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The Sam M. Walton College of Business

Season 4, Episode 2: Lisa Morden - Sustainability Efforts at Kimberly Clark

September 09, 2021  |  By Cindy Moehring

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On this episode of The BIS, Cindy Moehring chats with Lisa Morden, VP of Safety and Sustainability at Kimberly-Clark. Under Lisa, Kimberly-Clark achieved its greenhouse gas reduction goals four years ahead of schedule and continues to strive for positive environmental and social change.

Join in and listen to how Kimberly-Clark is setting its sights on more sustainability goals and taking charge in its ESG efforts.

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Episode Transcript:

[music]

0:00:15.2 Cindy Moehring: Hi everybody, and welcome back for another episode of The BIS, the Business Integrity School. I'm really excited to introduce to you today, our guest, Lisa Morden. She's the Vice President of Safety, Sustainability and Occupational Health, at Kimberly-Clark. Welcome, Lisa.

0:00:30.7 Lisa Morden: Hi Cindy, Great to be here with you, today.

0:00:33.8 Cindy Moehring: I'm really excited to dig into this conversation. But before we do that, let me tell you all just a little bit about Kimberly-Clark and about Lisa, and then we'll dive right into all things ESG. So for those of you who don't know, Kimberly-Clark is a global company behind iconic consumer brands, including Huggies, the diapers, Kleenex, which I always have handy. [chuckle] Scott and Lisa's got hers too. [laughter] Scott and Kotex, and they have a big... Kimberly-Clark has a big anniversary coming up next year. In 2022, the company will be celebrating being in business for 150 years. Wow, that's big. And Lisa is one of the people behind the scenes, making sure that Kimberly-Clark is gonna be around for the next 150 years as well.

0:01:23.7 Cindy Moehring: Lisa has been at Kimberly-Clark now, for over 28 years, which just is a fantastic legacy and she's gonna have so much wealth to share with us, in terms of her knowledge of the company and where they're headed with all things ESG. And on Lisa's watch, Kimberly-Clark has made some very significant strides in its efforts to create positive social and environmental change. Just as one quick example, the company met its 2022 greenhouse gas reduction goals, not one, not two, not three, but four years ahead of schedule. That's incredible, just incredible. So Lisa is also the one who is behind many of Kimberly-Clark's recent recognitions, including Forbes Most Reputable Companies, the Ethibel Sustainability Index, in being reconfirmed as a constituent there, for global excellence, and also the Forest Stewardship Council's Leadership Award, and Lisa herself was named by GreenBiz in 2019, I love this one, as one of the 25 Badass Women Shaking up the Corporate Climate Environment and the Movement. That is just fantastic.

0:02:26.9 Lisa Morden: Best title ever, yeah. That's the best one ever, for sure.

[laughter]

0:02:30.7 Cindy Moehring: That's really cool. And most recently, Lisa was invited to join the Forbes Ignite Change Makers Dialogue, on women in the C-suite and how they are changing sustainability. And we'll drop a link in the episode here, so you all can find that at forbesignite.com, but I just can't wait to dive right into this conversation with you, Lisa. Can you tell us a little bit about your time at Kimberly-Clark? How did you get into the position you are now, and what led you to an interest in sustainability and ESG?

0:03:02.7 Lisa Morden: Thanks for that question, Cindy, and thanks for that amazing introduction. So many of the points of pride that you've highlighted in the discussion, it takes a team effort. There's so many great and passionate people throughout a big company like Kimberly-Clark, with the talent and capabilities that we have, that are all playing such a meaningful role in helping us to position the company for the future, but also to help ensure that we're living our values every single day. It makes it a great place to work, quite frankly.

0:03:30.9 Cindy Moehring: That's awesome. Clearly, 'cause you stayed there for a really long time.

0:03:36.8 Lisa Morden: Exactly. That's right.

0:03:37.2 Cindy Moehring: That's a testament. Yeah.

