Presentation 1 - CAUCE Conference

advertisement

Why the

$u

$

tainability Imperative

Makes Sen

$

e

CAUCE

June 7, 2011

Bob Willard bobwillard@sympatico.ca www.sustainabilityadvantage.com

The “Sustainability Imperative”

Megatrend:

A fundamental shift in the competitive landscape that creates inescapable threats and game-changing opportunities ... profoundly affects companies’ competitiveness and even their survival.”

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 A. Lubin and Daniel C. Esty, “The Sustainability Imperative,” HBR May 2010

Significant CEO Mindset Shift

CEOs Agree /Strongly Agree that sustainability should be ….

2010 Increase

Over 2007

… fully embedded into company strategy and operations

… discussed and acted on by

boards

… fully embedded into

subsidiaries’

strategies and operations

… embedded throughout the

global supply chain

… the basis for

industry collaborations

and

multi-stakeholder partnerships

… incorporated into discussions with

financial analysts

Survey of 766 worldwide CEOs, including 50 in-depth interviews

UN Global Compact and Accenture study, “A New Era of Sustainability,” June 2010

Stakeholders Driving Sustainability

Stakeholders who CEOs believe will have the greatest impact on the way they manage societal expectations

Consumers

Employees

Governments

Communities

Regulators

Media

Investment Community

Suppliers

NGOs

Boards

Organized Labor

Other

Survey of 766 worldwide CEOs, including 50 in-depth interviews

UN Global Compact and Accenture study, “A New Era of Sustainability,” June 2010

CEOs: Sustainability Drivers

Top 3 drivers of CEOs’ action on sustainability issues

Brand, trust, and reputation

Potential for revenue / growth / cost reduction

Personal motivation

Consumer / customer demand

Employee engagement and recruitment

Impact of development gaps on business

Governmental / regulatory environment

Pressure from investors / shareholders

Survey of 766 worldwide CEOs, including 50 in-depth interviews

UN Global Compact and Accenture study, “A New Era of Sustainability,” June 2010

Sustainability 3-Legged Stool

Sustainability

Economic Leg

Good Jobs

Fair wages

Security

Infrastructure

Fair Trade

Environmental Leg

0 Pollution & Waste

Renewable Energy

Conservation

Restoration

Social Leg

Working conditions

Health services

Education services

Community & Culture

Social justice

Quality of Life / Genuine Wealth / Genuine Progress

Corporate Sustainability 3-Legged Stool

Sustainability = Sustainable Development (SD)

= Environmental, Social, Governance (ESG)

= Corporate Social Responsibility (CSR)

= Corporate Responsibility (CR) = Green

= Triple Bottom Line (TBL) = 3Es = 3Ps

E

nvironment -

P

lanet

Eco-efficiencies

Eco-effectiveness

E

conomy -

P

rofits

Growth, Jobs,

Taxes

Products

Services

E

quity -

P

eople

Employees

Community / Culture

World

Smart Business 3-Legged Stool

Economic / Financial

Capital

Built / Manufactured

Capital

Asset Management

Natural

Capital

Human Capital

Social Capital

Sustainable Value Creation

5-Stage Sustainability Journey

5.

Purpose/Passion

Values-driven founder / CEO

4.

Integrated Strategy

Enhanced organizational value

3.

Beyond Compliance

Save on eco-efficiencies

Avoid PR crisis

Avoid threat of new regulations

2.

Compliance

Regulatory enforcement

1.

