‘Good’ Sustainability is Good Business with Raytheon Company’s Frank Marino

September 8, 2015

John Shegerian: Welcome to another edition of Green Is Good and we are so honored to have with us today Frank Marino. He is the Senior Corporate Environmental Health, Safety and Sustainability Manager at the great brand Raytheon. Welcome to Green Is Good, Frank. Frank Marino: Thank you, John. Thank you. John Shegerian: Hey Frank, before we get talking about all the great sustainability initiatives that you have going on at Raytheon right now, can you share a little bit of the Frank Marino story, and how did you end up in this position, and was this something that was always part of your life or did you get inspired in college? What happened, and how did you end up in this great position that you have at the great brand Raytheon? Frank Marino: Well, I’d say, John, it started early for me. I just always had an ethos for the protection and respect of the environment, I guess I’d say. I was in college in the ‘70s, so the environment was kind of just working its way up. The EPA was formed in 1970, so Love Canal and some of those things had an influence on all of us in society at that time and I just kind of followed that ethos – if you will – to protect the environment. So I worked in the wastewater business. I worked for companies that handled hazardous waste to make sure we handled all that properly. Early on I worked in the high-tech industry for computers and then I moved over to Raytheon Company that had a very diverse background in aircraft and appliances and government defense. It’s served me well. I’ve been able to apply all my skills. John Shegerian: How long have you been at Raytheon? Frank Marino: I’ve been at Raytheon for 25 years. John Shegerian: Wow. That’s awesome. That is just awesome. And for our listeners out there, what is Raytheon’s core business, Frank? Just so our listeners can get a little bit of an understanding of what Raytheon does. Frank Marino: Yeah. So our core business is government and defense. We make a lot of tools for the war fighter out there – sensing tools, surveillance, command and control, communications – and we’re also into cybersecurity in a broad range of products in that area. John Shegerian: Right. I just saw recently you guys bought a company in cybersecurity or something like that, right? Frank Marino: Yes. John Shegerian: A software company. Web Sense or something like that? Frank Marino: Correct. Correct. Yeah. John Shegerian: Yeah. OK. And cybersecurity is a big business now. You can’t open or read a newspaper or turn on CNN or another major news channel without seeing some breach going on at a corporation or a governmental entity or something like that. It’s becoming sort of ubiquitous and part of our news flow. Frank Marino: Exactly. I mean, data integrity – as you would imagine in our line of business – has always been part of our DNA, if you will, so it’s a natural fit. John Shegerian: Yeah. So given that you’re in defense and cybersecurity, and now you just mentioned data integrity, let’s get into what’s going on in sustainability and how that ties into your core businesses and why sustainability is good for business. Can you explain how you and you colleagues at Raytheon have made sustainability good business and how it further shores up and strengthens the core brands in defense and in cybersecurity and all the other important things that you’re doing at Raytheon? Frank Marino: Sure. We’ve had an energy conservation program since the ‘70s here at Raytheon and so we just think that good environmental health, safety and sustainability is just good business. If you conserve energy and you conserve water, you use all your natural resources effectively, you’re just running your business more efficiently, right? It makes you a better business. John Shegerian: Right. Frank Marino: So it’s really the right thing to do is the way we look at it. One of our mantras at Raytheon is “It’s really the right thing to do.” People will ask, “Why are you doing this?” “Well, it’s the right thing to do.” So we’re conserving energy all across our buildings, in IT infrastructure, in our manufacturing processes. We’re conserving water. We run some facilities in water-scarce areas, and we’re particularly sensitive about that. We try to minimize what we send to landfill or incineration. We have really mature recycling and composting programs so that we’re actually moving towards zero waste in a number of our facilities across the country. John Shegerian: So as a macro theme, Frank, EHSS is part of the DNA of Raytheon. Frank Marino: Exactly. So when we look at a profit and loss, we show what kind of value we can add to the business bottom line. Exactly. John Shegerian: So when people push back – 10 years ago, eight years ago, even still a little bit I hear it but not as much as we did back in 2002, 2003, 2004 and 2005 – that “Oh, to be green costs us more money,” you just shake your head and say, “Just pure hogwash.” Frank Marino: Exactly. Exactly. We can clearly demonstrate that doing the sustainability initiatives that we have identified here has added business value to our business. John Shegerian: I have a slide