Improving Environmental Standards with As You Sow’s Conrad MacKerron

November 14, 2011

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JOHN SHEGERIAN: Welcome to Green is Good, and we’re so excited to have Conrad MacKerron, the Senior Program Director of Corporate Social Responsibility at Welcome to Green is Good, Conrad MacKerron. CONRAD MACKERRON: Great to be here. Thanks, John. JOHN SHEGERIAN: Hey, you know, Conrad, Mike and I have been huge fans of yours for a long time, and it’s truly an honor to have you on today. You are doing and touching so much, so many important issues in the green and sustainability revolution. Before we get into, your amazing website and organization, you have a biography that I could actually take the next 23 minutes and read to our listeners, and we’d never get to talk about your great organization. So, I’d rather you share with our listeners a little bit of some of the highlights of the journey that brought you to this position. How did you even get here? CONRAD MACKERRON: Sure. Well, thanks. My background is I really had a previous career as a journalist in Washington, DC. I got a Master’s in Journalism and started out in a journalism career. I covered a lot of environmental issues in Washington. I covered the Environmental Protection Agency, so I got very close up to how legislation is made, covering the Clean Air Act, the Clean Water Act, the Superfund Laws in the 1980s. I was a Bureau Chief for Chemical Week Magazine, so I got to look at a lot of regulatory issues and cover a lot of issues such as Love Canal, toxic waste cleanups in the eighties and nineties in Washington. Then in the mid-nineties, I really had a career switch, where I moved into the whole area of social research and shareholder responsibility, which is an outgrowth of the work that I’ve done today. So, I did analysis of the portfolios of investors and socially responsible investment firms, such as Progressive Asset Management in Oakland, and then Piper Jaffray’s SRI branch out here in San Francisco. That really started my work in terms of how to move companies towards more social and environmental responsibility using the shareholder opportunity, which is that as a publicly traded company, you have the right and opportunity to file shareholder proposals and have dialogues with companies, any publicly traded company here in the U.S., under some very simple rules set out by the Securities and Exchange Commission, and so some of the work that I started as a portfolio social research analyst, where started to engage companies on issues, I then took with me when we came over to As You Sow in about 1997 and set up this corporate social responsibility program that was focused very much on engaging companies to improve their performance as investors. We aligned with a lot of other social investment firms and we engaged scores of companies to improve in the areas of environmental health and recycling and human rights, laborer rights as well. It really has been a journey from focusing on journalism, on environment, into this social research arena. JOHN SHEGERIAN: That’s fascinating. So, you’ve been As You Sow. For our listeners out there, Mike and I have our laptop and our iPad open. Your website is just chock full of amazing information and important information for our listeners out there, not only here in the United States, but around the world since so many of the brands you touch and get to affect are worldwide and international brands. For our listeners out there, it’s It’s really, really a wonderfully well-done website. Conrad, though, you’ve been engaged at As You Sow since 1992 or so? CONRAD MACKERRON: Part-time, and then from 1997 on, full-time as we developed and I founded the corporate social responsibility program here, which has led the whole area of engaging companies as shareholders. So, yeah, full-time since 1997. JOHN SHEGERIAN: So, that’s a fascinating journey. You have great visibility, not only in the past, but in the future. Share with us a little bit about that journey now at As You Sow. Talk a little bit about what are some of the hurdles and challenges that you face with regards to shareholder advocacy, and some of the strengths that bolster your position when you’re trying to get audiences with some of these truly iconic brands? CONRAD MACKERRON: Well, in terms of some of the strengths, it’s a very easy, simple process. You basically have to educate yourself about the issues, but with a small number of shares, if you have $2,000 worth of shares, you can actually file a shareholder proposal against or with most of the companies that are publicly traded in the U.S. to begin an engagement. Normally, we like to start a voluntary process of dialogue. If there’s really not a lot of response, then we do have the option of filing the shareholder proposal, which really gets the attention of companies, and often is a real catalyst for engagement with companies. We’ve had the pleasure of working with a number of companies over the years, huge, iconic companies such as Apple and Dell and Hewitt-Packard and Best Buy. How could we do it because we’re such a small group? Well, a couple of things in mind. One is that we align ourselves, as I mentioned, with a lot of the social investment community, so we work with other larger investors in the social investment space, such as the Calvert Funds, Domini Social Investments, Walden Asset Management, a number of groups that are aligned with us in terms of trying to get companies to improve their social and environmental practices. The other thing is that we’re very, very persistent. I worked on recycling issues for over a decade here. We’ve engaged Coca-Cola and Pepsi for over 10 years on trying to improve their recycling, not all the time, but we’ve had an ongoing relationship that’s built up. So, tenacity and being very persistent, I think that helps small groups like us because it builds trust with large companies. They have a lot of groups that want to engage with them, and they have to choose who they want to engage with, who they trust, and I think the