1. SUSTAINABILITY AND B-SCHOOLS: WHY SHOULD YOU CARE? bobwillard@sympatico.ca www.sustainabilityadvantage.com U Vic Gustavson Faculty September 12, 2012

2. Criteria Availability of relevant courses (25%) Student exposure / Course time (25%) Relevant courses on for-profit impacts (25%) Faculty research (25%) http://www.beyondgreypinstripes.org/ Biennial survey and ranking of 149 B-schools on integration of social and environmental stewardship into curricula and research BEYOND GREY PINSTRIPES Rankings (2011-2012) 1. Stanford (USA) 2. York (Canada) 3. IE Bus School (Spain) 4. Notre Dame (USA) 5. Yale (USA) 6. Northwestern (USA) 7. Michigan (USA)8. Cornell (USA)9. UC – Berkeley (USA) 10. GWU (USA) 24. UBC (Canada) 35. U Calgary (Canada) 42. Concordia (Canada)

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

4. SOCIETAL SUSTAINABILITY QUALITY OF LIFE Economic Environmental Social

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

6. CORPORATE SUSTAINABILITY ESG Governance Environmental Social

7. CORPORATE SUSTAINABILITY GREEN +CSR Economic Environmental Social

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

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

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

11. “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 “Why Sustainability Is Now the Key Driver of Innovation”

12. “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

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

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

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

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

17. Revenue PROFIT 4.Reduced materials 1. Increased revenue 2. Reduced energy 6.Reduced turnover 5.Increased productivity 7.Reduced revenue and increased expenses 3. Reduced waste OpportunitiesRisksIncome Statement 10% 9% 75% 25% 2% 20% +51 to +81% -16 to -36% Expenses SUSTAINABILITY CAPITAL RESERVE MORE COMPELLING BUSINESS CASE

18. Company Data Profile Small Professional Services Company Large Manufacturing & Distribution Corporation Revenue$1,000,000$500,000,000 Energy expense$20,000$10,000,000 Materials and water expense$50,000$150,000,000 Total salary / payroll expense$300,000$150,000,000 Profit$70,000$35,000,000 Average salary$50,000$40,000 Number of employees63,750 Potential profit increase51%81% Potential profit at risk-16%-36%

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

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

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

22. MIT Sloan and the Boston Consulting, “2011 Sustainability & Innovation Global Executive Study and Research Project,” Jan. 2012. Surveyed 4,000 managers from 113 countries. 70% say that sustainability was on the management agenda in 2011, and will stay there permanently. SUSTAINABILITY AT TIPPING POINT? 67% said that sustainability- related strategies are necessary to stay competitive. 24% are “Embracers” … the Tipping Point?

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

24. SUSTAINABILITY AND B-SCHOOLS: WHY SHOULD YOU CARE? bobwillard@sympatico.ca www.sustainabilityadvantage.com U Vic Gustavson Faculty September 12, 2012