here in front of me showing your goals, your 2015 goals. It doesn’t seem like there is any part of your business that you’re not being sustainable in. I mean, you have – it shows on this slide here – recycled paper, renewable energy, green buildings, water use, fleet efficiency. You’re touching everything. Even in designing for sustainability, you’re trying to touch everything you do in the supply chain. Frank Marino: Right. Exactly. And we feel there are a couple things that have happened in the last several years. One is that the focus has really shifted from the air and water and land to really product-focused requirements. Particularly overseas, so on and so on and so we’re really putting in some – we have a global substances program that we run and that really looks at all the materials that are contained in our products to be sure that we’re in compliance so they can be marketed globally. John Shegerian: Interesting. Frank Marino: So that’s been a bit of a shift and we’re bringing those sustainability concepts into our design of our new products. John Shegerian: So these are 2015 goals. Share a little bit with our listeners some of the big wins that you’ve had. These are goals you made years ago. Now talk a little bit about the successes that you’ve had achieving these 15 goals, the ones that you would like to share with our listeners, Frank, and then talk a little bit about your next round of goals, and how you’re furthering stretching the company, and how you’re creating really the sustainability journey at Raytheon. Frank Marino: There are lots of wins we’ve had, John. We’ve reduced what we send to landfill incineration. We initially set a goal of 25 percent. We upped that goal to 35 percent, and now we’ve gone to 56 percent of materials that we’ve diverted from landfill and incineration. John Shegerian: Wow. Frank Marino: So we’re proud of that. We take all those recyclables, and we also do lots of composting, so in our dining centers we’ll divert food waste from the landfill or incineration to composting, so we’re really happy about that. A small one may be recycled paper. We were using some virgin fiber paper in many of our copiers and we set a goal to get to 100 percent of 30 percent recycled paper in all of our copiers that folks use around the company. We’ve achieved that goal, so that has been another win for us. So that closes the recycling loop – if you will. John Shegerian: Wow. Frank Marino: When you look at all the things that are recycled, if you buy recycled paper, it just makes sense, right? It’s the right thing to do. John Shegerian: Right. Frank Marino: And secondly, we’ve brought in the supply chain folks, and I think that’s where we want to focus next as well, because when you look at the footprint of a company – the entire footprint of a company, the environmental footprint – you really have to consider the supply chain, the entire value chain. So I think that’s part of the direction where we’re going with our next set of goals. We’re just in the midst of setting our 2020 goals in sustainability. John Shegerian: So how do you do that? How do you guys sit with your team and get your colleagues, and how are those goals created, and how far do you push yourselves? Which ones do you know are lay-ups and which ones do you know stretch, and how do you find the right balance, Frank? Because I find that such a – the process is so fascinating and brands are so different; I’d love for you to share with our listeners a little bit on how that process really works. Frank Marino: Sure. And it’s an interesting question, John. We call that the “what’s your level of ambition as a company,” right? So in other words are you comfortable? How much do you want to stretch, right? John Shegerian: Right. Right. Frank Marino: Can you set a goal that you don’t know how to get to yet? John Shegerian: Right. Frank Marino: So we’re having a lot of those internal discussions. But we also worked with a third party this year to establish what we call a “materiality assessment,” which is where we talk to a bunch of stakeholders inside the company – 50 folks in various disciplines – and we pooled all that input together, we did some benchmarking with outside companies and then we determined – we put together a scattered diagram where we look in the upper right of that quadrant and we see what are the items that are most important both to Raytheon and to our stakeholders then we focus our goals around those, John. So that’s just where we are. We’re just now completing our materiality assessment. Again, some of these are going to be the same that we’ve had in the past, in our 2015 goals, and these are going to be 2020 goals. So many of those are still important to us, because when we look at our footprint as a company, energy use is a big part of our business. So energy is still there, greenhouse gasses are still there. We want to reach out to the supply chain. We want to look at supplier performance and sustainable sourcing, things like that. The design for sustainability cross is still there. We’re going to coin kind of a new term for us. It’s going to be called “eco-manufacturing,” which is where we really want to zero in on manufacturing