Businessweek Extra - Sustainability Through Sports

San Francisco forty Niners. Cynthia Marshall, the CEO of Dallas Mavericks and kirktown Are the CEO of PepsiCo Beverages North America. They came at sustainability from different perspectives. It ended up being just a really rich and smart conversation. Let's start with you, all right, San Francisco. You have this amazing stadium. I mean you even have a dashboard I believe when you go there where fans can check out how green you are. Tell us about this stadium. Why you guys

did it well? I think, first of all, thanks for having me here. It's an exciting weekend for us. Oh wait a minute, I did this to him on the planning called like, all right, what are we gonna talk about? Oh yeah, and congratulations on being in the big game, that that game on Sunday. Yes, are you relaxed? I'm it's I'm a little getting a little anxious as the day's going. Nowadays are a little long, but it's been a fun week so far. Who do you think is

gonna win? I'm just kidding, I'm just kidding. Um. Look, I think for us being in the Bay Area, it's sort of it was a staple that we wanted to be green, we wanted to be sustainable. It came down it was an edict from our ownership group, Jed York. We wanted to be the first stadium that was ever built lead gold. There's been a number of stadiums that have opened and then became lead gold, but it was important for us to do so, and a lot of things went into it. Some of it is the location

in the stadium and where where we picked it. Obviously, all of us in the sports business have this challenge of have seventy people come down to a stadium, So how do you actually do that? How do you reduce the carbon footprint? The number of cars. Well, build a stadium next to two forms of public transit, get fifteen to eight percent of your people using those publican forms of transit on game day. It's very fair. It was

great for us. The second we really wanted to be you know, it was ambitious, but we wanted our game days to be powered by the sun. So we partner with NRG and sun Power. We have over eighteen hundred fold of voltaic panels in our building. We use that stored energy and we literally power Sunday via the sun, and then there's a number of other things in the recycled water. On top of our stadium. We actually have a twenty thousand square foot green roof where we actually

use those products. Um inside of our concession stands from our cooking perspective, but at the very highest levels, I would say it starts with ownership. It starts with leadership. It was important for our organization to really put a flat in the ground and make this an important thing for us, and I think a lot of the other stadiums that that came on board after us followed sit there.

I want you to come into it because speaking of sustainability, you were brought into a situation of the Dallas Mavericks that wasn't sustainable. So talk to us. First of all, I think everybody's probably heard the story. Mark Cuban, I think calls you, right and you're like, who is this? I didn't know him. You didn't know who he was,

all right, not me either, So it's okay. But you're a smart lady, and you get up to speed and you find out and you go to meet with him, but you don't think you're going to take the job to work with the Dallas Mavericks. Tell us a little bit about what was going through your head and what

you knew of the problem. Right, Well, first of all, I had just retired from a T n T. Your retirement, right, So I just retired started consulting company and it was a consulting company focused on leadership development, diversity and inclusion, cultural transformation. And so that I get this call and I want to talk to him, And on my way over to us off this, I read the Sports Illustrated story and that's when I thought, I don't know if

I want to do this. I don't I don't know if I'm gonna want to be a part of this. But obviously. The person who I talked to was so focused on a culture transformation, and Mark says, I need you to come in. We have some issues here. I need you to come in and help us. And as I was leaving his office, two women stopped me to tell me their stories. I came back the next day

and said, I gotta do this. I just have to do this, because what I have learned is it takes leadership, and you talked about that and the tone has to be said at the top. So here's an opportunity to come in be a part of something truly that would be sustainable, to create a culture and a climate of diversity and inclusion. Not just diversity because there's a difference, but true inclusion, a sense of belonging. Are really having people wanting to be a part of it, really appreciating people.

And so I got a chance to do it. I said yes. And it's been twenty three months and the NBA just gave us the Inclusion Leadership Award for the progress. The work is not done, but we've made a lot of progress. That's like congratulations. And I have to say I've been quoting you because you say there's diversity and Inclusion diversity being asked to the party. Being invited to

the party. Inclusion is being asked to dance. So you can invite me to the party and have me ask the only black at the table, the only woman at the table, and your numbers look good and I look good, and we think we've done something great. But then I don't feel included because you haven't taught me the rules. You haven't taught me the dance steps. Everybody's doing something, all the fellas are doing it, but I don't know

what you're doing. And so inclusion is about teaching me those moves and making sure that I can be successful at that table. And I want to get let's go. I would love that comes on in on this because, as you you know, in our prepping for call, you reminded us Indra Nuie talked about performance with purpose. She did that back and I think two thousand six, and I feel like now everybody talks about people profit planet right, It's become very common. When she did it, I think

people were like, well, what are you talking about? This has been income you go to you go to the PepsiCo website, It's ingrained in your culture. Talk to us about sustainability at PepsiCo, and I mean it goes all the way up absolutely. Um injur started with performance with purpose and we've built on that with winning with purpose. And I would say sustainability is center plate. It's as bording as profit, revenue, share volume. Sustainability is right a

part of it. We talk about our business and faster, stronger, and better and under better. We are attacking the sustainability opportunity. Of course, plastics is a big opportunity for us. We are working incredibly hard. We're leveraging our partnerships with the NFL and the NBA to drive awareness education because we do believe every plastic bottle can come back as another

plastic bottle if it's recycled, and that's our mission. Our mission is really to reduce our recycler virgin plastic, to recycle, inspire consumers to recycle. And then the third one is to reinvent, and that's things like our soda stream acquisition is things that are outside the bottle. So we think we can. We have to win across all those platforms well.

