When Barron’s 2020 list of the “100 Most Sustainable Companies in America” was released in early February, we were not surprised to see Agilent at #1. While Agilent’s story began back in 1966 with the founding of HP Labs, since its spin-off in 1999 we’ve watched Agilent climb the ranks of sustainable companies. Initiatives such as the early adoption of CSRs (Corporate Sustainability Reports) beginning in 2001, internal performance incentives for the management of climate risk, ambitious energy and water use reduction targets, and progress on workplace satisfaction and gender equality signal that the company takes sustainability seriously.
Where does Agilent, a maker of lab equipment with additional analytic, consumable and service offerings, take its direction for these kinds of initiatives? According to Mike McMullen, Agilent’s CEO, “stakeholder analysis is table stakes.” Such analysis includes Agilent’s weekly customer experiences surveys in 19 languages; its quarterly employee Q&As with senior leadership and 90% participation rate in its annual employee survey; and its numerous programs to give back to local communities, including matched employee giving in communities where the company has a presence and over $9 million in donations to non-profits in 2017. In another example of Agilent’s responsiveness to community stakeholders, its answer to early concerns that the coronavirus might cause a slowdown in its China business (which accounts for 19% of its revenue) was to quickly donate equipment to help analyze the virus. As McMullen said, “this is an opportunity for companies to demonstrate their commitment to the community.”
Agilent is starting to see real results from its stakeholder-driven sustainability efforts. By 2018, it had already achieved an 8% reduction in greenhouse gases compared to its 2014 baseline, reduced water consumption per square foot by 9% (well on its way to its 2024 target of a 20% reduction), and achieved 93% solid waste diversion from landfills, almost 2 years early against its 2020 target of 95%. In 2019 Agilent chose to fully align with the United Nation’s 17 Sustainable Development Goals, and is already tracking contributions to 8 goals as diverse as “Good Health and Well-Being,” “Clean Water and Sanitation,” “Reduced Inequalities” and “Climate Action.”
At Agilent, results like these seem to derive from more than just new initiatives or shifts in focus. With core businesses in healthcare, life sciences, food safety, and environmental sciences, the company has a natural alignment with socially and environmentally responsible goals. For example, Agilent’s GC/MS instruments can screen for 171 volatile organic air pollutants; recently Agilent produced a new method for detecting toxins in food samples even at very low concentrations.
Additionally, McMullen has described Agilent’s culture as one of risk-taking, where failure is viewed as a learning experience and innovation and disruption are paramount. This approach is borne out by new developments such as a gas chromatograph whose efficient direct heating system requires less than half the electrical power of a traditional GC instrument, an emission spectrometer that eliminates the need for water in sample analysis and runs on air instead of combustible gases, and an LC/MS instrument that is 70% smaller than its predecessor–the smallest of its kind on the market. These sustainable product developments are supported by an annual investment in R&D of approximately 8% of revenue.
While Agilent made #55 on Equileap’s 2018 Gender Equality Top 200, we would like to see the company improve on its 29% women in management roles and 20% on its senior leadership team. That said, Agilent appears to be taking questions of workforce diversity very seriously: in 2016 the company reported extremely equitable ratios of male to female pay among different classes of employees (at 0.99, 1.01 and 1.02), and McMullen has signed on to the CEO Action for Diversity & Inclusion.
Our bottom line: Agilent’s position at the top of Barron’s widely celebrated list for 2020 is well-earned.
