ESG-centered values drive management, strategies

• Name: Dave Muenz
• Title: Executive Officer, Kao Corporation/Senior Vice President ESG (environmental, social and governance) Division
• URL: https://www.kao.com/global/en/
• DoB: Nov. 15, 1960
• Hometown: Pittsburgh
• Years in Japan: 3.5

Dave Muenz hails from Pittsburgh, Pennsylvania, where pollution from the local steel mills was once so severe that his steelworker father had to take multiple shirts to work because by lunchtime “the color of his original shirt would be so bad.”

Such companies would likely not pass any ESG (environmental, social and governance) criteria used today to evaluate a company’s practices by investors or lenders — the field in which Muenz currently works for Kao Corp. — but Muenz sees innovation in how Pittsburgh embraced change when the government, academia, businesses and local communities banded together.

“The government and the people kind of came together and said, ‘We want something different.’ It was just phenomenal. That’s inspiring for me today to think about when we put our mind to it, and we worked together like that, anyone can create a new reality,” Muenz said. “It’s ended up being a personally inspirational thing with the new ESG role that I’m in. You’re working with many different stakeholders and trying to create a new reality.”

Muenz was initially attracted to working with Kao because of the company’s focus. “It was very evident this was a group of people who really were putting themselves in service of their consumer.” When he first arrived in Japan in 1996, there were some “stereotypical ‘Lost in Translation’ emotions,” but his feelings toward Japan are now “super comfortable.”

“As humans, we look for the differences in people rather than things that are the same. A gentleman walking his dog, teenage girls traveling together in a little gaggle of a group; there’s so much more in common than there is different, but our brains are trained to focus on the differences,” Muenz said, smiling.

He worked in research and development for 15 years before branching out into marketing and business. Muenz was surprised when company president and CEO Michitaka Sawada tapped him for the ESG position but conceded the decision, one of the first instances where a non-Japanese holds such a senior level role and is involved in corporate governance, made sense.

“Sawada-san’s known me for a long time; we worked together in R&D. He knew how I thought and felt about Kao and Kao principles,” Muenz said, describing his workplace as a mutually supportive environment where people are interested in achieving and finding success together. “We really want to see ESG become a driver of our business, a driver of our brands and products,” he added, reiterating Sawada’s vision that ESG standards were also something the company could rally around to make a difference in society.

Although Sawada had worked closely with Muenz, according to the American, he also knew “what I represent and the global perspective I can bring. The ESG movement is being driven heavily out of the Western world, especially Europe, and that global perspective (was seen as) important to help Kao move in the right direction and accelerate movement in this area.” A self-described nonautocratic, more collaborative and hopefully inspiring leader, Muenz sees his value to the company as someone who “creates a little bit of a discontinuity in the way we think.”

To accomplish this, Muenz sees his role as encompassing two main objectives. “One is to encourage full integration of ESG into the business,” he said. The second, he continued, “is to make it truly a global expression and to help drive our company to that idea of becoming … and having more of a global presence by 2030.”

Certainly, Kao has been making strides in its ESG efforts thus far. The consumer products and chemical business firm was selected for the Water A list by the CDP, a “global environmental impact non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests.” It ranked among the clean capitalism magazine Corporate Knights’ 2019 Global 100 Most Sustainable Corporations in the World and was also listed as one of the 230 companies selected for the 2019 Bloomberg Gender-Equality Index.

To Muenz, these are undoubtedly worthwhile achievements, but to view ESG solely with a corporate framework misses the strategy’s potential. “One of the things we’re really focusing on at Kao is moving from a corporate-focused ESG strategy to an ESG strategy that is much more consumer and people focused, helping our consumers achieve a more sustainable life and more of a sustainable lifestyle,” he explained. “The opportunities we have to use our technology and our deep understanding of that consumer behavior is incredible. If we truly harness that power and put it to the purpose of creating a more sustainable lifestyle, enabling a sustainable lifestyle for people, that’s amazing.”

While Muenz has helped launched billion dollar products during his career, some of his most gratifying business achievements have revolved around interactions and relationships with his co-workers, including one who was unable to finish his college degree due to extenuating family circumstances.

“He’d been working with us for about 20 years but hadn’t progressed because there was a rule that you had to have a degree to move to a certain level,” Muenz said, adding that because of the man’s experience, his performance outranked that of some of his peers with degrees. “I got the rule changed, and we promoted him; he’s now moved up several different levels in the organization. I think helping people along the way, individual people, are probably the things I’ll feel best about when I retire and look back at my career.”