COMMUNICATING THE
BU$INESS CA$E(S)
FOR SUSTAINABILITY
University of Calgary
Distinguished Speaker Series
March 3, 2016
bobwillard@sustainabilityadvantage.com
“Over the last 10 years,
the ‘Sustainability Imperative’ has emerged,
magnified by escalating public and governmental concern about
climate change, industrial pollution,
food safety, and natural resource depletion,
among other issues.”
David Lubin and Daniel Esty, HBR, May 2010.
NESTED INTERDEPENDENCIES
NESTED INTERDEPENDENCIES
Society and Business are
wholly owned subsidiaries of the Environment
BUSINESS IMPACTS THE NESTS
BOOMERANG IMPACTS
GREAT ACCELERATION DASHBOARD
Safe
operating
space
Will Steffan et al, “The Trajectory of the Anthropocene: The Great Acceleration,” Anthropocene Review, Jan. 2015.
GLOBAL RISKS
Impact
High
Likelihood
High
World Economic Forum (WEF), “Global Risks 2016,” January 2016.
“Expect the Unexpected: Building business value in a changing world,” KPMG, 2012
ENABLERS vs. ONE MORE GOAL
Profit
Access to capital
Share price
Talent wars
Brand value
Productivity
Revenue growth
Innovation
Market share
Risk management
Expenses
Security of supply
“Sustainability”
(SUSTAINABILITY) STRATEGIES
“BEST PRACTICES” CASE
Opportunities
P&L Statement
Risks
Revenue
7 Risks to
Revenue
Expenses
7 Risks to
Expenses
PROFIT
-16%
to -36%
Revenue growth
Company reputation; Innovative products;
Innovative services & financing
+9%
Energy costs
-75%
Waste costs
-20%
Materials & water costs
-10%
Employee productivity & innovation
Employee attrition costs
+2%
-25%
Sustainability Capital Reserve
+51%
to +81%
sustainabilityadvantage.com
60-employee manufacturing company
42 projects between 2006-2008
58% reduction in electricity usage
90% reduction in natural gas usage
Reduced annual CO2 emissions by 115 tonnes
Increased profits by 76%
Invested $46,186 to yield energy savings of $89,152
Average pay-back period of 6.3 months
“Manufacturer finds lighting energy efficiency convenient,” Green Manufacturer, March 1, 2010
Opportunities could
increase Profit
by 51-81%
Bottom-Line
Business Case
Risks could decrease
Profit by 16-36%
“Expect the Unexpected: Building business value in a changing world,” KPMG, 2012
“BURNING PLATFORM” FOR CHANGE
Piper Alfa oil and gas platform exploded in the
North Sea, July 6, 1988.
Worst catastrophe in 25 years of exploration.
The accident killed 165 of 220 crew members.
Andy Mochan plunged 15 stories into a burning
sea of oil and debris, knowing he would survive
only 20 minutes in the freezing water.
Why did Andy jump?
He chose uncertain death over certain death.
The pain of his “current reality” was too great.
He jumped because he had to, not because he wanted to.
Based on Daryl Conner, Managing at the Speed of Change, 1992.
CASE FOR FUTURE-FITNESS
INCOME STATEMENT / PROFIT & LOSS STATEMENT
Grow revenue
Risk of eroding revenue growth
Good company reputation / brand; Innovative
products; Innovative services & financing
Poor company reputation / brand; Outdated
products; Missed services opportunities
Save operating expenses
Risk of higher operating expenses
Energy; Water; Materials; Waste;
Maintenance; Travel; Insurance; Borrowing
Energy; Water; Materials; Waste;
Maintenance; Travel; Insurance; Borrowing
Engage employees
Risk of disengaged employees
Productivity & innovation; Attrition; Hiring
Productivity & innovation; Attrition; Hiring
Other risks
Physical disruptions; Societal disruptions; Insecure supply;
Compliance expenses; Litigation Expenses
Higher market value
Alignment
MARKET VALUE
Risk of lower market value
PURPOSE & VALUES ALIGNMENT
wiki.futurefitbusiness.org/overview
Risk of misalignment
FUTURE-FIT BUSINESS
A Future-Fit Business creates value
while in no way undermining
– and ideally increasing –
the possibility that humans and other
life will flourish on Earth forever.
If it were to operate forever, it would not only do no harm,
it could do well by doing some net good.
3-STEP METHODOLOGY
8 Science-Based
System
Conditions
8
Business
Principles
20
Goals
3
Environmental
System Conditions
3
Environmental
Business Principles
10
Environmental
Goals
5
Social
System Conditions
5
Social
Business Principles
10
Social
Goals
wiki.futurefitbusiness.org/overview
FUTURE-FIT BUSINESS GOALS
All renewable energy.
Fair /right taxes paid.
All environmentally responsible
and socially equitable water use.
All lobbying for FF outcomes.
All concerns addressed.
All products and packaging
can be repurposed.
All materials from responsibly
managed or recycled sources.
All concerns addressed.
Informed about all impacts.
(Suppliers are included within the
company’s extended operations.)
Products emit no substances
which cause harm.
Safeguard employee health.
Products emit no GHGs.
Pay at least a living wage.
Operational byproducts are repurposed.
No discrimination.
Fair employment terms.
All concerns addressed.
Operations do not
negatively impact areas of
high conservation value.
Operations emit no substances which
cause harm.
Operations emit no GHGS.
wiki.futurefitbusiness.org/overview
CASE FOR FUTURE-FITNESS
INCOME STATEMENT / PROFIT & LOSS STATEMENT
Grow revenue
Risk of eroding revenue growth
Good company reputation / brand; Innovative
products; Innovative services & financing
Poor company reputation / brand; Outdated
products; Missed services opportunities
Save operating expenses
Risk of higher operating expenses
Energy; Water; Materials; Waste;
Maintenance; Travel; Insurance; Borrowing
Energy; Water; Materials; Waste;
Maintenance; Travel; Insurance; Borrowing
Engage employees
Risk of disengaged employees
Productivity & innovation; Attrition; Hiring
Productivity & innovation; Attrition; Hiring
Other risks
Physical disruptions; Societal disruptions; Insecure supply;
Compliance expenses; Litigation Expenses
Higher market value
Alignment
MARKET VALUE
Risk of lower market value
PURPOSE & VALUES ALIGNMENT
wiki.futurefitbusiness.org/overview
Risk of misalignment
RESOURCES
www.sustainabilityadvantage.com
COMMUNICATING THE
BU$INESS CA$E(S)
FOR SUSTAINABILITY
University of Calgary
Distinguished Speaker Series
March 3, 2016
bobwillard@sustainabilityadvantage.com