0:03:38.4 Lisa Morden: It absolutely is a testament. And given, the company is just... It's got a global footprint. It's a very diverse organisation, it's given me so many different opportunities to work in different functions, different parts of the business, and certainly even to see parts of the world that I don't know that I otherwise would have visited and other opportunities. So it's just given me this really great rich set of perspectives and opportunities, as I've gone through my career. And throughout my career, whether I've worked in operations or in strategy roles or marketing, compliance roles, Cindy, I've always been very drawn to the environmental and social aspects of what we do as a company, who we are, what our categories are, what our value chain and supply chain look like, what we deliver to our consumers and our customers into the future.

0:04:28.0 Lisa Morden: So that's always been a big part of my focus, no matter the role that I've been in, and I think it became part of my personal brand, probably, is what I would say. How do we make this bath tissue more environmentally sustainable, more environmentally responsible? Those types of mindsets, bringing them to all of the roles that I've had through time, have created that brand and certainly, when an opportunity to leading the global sustainability function for the company came along, it was a no-brainer for me. [chuckle] I'd jumped at the opportunity, I was very excited to take it on. And again, those opportunities to collaborate broadly with all of these functions around the world, has just been amazing.

0:05:10.0 Cindy Moehring: Yeah, and I'm sure that business background and being in all those different roles sort of helped you bring the Kimberly-Clark ethos to the sustainability role, because you understood so much about the company. I can imagine that must have just been invaluable, and I'm sure it was a no-brainer for the company as well, to put you in the position.

0:05:30.5 Lisa Morden: Yeah. They had to take some risks, I would say, [laughter] putting me in some of these roles. But it's been sort of a meandering career, in different parts of the business, not necessarily one silo functional area that I've tried to... Always tried to build expertise around, but still providing that, we're still growing that broader business acumen, supply chain acumen, manufacturing acumen. That's really how you begin to see and understand the sustainability-related and CSR-related aspects of your business, is to see them from all of those different angles.

0:06:01.4 Cindy Moehring: Yeah. Well, ESG, sustainability, it is the hot topic these days. And it used to be an issue that was sort of, "Eh," there, but pushed to the sidelines. And there were some investment funds that had ESG efforts, but it wasn't front and center like it is right now. And one of the things I'm interested in your view on is, whether or not you think that shift from sidelines to front and center for companies is really here to stay.

0:06:39.1 Lisa Morden: Oh, there's the question of the century. I actually do think it is here to stay.

0:06:43.4 Cindy Moehring: Yeah?

0:06:43.7 Lisa Morden: 'Cause I believe it's been building for quite sometime, and that's reflected in just the sheer number of different disclosure frameworks that are out there, the rankings and rating systems that have proliferated over the years. So it's been growing, I think, through time. And we're seeing certainly, as you point out, more energy behind most of these than we ever have before. And I suspect, frankly, that there are probably a few more coming down the road, before the story is over 'cause the journey is still continuing. But I do think that there are a couple of other reasons that we may see more stickiness or integration embedding into business in the overall ESG side of the equation. I think that's, in a lot of cases, environmental and social issues may actually be material to the business and could be indicative of long-term value at risk, if not managed effectively.

0:07:37.0 Cindy Moehring: That's a really good point.

0:07:38.3 Lisa Morden: Yeah. And I think secondly, ESG, it can be an indication of how well a company has managed overall. You've probably seen some of those stats, the data and the research that correlates stock performance with overall ESG performance are incredibly compelling. And I think we're seeing more and more of that, through time.

0:07:57.0 Cindy Moehring: Yeah, yeah. Well, and I think that purpose, in wanting to work for a company that is purposeful and is doing something more than just putting products on shelves, whether it's Kleenex or diapers, really, really matters for the generations that are coming up behind us. Not that it doesn't matter to us, but I think that there is this sense of purpose in the younger generation and really wanting to make sure that that gets married into all things, corporate America as well. Do you think there was a certain tipping point that got us from sidelines and shareholder, it's reign supreme to front and center and all things stakeholder-related?

