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James Catmur Safety as a Springboard to Sustainability International Rail Safety Conference: Denver, Colorado 5 th to 10 th October 2008 Arthur D. Little.

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Presentation on theme: "James Catmur Safety as a Springboard to Sustainability International Rail Safety Conference: Denver, Colorado 5 th to 10 th October 2008 Arthur D. Little."— Presentation transcript:

1 James Catmur Safety as a Springboard to Sustainability International Rail Safety Conference: Denver, Colorado 5 th to 10 th October 2008 Arthur D. Little Limited 300 Science Park Cambridge United Kingdom Telephone +44 (0) Fax + 44 (0)

2 2 Safety as a Springboard to Sustainability.ppt Introduction Background Problem Answer Sustainability is much higher up everyones agenda There is an urgent need to respond However, many companies are ill-equipped to tackle this area A robust safety culture within a firm can be an excellent springboard to wider sustainability Safety is fundamental to the operations of public transport, poor safety performance can threaten the existence of a firm Safety has been a long-standing fact of business for most firms The way that company chooses to act forms part of its own responsibility as a corporation Safety as a Springboard to Sustainability

3 3 Safety as a Springboard to Sustainability.ppt Safety as a starting point Safety is part of the license to operate As such it is already well managed Safety has benefits for the bottom line and longevity of the firm –Reduced Costs – improved safety means services run to time reducing potential fines –Increased Opportunities – a good safety record can be the difference between success and failure in competitive tenders Safety as a Springboard to Sustainability

4 4 Safety as a Springboard to Sustainability.ppt Past focus on safety is being mirrored by the new focus on climate change Intergovernmental Panel –Scientific evidence of mankinds contribution to climate change The Stern Review –Economic assessment –Climate change shown to have an impact on the global economy Activity to address concerns The Clapham accident –A turning point for UK rail safety The Ladbroke Grove accident –Significant media attention –Increase in stakeholder interest –More interventionist approach by the safety regulator Significant activity to address concerns The past focus on Safety… …is now mirrored by Sustainability Safety high up the agendaSustainability higher up the agenda Safety as a Springboard to Sustainability

5 5 Safety as a Springboard to Sustainability.ppt Increasing importance of climate change brings with it pressure on other issues It is not enough to simply manage climate change and CO 2 Corporations are in the Spotlight Leaders have Emerged Leadership Requires a Holistic Approach Individual corporations are targeted as emitters, for example: –BAA/Heathrow airport are criticised over expansion plans –Drax, regularly attacked by pressure groups Virgin recently trialled an aircraft on running on biofuel UK retailer Marks and Spencer have adopted Plan A The spotlight on climate change has elevated attention on other sustainability issues, for example human rights, supply chain working conditions, governance, corruption and benefit to society Safety as a Springboard to Sustainability

6 6 Safety as a Springboard to Sustainability.ppt The drivers are growing, especially relating to risks and opportunities associated with climate change Market Drivers 1. Investor expectations The influence of SRI funds is filtering into mainstream investment decisions 2. Tendering requirements Companies could enhance position through environmental performance 3. Regulation Could use best practice to help shape regulation 4. Resources Rising resource costs a threat to transport companies but could build client base 5. Competition Competition from efficient vehicles could undermine the inherent advantage of mass transit 6. Changing attitudes Integration of sustainability into decision making places pressure on poorly performing companies Safety as a Springboard to Sustainability

7 7 Safety as a Springboard to Sustainability.ppt The difficulty is understanding which issues are relevant and where to draw the line CSR Navigating corporate social responsibility isnt easy Governance Disclosure Transparency Probity Responsibility Leadership ethics Engagement CSR Environmental stewardship Business principles Accountability Good business ESG risks Corporate citizenship Philanthropy Community investment Corporate social opportunity Sustainable innovation Sustainability- driven-innovation Social products Responsible marketing Reputation management Enhanced analytics Non-financial risks Competitive integration Safety as a Springboard to Sustainability

