Communicating the
Download
1 / 38

Communicating the BUSINESS CA$E for Sustainability - PowerPoint PPT Presentation


  • 107 Views
  • Uploaded on

Communicating the BUSINESS CA$E for Sustainability. Bob Willard bobwillard@sympatico.ca www.sustainabilityadvantage.com. Definitions of Sustainability. Sustainable Development (SD)

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Communicating the BUSINESS CA$E for Sustainability' - sterling


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Slide1 l.jpg

Communicating the

BUSINESS CA$E

for Sustainability

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


Slide2 l.jpg

Definitions of Sustainability

Sustainable Development (SD)

Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs-- Brundtland Commission, 1987 –

Sustainability

The possibility that human and other forms of life on earth will flourish forever

-- John Ehrenfeld, Professor Emeritus. MIT –

Sustainable Development (SD)

Enough - for all - forever

-- African Delegate to Johannesburg (Rio+10) --


Slide3 l.jpg

Conditions for a Sustainable Society

  • In a sustainable society,nature is not subject to systematically increasing …

  • concentrations of substances extracted from the earth’s crust e.g. heavy metals, mercury, lead, cadmium; fossil fuels

  • concentrations of substances produced by society e.g. 70,000+ chemicals; dioxins, PCBs, flame retardants

  • degradation by physical means e.g. forests, fisheries, farm lands

  • … and in that society …

  • human needs are met worldwide e.g. air, water, food, shelter, quality of life


Slide4 l.jpg

Core Concepts of Sustainability

Futures ThinkingIntergenerational responsibility

(Eco-)Systems ThinkingCarrying capacity of the planetto absorb waste and support life

Social JusticeEquity, Dignity, Basic services, Human rights, Stakeholder voices************************************

Economic, Environmental, Social/Culturalresponsibilities


Slide5 l.jpg

Sustainability 3-Legged Stool

Sustainability

Environmental Leg

0 Pollution & Waste

Renewable Energy

Conservation

Restoration

Economic Leg

Good Jobs

FairwagesSecurity

Infrastructure

Fair Trade

Social Leg

Working conditions

Health services

Education services

Community & Culture

Social justice

Quality of Life / Genuine Wealth / Genuine Progress


Slide6 l.jpg

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

Environment - Planet

Eco-efficiencies

Eco-effectiveness

Economy - Profits

Growth, Jobs, Taxes

Products

Services

Equity - People

Employees

Community / Culture World


Slide7 l.jpg

Smart Business 3-Legged Stool

Asset Management

Natural

Capital

Financial

Capital

Built

Capital

Human

Capital

Social

Capital

Sustainable Value Creation


Slide8 l.jpg

5-Stage Sustainability Journey

5. Purpose/PassionValues-driven founder / CEO

4. Integrated StrategyEnhanced business value

3. Beyond ComplianceEco-efficiencies / PR crisis / Regulatory threat

2. ComplianceRegulatory enforcement

1. Pre-Compliance


Slide9 l.jpg

Company Value “Iceberg”

Balance Sheet

Market Capitalization


Slide10 l.jpg

Company Value “Iceberg”

Balance Sheet

Tangibles

Financials

Intangibles - Nonfinancials

Reputation - Brand Image

Stakeholder Relationships

Market Capitalization


Slide11 l.jpg

Company Value “Iceberg”: 1981

Balance Sheet

Tangibles

Financials

83%

Intangibles / Nonfinancials / Reputation

17%

Market Capitalization

Arthur D. Little, The Business Case for Corporate Citizenship , 2002


Slide12 l.jpg

Company Value “Iceberg”: 1998

29%

Tangibles

Financials

Intangibles

Nonfinancials

Reputation

71%

Arthur D. Little, The Business Case for Corporate Citizenship , 2002


Slide13 l.jpg

Sea of Demanding Stakeholders

Financials

Economists

NGOs

Employees

Global Markets

Media

The Public

Nonfinancials / Reputation

Investors

Customers

Banks

Insurers

Competitors

Governments

Scientists


Slide14 l.jpg

Two-Part Business Case

OPPORTUNITIES

Financials

Economists

NGOs

Employees

Global Markets

Media

RISKS

The Public

Nonfinancials / Reputation

Investors

Customers

Banks

Insurers

Competitors

Governments

Scientists


Slide15 l.jpg

Mega-Issue Storm Clouds

Pollution & Health

WealthChasm

Climate Crisis

Pandemics

WaterCrisis

Energy Crisis

ErosionofTrust

Food Crisis

Economists

NGOs

Employees

Global Markets

Media

RISKS

The Public

Nonfinancials / Reputation

Investors

Customers

Banks

Insurers

Competitors

Governments

Scientists



Slide17 l.jpg

Risk of Losing Awakened Consumers

The “Goracle factor”+ Hurricane Katrina+Rising energy prices +Weird weather globally + + …

