Measuring the Impact of Corporate Responsibility at AT&T

Steve Odland: Welcome to C-Suite Perspectives, a signature series by The Conference Board. I'm Steve Odland, the CEO of The Conference Board and the host of this podcast series. 

In today's discussion, we're going to talk about corporate responsibility, and specifically how AT&T has built up its own portfolio. Joining me today is Charlene Lake, the chief sustainability officer at AT&T. Charlene, welcome.  

Charlene Lake: Well, thank you, Steve. It's great to be with you. AT&T's been a longtime supporter of The Conference Board, so we certainly appreciate how valuable you are to us and the rest of corporate America. 

Steve Odland:Well, and AT&T has been part of corporate America and America for a very long time. So thank you for all that you do. And you've been a leader in sustainability and corporate responsibility, but you've been doing this, Charlene, for a long time. You are an expert at it. Tell us a little bit about your background and experience first. 

Charlene Lake: Well, I am honored. I'm honored and privileged to be able to lead AT&T's corporate responsibility work. My journey actually started in a far different place. I started in journalism as a reporter years and years ago, but from there, I jumped ship to the corporate world. I joined the corporate telecommunications industry, working in areas of communications and marketing, advertising, public affairs before launching the official corporate responsibility function at AT&T in 2007. 

I call it all a really terrific journey, but I will say that I'm in a discipline now that's dynamic, ever-changing, but also complicated, sometimes frustrating— but it's also the most rewarding career experience I've ever had, so I'm very honored to be doing this.  

Steve Odland: And you've been at AT&T for nearly four decades, so you've seen just an incredible sea change over those years. 

Charlene Lake:Yeah, thank you for explaining to everyone how long I've been around.  

Steve Odland: Well, yeah, it makes you at least 40, right?  

Charlene Lake: Yes. Well, 40-ish, I'd say. Sure.  

Steve Odland: No, but over that period of time, corporate responsibility, sustainability, it's all evolved, hasn't it?  

Charlene Lake: Oh, it has evolved tremendously. You can track the roots back well beyond 40 years. But what we're seeing today is such a maturation of the industry, and a good maturation that I believe is eventually going to deliver even more and more impact. But yes, it's changed far away from what probably used to be just giving money away and trying to do good in the community. 

Steve Odland: And so what does corporate responsibility mean at AT&T today?  

Charlene Lake: What it means for us is that we look at our assets, we look at our resources, and we look at the very core of our business. And through that lens, we see things beyond our walls of our company that we can apply our resources and assets to bring benefit. 

Soit's very specifically designed to bring value to the company and value to society.  

Steve Odland:Yeah. And this is important because I think we've talked a lot about this at The Conference Board and written on it, but we have evolved from really a mono-constituency to a multiple-constituency world. It's not only just producing for shareholders as public companies, but we have to take care of our customers, our employees, our owners, the environment, our communities. And all of those components arereally important. And soit's a balance of all of that, isn't it?  

Charlene Lake: Yeah, you're making a really good point, Steve. And it'smaybe part of what stirred up some of the controversy in the environment today. Because it's not an either/or, and it's not all things equal.  

When you're working for a company, you are delivering for the company, and where the corporate responsibility comes in is the "how." So you deliver value to the company, but how you do it is through the relationships you have with your stakeholders and understanding their issues and understanding their problems and understanding how your business affects that, either with a risk or an opportunity. 

Steve Odland:Yeah, and corporate responsibility means something different to everybody, but it means contributing to your communities. It means guiding the businesses to do the right things, to make sure that you're taking care of your customers, but also, responsible to those communities in which you operate. It's really all that multifaceted look that we talked about, and you oversee that for a giant corporation.  

Charlene Lake: I do. I have a fabulous team that is very skilled and understanding how to bring that value to both business and society. It's been a portfolio that we've built up over the years, and corporate responsibility is really interpreted differentlyat every company. But for corporations to really drive impact, they need to focus.  

