ESG: A Business Imperative in Today's Digital World
(upbeat music) Hello, and welcome to The Six Five Summit. I'm Shelly Kramer, one of the founding partners and a Principal Analyst here at Futurum Research. And on behalf of my team at Futurum and the team at Moor Insights and Strategy, welcome, we're glad to have you. In this spotlight session, Futurum's Daniel Newman talks with Cassandra Garber, the Vice President of ESG for Dell Technologies.
And their conversation centers on the critical nature of ESG initiatives in today's business climate. A topic very near and dear to my heart. Cassandra shares her insights on the importance of ESG, and it also shares a little bit about what Dell is doing in this arena. I can promise you it's some pretty exciting stuff.
Let's hear what they've got to say. (upbeat music) Cassandra, welcome to the 2022 Six Five Summit. So excited to have you here.
I am so excited to be here. Thank you for having me. Yeah, it's great.
We were really excited about adding a track to focus on ESG, social impact, governance. This has been a wildly big topic over the last few years. I think during the pandemic, everybody being at home, spending more time online, more time consuming media. I think, it provided a really interesting inflection point for companies to start talking more, being more vocal, being more active, more communicative, and also setting some more ambitious goals and clarifying their positions about climate sustainability to the market. And so it's just time that this becomes almost is important, a track in the tech world, as all the products and services. And so having you here is really great.
So I'd love to start. You are in a role where this is every day for you. You're, I wanna just say, eat, sleep, and something with a G, cause that would've worked, but you're eat, sleeping, and giving all your time to ESG.
Talk about why in your view, and why is this so important? why have you made this the focus of your career? Yeah, first of all, I am absolutely gonna borrow the eat, sleep, and give to this work because that is 100% the case for anybody who's working. I made that up for the (indistinct). The that was impressive. That was seriously impressive. 'Cause trust me, the words or the letters have been used in lots of different ways, and that was the first for that. So I love that.
I'm gonna use that. So I think in terms of why this is so important right now, and it absolutely is. I wanna thank you for having this as a track because this conversation is so important. But in terms of why it's so important, there's so many things that have happened over the last couple of years. The pandemic itself has caused people, society to reflect.
So then, as humans were reflecting, as corporations were reflecting, and it is absolutely everything. From climate change to social injustices, particularly in the US. I mean, it is circular economy, and more waste in society, again, related to the pandemic, but also beyond.
All of these issues are now making some things that those of us, who have been working in this space for a long time, they're finally coming to a head. And you can name any stakeholder group. So we talk a lot about, this cannot be something that is just about profits and shareholders.
Every stakeholder group has to be considered in the actions that we're taking, and in the environmental and social space in particular. And so if you think about employees at companies are expecting more from their companies, not just that it's a good company, but they themselves can have an impact in the world. The financial community, there's now new offerings, new services. You can get credit back, or you can have better credit ratings, or you name it. There are financial opportunities from a investment perspective or from a credit perspective. Customers, so for a company like ours, consumers and B2B, both have different expectations and opportunities, and will purchase differently based on these topics.
And then, absolutely, communities. So when you're seeing things happening in communities, the role that a company plays in the community can change the game on whether or not you have the license to operate there in the future. So you can just, I didn't even mention governments, but the things happening from a government perspective are obviously very tied to social and environmental issues. So the way we think about is why it's important is basically every group of people is thinking about these things in ways that they haven't in the past, and therefore new frameworks, new criteria, new proposals, new demands, are all skyrocketing from they were bubbling in the past, and now they are top of mind. And that creates a lot of work, and a lot of expectations of companies.
Yeah, you made a lot of great points, and there's really a significant private public partnership when you mentioned government too, right? Is there's gonna be leadership from government, and there's gonna be leadership from the private sector. We all know the private sector tends to be able to move a little bit quicker. So it's gonna be push along, versus being pulled along. And of course, different companies in different industries have all come to varying acceptances, realizations, actions, and activities.
