Dean Calhoun: Jeff, Genzyme was recently named to the Dow Jones Sustainability World and North American Indexes. This is the 5th year in a row that Genzyme has been named to the North American Sustainability Index, and the 1st year of the Company being named to the World Index. Despite the current economic climate, what do you consider has been the key driving force that has enabled Genzyme to maintain such superior environmental performance?

Jeff Holmes: That’s a very interesting program for Genzyme, and you’re exactly right in pointing out that it’s the fifth year in a row that we were named to the North American Index, and we were just named to the World Index. I think the piece of that accolade that I’m most proud of is that we spend virtually no time discussing it during the year. Genzyme operates in a socially responsible manner – the triple bottom line – socially, economically, and environmentally just as a natural course of business. So, we don’t change anything that we do to get on these lists. It’s just a natural outcome of how we do business. And that comes from a lot of places but primarily because we are a patient–driven company.

What we are doing is meeting the unmet medical needs of patients so it’s just natural for us to do it in a way that is sustainable. Of course we do look at the indexes, and this just came up recently, where we look at the results after the fact and I can’t even remember the survey, there is about a million of these things between the Sustainability Index and the Carbon Disclosure Project evaluating the greenness for the social responsibility of companies, and there was one that just came out recently where we scored okay, but it wasn’t great. So we took a closer look because we wanted to figure out where we were lacking and usually what we find when we look at these more closely is it tells me that we are not doing a good enough job of communicating what we are doing so that these people who are evaluating us come to the right conclusion.

For instance, we got penalized for recycling. But we have won so many recycling awards through the EPA Wastewise Program it’s not even funny. Every year we win awards. We have a very high global recycling rate. We measure total solid wastes and how much of it gets recycled. We have about 15 different metrics for solid waste and recycling that we measure from every single laboratory and manufacturing site across the globe and we report that. We are doing all this, but someone who is doing the survey didn’t know that so they came to the conclusion that we didn’t have a good recycling program so they penalized us. So that tells us that we have to do a better job of communicating.

DC: Do you publish a corporate environmental report on an annual basis?

JH: No we don’t. We publish our data but we don’t have a slick report that we publish. That’s something that’s probably worth considering, but we just haven’t had the resources with the focus to do that. So in terms of how we collect the data, we have a program called "KEPI" – Key Environmental Performance Indicators, and it’s just a series of metrics related to chemical wastes, solid wastes, air emissions, energy, greenhouse gases, water use, compliance, success stories. We have a whole host of metrics that we measure. We collect the data quarterly from each site in terms of what’s new program wise, and then on an annual basis we collect the data. Basic stuff, nothing crazy. For example how much water did your plant use? How much of it was process water? How much of it was potable water? How much energy did you use? How much was natural gas or steam? Electricity? Diesel? Just the basics. That program has been great for the sites in that it forces them to collect the basic information to show to their own management to show how they can improve. But it’s also good for us to roll up to a global total and we are then able to track our own sustainability progress towards these metrics.

DC: Can you point out any one particular thing that has helped maintain the program?

JH: I would have to say the key driving force for maintaining superior performance is that we are a patient driven company. We’re a people company. So, it makes perfect sense that we behave in a sustainable manner – in a triple bottom line sense.

DC: Here in Cambridge, the Genzyme Center has earned Platinum Certification under the LEED Green Building rating system. In your 10-plus years of working for Genzyme, can you tell me a little about some of the biggest challenges with the LEED process and how Genzyme was able to overcome them?

JH: The biggest challenges with LEED, and we have come a long way actually, the first building, which is now a LEED platinum, is the Genzyme Center. Which is an amazing building. We have given thousands of tours to people over the five or so years that it has been in existence. We have won numerous architectural awards. So the biggest challenge that I’ve seen since that project is how do we build our buildings in a green manner in less of a grand scale than this building? This original building was unique. It was one of the very first green buildings, when the cost to build green was substantial. Now the marketplace has completely transformed.

For example, a project that I’ve recently been working on in Ridgefield, New Jersey has just been certified LEED Gold and that had less than a 1.5% premium for greenness. And that incremental cost for the green aspects will clearly pay for itself in under a year. So one of the biggest obstacles to overcome is the perception that it’s expensive to go green. The perception that it costs a lot of money, and that it’s a lot of wasted effort on documentation. So the way that we have overcome that is by doing a really good job tracking the project. What is the incremental cost? And what is the payback at the end of the project? With all of our LEED projects, at the end of the day, we sit down in a room with the architects and engineers, internal and external, and say "Look, honestly, let’s be brutally honest with ourselves - How, much extra did this building cost?" by getting LEED certified.

So the original Genzyme Center building, and I may have to correct this later, but I think it was a 20% premium, and over the last five and a half years it has come down to less than a 1.5% percent premium. And of course the payback for this is very, very quick. So, I believe that was our biggest obstacle. The other obstacle, secondary to the first, is basic education among the project teams. For some project team members that haven’t been working on constructing green buildings, there used to be a perception that the green building concepts detract from the mission of constructing the building.

DC: Do you perform a lot of the calculations on payback period yourself? Or, do you throw that back on the architects and engineers?