Pre-Compliance

The 3 R’s of Justifying Sustainability

R

ISKS

+

R

ESPONSIBILITIES

+

R

EWARDS

BUSINESS CASE

Based on Alan AtKisson,

The IRIS Agreement

, p. 127

Risks to Financial and Natural Capitals:

Big-5 Sustainability Storm Fronts

Waste, Toxicity, and Health

Species Extinction and

Overharvesting

Poverty and

Social Injustice

Food and Water

Crises

The 3 R’s of Justifying Sustainability

R

ISKS

+

R

ESPONSIBILITIES

+

R

EWARDS

BUSINESS CASE

Based on Alan AtKisson,

The IRIS Agreement

, p. 127

Risks to Financial and Social Capitals:

Stakeholders’ Rising Expectations

Waste, Toxicity, and Health

Poverty and

Social Injustice

Species Extinction and

Overharvesting

Food and

Water Crises

(NGOs)

Media

Economists

The Public

Investors

Customers

Employees

Risks to Reputation re

Corporate Responsibilities

Banks

Governments Insurers

Competitors

Markets

(Scientists)

The 3 R’s of Justifying Sustainability

R

ISKS

+

R

ESPONSIBILITIES

+

R

EWARDS

BUSINESS CASE

Based on Alan AtKisson,

The IRIS Agreement

, p. 127

Top 10 Business Priorities for 2011

Forrester's survey of 2,691 executives in Europe, North America, and Asia,

“Forrsights Business Decision-Makers Survey, Q4 2010.”

One More Goal … or an Enabling Strategy?

Profit

Share price

Growth

Revenue

Market share

New markets

Customer care

Expenses

“Sustainability”

Talent wars

Productivity

Innovation

Brand image

Quality

Risks

Compliance

Governance

Supply security

Enabling Strategies

The 3 R’s of Justifying Sustainability

SME

Companies:

At least 66% more profit

R

ISKS

+

R

ESPONSIBILITIES

+

R

EWARDS

BUSINESS CASE

Large

Companies:

At least 38% more profit

Potential SME Profit Increase

• Reduced recruiting costs

• Reduced attrition costs

• Increased employee productivity

-1%

-2%

+6%

• Eco-efficiencies: savings in energy/carbon, water, materials, waste handling

-10%

• Increased revenue / market share

• Lower insurance & borrowing costs

… yielding a profit increase of

+66%

+5%

-5%

REPUTATION

Sustainable Procurement: U.S. Gov’t

Executive Order 13514

(Oct. 2009)

Federal Leadership in Environmental, Energy, and Economic Performance

Largest consumer of energy in the U.S. economy

Impacts 500,000 buildings and 600,000 vehicles

Impacts $500B / Yr spent on 2M goods and services

Impacts 600,000 suppliers

Green procurement policy covers 95% of new acquisitions

• Federal agencies must set 2020 GHG reduction goals

• 30% reduction in fleet gasoline by 2020

• 26% boost in water efficiency by 2020

• 50% waste recycling and diversion rate by 2015

• Net-zero-energy building requirement by 2030

Ecovadis survey, “Sustainable Procurement: A Crucial Lever to End the Crisis?,” Aug 09

The 3 R’s of Justifying Sustainability

R

ISKS

+

(NGOs)

Climate Change

&

Energy Crises

(Scientists)

R

ESPONSIBILITIES

Customers

Governments

+

Employees

Economists

Investors

Insurers

R

EWARDS

At least 38% to 66% more Profit

BUSINESS CASE

The New Economy

• Low-carbon economy vs. fossil fuel-based economy

• Local supply chains vs. global supply chains

• Services vs. products

• “Dematerialization” vs. physical goods, processes, or travel using “virtual” alternatives like videoconferencing or online shopping”

• Responsible consumption / thrift vs. over-consumption

• Low / No-growth model vs. “grow or die” model

• New ownership models: employees, customers, co-ops, social venture funds, government funding

• New company purposes: “Social enterprises,” “B Corps,”

“Hybrid organizations,” “Flexible purpose corporations”

(California Bill SB 201, Corporate Flexibility Act, Feb. 2011)

In Summary …

Sustainability

is

smart business

Green Universities

are

smart universities

New market forces & risks are in play

Relevant

to existing priorities

Opportunity for leadership

1. Progressive

policies and courses

2. Walk-the-talk in university

operations

3. Use

procurement

clout

Why the

$u

$

tainability Imperative

Makes Sen

$

e

CAUCE

June 7, 2011

Bob Willard bobwillard@sympatico.ca www.sustainabilityadvantage.com

Related documents
Download