Nailing the Foundation of Sustainability with Flex’s Kyra Whitten

Sustainability is not a one-size-fits-all strategy for business. How a company approaches its sustainability efforts really depends upon what it does, who it works with, where it operates, what impact it has on its supply chain and the local community where it operates, as well as its customer base.

Kyra Whitten, Vice President, Sustainability and President, Flex Foundation at Flex, a global supply chain and manufacturing solutions provider which helps customers design, build and deliver products to make the world a better place, shares how Flex approaches sustainability.

As a $25 billion company operating in 30 countries around the world, Flex’s sustainability challenges are a little bit different than a traditional product company. Kyra breaks down how Flex approaches sustainability, what they decide to focus on, and shares thoughts on reporting, aligning goals with its non-profit foundation, and more.

• What Sustainability Looks Like At Flex: As a diversified advanced manufacturer, we manufacture products on behalf of our customers — products that you would see in your everyday world whether that’s your vacuum cleaner, the data center that’s powering your internet, your electric vehicle, etc., so there is a pretty high probability Flex was involved in the making of that product. I oversee The Sustainability Program Office which coordinates across operations, our business units, our sites, and our functions to ensure we have common goals and metrics for sustainability. They capture all of that data; we make sure it is validated and then we are responsible for external reporting and also providing updates to our investors and customers. (0:52)
• How Flex Approaches Sustainability: We try to think about it in a very holistic way. Through the lens of ESG, which is an interchange quite frequently with sustainability, we look at it across our world — the environment and our customers, suppliers, people, etc. — really anything associated with their health and safety, their career and development, including inclusion and diversity. That’s how we manage it from a data perspective and we look at governments and ethics through the lens of sustainability. We have established a new set of goals for 2030, but the story began five or six years before that when we launched our 20 by 2020 goals. Flex has always had goals with numbers or KPIs or milestones associated with them. This is the way you can make progress and can hold yourself accountable. We have had that data goal driven mentality for quite some time and it really laid the foundation for the strategies and the goals we just launched for 2030. (2:41) 
• How Flex Values Sustainability: It all starts with the consumer. We see there is a growing trend that people want to do business with and support brands that are sustainable and who have an agenda beyond making money — they have a purpose which is contributing positively to the planet. And so customers are driving that behavior and that’s influencing the entire value chain. As you go into buying a consumer product, I guarantee that anyone would be more apt to buy a product which has less packaging or recyclable materials in it. The customer demand for more sustainable solutions is driving our customer base to want more sustainable solutions. And then they’re coming to us with things like, ‘We have to measure our carbon footprint. As you manufacture our products, we need to know how much energy you’re using in that endeavor. How are you treating your people? Are you providing them a living wage, are you providing them with safe working conditions?’ So, this notion of sustainability is really being driven by that end consumer who is creating that requirement all throughout the value chain — literally back to the ground and the raw materials — to ensure we’re doing the best we can. (4:42) 
• Determining Which Initiatives To Focus On: Every company does not have to solve every problem. What’s important when you’re designing your sustainability strategy is that it has to be aligned to your business and it has to be about being relevant to, not only what your business goals are, but, as you think about sustainability, a lot of times it has been about risk mitigation and what is material to your business. The perfect place to start is understanding what are the areas of sustainability that are fundamental to your business. For example, we have 160,000 members of the Flex family around the world, we have roughly 130,000 of those employees working in factories every day to build products. So, they are our number one priority. Health and safety has been a number one priority in terms of our sustainability agenda. And then I would say number two is around the environment and it’s not just about carbon emissions, but also waste and water because we are a manufacturer, we consume materials. We need to make sure we are being as responsible as possible in terms of how we help our customers manage their product life cycle. Because we are so complicated and so broad, we have chosen to have goals across a lot of areas, but I don’t know if that’s right for everybody. It goes back to what really is material for you and builds from there. (7:23) 
• How To Align A Non-Profit Foundation With A Company’s Sustainability Goals: Anyone who is involved in philanthropy realizes it looks so fun and glamorous on the outside that you get to grant money to nonprofits and make positive contributions, but you also say no a lot. It’s really important in philanthropy and in your foundation to be super clear on where you want to make an impact and what’s aligned to your business. Aligning to the sustainable development goals is a really great way to help you with prioritization and make sure you’re not spreading yourself too thin. It’s all about going back to aligning with what is most important to your business and your key stakeholders. (9:50) 
• How Flex Is Expanding Sustainability Across Its Entire Ecosystem: One of the things we’ve embarked on with our 2030 sustainability goals is around customers and suppliers and having shared responsibility for scope three emissions. We look at our customer base by emissions. Which of our customers create the most emission, do they have carbon emission reductions goals based on climate science — whether that’s through the science-based target initiatives or other organizations that are based on climate science? That’s a very unconventional goal because, at the end of the day, we’re an influencer and a provider to our customer. We have no real control over the decisions that our customers make in terms of how they run their business, but we felt it was so important to take an ecosystem approach to our goals when we joined the science-based target initiative. And when we looked at our scope three emissions, our largest portion was in the use of products sold. We don’t own the products — they’re our customers’ products. We manufacture on their behalf, so it’s complicated, but we feel like we have an opportunity based on our learnings and our scope and scale that we can help our customers who don’t have goals today, to help them get started and join the conversation and contribute to the solution so everyone wins. (10:56) 
• How Flex Thinks About Disclosure As Part Of Its Sustainability Journey: A lot of companies are struggling with reporting because there are so many different rankings and ratings and there seems to be a new reporting format every few months. It starts with partnering with finance and your legal team to understand what you are already sharing in financial disclosures and what your philosophy is about transparency. The thing about sustainability that may be a little bit different than financial reporting has been that it’s not necessarily about whether you are doing well, it’s about disclosing where you are and what you’re doing to improve. This is a little bit of a different mindset in sustainability reporting versus other legal and financial reporting. As the investment community is paying very close attention to sustainability, one of the ways that we’re thinking about it is over time, making sure that we have more rigor and assurance in our data. In terms of what we choose to disclose, how we started is probably like most companies, which is aligning to the GRI (Global Reporting Initiative) and then building on it from there. And then along with those external indices whether its DJSI (Dow Jones Sustainability Indices) or Morgan Stanley, or Sustainalytics, it goes back to what is the philosophy of your company, what are you comfortable with disclosing, and what are you just not ready for. The key is to start somewhere and then try to improve every year. (13:56) 

