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THE BUSINESS CASE FOR SUSTAINABILITY September 12, 2012.

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Presentation on theme: "THE BUSINESS CASE FOR SUSTAINABILITY September 12, 2012."— Presentation transcript:

1 THE BUSINESS CASE FOR SUSTAINABILITY September 12, 2012

2 “Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs.” Dr. Gro Harlem Brundtland SUSTAINABLE DEVELOPMENT

3 “The possibility that human and other forms of life on earth will flourish forever.” Dr. John Ehrenfeld SUSTAINABILITY

4 Dr. Chuck Hopkins “Enough, for all, forever.” SUSTAINABILITY

5 Systems thinking CORE SUSTAINABILITY CONCEPTS Intergenerational responsibility Socio-economic justice

6 SOCIETAL SUSTAINABILITY QUALITY OF LIFE Economic Environmental Social

7 Sustainable Municipality (28 Indicators) Economic Security Employment participation Unemployment rate Household shelter spending % Low income people Household debt Infrastructure & Built Environment Density Green buildings Green transportation use Local food production Renewable energy Clean tech business opportunity Ecological Integrity Water quality & consumption Green space Air quality Waste diversion, GHG emission reduction Urban biodiversity Social Well-being Life satisfaction Crime rate Health and access to care Cultural Events Homelessness Governance & Empowerment Education Voter turnout City council diversity Household garbage limit GHG reduction target Corporate Knights 5 th Annual Sustainable Cities Rankings, Winter 2011 MUNICIPAL SUSTAINABILITY

8 Ecological Integrity Economic Security Govern’ce & Empower’nt Infrastructure & Built Envir’t Social Well-Being Large Cities Total Toronto Edmonton Ottawa Calgary Montreal Medium Cities Vancouver Mississauga Halifax Hamilton Quebec Winnipeg MOST SUSTAINABLE CANADIAN CITIES Corporate Knights 5 th Annual Sustainable Cities Rankings, Feb. 2011

9 Ecological Integrity Economic Security Govern’ce & Empower’nt Infrastructure & Built Envir’t Social Well-Being Small Cities Total Victoria Saskatoon Saint John Yellowknife Charlottetown Whitehorse MOST SUSTAINABLE SMALL CITIES Corporate Knights 5 th Annual Sustainable Cities Rankings, Feb. 2011

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

11 CORPORATE SUSTAINABILITY ESG Governance Environmental Social

12 CORPORATE SUSTAINABILITY GREEN +CSR Economic Environmental Social

13 CORPORATE SUSTAINABILITY ASSET MANAGEMENT Financial / Manufactured Capital Natural Capital Human / Social Capital

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

15 “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

16 “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

17 “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 “Why Sustainability Is Now the Key Driver of Innovation”

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

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

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

21 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

22 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

23 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%

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

25 THE NEW ECONOMY New company ownership models New company purposes Sustainable consumption / thrift Low- / No-growth / Steady-state economy Services vs. products “Dematerialization” of everything Lower-carbon economy More local supply chains

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

27 4. INTEGRATED STRATEGY 5. PURPOSE & PASSION 20% How long will it be before we reach the SUSTAINABILITY TIPPING POINT in the business community? 0-5 years 5-10 years years More than 15 years Never

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

29 MIT Sloan and the Boston Consulting, “2011 Sustainability & Innovation Global Executive Study and Research Project,” Jan 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?

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

31 THE BUSINESS CASE FOR SUSTAINABILITY September 12, 2012


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