And we'll talk more about that later, because I think that's one of the biggest shifts, is we're moving from the anecdotal to the realized, or achievable, or measurable, when it comes to this. But let's start with Dell. I still remember Michael speaking to us, it had to have been 2018 or 19 because we were in person, and it was before the pandemic, and him really talking about sustainable materials, and having a strategy to be able to shrink the footprint, improve, the company's ESG approach.
And like I said, this has been going on for years, and it's been corded Dell. It's not been something the company has shied away from, but when you are a manufacturing company and you make as big of a mix, and as much you have a hundred billion dollars in revenue, selling a whole lot of hardware, you're gonna have a significant footprint. There's just no way not to do that.
So making you better is a big part of your job, Cassandra. So talk a little bit, just foundationally, what is Dell Technologies' ESG strategy? Yeah. So I love that you brought up Michael in a few years ago, because actually, when we talk about how this came to be, and how dedicated we are, and how long we've been in this, we talk a lot about how when Michael founded the company, he founded on this idea of democratizing technology, and you could just put a period behind that and say, "That's exactly what we're trying to do."
Democratize technology in a way that is sustainable, and just, and ethical is what we spend a lot of time working on the thinking about. And some of it is risk and some of his opportunities. So you bring up, e-waste. So our strategy has four areas of focus, four impact areas. Those are climate action, circular economy, digital inclusion, and inclusive workforce.
And each of those are risks to our business, and opportunities for our business. And that's the fun dynamic we have in the ESG world is, how do we find those things? How do you tackle those things in a way that is good for your business, and good for society? So we like to say the simple way to describe our ESG strategy is it marries who we are with what we do. But when you actually dive into what is the actual strategy, there's a lot to it. There's a lot that comes in with how do you actually tackle those four really complex areas, and drive them in the company, innovate around them, govern around them, inspire people around them.
So our strategy actually has a lot of different components to it as we tackle those four areas. Yeah, it's interesting because oftentimes, ESG gets bucketed, specifically to the environment and climate part. We'll talk about ESG and they just leave it over here. And I liked your framework because I almost categorized the ESG track as a social impact track, because I felt like people were only gravitating towards the climate carbon and sustainability when I said ESG, but the social and governance part really have as to do.
And I like that you had in your little framework, you had inclusive. So the workforce inclusion, which is a big topic, digital inclusion, but it's also like a significant mandate, because worrying about one of those things, Cassandra, is a lot for your plate. So how do you demark the different parts of ESG to make sure that the market understands your approach to climate and circular, your approach to inclusion and diversity.
And then of course, all the other governance components that are part of a full ESG strategy. Yeah. So we break our strategy down, I think, in slides, and we work in PowerPoint slides. I actually have a little sign in my office that says, "Saving the world one slide deck at a time," because that's what we do quite frankly. But if I was to have the slide app, the half of the slide is what we call our ESG framework, and it's how we run ESG in our business. And it is holistic and inclusive of everything.
All kinds of things we're expected to focus on and work on, and everything from human rights to circular economy, and e-waste and device repairability, to greenhouse gas emissions and water, and workplace safety, trust, ethics, privacy, all of those kinds of things. On the right side of the slide is where we have created our priorities, those four things that I mentioned to you. So the way that we are managing it is that we have to run our business with a massive list of things in mind. Those things are table stakes.
They have to be there. We have to stay on top of them. But when we can make decisions on where we're gonna use our voice, where we're gonna invest our time, where we're going to drive product innovation, we have created those four areas to try to give our own teams, but also outside the company, you wanna work with us, you wanna partner with us. You wanna just know where Dell is gonna be a leader. Where we're gonna have an outsized impact, it's in those four areas.
And it's because of just what you said, one of the most challenging things for companies to do right now, is choose. Where are we gonna have an impact? Where is it most important for our business? Where do we have the resources to do it? And where does that match up with what the world needs? So that's how we are trying to navigate it. Is yet we gotta keep the train moving on all of these things, but we're gonna really dial up what we're doing in four areas, and take those to the next level. And I like something else that when I was reviewing the framework, you mentioned, they include the why. And I don't know if you're a fan of the Simon Sinek.
