“Sustainability and Performance” – An Interview with Tensie Whelan, Director, NYU Stern Center for Sustainable Business

Tensie Whelan (NYU ‘80), Clinical Professor for Business and Society, is the Director of the NYU Stern Center for Sustainable Business, where she is bringing her 25 years of experience working on local, national and international sustainability issues to engage businesses in proactive and innovative mainstreaming of sustainability. As the former President of the Rainforest Alliance, she transformed the engagement of business with sustainability, recruiting 5,000 companies in more than 60 countries to work with Rainforest Alliance. She has been recognized by Ethisphere as one of the 100 Most Influential People in Business Ethics and was a Citi Fellow in Leadership and Ethics at NYU Stern. 

Your work with the Rainforest Alliance is inspirational because it operationalizes a process for embedding human values across the supply chain. Have you thought about creating a similar process for government supply chains? 

Some governments are specifying certified sustainable products in their procurement policies. For example, the government of Oaxaca, Mexico, required wood for local school furniture to be purchased from sustainably managed forests in the region. In NYC, the parks department required certified sustainable wood for its construction. So yes, we need government to provide market demand for sustainable produced products and services.  

It feels like we are running out of time. Why are governments and businesses not driven by a sense of urgency to stop the looming climate (and societal) collapse? 

Change is hard and somebody always loses.

And those that will lose the most (e.g. oil and gas), tend to have the most power today and are trying to prevent change as long as possible. Also, consumers/citizens are not happy when they are inconvenienced by new rules trying to help us manage the transformation and are easily manipulated by private interests and politicians into opposing them.  

What do you teach executives that will change their minds? And how do they change the trajectory of the companies they lead? 

I focus on the business case because for them to be able to run their companies, they have to deliver on financial goals. While companies can make incremental changes at the margins with relatively small investments, the transformation we require needs bolder change, which will cost money. Corporate leaders are willing to invest in digitalization and AI, for example, because if they don’t they will be left behind and because they can see the upside in the future.

Sustainability can also help companies with defense and offense, but many don’t yet understand that. Our research at NYU Stern Center for Sustainable Business helps corporate leaders assess how sustainability drives better performance through innovation, risk management, operational efficiency, employee retention, supplier resiliency, and so on.  

We can’t even talk about ESG without a political backlash in the boardroom.

Is sustainability over? The backlash against ESG has roots in real problems. There has been greenwashing, overclaims, poor reporting, insufficient understanding of how to implement sustainability, etc. ESG is really just a term for measuring the outcomes of sustainability efforts and needs to be talked about that way. In addition, ESG reporting metrics are process and output based, not performance and outcome based, which means they are not useful for driving change and better financial performance. I see this as growing pains. The issues are not going away so the need for sustainability will not go away.  

The NYU Stern Center for Sustainable Business (CSB) and Edelman just released some cutting-edge consumer research initiative on best-practices in sustainability communications. Can you tell us a bit about that?

Our just released NYU Stern Center for Sustainable Business consumer research by Randi Kronthal-Sacco working with Edelman is truly ground-breaking. We partnered with nine iconic consumer brands across apparel, household items, food and beverage, and technology to test more than 30 marketing claims. The goal of this effort was to equip brands with the most effective communication strategies that refine positioning and empower marketers to deliver sustainability as a driver of consumer preference. 

The research found category claims are paramount, but certain sustainability claims have significant amplifier effects that perform across demographics.

Some of the other findings:

  • Across all nine brands, sustainability claims expanded brand reach by 24 – 33 percentage points above a category claim alone.
  • Sustainability claims were the top most appealing claim for 2 out of 9 brands, and among the topmost appealing for the remaining 7 brands, often outperforming other category claims.
  • Sustainability claims that ladder to relevant category claims were most appealing (ex. “100% sustainably farmed for great taste”)
  • The strongest sustainability claims performed equally well across demographics such as generations, gender, political affiliation, household income, education, and urbanicity.

What’s the ROI of life on Earth? Are financial metrics the only way to convince executives that corporations must change their operational behavior? 

Executives can be convinced with other arguments, but they cannot make significant investments in change without the business case behind them due to the demands of our current capitalist structures.  

What about Democracy? Any thoughts?

Such a broad question! 

Yes, I have thoughts, but where to start?

INTERVIEW by Christian Sarkar