THE BUSINESS CASE FOR SUSTAINABILITY

1. THE BUSINESS CASE FORSUSTAINABILITY September 12, 2012 bobwillard@sympatico.ca www.sustainabilityadvantage.com

2. 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

3. SUSTAINABILITY “The possibility that human and other forms of life on earth will flourish forever.” Dr. John Ehrenfeld

4. SUSTAINABILITY “Enough, for all, forever.” Dr. Chuck Hopkins

5. CORE SUSTAINABILITY CONCEPTS Intergenerational responsibility Systems thinking Socio-economic justice

6. SOCIETAL SUSTAINABILITY QUALITY OF LIFE Social Economic Environmental

7. MUNICIPAL SUSTAINABILITY Ecological Integrity Water quality & consumptionGreen space Air quality Waste diversion, GHG emission reduction Urban biodiversity Sustainable Municipality(28 Indicators) Economic Security Employment participationUnemployment rateHousehold shelter spending% Low income peopleHousehold debt Infrastructure & Built Environment Density Green buildings Green transportation useLocal food productionRenewable energyClean tech business opportunity Social Well-being Life satisfaction Crime rateHealth and access to careCultural Events Homelessness Governance & Empowerment Education Voter turnoutCity council diversity Household garbage limitGHG reduction target Corporate Knights 5th Annual Sustainable Cities Rankings, Winter 2011

8. MOST SUSTAINABLE CANADIAN CITIES Corporate Knights 5th Annual Sustainable Cities Rankings, Feb. 2011

9. MOST SUSTAINABLE SMALL CITIES Corporate Knights 5th Annual Sustainable Cities Rankings, Feb. 2011

10. CORPORATE SUSTAINABILITY TRIPLE BOTTOM LINE Equity Profits / Economy People / Planet / Environment

11. CORPORATE SUSTAINABILITY ESG Governance Social Environmental

12. CORPORATE SUSTAINABILITY GREEN +CSR Economic Social Environmental

13. CORPORATE SUSTAINABILITY ASSET MANAGEMENT Financial / Manufactured Capital Human / Social Capital Natural Capital

14. SUSTAINABILITY JOURNEY 5. PURPOSE & PASSION 4. INTEGRATED STRATEGY 3. Beyond Compliance 2. Compliance 1. Pre-Compliance

15. “Over the last 10 years, the ‘Sustainability Imperative’ has emerged,magnified by escalating public and governmental concern about climate change, industrial pollution, food safety, andnatural resource depletion, among other issues.” David Lubin and Daniel Esty, HBR, May-June 2010

16. “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

17. “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

18. CEO MINDSET IS SHIFTING UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010

19. STAKEHOLDERS INFLUENCE CEOs UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010

20. CEOs’ SUSTAINABILITY DRIVERS UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010

21. STRATEGIES VS. ANOTHER GOAL Profit Share price Growth Revenue Market share Expenses Talent wars Productivity Innovation Brand imageQuality Compliance Supply security “SUSTAINABILITY” SUSTAINABILITY STRATEGIES

22. MORE COMPELLING BUSINESS CASE Opportunities Income Statement Risks Revenue 1. Increased revenue 9% 2. Reduced energy 75% 3. Reduced waste 20% Reduced revenue and increased expenses Expenses Reduced materials 10% Increased productivity 2% Reduced turnover 25% SUSTAINABILITY CAPITAL RESERVE +51 to +81% PROFIT -16 to -36%

23. Potential profit increase 51% 81% Potential profit at risk -16% -36%

24. IN SUMMARY … SUSTAINABILITY IS $MART BUSINESS “The possibility that sustainable enterprises will flourish forever.”

25. THE NEW ECONOMY • Lower-carbon economy • More local supply chains • Servicesvs. products • “Dematerialization” of everything • Sustainable consumption / thrift • Low- / No-growth / Steady-state economy • New company ownership models • New company purposes

26. CLOSE TO “TIPPING POINT?” 5. PURPOSE & PASSION 20% 4. INTEGRATED STRATEGY 3. Beyond Compliance 2. Compliance 1. Pre-Compliance

27. 5. PURPOSE & PASSION 20% 4. INTEGRATED STRATEGY • How long will it be before we reach theSUSTAINABILITY TIPPING POINT in the business community? • 0-5 years • 5-10 years • 10-15 years • More than 15 years • Never

28. SURVEY SAYS … Based on survey of 1,251 companies, in UN Global Compact Annual Review 2010

29. SUSTAINABILITY AT TIPPING POINT? • 70% say that sustainability was on the management agenda in 2011, and will stay there permanently. • 67% said that sustainability-related 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.

30. “EMBRACERS” MIT Sloan and the Boston Consulting Group,survey of 3,000 worldwide executives in 2010, “Sustainability: The ‘Embracers’ Seize Advantage,” Feb. 2011

31. THE BUSINESS CASE FORSUSTAINABILITY September 12, 2012 bobwillard@sympatico.ca www.sustainabilityadvantage.com