“Enhancing U.S. Competitiveness Through Sustainable Manufacturing: A Public-Private Dialogue” Providing Value Through Sustainable Manufacturing Practices Steve Hellem Executive Director Global Environmental Management Initiative (GEMI) September 27, 2007

Overview of Discussion GEMI’s Journey Toward Corporate Citizenship/Sustainability, it’s not a destination. How do these activities meet the value proposition of a company? Where are we going, in a VUCA world?

What is GEMI? 40 Member Companies: Non-profit 501(c)(3) Organization Representing more than 22 Business Sectors Annual Sales: more than $915 billion USD Global Headcount: more than 2.5 million Number of Manufacturing Facilities Worldwide: more than 3,034 Non-profit 501(c)(3) Organization Not an Advocacy Organization

Current GEMI Members

Vision & Mission of GEMI “To be globally recognized as a leader in providing strategies for businesses to provide corporate citizenship.” Mission: “Business helping business improve performance, shareholder value, and corporate citizenship.”

A View of Global Citizenship “Global citizenship means putting partnerships and community engagement at the center of our work. For Abbott, this involves listening to needs and developing solutions together.” Miles D. White Chairman and CEO Abbott

TQEM and Environmental Management Systems Quality in the 80’s impacted Environment in the 90’s Environment was perceived as a cost adder The Environmental Department was responsible for environment Then Environment started to become a Major business issue GEMI developed work tools directed at environment/business integration Environment became a value adder 1996 - ISO 14001, Environmental Management Systems published

Developing Value Driven and Integrated Tools

2007 GEMI Tools

GEMI Case Examples of Meeting the Value Proposition Through Water Sustainability activities: Dow, Coca-Cola, Georgia-Pacific Through Supply Chain activities: Motorola, Duke Energy, Anheuser-Busch, Johnson Controls Through Transparency activities: FedEx Express Through Metrics activities: DuPont, Procter & Gamble, Pfizer Inc

Meeting Value Propositions Through Water Sustainability The Dow Chemical Company – Improving Process Water Quality and Cutting Costs at a Bulgarian Power Station Dow retrofitted a 22-year old power station with Dow’s UPCORE system, which resulted in: 60% reduction of regenerate consumption 70% reduction of the amount of wastewater 50% reduction of maintenance needs 40% reduction in water costs

Meeting the Value Proposition Through Water Sustainability (cont’d) The Coca-Cola Company – Using Source Protection Planning to Identify Source Vulnerabilities 25 plants located in areas of water scarcity received increased technical and financial support Developed a self-assessment tool A Coca-Cola bottling plant in Brazil invested more than $2 million in a partnership to protect the Jundai River watershed and improved water use efficiency.

Meeting the Value Proposition Through Water Sustainability (cont’d) Georgia-Pacific Corporation – Using Performance Goals to Focus Organizational Attention to Water Sustainability Set 5 water pollution prevention goals Addressed those goals and set, with input from employees, new performance measures to track continuous improvement of corporate-wide and individual business unit performance.

Meeting the Value Proposition In the Supply Chain Motorola – Motorola’s Inbound Discrepancy Reporting System: 58% reduction in pallet-related injuries avoiding $400,000 in Workmen’s Compensation $400,000 in reduced transportation expenses $100,000 in reduced handling and storage of pallets 16% improvement in recycling rate of non-hazardous wastes

Meeting the Value Proposition In the Supply Chain (cont’d) Duke Energy – Reel-Less Cable Packaging: Saved $500,000 by eliminating wood reels Reduced cable waste of $140,000 per year, tripping charges at landfill were reduced by $11,000 Reduced demand for 135 acres of forest each year, wood waste is reduced by 660 tons per year and protective wrap around cable is recycled and re-used

Meeting the Value Proposition In the Supply Chain (cont’d) Anheuser-Busch Inc. – Supply Chain Re-Engineering: 90% of low volume items are now within 200 miles of their destination Costs of purchasing, operations and transportation are minimized without loss of customer service Interplant shipments have been reduced by 78% and transportation service is 99% on-time or early

Meeting the Value Proposition In the Supply Chain (cont’d) Johnson Controls Inc. – Suppliers Partnership for the Environment (SP): Founding member of the organization Partnerships with NIST MEP’s Energy Work Group that saved one small auto suppliers $250,000 in one year thanks to the sharing of Chrysler’s energy program Creating foundation to address chemical in product issues for the auto industry and its supply chain led by GM

Meeting the Value Proposition In Transparency FedEx Express – Reciprocal Transparency: Teamed up with Environmental Defense to address environmental, economic and social objectives in developing with Eaton Corporation a hybrid-electric PowerTrain that improves fuel efficiency in the new vehicle by 50% with a corresponding reduction in CO2 emissions of 33%.

Meeting the Value Proposition Through Metrics DuPont – Managing Energy: Set a target to keep energy use flat at the 1990 baseline Achieved this objective Reduced total energy use by about 6%, while increasing production by 41% and thereby avoiding over $3 billion in energy costs Set a target of achieving 10% of its energy use from renewable sources by 2010 Set a goal of nearly doubling its revenues from non-depletable resources to at least $8 billion by 2015.

Meeting the Value Proposition Through Metrics (cont’d) The Procter & Gamble Company (P&G) – Exploring New Value-Creation Metrics: P&G’s vision of sustainable development incorporates: Reducing costs and impacts Creative value and business growth through sales, new markets, new consumers and new businesses P&G’s water purifiers (PUR) present significant opportunities to improve and even save lives in developing countries.

Meeting Value Propositions Through Metrics (cont’d) Pfizer Inc – Evaluating Company Wide Goals: Established company-wide environment, health and safety (EHS) goals on climate change and energy that include: Reducing CO2 emissions by 35% per million dollars of sales by 2007 from the baseline of 2000 Meeting 35% of its global electricity needs by 2010 through clean energy sources, including co-generation, solar and wind power

Where are we going, in a VUCA World? A VUCA is a place where everyday you wake up in a: Volatile Uncertain Complex Ambiguous world Term has been coined by the Institute for the Future (IFTF), Palo Alto, CA.

Where is Sustainability Going in VUCA World? There is a need for longer term, global sustainability planning Strategic planning will help turn foresight into insight There are key driving forces There are impact areas As key driving forces cross impact areas they become challenges, opportunities or dilemmas

Closing Comments Sustainability is a journey that each organization will take based on their own vision and mission. There must be a value proposition in that journey, or it will not succeed. We live in a VUCA world but we can operate in that world successfully, if we are committed to environmental, economic and socially responsible actions that are based on a grounded value system.

1155 Fifteenth Street, NW, Suite 500 How to Contact GEMI Web site: www.gemi.org email: info@gemi.org 1155 Fifteenth Street, NW, Suite 500 Washington, DC 20005 USA Phone: 202-296-7449 Fax: 202-296-7442 All GEMI Tools are available for free on the GEMI Website it’s part of “Business Helping Business.”