Generation’s System Positive Summit 2023
‘System Positive’ is Generation’s shorthand for companies that we believe will drive the transition to a net-zero, prosperous, equitable, healthy and safe future.
In late September, Generation Investment Management’s Growth Equity team hosted its annual System Positive Summit in San Francisco, bringing together our closest community of CEOs, management teams and advisors across various industries to discuss and learn from each other on how to scale mission-driven, high-growth companies. This year, the summit had a particular focus on how to embed sustainability in products, operations, culture and governance to drive impact at scale. We’re excited to share some of the key learnings from the summit.
Building and Protecting Culture and Diversity in a Downturn
Culture and diversity goals can suffer during a downturn, especially if talent teams are downsized, budgets are cut and employee uneasiness rises. However, leaders from Yelp, project44, BenchSci, Asana, and Gusto agreed that prioritizing employees and company culture throughout business cycles is critical to achieving growth. One idea on how leaders can continue to improve culture and diversity was to conduct regular “listening tours,” pulling in feedback from employees, surveys, external coaches and Glassdoor reviews to get a holistic picture on what needs addressing and how to best do it. The panel pointed to the importance of regular networking with underrepresented groups and creating employee resource groups early, even if the group is only 2–3 employees. Deciphering which diversity issues should take priority can be a challenge, but starting with your most prominent groups and identifying what you are uniquely positioned to speak about is a good place to begin.
Driving Growth with Sustainability at the Core
Generation’s mission is to fund companies driving the transformative change required for a net-zero, prosperous, healthy, fair, and safe society. We were glad to be joined by the CEOs of our portfolio companies Elation Health, Gusto, Remitly, and Vestiaire Collective, all of which put sustainability at the core of their business.
The panelists discussed how to balance long-term investments with short-term discipline given the changing macroeconomic environment — whilst the vision can remain unchanged, the path to getting there needs to evolve. This includes raising the bar on the return required for longer-term investments and how aligning with your investors is critical.
All panelists agreed that staying intentional with who and how you hire and train people is a challenge but critical to sustainable growth. It is hard to find the right leaders for different stages of the business and you need to be prepared to make tough calls when people aren’t growing with the company.
Investing in Education and Building Good Governance
Generation’s Head of Growth Equity Lila Preston and Monica Lozano, former President of the College Futures Foundation and current board member of Apple, Target and Bank of America, discussed education, corporate board governance and advice for companies in the growth stage.
Lila and Monica addressed how CEOs and management teams should see the corporate board as a strategic asset. The board should have the skills and backgrounds to help the company think through strategy, risk and ESG measurement.
Scaling Impact Measurement and Reporting
In the summit’s second half, sustainability leaders from Benevity, Back Market, Pivot Bio and DocuSign spoke about how to measure impact to drive value for your business. Selecting the right product impact KPIs to reflect the most powerful impacts of your business, getting buy-in from the board and reporting these KPIs in the same way financial KPIs are reported, were seen as critical first steps.
Measuring sustainability impact can be a key driver for business growth, as a critical indicator of customer trust, product efficacy and customer value. Data can be used to influence how products evolve to better meet customer needs. Regular environmental impact reports also build trust for stakeholders and customers while providing a proof point for climate advocacy.
If drafting an impact report, the tip is to start earlier than you think. You don’t need to move mountains with your first report. Instead, focus on your target audience and add to your report with additional metrics over time.
Sustainability in the Public Markets
Patrick Flynn moderated the final session with ESG executives from LinkedIn, Toast and Applied Materials. The panelists discussed the building blocks for creating mature environmental programs. They suggested getting started by setting sustainability goals that are good for the business and ambitious. Each panelist agreed that harnessing C-suite support is vital to developing an ESG roadmap, and the executive committee and board have critical roles in ensuring you stay on track with science-based targets.
ESG requires transparency and performance. Update your board on a quarterly basis and continuously educate them on the impact of the work being done. Once you’re public, there’s an expectation and a requirement to be more transparent, so in a pre-IPO stage, getting used to disclosing data and information on a regular basis helps develop the right muscles for down the line.
Looking Towards the Future
Despite the diversity of topics, each session had a common thread: all stakeholders within the private sector must align on common goals in order to create true growth along with environmental and social impact. In hosting its third annual System Positive Summit on the occasion of its seventh release of The Sustainability Trends Report, Generation aims to raise awareness of how investors and operators can bring the world closer to a system positive state.
For more information, please visit https://www.generationim.com/our-strategies/growth-equity/
