Is Hostility to Blame for Sustainability’s Leadership Gap?

The attack on Apple to refrain from doing anything that doesn’t add directly to the bottom line shows why it’s so hard to do good.

By now, you probably have heard about Apple CEO Tim Cook’s tart response to the conservative National Center for Public Policy Research (NCPPR) at Apple’s February 28 annual shareholder meeting. Representatives from the D.C.-based think tank demanded that Apple disclose all of its activities around energy and sustainability, and that it refrain from doing anything that doesn’t add directly to the bottom line.

Cook responded with visible irritation, according to witnesses, stating that a return on investment (ROI) was not the primary consideration on such issues. “When we work on making our devices accessible by the blind,” he said, “I don’t consider the bloody ROI.” The same thing was true for environmental issues, worker safety, and other areas that may not show an immediate profit, he said. Apple does “a lot of things for reasons besides profit motive,” Cook went on. “We want to leave the world better than we found it.”

Cook then added, “If you want me to do things only for ROI reasons, you should get out of this stock.”

Charging that Apple is “obsessed with the theory of so-called ‘climate change,’” the NCPPR put out a blustery press release claiming that Cook told investors to “drop dead.” The situation is ripe with irony.

But it’s also clear that the NCPRR’s worldview is a distinct minority. According to the Yale Project on Climate Change Communication, a majority of Americans would like to see some leadership and action on global warming: 83% say the U.S. should make an effort to reduce global warming, even if it has economic costs; 65% think that business should be doing more to address it and 71% say it should be a priority for the president and Congress.

So what does it mean to be a leader in the era of climate change?

Cook was willing to admit that Apple might not be immediately profiting from sustainability, something our own data shows it can be hard to do. In our most recent annual sustainability survey — the fifth MIT Sloan Management has conducted with the Boston Consulting Group — the percentage of companies that report their sustainability efforts are adding to profits has consistently come in at roughly 35% since 2010.

Cook stated up front that profit is not the motivation for all of Apple’s activities — a position NCPRR chair Amy Ridenour appears to find offensive, noting that “as the CEO of a publicly-held corporation, Tim Cook has a responsibility to, consistent with the law, to make money for his investors. If he'd rather be CEO of the Sierra Club or Greenpeace, he should apply.” Yet there is nothing in Cook’s stance that suggests profits are not a priority — even if not the only priority — and indeed, the argument between those who feel business must focus solely on profits versus those who feel it can and should also address competing societal priorities is a long-standing tension.

Cook’s confrontation may also explain one other piece of data from our survey. Eighty-five percent of respondents told us that while they believe that human activity plays a significant role in climate change, only 62% think their leadership believes so.

Human activity and climate change

Chart excerpted from, "Sustainability's Next Frontier." See the full graphic.

What might account for that gap? Openly committing to sustainability and climate change measures leaves company managers open to just the kinds of attacks that the NCPRR launched. And if business leaders are not able or willing to make the business case for activities publicly, that can leave employees wondering if their leadership actually believes in sustainability and climate change issues — and if it has the will to act on those beliefs.

Nevertheless, at the close of Apple’s meeting, it was clear that most of the shareholders went along with Cook’s take on what matters. The NCPPR’s proposal that Apple refrain from doing anything that doesn’t add directly to the bottom line received just 2.95% of the vote.

To quote the actor Walter Brennan in the most famous line from the 1959 Western “Rio Bravo,” “How do ya like them apples?”

1 Comment On: Is Hostility to Blame for Sustainability’s Leadership Gap?

  • Ron Sherga | March 12, 2014

    This is a tricky topic where most of the audience has little understanding. The biggest effects on climate from come from farming and buildings and construction. Yet, I believe we would be hard pressed to not eat or live outdoors. The complexity of the climate issue in regards to business practices is also very complex. Apple makes smaller devices that tend to utilize less materials and use less energy. They also create a powerful brand that’s a result of a culture perception. Part of that perception is derived from innovation, COUNTER culture mentality and loyalty among adopters. The NCPPR is asking Apple to align with its philosophy and in doing so risks disrupting a cornerstone of Apples branding and audience attraction. I can’t think of a more harmful potential to HURT the bottom line. It would be like suggesting Walmart change their motto to everyday HIGH prices. Or Nike saying Don’t just do it.

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