leadership in sustainability

Leadership in Sustainability

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LEADERSHIP IN ENVIRONMENTAL SUSTAINABILITY:

Creating Thriving Businesses that Deliver Maximum Value

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PROBLEM Business as Usual

Consumption

•  In the past three decades, 1/3 of the planet’s natural resources base have been consumed. • The U.S. has 5% of the world’s population but consumes 30% of the world’s resources and creates 30% of the world’s waste. •  If everybody consumed at U.S. rates, we would need 3 to 5 planets. •  We throw away 16% more per capita than Canadians; 26% more than Brits; and 46% more than residents of Japan. • Each person in the United States makes 4 1/2 pounds of garbage a day. That is twice what we each made 30 years ago. – San Diego over 7 pounds per person per day. •  For every one garbage can of material waste you put out on the curb, those materials required 70 garbage cans of waste to create. •  84 percent of the typical waste coming out of a U.S. Household is recyclable.



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PROBLEM

Business as Usual

Natural Resource Depletion

•  In the United States, there are less than 4% of the original forests left. •  40% of waterways in the US have become undrinkable. •  31 countries around the world today face chronic freshwater shortages •  As of 1992, studies found that that farmland in the U.S. is over 85% micronutrient depleted.


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PROBLEM

Business as Usual

Social Relations and Health Deteriorating

•  Each person has an average between 70 and 90 industrial chemicals and pollutants flowing through their circulatory system •  USA is ranked 49th on life expectancy •  The U.S. national happiness peaked in the 1950s. •  According to one gross national happiness index, the USA is ranked 114th in the world


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PROBLEM

Business as Usual

What has led to this?

•  Government agencies crea/ng policies that are oriented towards fast short-‐term growth

•  Businesses not being held accountable for their impacts on the natural environment

•  The Public not taking responsibility for the impacts of their behavior


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SOLUTION

Solution to these problems? Create a paradigm of

Sustainability

Sustainability is essen/al to:

•  The Survival of humanity and biodiversity which are inextricably linked •  Crea/ng healthy and func/onal communi7es •  Maintaining the value chain of products and services that create value for

communi/es


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SOLUTION

Requires major changes in

•  Government •  Business •  Consumer behavior


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SOLUTION

Environmental sustainability is a process of preserving natural resources and ecosystems. It is an approach that systema/cally takes into account the rela/onships of living beings and is oriented towards sustaining life and value.


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PRINCIPLES

The objec/ve of sustainability for businesses is simple:

“Create Value that Lasts for All

Stakeholders”


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PRINCIPLES A company can be sustained by taking into account 7 forms of value:

•  NATURAL CAPITAL – The value that is offered by the services and resources of the natural environment.

•  HUMAN CAPITAL – The value of employees’ and customers’ knowledge, experience, motivation, and wellbeing.

•  SOCIAL CAPITAL – The creative synergy of human interaction that can lead to innovation.

•  CULTURAL CAPITAL – The non-material value added by human diversity, the arts, and belief systems.

•  NETWORK CAPITAL – The opportunities offered through global communication, technology, and markets.

•  MATERIAL CAPITAL – The physical assets such as manufactured goods and infrastructure.

•  FINANCIAL CAPITAL – The investments and money that represent a tradable value.


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PRINCIPLES Strategically integrate sustainability into your company’s

-  Leadership

-  Business Strategy

-  Organizational Culture

Integrating sustainability into the company maximizes stakeholder value

and creates a competitive advantage


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LEADERSHIP “Clock building” NOT “Time telling” – Jim Collins Time-‐tellers

Focus is on the leader Leader can be authoritarian, charisma/c

Clock-‐builders Focus is on the company Build a company that can prosper far beyond the presence of any single leader and through mul/ple product cycles à Focus a lot on organiza/onal design

Capability to con/nually change and evolve beyond exis/ng product life-‐cycles

Listen Communicate Inspire Stay Flexible


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LEADERSHIP

If you want to build a ship, don't drum up the people to collect wood and don't assign them tasks and work, but rather

teach them to long for the endless immensity of the sea

Antoine de Saint-‐Exupery


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STRATEGY

•  Vision for your company •  Core competencies •  Product and Service Differen/ators •  Defining your industry •  Planned Ini/a/ves in opera/ons •  Financial Planning


