Precious metals giant Johnson Matthey plc is one of those huge companies you may never have heard of, but if you have a conventional car then there’s a one in three chance you own one of their catalytic convertors. The company is listed on the FTSE100, has 11,000 employees spread across 30 countries, and is one of Terra Infirma’s clients. Here I interview Global Sustainability Director Sean Axon about his views on corporate sustainability in general, and supply chain management and employee engagement in particular.

How did you personally get involved in the sustainability agenda?

It goes back a long way. As a kid I was very interested in chemistry and what science could do, but equally realised the potential downside to ecology from industry.  I got a book with my Thomas Salter Chemistry set about industrial ecology and the effect of chemicals on the environment which was very influential. Later, at a key point in my career I got interested in green technologies – solutions that would provide answers to some problems such as greenhouse gases etc. So I started pursuing that as an area specific research interest in the company.

Once Johnson Matthey started developing some early thinking on sustainability, I got my foot in the door and said I’d be interested in contributing to the discussion. After about a year of that thinking evolving, there was a recognition that it needed some full time dedicated resource so I was invited by one of our Executive Committee members to take on the role and lead on sustainability. In our organisation, the fit of a technologist moving into the sustainability lead role was crucial. I’m not sure that somebody from a non-technical background would be the right fit for Johnson Matthey.

What is the business case for sustainability from your Johnson Matthey’s point of view?

Lots. There is a financial benefit, clearly.

There is also a real sense around the legacy of our company, its founders and their attitude to ethical and moral behaviour. Our history is in assaying metals. The act of taking somebody’s precious metals and determining the composition for them is predicated on trust. So trust in assay and metal management is in-built in Johnson Matthey and our customers value that.

The other part was the recognition that the world was changing – governance practices, legislation and stakeholders taking more and more of an acute interest in this. And we’re seeing that ever more strongly, for example in the investor community and amongst our customers. Many of our products have arisen because of environmental legislation – they have been developed to help our customers meet tighter standards.

Security of supply is a part of the business case. Anticipating and planning for changes in the supply of materials has an impact on the products we make and their formulation. That also drives innovation in R&D in how we formulate or reformulate products.

Sustainability is not an add-on or an adjunct to our business – we really believe that it is at the core of our business. Our sustainability targets are the metrics by which we will judge the success of the business.

What are the main challenges you face?

Getting the message out clearly to all employees – to make sure that they understand the relevance of the high-level corporate targets to their day to day job function. When we launched our Sustainability 2017 strategy in December 2007 we had about 7,000 employees – today, we’re up to 11,000 employees. 40% of our employees weren’t even here when we did the launch. There is a requirement for continued reinforcement of training and messaging and understanding of what this means – both as a refresher for employees that were here but also as an introduction for those who have joined.

Stakeholder interest in Johnson Matthey has increased. We’re a B2B organisation, we’re not consumer facing like Unilever or Tesco or BskyB. We tend not to be not at the forefront of people’s minds – and there aren’t huge campaigns like those for example, on sustainable palm oil, in our industry. But there’s an increasing interest from institutional investors, regulators, trade associations, and customers all asking us for more and more information.

There’s a huge number of emerging new standards such as ISO 26000, GRI G4, IIRC, regulation around conflict minerals, mandatory carbon reporting in the UK – and managing and watching the horizon to make sure you don’t miss anything is key. That rapid change in areas of interest, policy and regulation is a real challenge – and assessing the materiality of each. We look at what is changing around us, assessing “is this relevant to Johnson Matthey ?” and, if ‘yes’, then we need to put in a strategy or a plan of action to address that. If no, “nothing required now”, “keep a watching brief on it” because it might change in the next year, or 5 years or beyond.

How do you go about employee engagement?