8 8 Safety as a Springboard to Sustainability.ppt Assess how social and environmental issues are managed across a business Governance Business integration of sustainability Environmental stewardship Social performance Vision/mission Board of Directors Organisation and culture Business principles Performance measurement & management Stakeholder engagement Profitability and growth Reputation Strategic management R&D Products and services Markets Partners and alliances Environmental impact Resource utilisation Facilities and operations Climate Change and carbon Workplace Treatment of employees Human rights Community Benefit to society Safety as a Springboard to Sustainability

9 9 Safety as a Springboard to Sustainability.ppt Review companys positioning in the zone of acceptability, and against peers and investor expectations PastPresentFuture Performance Timeline Top-quartile Sustainable Performance Leading Edge Prevailing Scores 5 on the ADL Sustainable Performance Template Performance is tomorrows leading practice Scores 3 on the ADL Sustainable Performance Template Performance is leading edge for the industry Scores 1 on the ADL Sustainable Performance Template Performance is consistent with industry Prevailing 1 3 Sustainable performance 5 Leading edge Trailing edge Zone of acceptability Safety as a Springboard to Sustainability

10 10 Safety as a Springboard to Sustainability.ppt Results were benchmarked to highlight the strengths, weaknesses, opportunities and threats 4 5 Zone of competitor performance 1 Governance Vision/MissionBoard of Directors Organisation and Culture Business Principles Performance Measurement Stakeholder Engagement Integration of Sustainability Profitability and Growth Reputation Management Strategic Management Research and Development Products and Services Markets Partners and Alliances Environmental Stewardship Environmental Impact Resource Utilisation Facilities and Operations Climate Change and Carbon Social Performance WorkplaceHuman RightsCommunityBenefit to Society Treatment of Employees - Score 1 Based on four benchmark companies examined for this project Company performance Future Stakeholder Expectations Safety as a Springboard to Sustainability

11 11 Safety as a Springboard to Sustainability.ppt To address the key drivers of sustainability, three different options are presented Maintain present activities, including biofuel and hybrid trials, eco- driving initiatives and technology upgrades at depots Communication is enhanced Governance issues such as determining and publicising policies and measuring performance are addressed Overhauls approach to those areas where it is deemed furthest from future stakeholder expectations Seeks to become identified with sustainability in its business but maintains a cautious approach to rolling out new technologies, etc Leads and shapes the direction of sustainability in the transport sector, working with regulators to influence new regulation Seeks out new avenues for revenue from intelligent transport Maintains a leadership position in resource management 3: Leading Edge Safety as a Springboard to Sustainability 2: Stakeholder Responsive 1: Risk Management

12 12 Safety as a Springboard to Sustainability.ppt The three options, with leading edge matching both peer performance and investor expectations 4 5 Governance Vision/MissionBoard of Directors Organisation and Culture Business Principles Performance Measurement Stakeholder Engagement Integration of Sustainability Profitability and Growth Reputation Management Strategic Management Research and Development Products and Services Markets Partners and Alliances Environmental Stewardship Environmental Impact Resource Utilisation Facilities and Operations Climate Change and Carbon Social Performance WorkplaceHuman RightsCommunityBenefit to Society Treatment of Employees - Score Leading EdgeBusiness As Usual Stakeholder ResponsiveRisk Management Safety as a Springboard to Sustainability

13 13 Safety as a Springboard to Sustainability.ppt Companies who have learned to manage safety are better placed to manage sustainability In reality it is no more of a change than that required to manage safety Companies who already manage safety: –Can see the tangible financial and operational value –Can also accept and understand the intangible benefits Are well placed to use the same experience to manage sustainability: –Seeing beyond the jargon and image of being Sustainable –Understand that it is about protecting and growing the firm An approach can be taken which builds upon strengths developed in safety and other key sustainability related areas The effort required to manage sustainability may seem high Focus on issues which are material and which are demonstrated a through the business case – just like any other strategic business issue Safety as a Springboard to Sustainability


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