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A Discussion of Sustainability Brent McKnight

A Discussion of Sustainability Brent McKnight. Conceptualizing sustainability. “Sustainable Development meets the needs of the present without compromising the ability of future generations to meet their own needs.” UN Brundtland Report -1987.

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A Discussion of Sustainability Brent McKnight

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  1. A Discussion of SustainabilityBrent McKnight

  2. Conceptualizing sustainability “Sustainable Development meets the needs of the present without compromising the ability of future generations to meet their own needs.” UN Brundtland Report -1987 “..sustainability is a mere possibility that human and other life will flourish on the Earth forever.” John Ehrenfeld

  3. Triple Bottom Line • Profit for a company is like oxygen for a person. If you don't have enough of it, you're out of the game. • But if you think your life is about breathing, you're really missing something. • Peter Drucker • Management Guru

  4. Pollution

  5. Ecosystem destruction

  6. Environmental vs Profit

  7. Human Health

  8. Equity

  9. Triple Bottom Line

  10. Sustainability as Resilience How well our society absorbs disturbances; changing and adapting but still retaining its identity • Resilience improved when • Reduced dependence on high risk inputs (ie heavy metals, energy, fossil fuels, particular industries, etc.) • Encourage diversity (in firms, in practices, etc.) • Emphasize caution and prudence over risk and optimization • Preparing for shocks and disturbances Resource Depletion Pollution Labour Unrest Occupy Wall Street Between propensity to consume and limitations Between the Have’s and Have Not’s

  11. A role for firms? McKinsey Sustainability’s Strategic Worth (2014) 49% - Place sustainability with a firm’s top 3 strategic priorities 43% - Using sustainability to align with company’s goals and mission Carbon disclosure project (2014) 767 – institutional investorsignatories US $92 Trillion – in assets UN Global Compact (2013) Over 8,000 firms participating in Global Compact 63% - Expect sustainability will transform their industry in 5 years 76% - Sustainability will drive new revenue opportunities 33% - Think that businesses are doing enough 84% - Businesses should lead solutions

  12. What do you think might be Lego’s biggest sustainability related challenges?

  13. Some Sustainability Challenges Holistic understanding of a firm’s social and environmental footprint Unlocking value from sustainable technology Distinguishing “identical” products made through very different processes Managing and navigating diverse stakeholders

  14. How to understand the full scope of a firm’s environmental/social impacts? Raw Material Extraction End of Life Material Processing Life Cycle Assessment Product Use Manufacturing Parts Assembly

  15. Life Cycle Assessment • Identify and understand risks • Reputation, regulation, resources • Opportunities for improvement • Cost reductions, supply chain partnerships, competitive advantage • Redesign processes and products • New materials

  16. How to unlock value from sustainable technologies? Product Servitization • Increase product utilization • Drives product innovation around cradle to cradle • Permits adoption of expensive technology • Monetizes sustainable technologies • Establishes ongoing client relationship • Provides the function without the product

  17. How to distinguish identical products made with more sustainable practices?

  18. Certifications • How it works • Independent third parties define certification rules • Provides transparency of product and process • Key success factors • Strong branding and awareness (combat label proliferation) • Partnering; firms, NGOs and government • Target willing customers (often higher prices) • Ongoing monitoring

  19. Lego and Shell https://www.youtube.com/watch?v=qhbliUq0_r4

  20. Stakeholder Analysis What are their Interests? Goals? Concerns? What is the impact of your firm on them? Who is powerful? urgent? legitimate? Other Parties Stakeholders Firm

  21. Stakeholder Analysis Power How can a stakeholder exert power and influence? 1 Dormant Stakeholder 4 Dominant Stakeholder What makes a stakeholder have more or less legitimacy? 5 Dangerous Stakeholder 7 Definitive Stakeholder Legitimacy 3 Demanding Stakeholder 2 Discretionary Stakeholder Why is urgency an important consideration? 6 Dependent Stakeholder 8 Nonstakeholder Urgency

  22. How can I sell more sustainable initiatives within a company? What role do you occupy? What issue selling efforts are required? Source: Berns et al 2009 Sustainability and Competitive Advantage. MIT Sloan Review, 51(1)

  23. Lego: A Sustainability Strategy • 9,000 employees • 400 billion bricks made since 1949 • 19 billion bricks annually • 50 million children annually

  24. Lego Sustainability Goals

  25. Waste at Lego

  26. Lego: A Sustainability Strategy How can LEGO effectively address emerging competitive threats while ensuring their future growth through leadership in sustainability?"

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