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Sustainability Makes Dollars & Sense:The Business Case for Sustainability
Mark PezarroEarthvoice Strategies
Sustainability Dialogue SeriesCity University in Canada (Vancouver)21 November 2018
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Sustainability
● Ability to operate and perform well over the long term through a business model that
enhances financial prosperity, reduces
environmental impact and increases
contribution to the surrounding community
● Core strategy for the world’s most forward-thinking companies. By working holistically
through rapid challenge and change, these
leaders are redefining business—and reaping
the benefits
● Earthvoice Strategies works with companies that are ready to make this change
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Why Sustainability Matters –
Dawn of the Anthropocene Era
• The earth has been evolving for
billions of years, yet over the
past 50 years humans have
changed ecosystems more
rapidly than during any
comparable period of time in
human history.
• Human activity driving species
change around the world
– Sarah Otto, UBC researcher
• Rates of species loss 1,000
times higher than pre-
Anthropocene
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● Driven by:
❑ Climate change
❑ Carbon regulation
❑ Peak resources
❑ Global population growth
❑ Changing expectations
A World of Change
Change in Arctic sea ice at
summer’s end over 30
years, 1972-2012
- NASA
Wholesale shift in how:
❑ Products are created
❑ Markets are developed
❑ Value is created
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● Humanity has wiped out 60% of mammals, birds, fish and reptiles since 1970
● Equivalent to emptying North America, South America, Africa, Europe & Oceania
● Many scientists believe it’s the onset of the 6th mass extinction & the first caused by a species – us, Homo Sapiens
● If destruction halted today, would take 5-7 million years for the natural world to recover
● Destruction of nature as dangerous as climate change
A World of Change – Biodiversity
WWF
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• The number of conscious consumers is growing
Growth of Conscious Consumerism
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Ecological Footprint
● Impact of a person or
community on the environment,
expressed as the amount of
land required to sustain their
use of natural resources and
dispose of their waste
● Today humanity uses the
equivalent of 1.7 planets to
provide the resources we use
and to absorb our waste
● If everyone on the planet used
the earth’s resources at the
same rate as North Americans,
we would need 5 planets!- Professor William Rees & Dr. Mathis Wackernagel, UBC
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The Sustainability Payoff
● Enhanced employee recruiting, productivity and
retention
● Lower costs & higher efficiency
● Reduced risk
● New revenue opportunities & competitive
advantage for early adopters
● Inspires innovation – breaks down silos
● License to operate
Embedding sustainability in your operations can
deliver a 30-40% improvement to the bottom line
The Sustainability Advantage:6 Key Benefits
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Easier RECRUITING & Higher RETENTION
• 51% of Canadian CEOs cite “inability to retain
talent” as biggest threat to corporate profitability
(Accenture study, 2006)
• top 2 things sought by recent Canadian
undergraduates (Universum study, 2006):
– progressive work environment
– employer with high ethical standards and commitment
to social responsibility
• 78 % of employees would leave their current jobs
for more environmentally friendly employers
(online poll by Monster.ca, 2007)
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Increased PRODUCTIVITY
• Improved working conditions from green buildings
increase productivity from 7 - 15% (Joseph Romm,
Cool Companies) and reduce sick leave and
absenteeism.
• Individual and team productivity increased by
employee identification with sustainable
development vision (Alcan, Cisco, Kodak)
• Roland Nilsson, CEO, Scandic Hotels, speaking of
employee participation in their environmental
dialogue program:
– “It is the first cooperative activity where they were really
unified irrespective of where they worked in the
company. I mean it was fantastic. Everyone loves
taking care of the world.”
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Reduced MANUFACTURING Costs
• Waste = Squandered Corporate Assets
• Americans consume 1million pounds of raw
materials per year per person; 98-99% => waste
• Substitute less expensive, more environmentally
friendly materials - e.g. fly ash concrete
• Reduce material, energy & water inputs
• Reduce, reuse & recycle scrap material & waste
energy
• Reuse & recycle components & materials from
returned products designed for disassembly &
recovery (circular economy) - e.g. Interface Carpet
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Lower Site OPERATIONS Costs
• Improved waste handling
• Energy efficiencies - e.g. IKEA NA
• Water conservation
• Lower landscaping costs - plant indigenous flora;
replace lawns by meadows
• Reduced office space & less business travel - e.g
telecommuting
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Increased REVENUE & MARKET SHARE
• New product opportunities
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LICENSE to Operate
• Literally invaluable
• Northern Gateway
failed to obtain it!