and make sure we’re doing all we can in terms of sustainability. John Shegerian: I love it. And for our listeners who just joined us, we’re so honored to have with us today, Frank Marino. He is the Senior Corporate Environmental, Health, Safety and Sustainability Manager at Raytheon. To learn more about Raytheon and all the great thing they’re doing to make the world a better place, go to www.Raytheon.com. Frank, talk a little bit about – I know you and I were chatting offline a little bit before we started the show – talk a little bit about one of your more exciting programs that you wanted to share because it touches sustainability, cybersecurity, data protection – your e-waste recycling program, which has been a huge success at Raytheon, and it was headed up by you and some of your colleagues in Texas. Frank Marino: Right. Yeah, so that was our e-waste program, John. We set a goal to have eco-responsible e-waste management, 100 percent eco-responsible e-waste management. So that is end-of-life electronics. John Shegerian: Right. Frank Marino: And it’s really important to us. We set out three tenants when we started out. Data integrity of course is very important, environmental protection and then we wanted to have robust financial returns, so we felt there was some value to be harvested out of the e-waste. And that has been a very successful program. We did an RFP, we selected an enterprise supplier and we put this test for the supplier, and we’re very, very happy with the results. The supplier is e-Stewards certified, which ensures that their workers are protected, that no e-waste is going to be inappropriately exported to developing countries, so we really feel it’s kind of the right thing to do. In other words, again, it’s back to our ethos of the right thing to do. So it’s handling our data properly. When we have hard drives – for example – that we can’t sanitize properly, we shred them. John Shegerian: Right. Frank Marino: To a specification. So we ensure that our data and some of our customers’ data, which may be on our hardware, is properly protected. So we’ve been very, very happy with that program, John. John Shegerian: And so you’ve achieved the goal of data integrity, you’ve protected the environment and there has been good financial returns, robust returns for Raytheon, in that good decision-making process. Frank Marino: Exactly right. John Shegerian: Wow. What a great win. It just sounds like a simple question, Frank, and it’s probably more complicated than I’m making it seem, but this weekend even we opened up the papers and we’re reading that the government is having breaches. And as you and I know, there are two ways to have a breach. One is through malware and corrupted software and the other one – as you’re pointing out – is data that’s encapsulated on the hardware that needs to be recycled at its natural end-of-life. How come the government isn’t following Raytheon’s model? How come the U.S. Federal Government and some of these divisions that are going through these massive breaches that just even in the last two weeks we’ve read about, why aren’t they just looking at your kind of model and saying, “Hey, we’ll look at their protocol and then follow that?” Am I making it sound too simple? Frank Marino: No. I don’t think so, John. I think the issue is – the one with the hardware – particularly in today’s environment we’re going to solid-state devices and so those are the tablets and the iPhones that we all have. John Shegerian: Yeah. Frank Marino: And those are particularly difficult to sanitize at end-of-life, particularly if they’re not operable. So they have to be shredded to a really small particle size in order to protect that data properly. John Shegerian: Got it. Frank Marino: So that’s important. I think some of the breaches you’re referring to, John, are more on the active, in the data server environment versus the end-of-life. John Shegerian: Yeah. Frank Marino: But certainly the end-of-life electronics is a big area for making sure that you take care of business as far as your data integrity. John Shegerian: And you’ve had a big win at Raytheon. And hopefully, other corporations and, hopefully, other organizations whether they’re government or corporations follow suit because you’ve proved that, again, you can do the right and sustainable thing – and it’s part of your DNA at Raytheon, as you’ve pointed our earlier – but it also can produce great returns while achieving your goals of environmental protection and data integrity. Frank Marino: Exactly. Exactly. John Shegerian: That’s awesome. What else is going on that you’re excited to share with our listeners? I know you and I talked a little bit earlier and I read a little bit about your LEAN programs and things of that such. What other things are examples of sustainability adding business value that you’re doing at Raytheon that you’d like to share with our listeners today, Frank? Frank Marino: So we firmly believe that we have some employee engagement programs – one of them is called “Sustainability Star” – where it works to educate our employees about sustainability and how they can help us achieve our goals, because we really believe that when you