So our portfolio at AT&T is really anchored first, on bridging the digital divide, and second, on using our technology to create environmental solutions. So the digital divide work is backed by a commitment to spend $5 billion and reach 25 million people by 2030 with affordable high-speed internet and tools to really be able to succeed in this digital world.  

And on the environmental front, we're committed to achieving carbon neutrality by 2035, but we're also working to help our business customers be more efficient and help them reduce emissionsm and we're working to enhance climate resilience of our network. 

So that's how we are approaching our portfolio. It's, as I said, very broad, but if you're going to make impact and drive change, you really have to have a focus.  

Steve Odland: And what is really important, I think, about what you're saying is that it's not just this one off thing that all goes and happens in the corner of the company. "Oh, let's give out donations or something." It's really core to your strategy.It's integrated with your core business model, with your customers, with the communities in which they live and operate. So, it's all intertwined like a fabric here. And that is really the ultimate way, the right way to do corporate responsibility. 

Charlene Lake:Yes,that's very well said, Steve. It's nuanced, but it is a fabric. It all works together. The initiatives to provide support to communities, that's not done just for the benefit of the communities. Every business wants to operate in a healthy community. And if our communities are not healthy, and if the residents and our neighbors don't have the economic viability to buy your products, then it hurts us as a company. 

So we are interdependent, and recognizing that and building your programs with that in mind is what will make it successful.  

Steve Odland: You know, there has been some pushback recently on corporate responsibility, some call it ESG, that has been, I think, a little bit misunderstood. It's been mostly in the investor community where some companies have pushed corporate responsibility measures over everything else or solely. And what we've talked about is balancing the needs of multiple stakeholders, which is the way AT&T does it, the way you lead this area.  

So the pushback is on those companies that don't deal with the multiple stakeholders in a balanced way, but were solely focused on this one dimension. I don't hear anybody out there saying, "Oh, we shouldn't do corporate responsibility," or it's bad. It's just a matter of doing it in the right balance, which has been your focus.  

Charlene Lake: Steve, you have hit on the topic of the day. Corporations, no doubt, we are caught in the middle of this polarized environment. That said, as frustrating as it might be, I really believe there's a healthy byproduct of what we're seeing right now.  

If a company's corporate responsibility work emanates from the core of their business and is part of their business strategy, then it's bringing value to the company. And when you can prove that benefit to the business and drive your programs with financial responsibility in mind, that's when you can be unapologetic about your goals and your ambitions and all of your actions. Now, if it's not delivering business value, then that's when you're ripe for criticism, especially in today's environment. So I really think that what this period of time is going to do, it's going to force companies that are not already operating with that philosophy to really mature their approach in their programs and become disciplined. 

It's what we have always tried to do at AT&T from the very start. Our work to bridge the digital divide is really a manifestation of our very company purpose. Our emissions work is driving down consumption and expenses and building deeper relationships with our customers. And our resiliency work for our network, it's a business imperative. 

Now, we provide all of that data we use to make our network resilient to the public, but we have to start at the intersection of business objectives and society needs, not on some side road of business irrelevance.  

Steve Odland:Yeah, and all of this balance requires consistency of strategy across the organization. And even though you lead an area with a hat that says corporate responsibility, you really have to shepherd your C-Suite colleagues into all pulling in the same direction, making sure there's alignment so that all of the constituencies are touched. And this is all integral to your strategy. So customers, employees, all owners, meaning the investment community, might have different executives in charge, necessarily, of each one. But you have to be consistent in all of this, which is why this integration of strategy across the business, the way you've articulated it, is so different and so important. 

Charlene Lake: Yes, it is across the business, but it's also vertical, too. When we started this function back in 2007, we made it a board accountability, and so it reports to the board, and many large companies are approaching it this way. So it starts at the top, and it flows all the way throughout the organization, horizontally and vertically, completely integrated with the business operations. 