0:08:45.2 Lisa Morden: Yeah, I think your comment on purpose is just so relevant actually, because if I step back to the beginning of the COVID-19 pandemic, for example, going back a year and a half now, I guess, it really highlighted, I think, to a lot of organisations how delicate everything is, ranging from supply chain resilience to just the fabric of our society being so delicate. You couple that with what we saw in terms of social unrest last summer, fires and droughts in the West and hurricanes and ice storms in the South, people can really visibly see, hear and feel some of these social and environmental issues. They're clear in their presence at this point in time, they're front and center. And I believe that's galvanising a lot more action, whether it's people and perspective employees wanting to work for companies that are there to make a difference in the world, or the organisations themselves, really beginning to focus on, "Okay, why do we exist? What is our corporate purpose?"

0:09:51.6 Lisa Morden: And at KC, it did that, I think. At Kimberly-Clark, we were very focused on protecting the health and safety of our employees first and foremost, but then also delivering the essential products to help people continue on with their daily lives. You may have noticed the run on toilet paper.

0:10:10.5 Cindy Moehring: Yeah, huge run on toilet paper, it's huge. And I would say this. Well, it's not toilet paper, the supply chain is still rather chunky, as we're coming out of COVID and this idea of, you mentioned resiliency and resiliency in when we... What we did have, just in time inventory, not seeing a lot of resiliency in that right now, at least not while the supply chain is.

0:10:35.7 Lisa Morden: Or delicacy.

0:10:35.8 Cindy Moehring: Yeah, it's very delicate. It's really delicate. But I think you did say it really well, that on a global basis, it felt to me like the tipping point was COVID and the social justice issues that arose around George Floyd's death and everything else, because they became global see, touch and feel moments for almost everybody.

0:10:58.5 Lisa Morden: That's so true.

0:11:00.6 Cindy Moehring: Because of social media and the way we're even taping this interview right now, things are more transparent and people are able to see, touch and feel things more than they could in the past, and that makes it real and personal.

0:11:13.9 Lisa Morden: Makes it real and personal. Precisely. I think there was also this phenomenon, that... I think, because so many of us were in lockdowns and could only get outside for a walk in the woods, for example, those of us who had the good fortune to do that. So I think we began to develop this perspective of those complex interdependencies between society and nature as well, throughout the period of time, and that actually had us. The corporate purpose is around providing better care and a better world, underneath that umbrella, we decided that it was time to look at and re-launch some of our sustainability goals and objectives as a result of the landscape just changing so dramatically externally. So we focused on our new sustainability ambition, which was about making lives better for a billion people in vulnerable and underserved communities, while at the same time... Yeah.

0:12:12.2 Cindy Moehring: Yeah. And that's been like 2030, right?

0:12:14.1 Lisa Morden: 2030.

0:12:14.3 Cindy Moehring: You wanna hit that metric in the next 10... Well, now, nine years. That's huge, yeah.

0:12:18.6 Lisa Morden: Nine years. The clock is ticking now, definitely.

0:12:20.0 Cindy Moehring: Yeah. [chuckle]

0:12:21.8 Lisa Morden: It's such an important objective that is really, I would say, created a lot of energy and enthusiasm within our employee base, and people are looking to find ways that they can contribute, whether you're working in a brand team or innovation team or supply chain team. There's a lot of folks that are really excited about helping to make a difference for people and those in need at the same time. Yes.

0:12:43.4 Cindy Moehring: Well, that's really great though. Just to see the momentum and the purpose and passion that you kind of across the business, the front line can bring to an issue like that is really... It's great.

0:12:56.8 Lisa Morden: Yeah, we can unleash the power of 45,000 employees around the world to tackle some of these big challenges, and so it's really exciting to see. So I'm just super fortunate to have a front row seat to it within the company, indeed.

0:13:11.9 Cindy Moehring: Yeah, front row seat, I would say your help leading the charge. [laughter] So you talked about the 4500 employees, but with big issues, Lisa, like, well, social justice issues and climate change, it's like it's not even one company, it feels like it's like all of corporate America plus different governments and NGOs, those are such massive issues and it's like not one segment of society alone can really solve it, if you will, by themselves. So tons of collaboration required in that effort, and there's power in that, I think, if you can get the collaboration right. There are some frameworks, too, that I think help inform it, like the United Nations, the 17 Sustainable Development Goals that they have. So can you talk for a minute about how those United Nations Sustainable Development Goals may have informed KC's objectives of where you wanna be by 2030, which ones maybe in particular informed where you're headed?