JH: I think we work together. I perform a lot of the calculations, but I also need a lot of assistance from the architects and engineers. The more controversial ones, I tend to have the architects and engineers perform the calculations because I don’t want there to appear to be a conflict of interest. So we leave it to the third party consultant to tell us what it would cost, and then what would be the savings. Because they are going to err on the side of being conservative. Because it’s their professional stamp, they’re the engineers of design so they are going to provide you with the most credible information, and it’s probably going to be perceived as the least biased.

DC: Jeff, you have been with Genzyme for over ten years, prior to joining Genzyme you spent some time at ENSR and International paper. In your 16 plus years of environmental experience, what would you consider to be your biggest professional challenge?

JH: The biggest standalone professional challenge has been an expansion project in China that I’m currently working on. It is a brand new research and development, manufacturing, office building in Beijing, China. You can imagine, working on a global project team with a twelve-hour time difference, an unclear permitting path, language barriers, and extremely ambitious environmental goals for this building. It has been a huge challenge. The first challenge was the environmental permit that took over a year to obtain. The equivalent in the United States probably would have taken three months. It was the equivalent of a NEPA or MEPA permit.

The big challenge was that our consultants didn’t speak English fluently, so they were asking for a lot of information that maybe we misinterpreted. It was very difficult. Another, was the green building part of the project – going for not only LEED Platinum, but going for Chinese 3-Star Certification, which is the Chinese green building certification and it is a lot more stringent than even LEED. We are going for highest rating in China. I don’t believe that there has ever been a building that has achieved a 3-Star rating. So we have really had to be innovative with the capital budget that we were given in order to achieve these goals. Right now, the status of the project is we have an environmental permit and we finished the design of the building. So, we are now in the mid-stream process of all the green building aspects of it. So by far, that has been my biggest professional challenge.

DC: What would you consider to be your biggest professional success?

JH: Actually that environmental permit would be one of the biggest successes. It was just a lot of effort that went into it. The thing that really sold the day on that permit was when a group of five of us made a trip to Beijing and we spent a week meeting with all the permitting authorities and dignitaries on a personal level. So, instead of having our consultants act on our behalf in China, we actually went there ourselves. We met with them face-to-face and explained to them who we were, because they didn’t necessarily know Genzyme. We have recognition in the States, but really no one in China knew too much about us. So, when we went there we met with them on a personal level to explain the project, why it is important, and what we were asking for. After that visit the permitting channels opened up.

DC: If you met someone just entering the field of environmental, health and safety today, what advice would you give them?

JH: I would say, and it’s almost a contradiction, I believe that you need a very strong skill set in a very narrow area. So for me, before coming to Genzyme, it was air. I had to be the air expert at Genzyme. I had to be really, really deep in knowledge, deep in understanding, deep in technical capability. Where there is something, and preferably more than one thing, where you are beyond a doubt, an expert. So, I’m constantly trying to do that in various areas. I need to be very deep in a particular area.

I would have to say to the new person "Find something that you love and get very deep, as deep as you can, and become as much as an expert as possible. But, you also have to be incredibly broad and well versed in a lot of things beyond the environment. Especially, if you are working for a corporation and one of the things I did to improve my breadth of skills was I did a part-time M.B.A. That helped tremendously in my understanding of the bigger picture of business, biotechnology, and the business world in general.

Therefore, I would have to say "Don’t think as it as an either/or", because that was the mistake I made, I thought it was an either/or when I came out of school. I remember being mentored on this – half the people would say "Stay technical. You need to be technical. Be a good engineer." And the other people would say "Well, you can fake the engineering part, but you better be well versed at a lot of different things" and everyone always positioned it as an either/or thing. Now, in retrospect, fifteen years later I believe you absolutely need both.

DC: That’s incredibly valuable insight for the new EHS person entering the field.

JH: Yes, and it doesn’t stop when you’re new. Fifteen years later, fifty years later, I will still be working on both. So, in terms of depth now, I consider myself a LEED expert, a green building expert – that’s expertise that I didn’t have five years ago.

I spent a tremendous amount of time in the nitty-gritty of that – you know, climate change, greenhouse gas emissions inventory, ISO14001 – those are that areas where you can’t fake it. You have to know your stuff. You have to be able to debate with the best – with your consultants. But you also have to be broad enough where you can talk about it in the bigger context. I certainly have a long way to go, but I recognize that’s where I need to be.

DC: Very good. How do you see the future, the field of EHS?

JH: The trend that I see is a shift from compliance with regulations to working with non-governmental external stakeholders. Maybe this has to do with the field that I’m in, which is a fairly green industry. There’s a bit of an industry effect where I work in the biotechnology industry. It’s not like I work for petrochemicals, and I consulted for petrochemicals when I was with ENSR, so I know the difference. I recognize that I’m in a bit of a green industry and there may be a bit of an industry effect. So, we are spending way more time now dealing with programs like Climate Leaders – which is completely voluntary, WasteWise – completely voluntary, energy conservation – completely voluntary, and LEED – completely voluntary.

I would say that the majority of my time is spent going beyond compliance. Of course, you can never forget the compliance piece of the job, but you also have to put it in perspective – I only have so many hours in the day. So, should we be spending our time on killing ourselves on the most obscure and contorted compliance issues or would we be better served by building more sustainable buildings or implementing environmental management systems? That’s a shift that I’ve seen over the course of my career at Genzyme – a shift to "beyond compliance."

DC: Very good. Thank you for your time.

JH: Thank you! It was fun.