70-80% of consumers say are switching to “green” companies20%actually did in 2006 (Sustainable brand study by egg, March 07)

LOHASsector $209B in 2007 $420B by 2010 $845B by 2015

Cover collage from Deloitte & Touche “Tax Wednesday” seminar, March 26, 2008


Slide18 l.jpg

Talent Risks

40% of MBA grads rated CSR as a an “extremely” or “very” important company reputation measure when job hunting (Hill & Knowlton Jan 08)

92% of students and entry-level hires seek an environmentally friendly company (MonsterTRAK.com survey, Nov 07)

83%of employees in G7 countries say company’s positiveCSR reputationincreases theirloyalty(GlobeScan 2006)

83%of employees in G7 countries say company’s positiveCSR reputationincreases theirmotivation(GlobeScan 2006)


Slide19 l.jpg

Warnings from Economists

Stern Review Report (Oct 2006)Former World Bank chief economist, Nicholas SternQuantified warnings in the 1997 Economists’ Statement on Climate Change

  • Cost of climate change mitigation:1% of annual global GDP by 2050 if we act now;5-20% if we act later

  • Benefits of $2.5Tif we act now; global depression if we do nothing

  • Must stabilize GHGs: Usecarbon taxesand / oracap-and-trade system; deploy low-carbon technologies;80-90% below 1990 levels by 2050 in developed countries


Slide20 l.jpg

Risk of Becoming a “Risky Investment”

Carbon Disclosure Project

Q. Revenue, regulatory, or physical risks to value

from climate change?

A.Carbon-intensive manufacturers could lose 40% of theirmarket value; Banks could lose 29% of value

http://www.cdproject.net/


Slide21 l.jpg

Investor Network on Climate Risk (INCR)

  • 65 institutional investors, $4T in assets

  • Asked SEC to require listed companies todisclose climate change risksin their financial performance(June 06);

  • Climate Watch Listof worst 10 GHG emitter companiesgot shareholder resolutions on climate change(Feb 07);

    • Capital to Capitol report: Request that Congresscut GHGs 60-90% below 1990 levels by 2050(Mar 07)


Slide22 l.jpg

European Union Leadership

Pollution & health regulations

Restriction on Hazardous Substances(RoHS)

Waste from Electrical and Electronic Equipment(WEEE)

End of Life Vehicles Directive(ELVD)

Registration, Evaluation, Authorisation and Restriction of Chemicals(REACH)

Energy-using Products(EuP)

Climate Change PlanReduce CO2 20% below 1990 level by 2020

Big retailers taking action


Slide23 l.jpg

Threat of U.S. Actions

U.S. Mayors’Climate Protection AgreementKyoto at city level for 850 U.S. cities (as of June 08)7% below 1990 GHG levels by 2008-2012

Western Climate Initiative (WCI) CA, AZ, MT, NM, OR, UT, WA + BC, MB, QC Cap-and-trade system

Regional Greenhouse Gas Initiative (RGGI)10 East-coast U.S. States Cap-and-trade system

Midwestern Greenhouse Gas Reduction Accord (Nov 07)9 Midwest States + MB: -80% GHGs by 2050

US Climate Action Partnership (USCAP)31 corps and NGOs; want cap-and-trade, 15% GHG cut in 15 years; 60-80% GHG cut by 2050


Slide24 l.jpg

Unusual Threats Driving Sustainability

National Security  Alternative energy$2B by 2011 fromU.S. Gov for international clean energy technology fund to help fight climate change.

War for Talent  Sustainability reputation

70% of NA grads seek companies with good CSR reputations

Revenue Pressure  Carbon trading$60B global market in 2007, up 80% from 2006

Sarbanes Oxley  Sustainability reporting

Global Reporting Initiative guidance on reporting risks 64% of Global 250 do sustainability reports


Slide25 l.jpg

Two-Part Business Case

OPPORTUNITIES

Financials

Economists

NGOs

Employees

Global Markets

Media

RISKS

The Public

Nonfinancials / Reputation

Investors

Customers

Banks

Insurers

Competitors

Governments

Scientists


Slide26 l.jpg

One More Goal … or an Enabling Strategy?