fact that we’ve been there for the long haul on a lot of these issues has helped build very positive relationships with a number of companies. I think on the downside, the challenges, a lot of the work is getting commitments that, while they’re very valuable and often very historic, some of them are voluntary, they’re incremental, they’re not the size of pace that we’d like to do, so again, that’s another reason you really have to be persistent. You have to stay on the companies. They make a commitment to change their practices or to reduce toxins, but you really stay on it for several years and make sure they follow through. The pace of the change sometimes can be frustrating, but I think, again, we are in this for the long haul. One of the benefits of this work is that it really is neutral in terms of the political environment, whether it’s a conservative or progressive administration at the federal level, or in terms of the makeup of Congress, this is progressive change that can take place directly with the companies, irrespective of the political climate. So, I think that’s another benefit, which is that we represent progressive shareholders, and we can engage them directly, regardless of the political climate. JOHN SHEGERIAN: So, Conrad, regardless of the political climate, once you engage a company and you’ve got their attention, what exactly do you guys do? How do you build up a dialogue once you have their attention? CONRAD MACKERRON: A lot of this is centered around avoiding risk. Again, coming in as a shareholder, you want the company to succeed. We’re not an advocacy NGO. We’re not a Greenpeace-type organization. We really do represent investors who have long-term investments in the companies, and of course, who want them to be successful, but we also want them to reduce social and environmental risk, and we also want them to have really strong stewardship programs. So, we center a lot of work around educating them as to how they can improve them from an investment point of view because a lot of that does involve reducing risk, so a lot of our work is focused on risk reduction and also brand management as well. A lot of the value of brands these days is in the actual brand itself, the marketing of the brand and the companies that have gotten caught up in controversies about sweat shop labor or toxics, it has potentially tarnished the brand. And, so part of the value of the company is keeping that brand in a much more positive social space. I think a lot of our approach is coming in as a long-term investor and approaching our issues in that vein. JOHN SHEGERIAN: So, let’s talk about this. I know through reading your bio and the great history of As You Sow, and for our listeners out there, we’re so excited to have Conrad MacKerron on. He’s the Senior Program Director of As You Sow. Look it up right now. Mike and I have it up. It’s a beautiful website with lots of information at Conrad, talk a little bit about how you do this because this is where our listeners all just lean in closer to the speakers and really want to hear. Back in ’07, there’s the history of you meeting with Al Gore and Steve Jobs, and really you helping to promote the appropriate recycling of products out there like electronics. Can you share a little bit of how a meeting like that came to be? What actions were taken after that meeting and all the success you’ve had in that segment of recycling? CONRAD MACKERRON: Sure. Thanks. We began to engage the big electronics companies back in 2003 on electronic waste recycling, or end-of-life recycling. Apple, HP, Dell, IBM at the time, were the companies that we engaged, and we did file shareholder proposals with the companies, asking them to have in-house take-back programs and to set goals for them. Early on, Dell was very responsive and set goals based on a dialogue we had, again, with some colleagues in the social investment community. We’ve had very good progress with Dell, and they really have risen to become a leader in this space. Apple was a little more reticent, and so we filed proposals a little later on, and at one of the meetings that we attended, the shareholder meetings, Steve Jobs basically got up and invited us to meet with him to come up with ideas about how they can improve their take-back programs. He did keep to his word. We had met separately with Al Gore because he’s on the board of Apple, and we were displeased about the dissonance between Al Gore being one of the foremost proponents of dealing with climate change issues and carbon footprint issues, and yet Apple not really being a leader in that area. So, we did have a good constructive meeting with Al Gore. Then about nine months later, we did meet with Jobs, and it was a fascinating meeting. At the end of the meeting, he basically did give us set goals to increase the amount of take-back that Apple would commit to based on a formula that we came up with of how often computers get obsolete. We look at about a seven-year average life of a computer, and so they set goals on computers they estimate to be obsolete at this point, so it looks like a percentage of what was sold seven years ago. Again, we were very persistent, and I think the fact that we were group that came in there, we did challenge the company but we weren’t doing it in a way that’s a traditional NGO protest. It was to come in and make this argument about how this was good for the company, and I think that’s how we got that inside impact and the ability to engage with senior management, in this case, certainly an icon of the whole era here in Silicon Valley. JOHN SHEGERIAN: Wow. So, you helped move the needle, but also you worked with Best Buy and Dell on these issues. Can you share a little bit about how things have worked with them also? CONRAD MACKERRON: Sure. Just to take a step back for a minute, the work we do in this space really comes about from our concern about the efficient use of materials in our society. I think that’s something the companies relate to as well, the fact that recycling represents inefficient production, the fact that waste goes into