several companies. If you then looked at where their banks invest, the whole picture drastically changes. So, the question of where you actually put your money is also really important.

We must think for ourselves; there are no clean answers and yet we need to take responsibility for our choices. You can ask yourself one question: Let us assume that what you are doing is on the front page of the biggest virtual newspaper in the world. If you can defend what you are doing, and your logic is obvious, it is good. If you hope nobody finds out about this, then you should not be doing it.

Where do you think our greatest potential for impact as a firm lies?

The first thing is the kind of questions you ask. You have access to people that are extremely powerful, and simply asking them two or three powerful questions about what they are up to, regardless of the answers, is a really important way to make an impact. Every single time somebody comes to you to either give you a mandate or as a candidate, the careful thought, the careful questioning of what they are up to in the world is huge. At a kind of macro level, I think you can really help people think through a different world.

The next point is you can recruit talent to help make the world the way we want it to be – that is the second most powerful thing. And I think the third is that you can become thought leaders in this space, if you can start to become the place where people go to look for new ways of thinking about things. You can help people in the thought leadership area because everybody is grappling with this complexity, and very few people will have the kind of honest conversation that we are having right now, and people want it and need it.

Lorna, thank you very much for sharing these insights!

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