Steve Odland: And you have to have conversations with each group of stakeholders to make sure that your work is aligning to their needs and that they understand what you are doing and all align. How do you orchestrate that within the organization?  

Charlene Lake: You have to understand stakeholder issues and concerns. 

That's critical input to any program design. If you're successful in doing that, you can't be in the echo chamber. And I think that's really important, especially in today's environment. You have to listen and solicit feedback from all of your stakeholder groups. As you said, employees and customers, policymakers, investors, whether it's through research and polling materiality assessments from the social and environmental end, feasibility testing. You should be talking with your frontline employees who day after day spend time talking with—you need to take the calls from the activists, even.  

And I think the point is not that we want to implement every desire of all of these voices in our orbits, but we have to understand their concerns, and we have to understand how our company relates to those priorities and the risk and opportunities it presents. 

So, in addition to that, once you understand them, then you can understand how to partner with them, because the problems we're trying to solve in the world today, they're not easy, or they would have already been addressed, right? So joining with companies and nonprofits and government entities and a shared mission gives you a much better chance of driving impact. 

Steve Odland: You sound like wonderful practices. We're talking with Charlene Lake, the chief sustainability officer, AT&T. We're going to take a short break and be right back. Welcome back to C-Suite Perspectives. I'm your host, Steve Odland, from The Conference Board, and I'm joined today by Charlene Lake, the chief sustainability officer at AT&T. 

Charlene,let's go a little bit deeper on some of these goals, and specifically, your environmental goals. You mentioned in the first half of our program that you want to reach carbon neutrality by 2035. Talk about the initiatives that you are putting in place to achieve these goals. 

Charlene Lake: Great. Thanks, Steve. We do have that goal to be carbon neutral by 2035. We also are working toward an interim goal to reduce Scope One and Two emissions 63% by 2030. So what this includes is our fleet operations, where we'reoptimizing routes and transitioning toward more efficient vehicles, hybrids, electrics. We also are supporting renewable energy marketplace through virtual power purchase agreements, and we're now one of the largest corporate purchasers of renewable energy in the US.  

But fundamental to this goal is really focusing on the efficiency of the business. And we were implementing thousands of energy efficiency projects every single year. I'll give you an example of one real significant initiative, and that is replacing our copper network with fiber, which significantly reduces energy consumption. 

For example, when we transition a neighborhood from copper DSL to one gigabyte fiber, we reduce our energy consumption in that neighborhood by 70%. And that's all while, of course, providing the customer speeds that are like 166 times faster than copper. So that's a win. It's a win for our customers. It's a win for us. It's a win for the environment. And that's the beauty of that efficiency approach that is going to help us get to our goal.  

Steve Odland: You also have a goal that's called the Gigaton Goal. I love the name. Talk about that.  

Charlene Lake: Well, maybe I should start by saying that for listeners who don't have gigaton as part of their vocabulary on a daily basis, a gigaton is a billion metric tons. 

It'sthe equivalent to the weight of 200 million elephants. Sothere's a nice visual for you. Or importantly, or more relevant, it's equivalent to the global greenhouse gas emissions from 1.6 billion flights from L.A. to New York. So AT&T's goal is to reduce a gigaton of our collective business customers' emissions by 2035 through the use of our connectivity solutions. 

Sowe'veidentified 30 smart climate solutions, and we worked with Carbon Trust to establish credible, verifiable carbon-reduction factors for each one of these solutions. Sowe've already reduced nearly 190 million metric tons of CO2 equivalent. And let me give you an example of one of those applications. 

So Traxen, which is a high-tech developer that's focused on safety and efficiency in the heavy-duty trucking industry, we work with Traxen to apply our connectivity to its AI adaptive cruise control, and that cruise control collects and uses topography and traffic and congestion data. So that connected solution then helps the drivers operate the vehicle engine and the transmission with 10% increased efficiency. 