landfills that could be put into a closed loop system and recycled, the plastics in bottles, the gold and the copper and the silver in all of the electronic waste, paper obviously, a very easy commodity to recycle. A lot of our work sprang from this basic notion of wasted materials and inefficient production. After we had engaged some of the big companies for a couple of years, it became clear that people needed other ways to recycle, other than the brands taking it back. So, we began to look at some of the retailers, and we decided it would really make a lot of sense if people had more convenient places to take back end of life electronics, so we did engage with Best Buy and said, “We’d like you to consider having in-store takeback of all electronics. You’re the #1 retailer of electronics in the U.S. You should be doing this. This really should be part of your business DNA.” To their credit, they responded positively, and they did a 100-store pilot project in 2008. It was very successful, and then in 2009 they expanded it to all 1,000 stores in the U.S. Now it’s one of several places that you can take back, mostly free of charge, not totally free of charge, old electronics. We think this convenience factor makes a huge difference because people are much more likely to recycle when it’s convenient for them. Now we are trying to get Target and Walmart to match what Best Buy has done, so that has been a great success story for us, that a major retailer like that saw the value, even though it involved some expense, of taking back end of life equipment, and now they are in a situation where they find it drives business into their stores. People come back to take their equipment, and then, of course, they shop. So, that’s a really good example of a win-win situation, I think. JOHN SHEGERIAN: It really is. That’s just a great way of how you work so well to make great changes that benefit not only these companies, but of course, the greater good, both the environment and the social structure that we live in. Conrad, what I always love is to hear the story, though, you were saying earlier in the show how it’s a small group of you who work at As You Sow. How small is the group? CONRAD MACKERRON: We have about 10 people here on staff, and about half of them are doing this work, so it is a small, dedicated group, and we do leverage a lot of support from interns and working with social peers. We’re a pretty small group, and my work is very much focused on the recycling issues I mentioned. I have colleagues working on environmental health, trying to get toxic chemicals out of products. We have other colleagues working on trying to get us into a post-coal energy era, challenging coal plants and looking to get the big energy companies to move more swiftly to alternatives. We also have colleagues working on rights. A couple of fascinating things we’re doing about the conflict minerals, trying to make sure that some of the minerals like coltan, that come from East Congo conflict areas, are not mined in ways that support the abuses that have been going on in the Congo. Also we have concerns about child labor in Uzbekistan, where the cotton crop is all harvested by child labor, and so a number of companies, including Gap, have pledged to boycott using cotton from Uzbekistan until child labor is eradicated. So we have staff focused on each of these over the long haul, very compelling social issues that we feel excited and privileged to be able to work on. JOHN SHEGERIAN: That’s a great point, Conrad, because what we keep learning over and over again here at Green is Good, and our listeners get to enjoy the benefit of having such great visionaries like you that are doing such important work, is that really, the ongoing message is that a small group of committed people can really change the world if they work together and they put their head down and really stay on the path. Again, you’re just another great example, and As You Sow is another great example of that. First of all, Mike and I are in awe of all that you’ve accomplished. Second of all, I want to share with our listeners again, Right on the landing page, there’s an area where you can, on the right-hand side, first sign up and get engaged and receive their newsletter, but more important, Conrad gets to continue to do his work and his organization gets to continue to do this important work if we all donate. We all can donate from the seat that we all sit in, but to get engaged and to support great organizations like As You Sow is all of our responsibility because we’re all living on this one planet. We don’t get to point fingers. That’s really not constructive. So, again, Conrad, thank you for all this great work. But I want to share, as we leave the e-waste issue, which of course is an ongoing and interesting area, talk a little bit about what you shared with our listeners earlier about Coca-Cola and Pepsi, and what you’ve accomplished and the commitments you’ve accomplished with giants like Coca-Cola and Pepsi, and what As You Sow has done with those groups. CONRAD MACKERRON: Sure. We’re very excited about that, and it kind of forms the core of our ongoing work to expand from beverage into the whole packaging area. We spent several years engaging Coke and Pepsi and Nestle waters all to recycle a much larger portion of the beverage containers sold in this country. Only about 30% overall of beverage containers are recycled, although aluminum is at a much higher rate. Long story short, we got Coke and Pepsi and Nestle to all make commitments to recycle 50-60% by 2016 or 2018. They’re a little different, but the idea being that they’ve committed to at least get us to halfway there over the next five or six years. That’s just beverage containers. It turns out that there’s an enormous amount of packing generally, which of course beverage containers are part of this packing total, that’s just wasted each year. We estimate 43 million tons of glass and metal and plastic, worth perhaps over $20 billion, are just tossed out into landfills or incinerated that could be recovered and