1. A Discussion of Sustainability Brent McKnight

2. Conceptualizing sustainability “Sustainable Development meets the needs of the present without compromising the ability of future generations to meet their own needs.” UN Brundtland Report -1987 “..sustainability is a mere possibility that human and other life will flourish on the Earth forever.” John Ehrenfeld

3. Triple Bottom Line Social EconomyEnvironment Profit for a company is like oxygen for a person. If you don't have enough of it, you're out of the game. But if you think your life is about breathing, you're really missing something. -Peter Drucker Management Guru

4. Pollution

5. Ecosystem destruction

6. Environmental vs Profit

7. Human Health

8. Equity

9. Triple Bottom Line Social EconomyEnvironment

10. Sustainability as Resilience Resilience improved when –Reduced dependence on high risk inputs (ie heavy metals, energy, fossil fuels, particular industries, etc.) –Encourage diversity (in firms, in practices, etc.) –Emphasize caution and prudence over risk and optimization –Preparing for shocks and disturbances Labour UnrestOccupy Wall Street Between the Have’s and Have Not’s Pollution Between propensity to consume and limitations Resource Depletion How well our society absorbs disturbances; changing and adapting but still retaining its identity

11. A role for firms? UN Global Compact (2013) Over 8,000 firms participating in Global Compact 63% - Expect sustainability will transform their industry in 5 years 76% - Sustainability will drive new revenue opportunities 33% - Think that businesses are doing enough 84% - Businesses should lead solutions McKinsey Sustainability’s Strategic Worth (2014) 49% - Place sustainability with a firm’s top 3 strategic priorities 43% - Using sustainability to align with company’s goals and mission Carbon disclosure project (2014) 767 – institutional investor signatories US $92 Trillion – in assets

12. What do you think might be Lego’s biggest sustainability related challenges?

13. Some Sustainability Challenges Holistic understanding of a firm’s social and environmental footprint Unlocking value from sustainable technology Distinguishing “identical” products made through very different processes Managing and navigating diverse stakeholders

14. How to understand the full scope of a firm’s environmental/social impacts? Raw Material Extraction Material Processing Manufacturing Parts Assembly Product Use End of Life Life Cycle Assessment

15. Identify and understand risks –Reputation, regulation, resources Opportunities for improvement –Cost reductions, supply chain partnerships, competitive advantage Redesign processes and products –New materials

16. Product Servitization Increase product utilization Drives product innovation around cradle to cradle Permits adoption of expensive technology Monetizes sustainable technologies Establishes ongoing client relationship Provides the function without the product How to unlock value from sustainable technologies?

17. How to distinguish identical products made with more sustainable practices?

18. How it works –Independent third parties define certification rules –Provides transparency of product and process Key success factors –Strong branding and awareness (combat label proliferation) –Partnering; firms, NGOs and government –Target willing customers (often higher prices) –Ongoing monitoring Certifications

19. Lego and Shell https://www.youtube.com/watch?v=qhbliU q0_r4https://www.youtube.com/watch?v=qhbliU q0_r4

20. Stakeholder Analysis What are their Interests? Goals? Concerns? What is the impact of your firm on them? Who is powerful? urgent? legitimate? Firm Other Parties Stakeholders

21. Stakeholder Analysis 4 Dominant Stakeholder 1 Dormant Stakeholder 7 Definitive Stakeholder 2 Discretionary Stakeholder 8 Nonstakeholder 6 Dependent Stakeholder 3 Demanding Stakeholder 5 Dangerous Stakeholder Legitimacy Power Urgency How can a stakeholder exert power and influence? What makes a stakeholder have more or less legitimacy? Why is urgency an important consideration?

22. How can I sell more sustainable initiatives within a company? Source: Berns et al 2009 Sustainability and Competitive Advantage. MIT Sloan Review, 51(1) What role do you occupy? What issue selling efforts are required?

23. Lego: A Sustainability Strategy 9,000 employees 400 billion bricks made since 1949 19 billion bricks annually 50 million children annually

24. Materiality of ESG Topics Consumer Topics Product Safety Learning via Business Learning via Philanthropy Employee Topics Employee Safety Partner Topics Anti-corruption Respectful Dialogue Surrounding Environment Topics Climate Waste

25. Lego Sustainability Goals

26. Waste at Lego

27. Lego: A Sustainability Strategy How can LEGO effectively address emerging competitive threats while ensuring their future growth through leadership in sustainability?"