Yes. I think everybody that's ever watched TED has probably now seen that, "Start with Why." I mean, talk about a breakthrough moment, you're a speaker. I mean, that was just perfect. But it really is a terrific question to ask that, I think, often companies don't. Whether it's when they launch products, whether they hire people is when they're building out messaging is like, "Do people understand that why?" 'Cause it is something we all connect with.
And so in your framework, you talked a lot about that, but you talked about, you went back and I think you said, "ESG marries who we are with what we do," well, So that's the who and the what. But the why part of it is that you've got a huge workforce of people, it's that you've got partners around the world that are everywhere from those that sell your products to the market, to those that help you manufacture and build your products overseas. I have to imagine that this inclusion of why is helping you determine where to start with a lot of things, because like I said, otherwise it's too much. I mean, that's the biggest thing I see here is that company's doing a hundred billion, that has a massive product portfolio, you have to be able to prioritize a little bit. Absolutely.
And I love that you're bringing up the why, and we talk about this. And sometimes, this topic can go a little fluffy. So I'm gonna keep us from going too fluffy, and sometimes, going all that, great. So we're not gonna talk morality or anything like that, but we have a company purpose, and it is using technology to drive human progress.
There's no better why than that. Why we exist is to drive human progress, and use the skills and the capabilities that we have. That is inspiring.
That is every employee can get behind that. So we talk a lot about how ESG is a perfect way to just demonstrate that meaningfully. The human progress we wanna drive is around these areas. It's around climate, it's around circularity, it's around inclusive workforces, and the current future workforce, and it's around digital inclusion, addressing the digital divide.
Thanks for not getting too fluffy, right? Right. But I do appreciate. By the way, I mean, that was actually gonna be my next question, because away with the fluff. Because I do like the core values of it, but one of the things that probably bothers me most, as an analyst, is I do feel oftentimes, that there was a little bit of posturing, positioning. We have the Paris Accord 2050, well, we're gonna do this by 2049, and blah blah.
And I'm being totally facetious now, but is part of that whole wave of companies being more active, there was also this wave of declaration. This is what we're gonna do 10 years sooner, 20 years sooner. But the interesting thing is we have a attention span of about five minutes as humans. So we hear this, and it's like, "Oh, I like this company more because they said this," and then we actually forget.
And then, we never really go back and hold 'em accountable. So it's a great way to maybe get a couple of net promoter score points in the short run. But in the long run, someone's gonna eventually want to come back and say, "All right, this is what you said you're gonna do, show me. Show me."
So where are you at in terms of the show me? What are some examples of how you're moving forward in here, and being able to capture, and be able to articulate that, "Hey, this effort isn't just a marketing effort. This is something that we are living, breathing, and achieving with data." Yeah. Yeah. So one thing that most companies and all companies are gonna be forced to do this already is creating an annual progress report on what they're doing.
So companies have their ESG or sustainability, or CSR, Corporate Citizenship Report or impact, call it what you want. There should be a report of annual progress. And thanks to the SEC and some other organizing bodies across the globe, there's gonna be even more pressure to do annual reporting.
So what that's doing is it is starting to force the right conversations on how are we consistently reporting this? How are we holding companies accountable? How are we all using the same types of frameworks, and methodologies, and criteria and all of that? So we are actually inserting ourselves in those conversations in general, just so that we are part of where are things going. But for ourselves, we have been reporting. So you can always see our public report and progress we've made. Specific examples, I would love to talk about.
So one, I mentioned circular economy as something that we have been talking about for some time. So we have pro our Concept Luna, which if you haven't seen is phenomenal. It is basically the concept card for how do you create a circular laptop? So the thing can easily be taken apart, and put back together. So we are getting into this whole idea of how do you create with circularity in mind? How do you innovate a product? it's amazing, and people can take it apart, and put it back together in like five minutes time.
It's super cool. But it was intended to be at, let's start with this issue of circularity, innovate around it, and then see what that. So it's not ready for mass scale, but we have learned a ton in the process. So we're innovating differently on circularity. And we have other things take back programs.