• Trans-Mountain’s
challenges not over
• Harvest Power
closing in 2019
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10%Building Operations & Some Transportation(Carbon “Toe-print”)
15%Product TransportUsually 3rd-party
75%Product
All 3rd-party
Carbon Footprint – Typical Retailer
Raw Materials
Product Manufacture
TransportProduct
Retail
Source:
‒ Tyler Elm,VP, Business Sustainability,
Canadian Tire
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10% $10 MMBuilding Operations & Some Transportation(Carbon “Toe-print”)
15% - $15MMProduct TransportUsually 3rd-party
75% - $75 MMProduct
All 3rd-party
Carbon Risk – Typical Retailer
Raw Materials
Product Manufacture
TransportProduct
Retail
Illustrative Example
•Retailer with $10B in Sales
•Carbon priced at $30/tonne
•Carbon price risk: $100MM
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Minimizing Carbon Price Risk
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Pre-
Compliance
1
ComplianceRegulatory
enforcement
2
Beyond
Compliance
Eco-efficiencies
PR crisis
Regulatory
threat
3
Integrated
Strategy
Enhanced
business
value
4
Purpose/
Passion
Values-driven
Founder/CEO
5
Where is your organization today?
Where does your firm
aim to be in … • In 1 year
• In 5 years
• In 10 years
5 Stages of the Sustainability Journey
- Bob Willard
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• Stage 4 & 5 sustainability
demands vertical thinking:
thinking outside the box
• Example: partnership between
Google and Ellen MacArthur
Foundation (EMF)
– 2 global leaders
– EMF championing transition
to circular economy
– Google a global CE100
partner savings hundreds of
millions annually
• Possibilities for your firm are
….
Sustainability: Thinking Outside the Box
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Surrey’s Rethink Waste Collection
• 3 cart system
• Diesel trucks replaced by CNG trucks– Replacing one diesel truck equivalent to
removing 475 cars
– 23% reduction in GHG emissions, 90% reduction in particulates
– 25% reduction in cost of waste collection services ($2.8M annually)
• Biofuel facility being built at Port KellsIndustrial Park– Feedstock will be organic waste
– Biomethane will be piped into Fortis BC’s grid to deliver green gas
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Circular Economy• Ellen McArthur Foundation mission:
– accelerate transition to a circular
economy
• Circular economy:
– Framework for an economy that is
restorative and regenerative by design
• Based on 3 principles:
– Design out waste & pollution
– Keep products & materials in use
– Regenerate natural systems
• Circular Economy 100
– a pre-competitive innovation program
enabling organizations to develop new
opportunities and accelerate their
circular economy initiatives
– Source:
• The Ellen Macarthur Foundation
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Circular Economy
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Some Sustainability Leaders
• CE100 global partner
• 70% of materials are recyclates
• 30 million shoes taken back for reuse
• CE100 global partner
• Circular economy & total cost of ownership approach
saving hundreds of millions of dollars annually on data
center hardware costs
• Over $1B annually saved through energy efficiency
• Zero waste - 100% landfill diversion
• 100% renewable energy
• Supply chain greening
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• Wal-Mart Sustainability Product
Index
• Announced July 16, 2009
• Single source of data for
evaluating sustainability of
products
• Launches Love Earth jewellery
made from metals sustainably
mined by Kennecott Utah Copper
• Catalyst Paper develops Sage
product line
The Walmart Effect:
Driving Sustainability Down the Supply Chain
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• 27 September 2010
• Proctor & Gamble announces long term
sustainability vision:
– 100% renewable energy in plants
– 100% renewable materials or
recyclates
– Zero waste
– Public targets for 2020
• Wal-Mart is 40% of P&G’s total sales
The Walmart EffectThe Walmart Effect:
Driving Sustainability Down the Supply Chain
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BC Sustainability Leaders
• Social Banking
• Living Wage
• Local & Social Enterprise
• Green Materials (PVC-free, natural/organic/recycled/humane
animal fibres, Bluesign approved)
• Sourcing from Fair Trade Certified Factories
• 1% for the Planet
• Green building leader
• Eliminated disposable bags
• Vendor Assessment Process & Code of Ethics
• Researching Raw Material Sources & Reducing
Environmental Impacts
• Human Rights & Working Conditions
• Humane Animal Treatment Program
• Local Purchasing
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• Sustainability is a journey, not a
destination
– David Buzzelli, Former CEO, Dow
Chemical
• We can help no matter where you
are in your sustainability journey
The Sustainability Journey
Making the commitment
Refreshing your
commitment
Embedding the
commitment
Measuring success
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Let’s talk!
Mark Pezarro
(m) 604-785-6884
Questions / Discussion