THE BUSINESS CASE
FOR
SUSTAINABILITY
September 12, 2012
bobwillard@sympatico.ca
www.sustainabilityadvantage.com
SUSTAINABLE DEVELOPMENT
“Meeting the needs of the present generation
without compromising the ability of
future generations to meet their own needs.”
Dr. Gro Harlem Brundtland
SUSTAINABILITY
“The possibility that human
and other forms of life on earth
will flourish forever.”
Dr. John Ehrenfeld
SUSTAINABILITY
“Enough, for all, forever.”
Dr. Chuck Hopkins
CORE SUSTAINABILITY CONCEPTS
Intergenerational
responsibility
Systems
thinking
Socio-economic
justice
SOCIETAL SUSTAINABILITY
QUALITY OF LIFE
Environmental
MUNICIPAL SUSTAINABILITY
Sustainable
Municipality
(28 Indicators)
Economic Security
Employment participation
Unemployment rate
Household shelter spending
% Low income people
Household debt
Infrastructure &
Built Environment
Density
Green buildings
Green transportation use
Local food production
Renewable energy
Clean tech business opportunity
Ecological Integrity
Water quality & consumption
Green space
Air quality
Waste diversion,
GHG emission reduction
Urban biodiversity
Social Well-being
Life satisfaction Crime rate
Health and access to care
Cultural Events Homelessness
Governance &
Empowerment
Education
Voter turnout
City council diversity
Household garbage limit
GHG reduction target
Corporate Knights 5th Annual Sustainable Cities Rankings, Winter 2011
MOST SUSTAINABLE CANADIAN CITIES
Ecological
Integrity
Economic
Security
Govern’ce &
Empower’nt
Infrastructure
& Built Envir’t
Social
Well-Being
Large Cities
Total
Toronto
5.5
6.2
7.9
7.3
7.7
6.9
Edmonton
7.1
6.2
5.3
4.7
7.2
6.1
Ottawa
4.8
7.3
6.0
4.1
7.6
6.0
Calgary
5.8
6.6
5.5
4.5
7.6
6.0
Montreal
5.2
4.4
5.3
6.8
7.5
5.8
Vancouver
6.5
6.0
7.6
7.7
7.5
7.1
Mississauga
5.5
7.6
5.7
5.3
7.6
6.3
Halifax
6.3
7.1
6.7
4.3
6.8
6.2
Hamilton
5.2
7.5
6.8
4.0
6.8
6.1
Quebec
4.5
8.4
5.9
3.7
7.7
6.1
Winnipeg
4.6
7.4
5.0
5.5
6.9
5.9
Medium Cities
Corporate Knights 5th Annual Sustainable Cities Rankings, Feb. 2011
MOST SUSTAINABLE SMALL CITIES
Ecological
Integrity
Economic
Security
Govern’ce &
Empower’nt
Infrastructure
& Built Envir’t
Social
Well-Being
Small Cities
Total
Victoria
5.2
7.2
7.2
7.6
8.2
7.1
Saskatoon
4.7
7.4
6.6
4.5
7.4
6.1
Saint John
4.6
8.2
5.5
4.6
7.5
6.1
Yellowknife
5.7
6.4
6.1
4.3
7.6
6.0
Charlottetown
4.6
6.3
5.2
5.4
7.3
5.8
Whitehorse
4.7
5.7
6.9
2.8
6.5
5.3
Corporate Knights 5th Annual Sustainable Cities Rankings, Feb. 2011
CORPORATE SUSTAINABILITY
TRIPLE BOTTOM LINE
Planet / Environment
CORPORATE SUSTAINABILITY
ESG
Environmental
CORPORATE SUSTAINABILITY
GREEN +CSR
Environmental
CORPORATE SUSTAINABILITY
ASSET MANAGEMENT
Natural Capital
SUSTAINABILITY JOURNEY
5. PURPOSE & PASSION
4. INTEGRATED STRATEGY
3. Beyond Compliance
2. Compliance
1. Pre-Compliance
“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-June 2010
“Capitalism is under siege …
The purpose of a business must be redefined
around creating shared value (CSV)…
How to reinvent capitalism—and
unleash a wave of innovation and growth”
Michael Porter and Daniel Kramer, HBR, Jan-Feb 2011
“Why Sustainability Is
Now the Key Driver
of Innovation”
“Sustainability should be a touchstone for all innovation …
In the future, only companies that make sustainability a
goal will achieve competitive advantage.