And I do think about we asked this that the athletes who are on stage about their responsibility about you know, having incredible platforms and to be you know, social agents have change. And I do wonder how you folks see, Cynthia, I want to go back to you for a moment. I mean, the Me Too movement certainly got it all out front and center. Tell me about the culture though, that you walked into at the Mavericks, because from what I understand, I think you said to me, people were saying, Hey,

don't worry, don't worry about her. It's just gonna be god a ninety day. It's just about optics. That's a culture that's tough to change, all right. That's a culture that says we don't want to change. It's been like this for twenty years. Uh. It's a place that, uh is not as friendly to women that you know, like you wanted to be. And so change is difficult. But I got a mandate. Mark Cuban gave me a mandate to change the culture. He was serious about it. He

wanted a different culture. And we brought in a leadership team. And our team now is fifty women. Our leadership team from zero women and percent people of color. So we have a diverse leadership team around the table and we're all on the same page. We put a set of values in place, the spells, crafts, character, respect, authenticity, fairness, teamwork,

and safety, both physical and emotional safety. And what I told the team is that these wouldn't just be on the walls, these words, but they would operate in the halls. Everything we do, every decision we make, every higher we make, everything will be about the set of values and this culture. And I got all the backing in the world from Mark, and we're doing it. We're doing it well. And I'll come on in on it because I do think you know,

it's got to start from the top. I mean there's you can greenwash something and say hey, yeah, we should be doing this, and then there's actually doing it. I mean, you guys, when you set out doing a stadium, was there any pushback? I mean, you're in San Francisco, so I feel like that's an environment where if you're gonna do a stadium like you did, it's perfect. But tell me about ten years ago when you started talking about it, We're some people like, oh, we really need to do that.

On the stadium front, yeah, I mean in California that we were the first new stadium built in fifty years, so not an easy place to get things done sometimes. Um, but I think from our perspective, it's a privately financed building, which was important to the ownership group, right. We wanted to get back into the community. And I think this topic is fantastic in the current world we're in in sports, and what this lady has done down there, I don't

it's it can't be. It's understated up here. Frankly, it's a complete turnaround and we're really proud from our organization. The two teams playing the Super Bowl this weekend are run by females. Denista Barnalow York all right, again, the two teams playing in the Super Bowl are owned and run by females who talk about, yeah, we're We're unbelievably proud. We have the first female coach coaching in the game on Sunday with Katie Sours. We have three minority coordinators

that work for the San Francisco forty Niners. Our front office is highly diverse and so it is unbelievably important. You know, our goal this weekend is obviously to win a Super Bowl. We talk about our why. Our why is to go a step further for someone so they feel part of our family, and that reverberates around every decision. It is the lens in which we look through when we make hiring decisions, when we make business decisions, whether

it's on the field or off the field. And I'm so proud of it's not just about what these guys do or what these people do on Thursdays and Sundays and Mondays. It is about what they do in the community after fact. And I think the greatest thing about the today's current athlete is they They're more than what they portray on the court or the ice or the field, and things matter to them and when you ask them to get involved in something, it has to be a

passion project for them for it to really matter. But when it is, the difference it makes in our communities and across the globe, I mean, it's staggering. And so we have a tremendous group of individuals inside of our our team. We have a great group of players that are really outspoken on a lot of these topics, and frankly,

we encourage it. We think this debate is healthy and uh where it's it's nice to be on a platform like the Super Bowl to be talking not just about the game itself, but all of these other tremendous or important issues. Well, Kirk, come on in on this, because all right, I think a PepsiCo one of the great global brands that are out there, and you do have a partnership with the NFL, you partner with a lot

of different sports franchises. We are, I think in a very critical juncture where these athletes, team owners, leagues can really help push the needle in some really important issues. What do you think about that in terms of a

corporate perspective when you're thinking about sponsorships. Yeah, I think it's critical and I think in today's world, you want to surround yourself with partners that have this high performance mentality and all high performance only comes from diversity and inclusion, and I think this vision of purpose, So it's it's much more we talked about it before. It isn't just

about the bottom line or the top line. It is about the longevity of the partnerships you want to create, and that comes down to sustainability and having a high performance culture. That's that's who you surround yourself with. I think PepsiCo does a really good job surrounding themselves with partners that have the same passion to do things the right way. I think that's really important to us. Well,

it's interesting. I know at PepsiCo and I want to bring you into the end, but you guys, it's I think about you go back a few years and it was like if you created a sustainability office, it was in the back room, and I don't know what those guys are doing. They're getting paper cups, you can recycle. It's not that way anymore. And it's not that way I know a PepsiCo right, the CEO is involved, C suites involved. Absolutely. We have a senior leader in Simon Loudon,