Profit

Share price

Growth

Revenue

Customer care

Expense savings

Competition

Market share

Leadership

Governance

Innovation

Speed to market

New markets

Talent wars

Productivity

Motivation

Brand image

Managing risks

Compliance

Supply security


Slide27 l.jpg

Sustainability Investing is Not a Sacrifice

Sustainability indices equal or outperform the market:

DJSI, Jantzi, FTSE4GOOD

SRI Funds GrowingUS SRI assets grew258%from 1995 to$2.3Tin 2005

Freshfields ReportDispels the myth that laws prevent fiduciaries from considering CSR issues; in fact, the law sometimes requires them to

DJSI

Jantzi Social Index


Slide28 l.jpg

Typical Large Company Benefits

Revenue $44,000,000,000

Profit $3,000,000,000

Workforce 120,000

Avg. Employee Salary $60,000

Avg. Manager Salary $70,000

Potential profit increase: +38%

+ Energized employees + Improved corporate image

+ Competitive advantage + Positioned for the future


Slide29 l.jpg

Lead It Like Any Culture Change

  • 1. Walk the talk as senior leadersIntegrate into vision - mission – strategiesBusiness strategy vs. philanthropyAvoid “green-washing” hype

  • 2.Educate the whole company Solicit employee ideas - help

  • 3.Align with measurement & reward systems


Slide30 l.jpg

7 Benefit Areas

  • 1. Reduced recruiting costs

  • 2. Reduced attrition costs

  • 3. Increased employee productivity

  • 4. Reduced expenses in manufacturing

  • 5. Reduced expenses at commercial sites

  • 6. Increased revenue - market share

  • 7. Lower insurance & borrowing costs

  • … yielding a profit increase of +38%

Usual

focus

REPUTATION


Slide31 l.jpg

Potential Improvements

-1%

-2%

+10%

-5%

-20%

+5%

-5%

  • 1. Reduced recruiting costs

  • 2. Reduced attrition costs

  • 3. Increased employee productivity

  • 4. Reduced expenses in manufacturing

  • 5. Reduced expenses at commercial sites

  • 6. Increased revenue - market share

  • 7. Lower insurance & borrowing costs

  • … yielding a profit increase of +38%

REPUTATION


Slide32 l.jpg

What if … ?

-1%

-2%

+10%

-5%

-20%

+5% +2%

-5%

  • 1. Reduced recruiting costs

  • 2. Reduced attrition costs

  • 3. Increased employee productivity

  • 4. Reduced expenses in manufacturing

  • 5. Reduced expenses at commercial sites

  • 6. Increased revenue - market share

  • 7. Lower insurance & borrowing costs

  • … yielding a profit increase of +38%

    • +35%

REPUTATION


Slide33 l.jpg

What if … ?

-1%

-2%

+10% +4%

-5%

-20%

+5%

-5%

  • 1. Reduced recruiting costs

  • 2. Reduced attrition costs

  • 3. Increased employee productivity

  • 4. Reduced expenses in manufacturing

  • 5. Reduced expenses at commercial sites

  • 6. Increased revenue - market share

  • 7. Lower insurance & borrowing costs

  • … yielding a profit increase of +38%

    • +23%

REPUTATION


Slide34 l.jpg

What if … ?

-1%

-2%

+10% +4%

-5%

-20%

+5% +2%

-5%

  • 1. Reduced recruiting costs

  • 2. Reduced attrition costs

  • 3. Increased employee productivity

  • 4. Reduced expenses in manufacturing

  • 5. Reduced expenses at commercial sites

  • 6. Increased revenue - market share

  • 7. Lower insurance & borrowing costs

  • … yielding a profit increase of +38%

    • +20%

REPUTATION


Slide35 l.jpg

Two-Part Business Case

OPPORTUNITIES

Financials

Economists

NGOs

Employees

Global Markets

Media

RISKS

The Public

Nonfinancials / Reputation

Investors

Customers

Banks

Insurers

Competitors

Governments

Scientists


Slide36 l.jpg

The “Tipping Point”?

5. Purpose/Passion

Values-driven founder / CEO

4. Integrated Strategy

Enhanced business value

3. Beyond ComplianceEco-efficiencies/

PR crisis/

Regulatory threat

2. Compliance

Regulatory enforcement

1. Pre-Compliance

20%


Slide37 l.jpg

In Summary …

Sustainability is smart business

Business language applies

Important stakeholders’expectations are rising

New market forces & risks are in play

Relevant to existing business priorities

Can protect & enhance company value

Many willing, helpful partners

Opportunity for leadership


Slide38 l.jpg

Communicating the

BUSINESS CA$E

for Sustainability

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