Purpose Driven Culture Through Sustainability

Many companies today are re-evaluating the connection between purpose and profit. A growing cohort of investors and business leaders now recognize that, in many cases, the two go hand-in-hand.

Traditionally, companies would rely on charitable contributions and timely social media campaigns to promote equity and inclusivity. Now, truly purpose-driven organizations are embedding purpose-driven values across the organization; metrics to track and report progress; and consistent internal and external messaging (and action) that goes beyond press releases. Fortunately, with unprecedented attention being paid by consumers to the efforts of these companies, being a purpose-driven company often leads to improved company culture, better talent recruiting and retention, and (ultimately) a better and more sustainable business.

Environmental, social and governance initiatives, more commonly referred to as ESG, have become tenets of what being a purpose-driven organization is all about. From the urgency needed to address climate change and sustainability to calls for inclusivity and equity around the world, a robust ESG strategy is not only the “right thing to do;” it is a necessity to create a better world.

JELD-WEN, a leading global manufacturer of building products, is committed to having a purpose-driven culture – and sustainability is at the heart of their mission. Last year, JELD-WEN issued their inaugural ESG report which details “not only where we are and what we've been, but also how we’re starting to look at those bold aspirations around ESG-type of work,” says JELD-WEN CEO Gary Michel.

“We delivered our first ESG report; they're really the first opportunity for us to take a cohesive look at all of the elements of ESG, see how they relate to our stakeholders, and benchmark against other companies. Now that we've put a stake in the ground with the first part of the story, by publishing our inaugural ESG report, we're now working on how to establish that baseline and turn our aspirations into intentional activities, and really make them part of our continuous improvement culture,” says Michel.

For JELD-WEN, sustainability is core to their business, with stakeholders throughout the organization advocating for specific areas of their ESG mission. “JELD-WEN was the first company I worked with that took corporate social responsibility and moved it from a philanthropy-oriented topic to something that was actually embedded into business strategy,” says Roya Behnia, General Counsel and Chief Compliance Officer.

ESG is not just one task or focus area, it is a company-wide strategy. “A cross-functional global team was very invested in defining our ESG areas of focus. Couple that with the full support and deep demand of our board for us to get more active in this area, that sort of propelled our progress, far more than even we imagined,” says Behnia.

“A lot of people focus on sustainability and what that means for the company and its products. In our case, energy efficiency is something that we have worked on for a long period of time with EnergyStar-rated products – particularly windows and exterior door products that help homes be more efficient,” says Michel.

“We think about social areas; about inclusion, for example, bringing diversity into the company and the advantage of having employee resource groups within the company. We do quite a bit in the communities we serve to be a good citizen and be involved in things that make our communities better. We are particularly interested in efforts related to housing and food security,” he continues. “On the governance side, we’re making sure that we're transparent about our reporting and accounting, making sure that we have good leadership and governance and sustainability in our results. So, all of that ties together to what's meaningful to our stakeholders and our business.”

JELD-WEN conducted a materiality assessment and, over 18 months, refined their framework, focusing on sustainable, energy-efficient products, supporting a circular economy, sustainable supply chain and ensuring the growth and safety of a diverse workforce.

“We were always doing these things. But in terms of a more rigorous programmatic approach to ESG, I would say these are opportunities we identified to track and set targets for going forward,” says Behnia. “We haven't gotten to the point where our investors are demanding ESG performance, but we will. We did have the benefit of intense focus by our board early on. That gave us the leeway to do the kind of work and make the kind of investments that we're making.” Ultimately, she says:

ESG is critical to long-term shareholder return. We see time and time again, how important it is for long term viability of enterprises.

“We have a central ESG office with an executive steering committee that provides oversight for people engaged in the day-to-day work. And the board’s having a review process and holding us accountable for the objectives that we set as well is all part of operationalizing any strategy at our company, but particularly in the space of ESG,” says Michel.

Attracting Talent and Giving Back

Being driven by purpose has also been a boon for JELD-WEN’s talent strategy. For more recent graduates, their ESG focus has been a large attractor. “We have made a very significant push in recruiting diverse candidates at the early stages, including an early career rotation program. We're seeing significant benefits, both in terms of meeting our aspirations around diversity, equity and inclusion and in attracting the right people with the right talents into the company,” says Behnia.

In some smaller communities, JELD-WEN is the largest employer in the area. “Employees are looking for places they can achieve personal and professional aspirations and feel good about the company they work for and the products they supply,” says Michel. “Throughout the COVID-19 pandemic, giving back to the communities has been a priority.” He continues:

Our people love to be involved hands-on. It's not just about giving money, it's about giving time and effort, and being personally a part of the community that we serve.

Gaining Buy-In – Where to Start

If your organization does not have a comprehensive ESG strategy, it can be daunting to think of where to start. But between upcoming regulations and investor and public interest, it’s critical to prioritize these efforts. Michel and Behnia offer some advice to those who are seeking to build out their ESG strategy for the future.

“The most important thing is to understand deeply your company's strategy from a business perspective and not be siloed. The reason we can be successful in ESG, or broaden outside the traditional legal or compliance world, is if we are viewed as true business partners.”

“And the way you can be viewed as a true business partner is to understand the business deeply. In our case, with ESG, the way in which we define ESG at our company is not a compliance function. It is a business strategy. Compliance's role within ESG is to ensure transparency and accountability,” says Behnia.

“One of the challenges that we had was data--the ability to collect data in some of these areas and determine if it was appropriate or not. It's like any project; if you weren't collecting it specifically in the beginning, it exists all over the company and we have to collect it. We just said, ‘we're starting at the beginning.’ So, whatever we've got is where we're going to start. And then, true to our form, continuous improvement is what we'll work on. We'll work on getting better data. We'll also be able to build on what we learn and the insights that we gain. And we'll get smarter over time,” adds Michel.

Embedding ESG into your culture is no easy feat. And there is no singular playbook because of the unique organizational structures, priorities, and challenges. An increased focus from regulators and the public demonstrates the importance of making a meaningful effort, and soon. ESG is a journey, not a destination, and learning from organizations with successful ESG programs and ongoing commitments will help pave the way for better practices for the long term.

Watch Gary Michel and Roya Behnia’s interview with NAVEX Global CEO Bob Conlin 

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