0:14:17.3 Lisa Morden: Yeah, absolutely, Cindy, and I'd say, totally agree with you that SDGs provide some of the best shared definitions of those global challenges, I would say, and we use the framework as we considered, looking across our value chain, the key impacts that we have, either impacts or outcomes that we could drive, that we could take a leadership role in. We wanted it to be relevant to the business and relevant to our consumers and to our employees, if you will. So we took those list of 17 and we really begin to map them across our value chain in terms of where we can make a material difference with that. So some of the areas that we focus on, as a result, were our good health and wellbeing, as you can well imagine, given the nature of our products in our categories being very much focused on health and hygiene, and certainly what our brands stand for in terms of their personal connection to consumers, that's a good fit. Gender equality, which is SDG 5, right? The Kotex brand, just as an example, right? It's very much about championing progress of women and girls everywhere. That's very much their efforts and activities really really center around gender equality, and then you couple that, of course, with inclusion and diversity initiatives within the company, which have really been accelerating over the past year as well, which is great to see.

0:15:45.1 Cindy Moehring: Yeah.

0:15:45.5 Lisa Morden: Couple others, life on land, where there's a lot of fiber in our products, tree fiber from forests, etcetera, lands and biodiversity protection and sustainable force management are so important for us.

0:16:00.5 Cindy Moehring: Yeah, yeah, they really are. So I loved how in addition to making an impact on a billion people and under-served populations by 2030, which I think is important because Kimberly-Clark is a consumer product's brand, so there are things like this that we use every day, right? So that's a big deal, but I also really liked the other goals that we're reducing by 2030 by half your footprint and climate and forests and water and plastics. So can you talk for just a little bit about that side of it and marry that with the collaboration that's... Maybe tell us a little bit about some that behind the scenes work with other companies and NGOs and even governments on some of those efforts.

0:16:48.8 Lisa Morden: Sure, sure. It's one of my favorite examples actually of our programs cuts across many of those SDGs as well, and it's probably one of our longest-standing programs, an area that we've been focused on for many, many years, and it's responsible force management I touched on a second ago. We depend on healthy forests, not only for our products and our business, but they're also critically important to healthy people and a healthy planet, so for us, the focus on mitigating climate change, enabling biodiversity, and certainly providing cultural and economic values to people, those force connect communities is critically important. It kinda ties all of those social and environmental aspects together into one program. And while it's been a focus for us for many years, it's one of those that actually continues to evolve and really must continue evolve as we get more data and science and research conducted so that we have a better understanding of just how critical a role for us are playing in the world, and particularly as more pressure comes to bear on them, quite frankly.

0:17:58.5 Lisa Morden: So one area that we're focused on in that mode of, we have to seek to understand for us to get the science, get the data, but it's related to our science-based target to reduce our scope 3 GHG emissions, which is those climate emissions in your extended value chain, it would be related to things like your suppliers' reinforced gas footprint or even the footprint of your products after the consumer has used them, or after they have left your operational control, into distribution into retail and into the consumer use phase. All of those admissions are outside of your direct control.

0:18:39.2 Cindy Moehring: Right, right.

0:18:39.3 Lisa Morden: So we want to very much understand, if you think about the Scope 3 for forests in our supply chain, what does that look like? Because it is such an important topic in the role that forests play in the mitigation of climate change. So we've been engaged in some work with environmental groups and a lot of other stakeholders to understand, how do you even measure this, how do you understand this, how do you put some logical techniques or tools to bear, to help support the measurement so then we can figure out how best to mitigate it and manage those emissions, if you will.

0:19:13.1 Cindy Moehring: How do you actually measure progress in this space? What are the metrics? How do you come up with them and how do you really measure it? And then how do you transparently and authentically communicate that in a way that people can rely on?

0:19:31.9 Lisa Morden: Yeah, and it's so important because with a classic statement, what that gets measured, gets managed, right?

0:19:38.3 Cindy Moehring: Right.