recycled. So, we’re very excited about moving the beverage work into a broader space called extended producer responsibility for postconsumer packaging. A lot of folks don’t realize this is already going on in over 25-30 countries, all of Europe, Canada, parts of Brazil, Japan, Korea. They all have a situation where you put a package onto the market, you, as a business, are responsible for collecting and recycling it, or for paying for someone else to do it. We don’t have that here in the United States. Pretty much taxpayers pick up waste, so we’re talking about a potential revolution in how packaging broadly is dealt with. It’s not waste; it’s a resource in many cases, and we’d like to see it seen as a resource. We are working with Nestle waters and several other companies to build a new organization that we think will begin to pass legislation at the state level, to try a new way using EPR, the Extended Producer Responsibility, that is already involved and operating well in Europe and parts of Canada, where the companies either go out and collect this material themselves, or they pay for government or for a third party to do it. We think this could really increase dramatically the amount of recycling in this country, develop new markets for plastics and metals and glass, and closed loop technologies that could really thrive if we got the volumes up from these kind of very disappointing volumes up to 60-70-80%. We’re hopeful that there will be a real shift in both consumer and business attitudes in the coming years, so that we can really have genuine responsibility for post-consumer product management. JOHN SHEGERIAN: That’s so important. I’m so glad you’re doing that work, and it touches all of us, not only here in the United States, but we have listeners around the world from Shanghai to Mumbai to London and Paris. To get that message out to them and to engage like that, we’re so thrilled. Talk a little bit about on your landing page, you also have more iconic brands like Exxon Mobil, Chevron, and then McDonald’s and Starbucks. What are you doing with those brands? What’s going on with them? CONRAD MACKERRON: Sure. With Exxon Mobil, we are concerned about hydrofracking, which is another area I failed to mention. Hydrofracking has become a huge concern in recent years because there’s stability to contaminate groundwater in a lot of residential areas, especially on the East Coast, although there’s some going on out here on the West Coast. So we are engaging with Exxon and Range Resources and several other fracking companies to disclose the toxics that are involved in some of the drilling fluids that are used for hydrofracking. We see this as a way to protect the water supply and build a healthy dialogue about safer extraction. We’re not trying to say to ban it, necessarily, but to make it safer because we feel right now there’s a lot of watershed to risk. We’ve worked with McDonald’s in the past on labor rights issues, but we have a current concern that’s related to the beverage work, which is that they have Styrofoam cups. A lot of people don’t realize they still use Styrofoam cups. Well, with all the controversy about using Styrofoam, it’s been banned in over 50 communities here in California, and a lot of folks think that paper is a much more environmental way to go for beverage containers of the take-out variety. We’ve asked them to evaluate that. We’ve also said that if you’re going to stay with Styrofoam, you should at least recycle it. You should at least have bins in all of your facilities, all your restaurants, and you should develop markets for Styrofoam to be recycled. So, we’re looking at them in the same way as we’ve dealt with Coke and Pepsi, more as a restaurant provider of beverages, to say all those cups and packaging, you’ve got to develop markets for it. You have to do it in other countries. It’s time here in the United States, your home market, to really ramp up the environmental responsibility for post-consumer packaging. JOHN SHEGERIAN: Conrad, you’re so engaging and you’re doing such great work. We’re running out of time here. We’re going to have you back on. We’re down to the last minute or so. Can you share final thoughts for this show with our listeners, as we have to sign off? As I said, Mike and I are going to be thrilled to have you back on at a later date and continue this dialogue with all the great work that As You Sow does. It’s your platform now. CONRAD MACKERRON: Well, thanks so much. It’s really been a pleasure to share our work. I think a couple of ways listeners can support us, obviously, yes, if they have the means, we would love to have donations. There’s a button on our site to do that. The other way you can do it, if you’re a small investor and you own shares of some of these companies, sometimes we don’t have investments in shares of all the companies we’d like to engage, so you can actually loan us your shares or allow us to use your shares when we file shareholder proposals, so if there are folks that have shares in companies that we are working with, that’s another way that they can help us. Generally, I think just the work of the individual, I think we can’t overestimate that enough, your ability just when you go out every day to sort your trash, sort your recyclables, get involved in your community. A lot of the waste is at a community level in the United States, and if you can help energize and reform waste collection at the local level, that helps wake up policymakers at the regional and federal levels, and it really helps our work and helps companies realize that consumers care about this as well. Playing all those roles helps us, and we’re just thrilled to be able to share this work and privileged to be able to do it. JOHN SHEGERIAN: Thank you, Conrad. Like I said, Mike and I are going to be privileged to have you back on Green is Good. For our listeners out there, one last time, please go to Conrad’s site, Conrad MacKerron, you are a visionary and a sustainability leader, and truly living proof that green is good.

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