integrate sustainability into the DNA of the business you’re adding value year after year. So in other words, if you’re conserving water and energy and so on, every year you do that you’re saving more and more money so it just makes you a better business. Then when you integrate these programs into the existing programs – like you mentioned LEAN and Raytheon’s Six Sigma, for example – it really becomes a part of the DNA of the company. It’s not an aside, but it becomes a mainstream of the business, and we found over the years that if you look at the profit and loss of a company – for example – and you find that if they have good profit and loss numbers, chances are they have good EHSS – Environmental, Health, Safety and Sustainability programs. It’s just kind of a barometer of the business we feel. We feel it’s just an indicator of a well-run business. John Shegerian: That’s so interesting. And you were kind enough to send me sort of an ORC chart in sustainability at Raytheon. And, Frank, when you joined the company 25 years ago to today, how many people in the organization, how many champions and environment evangelists and sustainability evangelists has the company transformed to be, and how do you continue to drive it as part of your DNA among a huge organization like yours? Frank Marino: I think we’ve been really blessed, John, with having really high level management, CEO, board-level support for our Environmental, Health, Safety and Sustainability programs and so, therefore, we send our performance metrics to the board on a quarterly basis. The CEO reviews them, the business presidents all see them and we have a governance structure – as I mentioned. We have a senior sustainability advisory council that is headed up by our VP in General Council and then we have a steering team that’s also made up of vice presidents of the different organizations, and those folks help give us direction, and then when we go to the board, we go to that senior advisory council and we report our environmental, health, safety and sustainability metrics to them on an annual basis face-to-face. So we’ve really been lucky to have really high-level management support through the years. John Shegerian: That is so great. We’re down to the last two-and-a-half minutes or so, Frank. I’d love to have you – because you’ve had such a fascinating journey and you’ve moved the needle so much at Raytheon and for the environment and your customers at large – share a little bit about some of the major trends that you see that excite you the most, whether it’s the proliferation of solar or now the hybrid cars and energy efficient cars. What trends do you see that are coming in technology and society that excite you the most with regards to sustainability? Frank Marino: Well, you know we’ve put in some electric vehicle charging stations for our employees. John Shegerian: Wow. Frank Marino: We have about 17 or 18 of them across the company and that has gone real well for us. I think employees are happy to have those charging stations at work. It’s sort of one of those attract and retain the high quality employees, which we all want to do. We’re all in a war for talent, right? John Shegerian: Right. War for talent. Frank Marino: We think that’s kind of a nice perk. John Shegerian: Yup. Frank Marino: Those EV stations. And we’re looking forward to seeing if there is going to be major strides in the transportation area, because we think with fuel efficiencies really being notched up, is there a way? Is there another answer? Is hydrogen an answer? What is an answer? Fuel cell cars, etc.? We’re excited about that and where that’s all going. John Shegerian: Wow. And how about solar? Is solar a big deal at Raytheon, or is it just fun to see it grow in Massachusetts and in the surrounding areas? How do you like the growth of solar and Solar City and great brands like that? Frank Marino: Yeah, so we have some. We’ve used Solar City to some of our employees to encourage them if they wanted to use it at their homes. John Shegerian: Yeah. Frank Marino: We have some pilot solar foldable tech systems at Raytheon. It’s been a little bit difficult for us to make the numbers work there financially. John Shegerian: Ah. Frank Marino: We’re still looking at it. But there is more to come there – I think – as the efficiencies improve and so on. And the other way to participate in the renewable energy is to buy renewable energy credits – as you know. John Shegerian: Right. Frank Marino: And we think that’s another sensible approach for a business. John Shegerian: I love it. Well, “more to come” sounds like what’s going on at Raytheon now. As you said, you’re making your 2020 goals, you’ve done an amazing job hitting the 2015 goals and we’re so appreciative of your time today. This has been Frank Marino. He is the Senior Corporate Environmental, Health, Safety and Sustainability Manager at Raytheon. To learn more about all the great things that Raytheon is doing to make the world a better place, go to www.Raytheon.com. Thank you, Frank Marino, for joining us today and sharing your thoughts with our listeners. You are making the world a better place and are truly living proof that Green Is Good.