Our overall approach is to use multi-media and multiple tactics. If I think of the lifecycle of our sustainability strategy over the last five years, it’s about ensuring that we’ve got clear buy-in and leadership from the top. It’s about having a clear set of defined targets and a strategy. It’s being on a vector – a clear sense of direction and magnitude about how and why we are doing this. It needs to be communicated effectively, whether by the web, intranet, pamphleting and training in a way that strikes a chord with our people. Some people talk about branding sustainability. I’m not sure we’ve branded it, but we have given it an identity, so people can understand the five elements of our programme and the 10 year targets we have set.

Our approach is like the Deming Cycle – Plan, Do, Check, Act. We check progress against our Sustainability 2017 targets – we felt 6 or 7 was the optimum number for our employees – 10 or more targets would be too many to handle. We publish these externally and internally and follow that up with a short comms pack which might include a video message from Neil Carson, our Chief Executive, and/or a 3-6 slide presentation. We’re aiming for repeated reinforcement of the message.

We provide support on site, visiting, educating, sharing good practice. Embedding professional competence is another priority as there is no point in having the expertise only concentrated in the corporate centre – the divisions must have their own competent staff. The 2 biggest of our 5 divisions now have full time sustainability managers. They’re closer to the sites, closer to their business and they can contextualise sustainability targets and messages for their particular division.

We have a face-to-face introduction to sustainability course and an e-learning version. We have sustainability content in our Graduate level development programmes. These are regional business training events aimed at people 3-10 years into their careers and we have specialist training for specific roles e.g. manufacturing. On all our sustainability courses, we ask people to commit to ‘one thing’ at the end of each course – what’s the one thing they will do differently when they go back to the workplace.

We often use the Terra Infirma sustainability maturity model. We put it up and ask people to vote on where they think the business is on a scale from nothing to fully embedded. It’s totally unscientific, but it gives you an instant “gut-feel” for where people think we are.

I feel very strongly that the Chief Executive and the boardroom have to be engaged in this debate. I’m very fortunate that the very highest level of governance, the board of directors, is right behind us. I give an update to the board every year. Just below that, the Chief Executive’s Committee asks me to give an update twice a year. There’s a clear understanding among the directors as to what their non-financial responsibilities are.

How do you manage risks in your supply chain?

There are some real challenges in our supply chain in terms of extractive sector, in terms of regional and national policy and regulation, for example the Dodd-Frank act in the US on conflict minerals. We are not obligated under that legislation, because we’re a UK based company, but many of our customers are obligated. So naturally they’re coming along the supply chain to us, and asking what’s our policy, approach and auditing procedures for our suppliers.

We have a very diverse supply chain both geographically and the types of material from natural materials through extractive materials to recycled materials coming from a broad range of sources. Ensuring provenance and ensuring standards is a real challenge but we are developing skills and broader competence in this area as we see it as critical.

Culture is a challenge. Even in Europe the differences in approach to, say, sustainability in Italy, Germany and the UK are quite marked. Some countries and cultures are quite compliance based, if there’s a set of rules they will comply with those rules. In some territories they are more interpretive of the rules and guidelines.

How do you manage the supply chain in a practical sense?

The way JM has developed as an organisation through acquisition and growth, many of our divisions have quite a high degree of autonomy, so we don’t have a huge “command and control” structure from the centre which dictates everything that happens.

We provide policy and guidance to the divisions. But often that may require them to interpret it slightly differently because of the type of supply chain or the suppliers they have. All of our divisions have some form of supplier audit process, but is it consistent? No. And that’s appropriate as they’re purchasing different raw materials and services from different territories, but they do all have a working protocol.

We’ve done a lot of work with our supply chain professionals. We’ve run a series of workshops about 3 years ago. Last year I reconvened the group of supply chain professionals as the world is changing. That team is starting to self manage. They’re discussing issues around audit, regulation and combined procurement. And we are generating training materials to raise awareness through out the teams.

Do you have any advice for others?

1. Show personal conviction

2. It will require a large amount of personal energy

3. Be aware of all stakeholders

4. Engage with trusted but challenging external organisations to get some robust feedback

5. Don’t underestimate the huge diversity of subject matter that you will be expected to have a considered opinion on.