TD Bank becoming forest expert?
April 18, 2012
By: Financial Post
Karen Clarke-Whistler is the CEO of TD Bank Group – Chief Environment Officer that is. A rarity in the corporate world, her role entails making TD live up to its green logo from the inside out. Last week she spoke with Dan Ovsey about the bank’s latest eco-initiative, TD Forests, as well as how and why a financial services company feels compelled to tackle the issue of environmental sustainability on a large scale. Following is an edited transcript of their conversation.
Q The role of chief environment officer isn’t common in the private sector. How did this role come about?
A This really came about in 2007 when, at that time, TD was receiving negative press regarding its lack of commitment to the environment and our “other” CEO said ‘‘this isn’t right and we need to do something about this,’’ and that’s what spawned it. I think I had 16 interviews for the job. It was quite interesting, but how I ended up fitting the bill [is] my background is environmental science and I had spent 15 years as an environmental consultant, and half of that was spent in North and South America, and the rest in Europe and Africa.
Q What exactly does a chief environment officer do at a bank?
A My job is to look at how to bring the environment directly into the business strategy of the bank, so not just keeping it in the community and be philanthropic, but start grappling with the question of what it would mean to embed this perspective into the business strategy of the bank. The more we looked at it, we realized the environment had to come in to the business, not just from the point of view of risk management, but from the point of view of diversity of thought and a driver of innovation.
Q Last week, you announced the launch of TD Forests, an initiative to reduce by 20% the company’s paper usage within three years, and increase the area of protected forest habitat by a rate that’s comparable to your total paper usage. Why does the bank feel compelled to do this?
A Banks are absolutely huge consumers of paper. I think the current benchmark is 10,000 pages of office paper per person. We need to raise awareness of the fact that paper isn’t just a commodity, but something that has value when you use it. It’s not just value in the business, it’s a natural resource product and we want to make sure people understand how these things are connected. The main proposal in TD Forests isn’t to plant more trees, but to protect critical forest habitat because right across the country forest habitats are under huge threat.
Q Beyond reducing your paper usage while increasing protected forest habitat, what is this initiative ultimately trying to achieve?
A We’re trying to draw the link between the forest — which takes about 100 years to develop and has a lot more than just trees (there are all the things that live between the trees) — and have a visible view of our use of paper and what that means from a forest perspective. So, we’re not planting trees as much as protecting forests, and we’re choosing to protect forests not by the amount we reduce, but by the amount we continue to use, so it’s a visible reminder to us and everybody else of our impact and what we can all do to try and reduce that.
Q The average bank consumes about two football fields worth of forest through its use of paper. What’s your strategy to reduce that by 20% within three years?
A We are very much looking to reduce paper usage within our own business operations and there’s lots of benefits to streamlining business processes. From a customer perspective, we’re looking to increase our online offering. When we poll our customers and ask what’s the biggest single thing a bank can do to improve its environmental performance, over 50% say it’s reduce our use of paper. Four out of five TD customers who are opening accounts are now opening them online; over nine million of our customers have paperless banking options. So, it’s not just a poll, their behaviour demonstrates that.
Q What does the bank use all that paper for?
A There’s office paper. When you look at a company like ours with 80,000 employees, there’s just a lot of communication going on and a lot of use of office paper. From a customer perspective, we have a lot of regulatory requirements that require the printing out of paper for our customers. I think the whole banking community is hoping to move that forward. Commercial print is another area. The question of how we get our message out to customers is a huge one. The TD Forest campaign will be completely paperless, so that will be a great way for us to get a sense of how much we should still be relying on print media and direct mail and that sort of marketing to get our message out to customers. There aren’t great statistics on that yet. People are looking at online media more, but no one has a great sense of that yet.
Q Where do you want to be 10 years from now?
A I’m very much hoping we’ll exceed our 20% target within our goal of three years. This year will be the year that we are absolutely making sure that we have counted and accounted for all of our paper. Interestingly, we’ve also just had approval for a major initiative in the bank to look right across the bank at how we use paper and what the processes are and develop a full cost-of-ownership approach that I think could be very interesting.
Q Corporate social responsibility is a wonderful thing to do during good economic times, but during hard times these initiatives tend to fall down the priority ladder. What are your thoughts on that?
A I was hired in 2008, just as the financial meltdown was happening, so there were a few white-knuckle moments there. I do agree with your statement, but I think we’ve been able to prove the business case that not only can you save money but there are great opportunities to make money. I think that’s the secret sauce to the environment question. You have to look — even in tough times — not only at the bottom line, but also the top line. I think that’s where our approach to the environment — it’s very honest and transparent but also a real driver of business opportunity — comes into play.
Q Do you think that the end result will strictly be altruistic or — whether intentional or not — something that’s going to drive consumers to TD?
A As we’ve been doing this [research] and asking customers what they think about it, they say, “We expect this from you.” Another huge driver for us is employees. According to the Aon Hewlett Best Employees survey, we have among the most engaged employees on the environment of any company surveyed. That is huge for us because of engaged and excited employees make for happy customers. They’re really behind this; they’re generating paper-reduction initiatives, they’re planting trees. Also, our customers tell us: “If you’re going to tell us to do something because it’s good for us, we had better see you doing it, too.”