So how are we starting to take back products because we have a significant goal on that, a take back one for everyone that we sell as well. So those are some of the things that concept Luna is a perfect example of how it's not just talk. It is an actual innovation that we're putting in place. Then I talked about digital inclusion. So something else that we've just launched is solar community hubs. And we now have 25 hubs across the globe, that are basically repurposed shipping containers.
And within them, they have access to the internet. They have our own tech in them, so that people have access to the technology. And we are now expanding them, so they provide other services for the community. So when you think about the divide, and how many people have been left behind because of the pandemic or for other reasons, there are so many communities out there that don't have access to tech, or any, or other basic human services. So when we put these shipping containers out there, the images on these are just amazing because the local communities are decorating them, and painting them, and all of this.
And you see students and kids, who have not had access to tech in the past, working and learning from these places. They're all solar powered. And we're even doing things like monitoring deforestation in the Amazon.
So it serves as a hub for data that we can collect and other activities. So these things, we started them in 2011 in partnership with Computer Aid, and we're now up to 25 of them. And we're looking at how could we expand them in other ways? How can we partner with others to bring access to tech? Keeping in mind, climate change and all those other things that we wanna keep in mind with these things. So those are couple of examples.
Of course we have climate commitments that we've made too. We're with everybody else. We've communicated or we've committed to Net Zero, and we have a lot of stuff happening in that space also. Yeah. I mean, it seems just reviewing some of the stuff in your various disclosures that you've made a number of commitments. You're tracking them.
You've got some commitments about inclusions. Yup. To get to balance in the workforce. I think you have a goal to do that in the next decade, and you're making strides there.
You have equality or larger representation of different ethnic groups, that's in your plans. And you've documented that, so you're gonna be held accountable. I also noted in your plans as I've read, and I've talked to your executive team that you guys have put ESG into the goals of your senior leaders, where part of their performance targets are gonna be tied to meeting these. So things like we just mentioned, circular inclusion, they're going to be required to be able to validate that they've met those objectives as part of their compensation. Which of course, once you do that, it makes it very tangible to a leader.
So to me, these are some of the things, I guess, if I wanted to sort of wrap this up with you by saying, what are the things that leaders and boards can do to inspire an organizational wide? That sounds like a few. I guess, I'll give you the floor. Any other recommendations to others in your seat and sitting on boards that wanna make ESG more real in their organization? Ways to really make it happen sooner than later. Yeah. Thank you for that. So I would say three things. One, governance, we make the joke, governance, governance, governance, with a little governance sprinkled on top because one thing every company should be doing right now is putting governance structures in place.
So taking these things that have previously been initiatives or been volunteer activities, where someone stood up a green team and making them a legitimate part of how they run their business, and governing accordingly is really important. So just putting the right governance structures in place, and making the boards be part of that. So our board of directors seize ESG on a quarterly basis, it is a standing agenda item. And then, that will change the conversation all the way down.
The next thing is strategy integration. And as corporate as that sounds, it's really, really important. So for us, for the first time, we put ESG performance as a success measure on our strategy map. And our strategy map is one slide that everyone in the company is responsible for delivering, and building their strategies against.
So right there next to revenue, and share gain, and all of those typical things you would expect to see for us is ESG performance. So building it into your actual strategy, and demonstrating that it is core to how you run your business is really important. And then as much as governance and strategy integration are phenomenal and super inspiring topics, I actually would add a third, and that would be starting to talk more and more about this whole idea of business and societal value. So when you're talking to employees, it's really important to be inspirational in this because they are hungry for that right now.
With everything that's happened in the world, they want to know that their company's doing good things, and that they can be a part of it. So talking about how this is something that is important to the business, but the beauty is in both business and societal impact. That would be the third thing that I would encourage companies just get comfortable.
Some of it's gonna feel a little fluffy sometimes. And it's okay to be a little fluffy, even while making it part of how you run your business. You can do both. And that's the whole idea of shared value.
Okay, Cassandra, I think that's a great way to wrap up this session. I wanna thank you so much for joining me here at the 2022 Six Five Summit. Helping get this ESG conversation started in this community. Hope to have you back again soon. And we'll see you when we see you. Sounds great. Thank you so much.