one of our top executives these over sustainability. Uh, it's a part of our KPI. So we have our performance metrics every year across from top down and we have specific thick goals against this that are as important as our financial performance. It is top to bottom or bottom to top. Everybody in the organization believes in it. I'll

say one more thing. If you want to attract talent into your organization, so if you're attracting that person graduating from college and you don't have a sustainability agenda, and are passionate about it and make it real. They won't come to work for you. Is that safer, plain and simple. They'll find someplace that will, you know, meet that need. And it's focused on sustainability. And I just want to jump in and say that's one thing that I truly

love about our players. We start our preseason with a day of service. We figured we can serve. We can start by serving each other, then we can serve our fans, we can serve others, and we go out into the community and they are so passionate about it. And even when something happens, like when you look at what jj Barea did when we had the crisis in Puerto Rico,

they step up immediately. When we get new players, the first thing they want to know about is what are you doing in the community or what are you focused on? Here's our personal passion. Can you help us with that?

So they are champions on and off the court. We put together a community impact report last year and we use the NBA's tagline, this is why we play because they will tell you, The players will tell you in our leadership will all tell you, Yes, we play for the fans, and we play for what's on the court, but we play a lot for what's off the court,

what truly is happening in the community. And to your point, when we get new employees, they want to know what are we truly about that is happening in the community. What are the passion points? What kind of issues will we take a stand on. That's how you attract talent, That's how you attract good players, That's how you keep them. Are we doing enough though? Because we think about diversity, right, you don't even have to finish. No, no, there is more to do. There's clearly more to do. You can

look around this room. There is more to do. So all right, So I want to get to you guys, So what more can we do? Having you have to make some drastic changes? At the mast of all, I think we have to really understand and appreciate and digest the business case for diversity and inclusion. And you gave it. I mean, there's a financial impact to have you a diverse group of people that are included two and since no, no, no, hallelujah. But I've been we've been talking about those studies right

for how long? In terms of diversity, the importance of a diverse board or diverse executive suite. How important is to financial performance if you have to do it though? Okay, but you have to do it. We turned around our leadership team in the makeup of it in ninety days. Talking is one thing, but you you don't just talk about it. You have to be about it and you have to make it happen if you want to change, Kirk,

what do you think about that? Yeah? I agree. I think actions speak louder than words UM, and I think that for a company like PepsiCo, we're serving the community, We're trying to engage consumers, We're trying to win consumers over and if you don't reflect the consumers that you're trying to serve, you have no chance. So if you don't have the diversity and inclusion, you won't create the right brands, you won't develop the right products, and you won't be able to talk to consumers. So it's this

full circle that returns. And I believe that diversity and inclusion is a direct impact on financial performance. UM to go faster, I think it's all about holding each other accountable for it UM and keep raising the bar so we'll make an achievement. But you have to keep raising the bar because it's a journey. We're not there and there's a long way to go, but I think you gotta keep you know, moving and pushing the target forward.

The answer is no, um, But I'd say in our world in sports entertainment, I would say it's gotten a lot better. Um, But we're not where we need to be yet. This fast hiring season in the NFL, you know did not uh, you know, we did not wind up with the minority head coach outside of Ron Rivera that got hired with the Washington Redskins. And so I think what Art Rooney did years ago in the NFL. And I was at uh function the other night, the French Polity Alliance where Promurate who works for us, won

an award. We need at the NFL and across our entities on certainly on the business side, we need to put in place policies that lead to change. Right if we continue to just say, hey, you know, bring a diverse state of candidates, but let that same hiring manager higher, there's gonna be human bias in that. And so at the San Francisco forty nine is what we've done, is we've instituted the Rooney rule across our entire organization, because what we said is why should it just be coaches,

Why shouldn't it be executives as well? And we need a diverse candidate for every open position. Every position we have, we post and everything whole time we bring in a diverse slate of candidates, and we interview across business verticals.

So even if that person is interviewing for a job on the G and A side, folks in the sales and marketing department will make sure they interview and then we'll grade that person on a scale across five or six or seven people, because we think it's the best way to take an overall look at a candidate as opposed to just letting the hiring manager dictate who are

who they may want to hire. And I think sometimes that hiring manager they don't really know it until they get outside perspective around what that person can mean to their organization or their business line and how it may change. And I think Kirk said it so well, it's how you view yourself a little bit. If we were just to view ourselves as an NFL football team, my answer

might be different. But we're an NFL football team, and we're a sports entertainment property and where a fabric out of our community, and we have fans across all different spectrums. That was out president of the San Francisco forty nine, or Cynthia Marshall, CEO of Dallas Mavericks, and Kirk Tanner, the CEO of PepsiCo Beverages North America. And you've been listening to Bloomberg Business Week Extra be sort of tune into Bloomberg Business Week Radio Live Monday through Friday at

two pm Wall Street Time. I'm Bloomberg Radio. I'm Carol Masser, and I'm Jason Kelly. This is Bloomberg