Michael Kobori: So the way that we have learned, I think, over time, to build the business case

for sustainability is really at three different levels that we talk about.

New Speaker: The first is protecting and managing our reputation and our brand image. And so
all of the work that we do helps to protect the company's reputation. That's the
basics. In fact, this is how the whole field of corporate sustainability, as we call it
today, really started about 20 years ago. It was about managing what
stakeholders thought of you, and how they viewed you. But that really is table
stakes these days.

Michael Kobori: The next level is: What can you do about sustainability and better human rights
practices that actually helps productivity? That can save you money, that can
improve productivity? And so as we look at that ... For example, the Water<Less
program we have to use less water in our manufacturing process actually saves
about five cents on every unit. That may not seem like a lot, but If you add it up
across millions of units, it becomes real money.

Michael Kobori: The worker wellbeing programs that we have, that improve workers' health,
that improve workers' financial standards, this makes them happier workers,
more engaged workers, more productive. It reduces turnover and absenteeism
in our contract manufacturers, and they see that. And so the business case that
we've been able to document is a four-to-one return. For every dollar that's
invested in these kinds of worker wellbeing programs, the payback to the
supplier is $4. So that's the productivity part of the business case.

Michael Kobori: The last part of the business case, and the one that sometimes we still struggle
with trying to achieve, is growth. How does sustainability contribute to growth?
Either revenue growth or innovation? We see it very clearly in innovation. As we
set out to reduce the kinds of chemicals that we use to make our product, we
actually discovered a different process for finishing our jeans. What we
discovered is that lasers could get the same look as some chemicals could.

Michael Kobori: This new process that uses lasers is called FLX, future-led innovation. And it is
replacing now some of those chemicals that we used to use, that required
workers to wear heavy protective equipment and masks and gloves, and us to
install all kinds of engineering solutions at the vendor level. We don't have to do
this anymore, because we've eliminated the use of this particular chemical.

Michael Kobori: That's on the innovation side. Now on the growth side, it's harder. That's where
we're really trying to take all of the good work that we do around sustainability,
embed it in our products and tell that story to the consumer. It's harder right
now, because today we know there's just a very small percentage of consumers
that are willing to pay more for a more sustainably made apparel product.

Michael Kobori: It may be different for food, it may be different for consumer products,
cosmetics. But for apparel, it's still a very small percentage of consumers who
 are willing to pay more. So we're still trying to figure out how we add to the
growth equation in terms of the business case for sustainability.

Vien Truong: Despite all of the bad news in the world today, the good news is more and more
people are now demanding companies to be responsible to the community.
Cause marketing is a big thing now in the private sector. Consumers now are
picking brands that actually invest in the community, that seem to have more
responsibility to communities, and that's a good thing. And while Trump has
stepped back from the Paris Climate Agreement, we have seen our private
companies step up, we have seen our subnationals step up. We have seen
private companies now saying, "What more can we do?" And that's really
hopeful.

Vien Truong: One of the companies that I'm most just kind of in awe of, inspired by, is our
partner ECOS. It's led by a CEO of color, a woman of color named Kelly Vlahakis.
And she has been able to lead ECOS, a cleaning supply company, to be zero
waste, carbon neutral, and water neutral. The first ever, a cleaning
manufacturing company itself, right? But the first-ever company that can do
that. And not only that. — when we were able to go see her facility, her
employees love her. They get paid good wages. They're deeply committed to
the issue. And this is a global company.

Vien Truong: I lift them because, on the one hand, it's important for our private sector to step
up. And then the second point is — great, we're beginning to see that push. In
fact, a lot of the people attribute the Paris Climate Agreements to the
commitment of our private sector, in order for it to have happened in the first
place. But now we really need to have private companies step way up the way
that ECOS has. Because we all know that 1.5 degrees is still not enough, and we
just need to have some bold leaders, some bold CEOs, step up and lead the
industry and lead the work.

Mark Tercek: Yeah, lots of companies have now figured out — and at TNC we're always
encouraging them to figure this out — that doing the right thing for the
environment is usually the right thing for their business, too. Sometimes you
might have to be creative in how you think about that. You might need to take a
medium or longer term perspective than otherwise. But it's hard for me to think
of many businesses where doing the right thing for nature doesn't benefit your
business. There are many, many examples to point to.

Mark Tercek: One that comes to mind right away is Walmart. Walmart is a controversial
company. I'm sure they would prefer to be viewed as less controversial, but
they're in everybody's spotlight. And so 15, 20 years ago ... 15 years ago I think
would be about the right timeframe. They decided to take a hard look at
whether they could be a better environmental citizen, and do that in order to
improve their reputation. But do that in a way that would also improve business
results.
Mark Tercek: The more they looked at the opportunity, the more they found. The first sets of
things they did was they just really focused on energy efficiency in their stores
and in their distribution system. And of course, they quickly discovered the
more efficient they became, the savings fell to their bottom line, but their
environmental footprint improved, too.

Mark Tercek: Then, Walmart is a bold company, and they've got some bargaining power as
such a dominant retailer. For many of the biggest consumer goods in the
company, Walmart is by far their biggest customer. So Walmart's got some
clout. So Walmart has now been in the practice of convening the CEOs of their
big suppliers — it's a who's-who of some of the biggest companies of the world.
They also invite the CEOs of some of their friendly NGOs. I'm one of them, so I
show up.

Mark Tercek: Walmart has gotten very good at graciously, but forcefully, requiring all of their
suppliers to up their environmental game. The most current example of this is
something Walmart's doing called Project Gigaton, whereby Walmart aspires to
reduce greenhouse gas emissions in their supply chain by one gigaton. That's a
lot of greenhouse gas emissions. I'm sure they'll pull it off.

Mark Tercek: And then in turn, all of those companies who are participating in this, they've all
discovered in their own way that this is in their best interest, too. As they get
more sophisticated in managing their supply chain, what happens? They find
cost savings, they find operational improvements, better community relations.
What else happens? As they seek to recruit young people into their companies,
young people want to work for companies whose values match their own, so it
helps on that front.

Mark Tercek: More and more investors care about companies' environmental performance.
They're favored for those kinds of reasons. So it becomes a very virtuous cycle
and lots of good things happen from these kinds of corporate initiatives.

Mark Tercek: But it's a little bit tricky and complex, because we're always finding — the
harder we look at this, there's even more we would like companies to do. As
commendable it is that Walmart and their suppliers, together with NGOs like us
and others, are working to reduce greenhouse gas emissions by one gigaton in
the Walmart supply chain, that's positive. We are also saying to all those
companies, "We need you to be more forceful and assertive with us here on
Capitol Hill, when we push for the government policy we need."

Mark Tercek: So I think it's a requirement for NGOs, for customers of big companies, for
investors, to keep pushing the envelope. How can we ask companies to do
more? And I expect what we'll find, as we do that, companies will do more, and
they'll find that it redounds to their bottom line best interest, too. So this ought
to be a win-win, but we need to be pushy to make it happen as best we can.