0:19:38.8 Lisa Morden: You have to be able to communicate externally with authenticity and legitimacy your progress or lack of, and be able to have strong systems and tools in place that allow you to get to the numbers in the first place. One of the... I'll just use an example for you because I think we use different approaches to our metrics, some are simpler than others. Water use is pretty straightforward to measure, for example, water use efficiency, but one of the areas that's... One of our biggest challenges, I would say is measuring social impact. How do you measure that you've enhanced the lives of somebody who's living in a vulnerable community? If that makes sense. How do you know? And it's one of the greatest challenges out there, frankly. The approach that we've taken actually is to build some guiding principles that we agree with our collaboration partners externally, but certainly our teams internally as well, and begin to collect the numbers, so a billion people, our metric is, people's lives improved, basically.

0:20:47.1 Lisa Morden: So various programs around the organisation that all have different forms, whether it's providing sanitation systems to communities that don't have them, or it's providing some educational tools to help empower women in certain jurisdictions; they have very, very different forms and fashion. So we use this set of principles and a bit of a government structure around them to calibrate and align everybody in terms of what we believe to be a meaningful and relevant positive impact and we put that together. So it is a pretty big challenge, I would say. What I would suggest, we are about to publish our annual sustainability report tomorrow, so this week.

0:21:34.1 Cindy Moehring: Oh, great, so by the time this podcast gets released, then the new KC Sustainability Report will be out, so we'll drop that link.

0:21:42.6 Lisa Morden: Drop that link.

0:21:43.4 Cindy Moehring: Yes, we'll drop that link as well into the show notes so everyone can find it.

0:21:47.9 Lisa Morden: It's got some great examples of the initiatives and how we measure those initiatives and put some quantification behind them, but it's such a critically important area to get right, no question.

0:22:00.7 Cindy Moehring: Yeah, I think it really is particularly as everyone is very focused on, how do we calibrate even between companies when they're reporting on their sustainability metrics, and you had mentioned earlier, there's all these different rating agencies out there. Oh, my goodness. There's ISS, there's SASB, there's Dow Jones Sustainability Index, in addition to the others that we mentioned earlier, they're all over the board. But some of the regulatory agencies are now starting to pick it up, and I think everybody is waiting, at least here in the US, to see what the SEC is gonna do, if anything, to try to bring some almost required consistency to disclosures. Let's just talk governance for a minute, what do you think would be helpful in this space in terms of governance reform to set a bar that would be consistent for investors to look at it across companies and compare?

0:23:01.7 Lisa Morden: Yeah. There's so many aspects to that question.

0:23:05.4 Cindy Moehring: There are.

0:23:06.5 Lisa Morden: There are like 12 thoughts going through my head, Cindy. But what I would say is that overall, I think to your point about the SEC, I think we're seeing ESG moving from discretionary to an era of more mandates, and within those mandates are probably gonna come some structural tools, things like the Greenhouse Gas Protocols that you want to be sure that companies are measuring their Scope 1, Scope 2, Scope 3 climate emissions the same way using some of our methodologies, right?

0:23:35.9 Cindy Moehring: Yeah.

0:23:37.1 Lisa Morden: So I think some of that is organically growing up through non-financial disclosure sort of maturity through time that is coming along. And you know, it's interesting because I think the Biden administration has gone out of the gates pretty quickly. We're joining the Paris agreements and integrating environmental justice green infrastructure into the plan, and certainly the SEC work to assess what good disclosure has to look like in the future, I think puts the country back on our leadership track and certainly relatively consistent with where the European Union has been headed for some time.

0:24:13.6 Cindy Moehring: Yeah, yeah. On a continuum would you say that where does the US fall in relation to where the EU is perhaps on governance reform for this area? And should it be global or should it just be driven by the national regulatory bodies?

0:24:29.4 Lisa Morden: It's a great question. I think we're entering a period of accelerating regulatory activity all around the world, generally speaking, not just for this ESG space, but generally speaking. So I think some of those gaps will close up, I think we've exited a period of relative quiet in the United States on regulatory reform, and certainly the governance reform around ESG. I think the gap is closing rapidly though, quite honestly. We'll see the SEC's commentary just closed, wiped out just recently a few weeks ago. So I think the story is yet to be told and regardless of whether we have regulatory action and legislative action, I do think that investors will continue to wave the banner and set a town in terms of the types of disclosures they expect and what they expect to see in them. I think I read a stat recently that said, "85% investors are considering SG factors today," in their decision-making. And that has jumped dramatically over the past few years.