TRANSCRIPTION

Jennifer: Can you tell me more about your role and responsibilities with the team? 

Kyra: Flex is a diversified advanced manufacturer, and we manufacture products on behalf of our customers. Products that you would see in your everyday world whether that’s your vacuum cleaner, whether it’s the data center that’s powering your internet, whether its your electric vehicle, there is a pretty high probability that Flex was involved in the making of that product. So, we have a very diverse customer base. We are about a 25-million-dollar company in about 30 countries around the world. So, our sustainability challenges may be a little bit different than a traditional product company. So, my role at Flex is to oversee what we call The Sustainability Program Office. So, my organization coordinates across operations, across our business units, across our sites and our functions to ensure that we have common goals and metrics for sustainability. They capture all of that data; we make sure that it is validated [2:00] and then we are responsible for external reporting and then also providing updates to our investors and our customers. So, we’re really in a collaboration role here in the program office and then we have specific owners across our nine pillars of sustainability who are responsible for delivering on that and then we act as a facilitator and a coordinator to those owners across Flex. 

Jennifer: Can you share more about how Flex approaches sustainability? 

Kyra: One of the ways that Flex thinks about sustainability is we try to think about it in a very holistic way. And if you think about it through the lens of ESG, which is an interchange quite frequently with sustainability, we look at it across, you know, what we would call our world which is the environment and our customers and our suppliers, our people, which is really anything associated with their health and safety, their career and developing, including inclusion and diversity. And then our approach and that’s how we manage it from a data perspective and how we kind of look at governments and ethics if you will in the lens of sustainability. So, we have established a new set of goals just this past spring for 2030 but really the story began 5 or 6 years before that where we launched our 20 by 2020 goals. So, Flex has always had goals that had numbers or KPIs or milestones associated with them. And that’s just the way that you can make progress and hold ourselves accountable. So, we had that data goal driven [4:00] mentality now for quite some time and it really laid the foundation for the strategies and the goals that we just launched for 2030. 

Jennifer: How does Flex view the value of sustainability? 

Kyra: It all starts with the customer and, you know, as consumers, we know. We see that there is a growing trend that people want to do business with and support brands that are sustainable, that have an agenda beyond making money, that have a purpose that is contributing positively to the planet. And so really customers are driving that behavior and that’s influencing the entire value chain. So, as you go into buying a consumer product, you know, I guarantee you that anyone would be more apt to buy a product that had maybe less packaging, that had recyclable materials to it. So, the customer demand for more sustainable solutions is driving our customer base to want more sustainable solutions. And then they’re coming to us with things like, ‘We have to measure our carbon footprint. As you manufacture our products, we need to know how much energy you’re using in that endeavor. How are you treating your people? Are you providing them a living wage, are you providing them with safe working conditions?’ [6:00] So, again, this notion of sustainability is really being driven by that end consumer that’s really creating that requirement all through the value chain, literally back to the ground, to the raw materials, to ensure that we’re doing the best that we can. And so, I don’t see this trend slowing down if nothing, accelerating. So, in terms of how we think about sustainability or why it’s so important is really because we can see what our customer’s customers are looking for, so we know that in order for us to provide that value, we have to deliver that and help our customers meet their sustainability goals. 

Jennifer: How do you determine which initiatives to focus on when you are such a diversified manufacturer, kind of globally? 