That means rethinking business models
as well as products, technologies, and processes.”
Nidumolu, Prahalad, and Rangaswami, HBR Sept.-Oct. 2009
CEO MINDSET IS SHIFTING
Sustainability should be …
fully embedded in
strategies and operations
96%
72%
93%
… acted upon by boards
69%
88%
… embedded in supply chains
2010
50%
2007
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
STAKEHOLDERS INFLUENCE CEOs
Consumers
50%
Employees
39%
Governments
32%
45%
39%
29%
Commmunities
28%
26%
Regulators
25%
2010
2007
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
58%
CEOs’ SUSTAINABILITY DRIVERS
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
STRATEGIES VS. ANOTHER GOAL
Profit
Talent wars
Share price
Productivity
Growth
Innovation
Revenue
Brand image
Market share
Expenses
“SUSTAINABILITY”
Quality
Compliance
Supply security
SUSTAINABILITY STRATEGIES
MORE COMPELLING BUSINESS CASE
9%
25%
+51 to
+81%
PROFIT
-16 to
-36%
2. Reduced energy
75%
3. Reduced waste
20%
4. Reduced materials
10%
5. Increased productivity
6. Reduced turnover
SUSTAINABILITY
CAPITAL RESERVE
Revenue
Risks
7. Reduced revenue and
increased expenses
1. Increased revenue
Income Statement
Expenses
Opportunities
2%
Company Data Profile
Revenue
Energy expense
Materials and water expense
Total salary / payroll expense
Profit
Average salary
Number of employees
Small
Large
Professional Manufacturing &
Services
Distribution
Company
Corporation
$1,000,000
$500,000,000
$20,000
$10,000,000
$50,000
$150,000,000
$300,000
$70,000
$50,000
6
$150,000,000
$35,000,000
$40,000
3,750
Potential profit increase
51%
81%
Potential profit at risk
-16%
-36%
IN SUMMARY …
SUSTAINABILITY IS
$MART BUSINESS
“The possibility that
sustainable enterprises
will flourish forever.”
THE NEW ECONOMY
• Lower-carbon economy
• More local supply chains
• Services vs. products
• “Dematerialization” of everything
• Sustainable consumption / thrift
• Low- / No-growth / Steady-state economy
• New company ownership models
• New company purposes
CLOSE TO “TIPPING POINT?”
5. PURPOSE & PASSION
4. INTEGRATED STRATEGY
3. Beyond Compliance
2. Compliance
1. Pre-Compliance
5. PURPOSE & PASSION
4. INTEGRATED STRATEGY
How long will it be before we reach the
SUSTAINABILITY TIPPING POINT
in the business community?
•
•
•
•
•
0-5 years
5-10 years
10-15 years
More than 15 years
Never
SURVEY SAYS …
Based on survey of 1,251 companies, in UN Global Compact Annual Review 2010
SUSTAINABILITY AT TIPPING POINT?
• 70% say that sustainability was
on the management agenda in
2011, and will stay there
permanently.
• 67% said that sustainabilityrelated strategies are
necessary to stay competitive.
• 24% are “Embracers”
… the Tipping Point?
MIT Sloan and the Boston Consulting, “2011 Sustainability & Innovation Global Executive Study
and Research Project,” Jan. 2012. Surveyed 4,000 managers from 113 countries.
“EMBRACERS”
MIT Sloan and the Boston Consulting Group,survey of 3,000 worldwide executives in
2010, “Sustainability: The ‘Embracers’ Seize Advantage,” Feb. 2011
THE BUSINESS CASE
FOR
SUSTAINABILITY
September 12, 2012
bobwillard@sympatico.ca
www.sustainabilityadvantage.com