So providing our business customers connectivity with these solutions, along with credible reduction data, helps our customers reach their own energy goals, as well as their emissions goals. And you know that the majority of large customers and majority of the Fortune 500 has actually set some type of emissions goal. 

Steve Odland:Yeah. Soit's a gigaton of CO2 that you'reattempting to eliminate, but you're well on your way. Soit's really a great goal and saves money. Soit's not just for the benefit of one of the many stakeholders. It's really for the benefit of all, which is, you said a win, but there's got to be more wins in there than that. It's brilliant.  

You also mentioned climate resilience and you hear this a lot, particularly with the climate change and the veracity of some of these weather events. Why is resilience important and what does it mean for AT&T?  

Charlene Lake: We do hear about resilience. It seems like we hear so much more about emissions reduction, which is important, but both have to be addressed, right? 

So our world is changing. Our climate is changing. Every company needs to understand how to anticipate the impact of that change and then adapt the business accordingly. So at AT&T, climate resilience means working to build stronger networks and communities today to withstand the storms of tomorrow. 

So for our network, what we did is we worked with Argonne National Labs to incorporate advanced, forward-looking climate data, like up to 30 years in advance, into our decisions so we can protect and we can harden our infrastructure against future hazards and severe weather. For example, we factored this climate data into our flood-vulnerability analysis for about 7,000 of our facilities, and what that enabled us to do was to pinpoint which locations could benefit from hardening solutions like floodgates or raised equipment, and it helped us prioritize our resources. 

Now there's another side to this coin. It's important to understand when it comes to resilience that none of us can be resilient in a vacuum, right? So in times of disaster, it is so evident that companies are interdependent with their communities. So our technicians are at disaster sites, ensuring connectivity, but we also need the resilience of the community's infrastructure, the transportation networks, the power grids, the first responders. And that interdependency is why we make this climate data free to the public, and we do it through a couple of different avenues. But we want people to take the data. We want them to understand the data, and then build their own resiliency plan, so we as a community and a society can be more resilient to these disasters.  

Steve Odland: You also engage in a lot of social and community kinds of events as part of corporate responsibility. 

Talk a little bit about that.  

Charlene Lake: You can't have a sustainable business without understanding the risk and opportunities of social issues. I think a lot of people define sustainability only as environment, but it really is environment and social issues. And for us, that issue is connectivity. 

It's a key to almost every door of opportunity now, but sadly, millions of Americans still don't have access to high-speed internet, or can't afford it, or don't know how to use it. So this is what we call the "digital divide." So connecting people to a better life, to more opportunity. That is our company's purpose. 

And that's why we've made this commitment to reach 25 million people and spend $5 billion this decade to unlock those opportunities. We do this by focusing on three areas.  

We want to extend our networks, bringing that high-speed internet through fiber networks to more people. We also are focused on affordability. So how do we lower the cost barriers and advocate for sound policies that help support consumers in their ability to afford connectivity? And the third is adoption, because what's interesting is that, even if someone has access to a network and knowledge about low-cost options, many don't pursue access. And this is probably the most complicated barrier. They may not have the skills to use the internet. They may be fearful, they may have concerns about security, they may not have a computer.So we have community programs that address all of those angles to help people get over that barrier of signing up for the internet. 

Soconnectivity, it is a social determinant of education, of income, of health. It just creates a world of opportunities. So that is our company's purpose, and it is the way we are addressing the social aspect in society.  

Steve Odland:Yeah, and when these efforts first started many decades ago, companies just did it because they felt it was the right thing to do. 

I think the most advanced companies, and AT&T is right there at the top, are really measuring the results of their programs in order to articulate value across all their groups. How do you do that?  

Charlene Lake:Yeah, this is a great question because companies frequently do find it a lot harder to track the impact of social programs than they do environmental programs. 

