Case Study: Brown-Foreman Corporation’s Sustainability Road Map
Brown-Forman, one of the largest American-owned companies in the spirits and wine industry, is known mainly for brands such as Jack Daniels Tennessee Whiskey, Southern Comfort and Korbel California Champagnes. The company has been involved with many aspects of sustainability for a while. For example, in 2004, they sponsored a company-wide symposium on sustainability to learn more and debate the issues as they related to the businesses and the company. This initiative led to the creation of a position of Vice President of Corporate Responsibility. In subsequent years the company has made steady progress in addressing issues such as responsible drinking.
The company has used their powerful brands to carry messages on responsible alcohol consumption and been transparent with regard to their issues and positions around alcohol responsibility. At the same time, the company has also focused on environmental and energy-related issues such as the reduction of water and energy usage, as well as reduction in carbon emissions and waste. Even as the company made progress on several sustainability fronts, they functioned without a clear, comprehensive strategy for sustainability. They recognized the need for more focus on their environmental sustainability efforts and goals.
They began a process that would lead them to their next generation sustainability goals. The two executives responsible for environmental sustainability decided to broaden the focus of sustainability conversations. They brought together a group of employees from many functions, including Production, Marketing, EHS (Environmental, Health and Safety), Research and Development, Facilities Management, Corporate Responsibility, and Packaging. They wanted not only to explore technical issues such as how to reduce the company’s environmental footprint, but also wished to consider the equally important issues pertaining to how to create an organizational culture that was committed to these issues. In preparation for the critical, cross-functional conversations, the company administered an early version of the assessment instrument SCALA™ (Sustainable Culture and Leadership Assessment) to a cross-section of the company’s population of employees. The results of the survey revealed a rich diversity of viewpoints on the company’s culture as it relates to sustainability. The data revealed the need for a greater understanding of the issues across the company, as well as a differentiated, yet coherent and cohesive sustainability framework across the businesses. Respondents were looking for more information pertaining to the business case for environmental sustainability strategies and a better understanding of how environmental decisions were made. One of the most interesting findings based on the analysis of quantitative data was that employees who were involved in sustainability efforts either as part of their day job or as an addition to what they do day-to-day were more connected and engaged with the company than were others. The process facilitators supplemented the survey by interviewing leaders from the various business functions and members of the long term shareholder base. They heard about the challenges of responding to consumer’s expectations and maintaining brand equity while also addressing sustainability considerations. Packaging for premium brands served as an example of the difficulties of balancing brand identity with sustainability- related factors such as minimizing waste. Issues of this type beg for creative, innovative solutions.
A picture emerged from the combined survey and interview data of a company with values that were aligned with environmental sustainability, but with a culture that tended to be cautious, passive and reactive to the environmental sustainability challenges. The facilitators introduced the results of the survey and interviews at the cross-functional gatherings. Throughout the conversations described by a participant as “transformational”, the group brought their varied backgrounds and expertise to bear in identifying areas of company strength that could impact sustainable innovation. By the end of the process, the group reached consensus on priorities, direction, high-level goals and preferred methods for achieving their goals. Several noted the potency of assembling so many players from different yet interdependent parts of the organization. They heralded the value of hearing points of views from functions outside of their own. One person remarked that he had worked for the company for 25 years, and yet this meeting was the first time that he had met some of the people in the room and heard the perspectives of other functions.
The result of these cross-functional conversations was an Environmental Sustainability Roadmap that laid out a plan for the company for more tightly linking the environmental sustainability strategy with its 2020 vision, brands and business strategies. Brown-Foreman wants to endure, remain independent and become a “forever company” meaning that they want to thrive and grow into the future. They have connected their environmental sustainability goals to their strategy that they refer to as BF 150 – which takes the company from today to 2020. The engagement generated by this process was summed up by a participant who said, “What I find so interesting is that this topic cuts across age, gender, and other differences within the company in terms of its ability to attract interest. It represents an opportunity for Brown-Forman to lead and work with other partners to try and find solutions to issues. It gives us an opportunity to engage unlikely suspects and to build real innovation.”
In fact, Brown-Forman did engage with some of these “unlikely suspects,” with the help of Ceres, a coalition that mobilizes a powerful network of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices. In the meeting organized by Ceres, Brown-Foreman presented their Environmental Sustainability Roadmap, their Performance Objectives and an overview of their major projects to a broad base of external stakeholders. They engaged in conversations with the group that they referred to as “deep dive discussions of water, climate and energy issues.” The group gave them input and specific recommendations on issues such as governance, leadership and accountability, their approach to goal-setting and how they might consider approaching their supply chain. According to Rob Frederick, V.P. of Corporate Responsibility,” We just opened up our Roadmap for heavy input from a diverse group of external experts in environmental sustainability. This stakeholder dialogue/engagement is critical to moving us outside our comfort zone, so that we can see the issues and solutions differently, think more creatively and innovate. “ Brown-Forman serves as an example of how broader conversations within the company can lead to greater engagement with people outside of the company. While interacting with colleagues across organizational boundaries on the inside can be exciting and fruitful, enabling employees to have conversations with those on the outside can be equally fertile and rewarding.