ClimateVoices Featuring Ken Pucker

In this issue, I’m pleased to be talking with Ken Pucker , an operator, investor, educator, and author with an abiding focus on sustainability. Ken teaches “Sustainable Business Dynamics” as an Adjunct Professor at The Tuck School of Business at Dartmouth and a Professor of the Practice at The Fletcher School at Tufts University . In addition, Ken serves as an Advisory Director at Berkshire Partners. Ken spent the bulk of his career working in fashion. He served as 添柏岚 ’s Chief Operating Officer from 2000 to 2007.

Ken is a published author in periodicals such as the Stanford Social Innovation Review , Institutional Investor and the Harvard Business Review . Ken also is a board member at King Arthur Baking Company and serves on the boards of the Commonwealth School , Mighty Earth , and the High Meadows Institute .?

During your tenure, Timberland became the first public company to issue quarterly CSR reports and publicize the environmental footprint of its iconic boots, all while it grew by ten fold to over $1.6 billion in sales. How did actions like these ultimately end up highlighting the current limits of our market-based system and why regulation is needed?

When I served at Timberland (1992-2007) the company was publicly traded (NYSE) and privately controlled (by the Swartz family). I was fortunate to work for the second generation of the family to lead the company, Sidney, and his son, third generation leader, Jeff. By the time that Jeff ascended to the role of CEO, he had already worked at the company for more than fifteen years and found himself no longer inspired by budget and marketing meetings.

Jeff was a curious polymath and around the time of his appointment to CEO, he found faith. To make his work more rewarding, and better match his day job with his faith, Jeff rewrote the mission of the company. As of the year 2000, Timberland’s mission shifted to become one that was “equal parts commerce and justice.” Justice was defined by three pillars, global human rights, citizen service and environmental stewardship. By leading in each of these areas, Jeff wanted the company to become a paragon for “doing well and doing good.”

Timberland was able to deliver on his aspiration. Between 2000 and 2007, the company delivered 28 straight quarters of record financial results (doing well), while redefining the standard for a sustainable company (doing good). As but a few examples, Timberland powered its (owned) factories and distribution centers with renewable energy, gave all employees 40 paid hours to engage in community service, decreased its CO2 emissions by double digits and enforced the strictest code of conduct in the industry.

And yet, notwithstanding Jeff’s authentic commitment to sustainability and the Swartz family's private control, Timberland’s environmental footprint grew between 2000 (when I became COO) as compared to 2007 (when I graduated). Here are few reasons why:

• To grow the business (an imperative for any for-profit company), Timberland expanded its product offering. Between 2000 and 2007, the company started a kids product line and a sub-brand (Timberland PRO) of boots for industrial trades. In addition, the company dramatically accelerated its cadence for new product development (in keeping with industry practice) thereby resulting in more churn of styles. This focus on ever more “newness” led to more obsolete products and shorter lifespans for parts of Timberland's product offering.?

• How then, you might ask, did Timberland’s carbon emissions decline over this period (per mention)? More precisely, direct emissions (scope 1) and emissions from purchased energy (scope 2) both declined over this period - an impressive feat in light of double digit topline growth. However, Scope 1 and 2 emissions represented only 4% of the company’s overall carbon footprint. This is because most emissions from footwear businesses come from upstream outsourced suppliers (e.g. cattle ranchers and tanneries) whom Timberland could not track. This remains the case from most companies. Even today, less than half of all public companies that report to CDP, disclose their Scope 3 emissions from their supply chains.?

This highlights the limits of market based, voluntary corporate sustainability. If Timberland, a company that was privately controlled and led by a faith based, sustainability enthusiast, could not measure or reduce its Scope 3 emissions, what about the rest of companies who did not enjoy those advantages.

The current system of capitalism demands revenue and profit growth. CEOs are rewarded for delivering on these measures - not on how much they are able to reduce carbon emissions or water intensity. Hence the need for regulation, or, new rules.

In your TEDx Talk* you discuss the limits of voluntary corporate action and suggest that citizens need to demand more of business leaders and lawmakers. What can employees do to urge their employers to speak up when climate policy is being rolled back in the United States?

*TedX Boston - The Limits of Corporate Voluntary Action

Employees are also citizens. As climate change accelerates, more and more people are impacted by natural disasters. The horrific LA fires are only the latest manifestation of a trend that is headed in only one direction. Sadly, it is only the incidence and imminence of destruction that is waking citizens to the consequences of living beyond humanity’s shared climate budget for the past fifty years.?

At the same time, this recognition represents an opportunity. Engaged citizens can organize to insist that their employers and legislators better represent their interests and those of their children and grandchildren.?

Companies are the biggest source of carbon emissions. For years, sustainability professionals had assumed that disclosure would enable investors and consumers to pressure companies into a “race to the top” - where the companies that performed best on carbon and water use (for example) would be rewarded with more investors and consumers. This has not happened, mostly because these stakeholders care about other things more than they do about environmental impacts.

But, what if employees were able to use their considerable leverage to force their companies to become more responsible? What if citizens (also employees) were to band together to demand that their legislators protected the interests of future generations? These are, I think, better possibilities for leverage…especially as the world burns hotter.

Last summer you wrote an article titled "Companies Are Scaling Back Sustainability Pledges. Here’s What They Should Do Instead.”* Can you elaborate on your argument and why you want businesses to step up their policy advocacy??

*Companies Are Scaling Back Sustainability Pledges. Here’s What They Should Do Instead

Even before the U.S. election, companies were retreating from their sustainability commitments for a number of reasons. More specifically:

1. Many targets were set without sufficient diligence. As one CSO for a multibillion dollar company told me, “not enough people did their homework” in advance of setting goals. After all, companies get credit for setting goals and are not penalized for missing them.
2. After exhausting early positive NPV sustainability investments (“win-wins”), companies found it harder and harder to justify NPV negative investments in decarbonization.
3. Most companies set goals for 2030 in the late 2000-teens. As 2030 approaches, companies are realizing that the math no longer works (note; this is the same as the math for 1.5 degrees, which no longer works). For years, companies put off this reckoning, but now, it is obvious that previous aspirational targets will not be met.
4. Laws in Canada and the EU have passed or are pending that allow lawmakers to penalize companies making unsubstantiated “green” claims.?
5. Companies have learned that there are no consequences for missing sustainability targets. As such, resetting more realistic goals is a pain free process.

Corporate retreat from DEI and sustainability has only accelerated since the U.S. election.

The sooner that we collectively realize that market based, voluntary sustainability is a woefully inadequate response to growing inequality and environmental damage, the sooner we can have a more honest conversation about what must change.?

Unfortunately, on their own, legislators, corporate executives, investors and consumers are not equipped or incentivized to advocate for the rules and structural changes that are necessary to secure a safe future. Thus, citizens, who are also employees, must raise their voices and force rule-makers to set rules that “lift the floor” for social and environmental outcomes.

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The opinions and views expressed in this interview are solely those of the individual(s) being interviewed. They may not reflect the views, policies, or positions of ClimateVoice, the employer(s) of the individual(s) being interviewed, nor of any other organizations with which the individual(s) being interviewed are affiliated. This interview is intended for informational purposes only and should not be interpreted as an endorsement or official statement on behalf of such employer(s) or organization(s).