0:25:36.2 Cindy Moehring: Sure, yeah.

0:25:37.0 Lisa Morden: So I think even if they're sluggish-ness on the regulatory side, I think institutional investors are really pushing the needle, on pushing this forward.

0:25:45.3 Cindy Moehring: Very interesting. Yeah, yeah. So let's talk about pushing forward, particularly in an area like ESG where you do have to have principles. I love how you describe that, but also very specific kind of measurement metrics, right? So you kinda have to have both to make real progress. And let's face it, it's not all gonna be success stories, right? There's gonna be some mistakes that get made along the way or things that you think might work and might not. So, interested in your thoughts on a couple of things related to that. Should those kinds of mistakes be discussed and revealed? Do you think that's helpful? And how does that play into the recalibration, if you will, of what the goals ought to be?

0:26:34.7 Lisa Morden: It's interesting because coming out of our sustainability report process, we had to challenge ourselves actually to be the most transparent on what some of those challenges where. It's not natural to say, "Well, this didn't work and that didn't work, and I wish we would have done that a bit differently," but there are important learnings in that. And I think the transparency about what has been effective versus what hasn't been effective are both very important angles on this discussion. To me, it gets back to authenticity and just if you're not making progress on a goal, explain why not, and talk a little bit about what you wanna do differently going forward to try and unlock it. I think that is important and it's quite liberating frankly as well, because there's nothing worse than being a metrics-driven company or organisation and missing your targets, none of us like that for sure. But understanding what you can learn and take away from that as you go forward, because we are driving very complex into those changes, right?

0:27:37.1 Cindy Moehring: Right.

0:27:37.6 Lisa Morden: Some things won't always be successful, they won't always work, and we have to be clear on what has worked in order to learn going forward, but also what hasn't been successful, so we can check and adjust.

0:27:49.5 Cindy Moehring: Yeah, I think that's important. Well Lisa, I for one, am certainly looking forward to seeing the sustainability report from Kimberly-Clark, and this has been a fabulous conversation. So thank you so much for your time. I always like to end on one question where if somebody is interested in learning a little more. What do you have as recommendations for good books, or good podcasts, or maybe a good documentary or something that you found helped you in your ESG journey? And what would you recommend to the audience?

0:28:23.5 Lisa Morden: I couldn't resist Cindy, I'll show you what I'm reading right now at the moment, I don't know if you can see that.

[overlapping conversation]

0:28:28.7 Cindy Moehring: Hold it up again. Just below, Bill Gates, How To Avoid...

0:28:33.6 Lisa Morden: Yeah, it's Bill Gates, How To Avoid A Climate Disaster.

0:28:38.4 Cindy Moehring: Got it.

0:28:38.9 Lisa Morden: Which I think it's been a... I'm in the middle of it, frankly, and it's a pretty compelling read, and I love that it has its focus on the importance of net zero climate emissions, carbon neutrality, if you will. But it talks a lot about the solutions and innovation that we need to get there. So it's got these various solutions oriented focused to it. Some of the material that you read in the sustainability space is kinda, it can be gloom and doom-ish, and so much to that published material. So it's good to have a bit of a focus on, what do we do about it?

0:29:13.9 Cindy Moehring: Well, thank you so much for your time today. I really appreciate it, and this has been just a fabulous conversation.

0:29:22.0 Lisa Morden: Thank you so much for having me, Cindy, it's been a pleasure connecting with you today. Great questions, enjoyed it.

0:29:27.1 Cindy Moehring: Absolutely, you're welcome. Join us back here next week for another episode of The BIS.

[music]

Matt WallerCindy Moehring is the founder and executive chair of the Business Integrity Leadership Initiative at the Sam M. Walton College of Business at the University of Arkansas. She recently retired from Walmart after 20 years, where she served as senior vice president, Global Chief Ethics Officer, and senior vice president, U.S. Chief Ethics and Compliance Officer.


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