Kyra: Great question. And I think that’s probably why our sustainability agenda is broader than most. I don’t think that every company has to solve every problem and I think what’s important when you’re designing your sustainability strategy is that it has to be aligned to the business and it has to be about being relevant to, not only what your business goals are, but, you know, as you think about sustainability, you know, a lot of times it has been about risk mitigation at the end of the day and what is material to your business. And so, I think that’s the perfect place to start is really understanding what are the areas [8:00] of sustainability that are so fundamental to your business. And so, for example, we have 160 thousand members of the Flex family around the world, we have 130 thousand of those employees roughly working in factories everyday to build products. So, they are our number one priority. So, health and safety has been a number one priority in terms of our sustainability agenda. And so, again, making sure that the things that you’re really going to focus on is what is most impactful and important to your business. So, I would say the health and safety agenda is number one. And then I would say number two is around the environment and it’s not just about carbon emissions, but also waste and water because we are a manufacturer, we consume materials. And so, making sure that we are being as responsible as possible in terms of how we help our customers manage their product life cycle, you know, that obviously is really key to us. So, I would say, again, you know, because we are so complicated and so broad, we have chosen to have goals across a lot of areas, but I don’t know that that’s right for everybody. I think it goes back to what really is material for you and builds from there. 

Jennifer: That’s great advice. I think that is one of the biggest challenges, trying to figure out what makes sense for your business as well as your stakeholders when everyone wants to make progress against every sustainability topic because everyone cares about the environment or wants to support their team around them. 

Kyra: Yeah, and I think how that translates to is in our foundation. So, you know, and I think this is anyone who is involved in philanthropy. I think one of the hardest things, you know, it looks so fun and glamorous on the outside that you get to grant money [10:00] to nonprofits and make positive contributions, but, you know, you say no to a lot as well. And I think it’s really important in philanthropy and in your foundation to be super clear on where you want to make an impact and what’s aligned to your business. So, I think that aligning to the sustainable development goals is a really great way to help you with that prioritization and make sure that you’re not spreading yourself too thin. And again, back to aligning to what is most important to your business and your key stakeholders. 

Jennifer: How is Flex helping to expand sustainability across the entire ecosystem that you’re connecting with today? 

Kyra: I think one of the things that we’ve embarked on with our 2030 sustainability goals is one of our goals is around customers and suppliers and having shared responsibility for scope three emissions for example. So, we look at our customer base by emissions. So, which of our customers create the most emission, do they have carbon emission reductions goals based on climate science whether that’s through the science-based target initiatives or other organizations that are based on climate science? So that’s a very unconventional goal because at the end of the day, we’re an influencer and a provider to our customer. We have no real control over the decisions that our customers make in terms of how they run their business. But we felt it was so important to take an ecosystem approach to our goals [12:00] when we joined the science-based target initiative and when we looked at our scope three emissions, our largest portion was in the use of products sold. Now, we don’t own the products. They’re our customers’ products. We manufacture on their behalf so it’s super complicated, but we feel like we have an opportunity based on our learnings and our scope and scale that we can help our customers who don’t have goals today, help them get started and join the conversation and contribute to the solution, everyone wins. So that’s an example of where we’re really trying to drive the ecosystem. And I would say on the other side of that equation as suppliers, we’re working through CDP and enabling our preferred suppliers to have access to the knowledge of CDP and set requirements for our suppliers to have science-based climate emission reduction is one of our goals. So then again, we’re trying to impact the whole value chain, which is really what the science-based targets initiatives are trying to do. So, unconventional, and more of an influencing type of initiative but now less important to solving, you know, the challenge of climate change. 

Jennifer: How does Flex think about disclosure as a part of your sustainability journey? 

Kyra: That’s a great question and I think a lot of companies are struggling with reporting because there are so many different [14:00] rankings and ratings. There seems to be a new reporting format every few months. And so, it can be very overwhelming. And so, I think that, you know, it starts really with partnership with finance and your legal team to understand, what are we already disclosing in our financial disclosures and what is our philosophy about transparency. And so, I think that’s a good place to start. And then, you know, the thing about sustainability that may be a little bit different than financial reporting, at least traditionally, has been that its not about necessarily whether you are doing well, its about disclosing where you are and what you’re doing to improve. And I think that that is a little bit of a different mindset in sustainability reporting versus maybe other legal and financial reporting. Having said that, I think that they’re getting much much closer as the investment community in particular is paying very close attention to sustainability. And so, one of the ways that we’re thinking about it is over time, making sure that we have more rigor and assurance in our data. In terms of what we choose to disclose I think that, you know, how we started is probably like most companies which are aligning to the GRI and then building on it from there. And then along with those external indices, you know, whether its DJSI or Morgan Stanley, or Sustainalytics, I think that it goes back to what is the philosophy of your company, what are you comfortable with disclosing, and what are you just not ready for. And then, you know, just trying to improve every year. I think that the key is to start somewhere and then try to improve every year. And that’s been our strategy really over the last five years in terms of reporting. 

It is just all about being okay with where you are and, you know, having the desire to improve is really the most important thing. Start with GRI. There are lots of great resources out there to help companies get started and learn from others. I think that the other key is to ask for help. People in the sustainable community are so generous with their time and we’re all working towards the same goal so don’t be afraid to reach out and ask for advice or ask for help.