As I've said before, we require our initiatives to deliver impact to both the company and society, and we prove that out on both sides. We're, of course, tracking, the spend on $5 billion and the reach to 25 million people, and that tracking isn't terribly complicated. 

But what's important is we want to understand the impact, not just the output, whether we're truly driving change. So we hear stories every single day that tell us—whether it's a student who no longer has to do homework in a retail parking lot or a young man who uses the internet to explore opportunities and turns his life around—but we have to back those stories up with data. 

And we're working with third-party researchers to evaluate the reach and effectiveness of our work. The research relies on what's called a social return on investment methodology. And that helps us understand the short-term and the long-term value that's created through our digital investments. When we spend a dollar, what does it bring to the economy? So that's a study that we'll complete soon. We've done it before on previous programs, but it's going to help us understand how effective we are in supporting economic mobility and reducing what we call digital poverty.  

Of course, that's half of the measurements, because our programs are also supporting the company. So whether it's a product, a policy, a network expansion to underserved areas, or these community programs, they innately deliver shareholder value by attracting and retaining customers. And that's important to our metrics today, our quarterly earnings, but connectivity improves a household's economic strength. And so the work is contributing to the long-term sustainability of the business, as well.  

Steve Odland: Right. And you talked a little bit earlier about some of the technologies that are behind the efforts. Were there any others that that you didn't get a chance to talk about? Specific advancements or tools that you're excited about? 

Charlene Lake: Yeah, I don't think you can have a discussion today about tools or innovation or technology without talking about AI and automation.It's, of course, the discussion in nearly all industries. How are they driving efficiency and innovation for businesses? So AT&T's been using AI for generations. In fact, our researchers were deeply involved at the 1955—and by the way, I was not there—conferencewhere the term "artificial intelligence" was born. Again, I wasn't a firsthand witness to that, but it's recorded in the research.  

In the corporate responsibility field, it's being used to optimize operations for energy consumption and supply chain management and waste reduction. Being able to monitor energy usage in real time and forecast potential issues before they occur. That is a game-changer.  

Now, specifically for AT&T's corporate responsibility work, we have a data scientist on our corporate responsibility staff whose entire job is dedicated to data consumption and analysis. And then AI is a powerful tool to process that data. And what happens is it enables our business teams to integrate our insights into their workflows and to drive more informed decisions. And I can't wait to see where all of this goes because I think, just a couple years down the road, we're going to look back and just see how rapidly we have progressed in this space. 

Steve Odland:Yeah. So as you look ahead now to 2025, and as we wrap up here, what does this year look like? What are you going to do differently and new?  

Charlene Lake: Well, the long term is we're still tracking toward our overarching goals. Those are public goals, and we're working towards that. I'd say in the near term, there's a couple important drivers of work that all companies are wrestling with. And certainly we are, too.  

First the emerging worldwide regulations for tracking and disclosing impact in this entire space. We have to persistently work to ensure that our data collection and our reporting is auditable and is SOX compliant. Second, and we touched on this before, Steve, but it is important to accept that corporate responsibility work will continue to be caught in the middle of a polarized society, regardless of whether the pushback is right or wrong or fact-deficient.  

So this is an opportunity for all of us to strengthen our work, and to really take it to the next level. If we want to ensure that our programs continue to thrive and continue to drive impact amidst all of this social discourse, we have to prove and validate the business relevance and the company benefits. And the work we do should not be an ideology, it should be an imperative for business success. And that is going to be the driving force certainly in the short term.  

Steve Odland: Charlene Lake, chief sustainability officer at AT&T. It's been a pleasure talking to you today. Thanks for being with us.  

Charlene Lake: Great to be with you, Steve, and thanks again for all the support The Conference Board does to provide to the corporate community. 

Steve Odland: Well, and thank you for everything that AT&T does for your customers, your employees, and our communities. It's just so important. And thanks to all of you for listening in to C-Suite Perspectives. I'm Steve Odland, and this series has been brought to you by The Conference Board.