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CULTURE

Culture consists of:

•  Behavioral Norms and prac/ces

•  Values

•  Communica/on paSerns

•  Decision making structure

•  Socializa/on and interac/on

• Training and Encultura/on Process

Can Influence:

•  Capacity for change and Innova/on

•  Feedback channels

•  Development of Product and services


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COMPETITIVE ADVANTAGES Environmental Sustainability à Competitive Advantage à Profitability

Cost Savings Waste Energy efficiency Design efficiency Operational efficiency Enhanced Brand Higher value through Social responsibility, community-oriented brand, Innovation Capacity for innovation Reduced Risk Exposure

Increased Market Share Stakeholder Satisfaction and Loyalty Customers, employees, suppliers, city governments, local community, regulatory agencies Product and Service Differentiation Greater Employee Performance High employee satisfaction, retention of top talent,


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INDUSTRY Real Estate -  Buildings are the 2nd largest GHG emitter, 25% of emissions in California -  By 2020, all residential homes will need to have net-zero emissions -  By 2030, all commercial will need to be net-zero emissions -  value walkable neighborhoods -‐-‐ to the tune of $4,000 to $34,000. That's how much more people paid for houses within neighborhoods with high Walk Scores than they did for comparable homes in less walkable neighborhoods. Health Services -  Educating clients on sustainability offers healthier lifestyle choices and community development relevant to issues of food, water, pollution, exposure, toxic chemicals, Finance -  Helping clients understand how sustainability benefits them and why its in their interest to invest in more sustainable companies à consumer demand for green product rising -  Financial ins/tu/ons, such as JP Morgan Chase, Ci/group, Bank of America, and Goldman Sachs are all modifying their lending policies to reflect environmental considera/ons.

Examples of Sustainability In Different Industries


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ENVIRONMENTAL SUSTAINABILITY

Environmental Sustainability in the Company Operations q  Facility design q  Energy q  Waste q  Transportation Sustainable Solutions ü  Sustainable materials and efficiency in design (LEED) ü  Renewable energy ü  Reduce and eliminate waste ü  Alternative forms of fuel


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Environmental Sustainability in the Company Products and Services q  Product and service design and development q  Supply chain and sourcing q  Delivery q  Retailers Sustainable Solutions ü  Servicizing, biomimicry, end-use planning, dematerialization ü  Working with suppliers to adopt an environmental sustainability strategy ü  Life cycle assessment, local sourcing ü  Educating retailers on sustainability initatives, incentivizing community support


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Environmental Sustainability in the Company Stakeholders q  Customers q  Employees q  Community q  Governing bodies Sustainable Solutions ü  Marketing to advocate sustainability ü  Internal training ü  Community projects ü  Working with governments to create a sustainable future


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BEST PRACTICES CASE STUDY Interface Carpet manufacturer

Sustainability strategy led to a cut in greenhouse gasses by 82 percent, fossil fuel consumption by 60 percent, waste by 66 percent, water use by 75 percent. Over that same period of time those reductions were achieved, sales increased 60 percent and profits doubled.


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BEST PRACTICES CASE STUDY

Patagonia Outdoor recreational equipment retailer

The company’s sustainability initiatives include: •  All organic cotton and recycled clothing •  Revolutionary transparency of sourcing and supply chain •  Creation of non-profit environmental organization •  LEED certified buildings utilizing solar power


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BEST PRACTICES CASE STUDY Scandic Hotels Nordic Hotel Chain

The company drastically reduced energy and water consumption per guest night (17% and 14% respectively from 1996 to 2006). CO2 emissions were cut by 30% and Scandic has the ambitious targets of reducing CO2 emissions by an additional 50% by 2011 and eliminating fossil fuel emissions altogether by 2025. The sustainability program led to a stronger corporate culture, improved operational efficiency and saved the company 18 million Euros.

leadership in sustainability

Documents

companys leadership

natural capital

problem business

human capital

material capital

value of employees

social capital

stakeholder value