Sustainability: business cost or competitive advantage? Victorian TAFE Association State Conference Friday, 8 May 2009 Jenny Hunter Director Sustainability Works Pty Ltd

Sustainability a way of operating and investing that recognises the dependence of the overall health of the economy on the long-term availability of natural resources, a healthy environment, a productive workforce and cohesive societies. Brundtland Commission 1987

Integrate into the business Current business model Environmental & societal issues and opportunities Sustainable business growth A better bottom line & a better world The right thing to do A better world Stewardship & charity R&D Programs, Capital Projects, Processes & Systems Metrics and Goals Source: Paul Tebo

But what are the criteria by which you will judge the payback? Financial only? There is a cost.

Costs & benefits of sustainability Costs Capital outlayStaff timeProcess re-engineeringReporting Benefits Brand & reputation Resource efficiency and cost reductions Knowledge developmentNew products and marketsInnovationStaff engagement

Human capacity is vital only human capacity can create sustainable competitive advantages for organisations Prof Lynda Gratton, London Business School, author Living Strategy

Human capital Rare and competitors lack it When it is valuable – has an impact on bottom-line performance When it is difficult to imitate Contributes to competitive advantage when

Sustainable value framework Internal Sustainable value External Tomorrow Framework Source: Hart-Milstein Today Reduce impacts from operations Cost and risk reduction Create value/reduce impacts in markets Reputation & legitimacy Transform through innovation & technology Innovation & repositioning Reach new markets and populations, meet unmet needs Business growth Pollution Consumption Waste Disruption Clean tech Footprint Civil society Transparency Connectivity Drivers Strategies Drivers Population Poverty Inequity

Case study – DuPont Internal Growth Opportunities External Tomorrow Framework Source: Hart-Milstein Note: Modified by Tebo Today Emissions, waste, energy, GHG reductions Market facing goals – energy, GHG reductions Renewably resourced products and energy Agriculture, food and nutrition Drivers Strategies

Internal Sustainable super External Tomorrow Framework Source: Hart-Milstein Note: Modified by Tebo Today Paper, waste, energy, GHG reductions, staff engagement, business knowledge Contribution to more sustainable business practices worldwide Sustainable mindset returns by investing in more sustainable companies New markets and products Low carbon super Case study – VicSuper

Internal ? External Tomorrow Today TAFE Institutes?

Activity Complete the framework 1.Goal (centre) 2.Drivers 3.Strategies

Summary Sustainable value Sustainability must be part of core strategy to be competitive advantage Need to invest time and money to see the rewards Must develop the capacity of your people

Discussion