By degrees - An expanding network is reducing its carbon emissions

By Susan Rice - CEO, Lloyds TSB Scotland
Holyrood Magazine, June 16, 2008

16 June 2008

We’ve all heard the claim that you’re only six handshakes away from anyone else in the world - the famous ‘six degrees of separation.’ 

It’s based on an experiment performed in 1967 by the Harvard University social psychologist Stanley Milgram.  He sent documents to several hundred randomly-selected people in America’s Midwest and the aim was to get the documents delivered to specific individuals in Boston.  People were told the intended recipient’s name, approximate location and occupation, and were asked to post the document to an intermediary who might have a better chance of getting it to the recipient.  The only rule was that the sender should be on a first name basis with the intermediary.  Milgram found that, on average, the packages reached their target after passing through astonishingly short chains, typically just six people.

In 2003, a team from Columbia University in New York decided to test whether Milgram’s theory still applied in our age of electronic communication.  More than 60,000 people from 166 different countries took part in that experiment.  Participants were assigned one of 18 target people and were asked to send emails to someone they already knew, who they thought might be closer to that target.  The researchers found that, in most cases, it took from five to seven emails to contact the target - the same result as Milgram 35 years earlier.

As businesses, we all have reach – through our people, our customers, our suppliers, our relationships with other businesses.  We also all have influence, one way or another – and that reach and influence can be put to good use in the context of tackling climate change and working toward a more sustainable future.

With the focus provided by the May Day Network and the support of Scottish Business in the Community, I believe business can leverage its reach and influence to prompt more action on climate change, helping more people make the decisions that will lead to sustainable growth.

I don’t come from the perspective that we should all jump on the bandwagon because climate change happens to be flavour of the month, or the year.  If we do that, we’ll jump off it just as quickly.  Rather, I think first, that climate change is a factor in our business and personal lives.  Second, that there are lots of reasons to tackle climate change and, as much as figuring out what actions to take, we need to understand the reasons why and help others understand too.

We need to spread the message that the things businesses can do – however small – can have multiple benefits whether it’s on staff morale, customer loyalty, boosting the bottom line, as well as contributing to a sustainable future.  The real question is ‘why wouldn’t you want to do this’?

In Lloyds TSB, we’ve set out to take a lead in response to climate change.  We’re already carbon neutral, but we’ve also set a stretching target to reduce our carbon emissions 30% by 2012 against a 2002 baseline.  It’s the biggest reduction target of any FTSE 20 company. 

We’ve put in place a number of initiatives to reach that goal; and I know more will emerge over time.  Some of the initiatives are around our customers, such as encouraging on-line rather than paper communications.  Others involve our people, our buildings and the way we do business – both internally and through external relationships.

Shortening the time to open a new account, for instance, may be greener because we’re on the PC for less time per transaction, but it’s also more efficient for the Bank, creating a cost benefit and, most importantly, it’s on the customer’s agenda.

One of the key objectives of our carbon reduction target was to engage and, indeed, inspire staff.  That’s because if we want to meet our goal, we need every member of staff to play a part, whether that means travelling to work in a different way or doing something as simple as turning off their PC at night.

We also recognise that, when staff go home, they engage with families, friends and local communities. Lloyds TSB Scotland is located in 185 communities around Scotland, so leveraging our reach has huge potential.

We’ve developed target communications using a range of channels – email, intranet, staff forums, podcasts – telling staff what we’re doing as an organisation and why, and encouraging them to join in both at work and beyond the workplace.  This led to the creation of a sustainability network of staff at all levels who are committed to driving forward the climate change agenda.

We want to mobilise change across our company, spark ideas for new business but, above all, understand what’s on the minds of our customers.  I want my staff to know more about the issues, so they can respond to customer queries, guide customers who want guidance, grasp the fact that people and companies are taking more and more financial decisions in light of the green agenda.  We want sustainability to become business as usual and we need to take our people with us on that journey.

We’ve all seen the research demonstrating that people are increasingly making value-based judgments when they choose a company to work for.  They want a company that’s responsible with regard to the environment, as well as to staff and local communities.  Of course, engaged staff who act as advocates for the organization help us reach our customers more effectively.

With the changing climate and mounting environmental pressures, many businesses have the opportunity to become a trusted advisor to our customers, helping them make sense of complex issues.  We touch thousands of customers directly or indirectly.  We’re all only a few of handshakes away from almost anyone.  If an issue affects our customers, our staff, our suppliers, then it’s affecting us – we have to respond commercially.

But we also have a push from government, in the UK and here in Scotland, where we have a regulatory environment which prompts action on climate change.  We also have organisations such as Scottish Business in the Community challenging us to think more widely about all facets of corporate responsibility and, in particular, this one.

There are so many factors that influence our behaviours, personal or corporate - regulation, public pressure, social influence, and commercial considerations.  But, whatever the motivations, I think we ought to recognise the strides we’re taking in the UK and especially here in Scotland.  We are already leading the way in many respects.

The May Day Network has a big part to play in ensuring Scotland continues to lead the way.  There are now NUMBER of firms signed up.  That is impressive, but to maximise the reach of the Network, we need more.  My colleagues and I on the Climate Change Business Delivery Group* will sign up another 100 firms to widen the Network and increase our impact.

The Network has its own ‘six degrees of separation’.  I would urge all members to talk to, write to, email or call a colleague - and ask each person they contact to spread the word to someone else.  That way, the message of what we’re doing in Scotland, the steps we are taking, however small and the reasons why could quickly spread far and wide.

* Susan Rice is a member of the Climate Change Business Delivery Group, a group of business leaders in Scotland who’ve made a personal pledge to tackle climate change within their own organisations and use their influence and reach to encourage other businesses to do the same).