An Overview of the Triple Bottom Line Approach

An Overview of the

Triple Bottom Line

Approach

Bob Willardwww.sustainabilityadvantage.com

Terminology The bottom line The catch 7 benefit areas What if’s

Agenda

Economy / ProfitsSustainable businessProfitsTaxes, R&DJobsExpendituresTrainingFair tradeCore values

Terminology

Environment / PlanetEco-EfficiencyManufacturing efficienciesOperations efficienciesProduct efficienciesSmart designCradle-to-cradle, take-backBeyond complianceRestorative to nature

Equity / PeopleEthical businessInternal employeesHuman rightsHealth & SafetyEmpowermentRespect, CaringLocal communityRest of the world

“Sustainable Development (SD)”

“Corporate SocialResponsibility (CSR)”

“Sustainability”

“Triple Bottom Line (TBL)”3Es 3Ps

Business Priorities

Productivity Brand Image

Profit

Growth

Attracting & Retaining Top Talent

Managing Risks Innovation

Speed to Market

Leadership

Market Share

Motivation

Share Price

CompetitiveAdvantage

Governance

Expense Savings

New MarketsComplying withNew Regulations

Attracting & Retaining Customers

Responding to Emerging Market Forces

Revenue

Dow Jones Sustainability Index

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04

Valu

e of

$1

inve

sted

DS 400 S&P 500® Russell 1000®

Potential profit increase: 38%

+ Energized employees+ Improved corporate image+ Competitive advantage+ Positioned for the future

Benefits to “SD Inc.”

1. Show senior leadership Include SD in vision / mission / strategies Avoid “green-washing” hype Visibly support SD: speeches, questions, actions

2. Educate the whole company Visibly sponsor and support the sessions

3. Establish an “SD Profit Center” Led by a top person Reinforces that it is business strategy vs. a

compliance or philanthropy issue

The Catch

1. Reduced recruiting costs2. Reduced attrition costs3. Increased employee productivity

4. Reduced expenses in manufacturing5. Reduced expenses at commercial sites

(energy, water, consumables)

6. Increased revenue / market share7. Reduced risk, easier financing

7 Benefit Areas

Usual

focus

1. Reduced recruiting costs -1%2. Reduced attrition costs -2%3. Increased employee productivity +10.5%

4. Reduced expenses in manufacturing -5% (-2.5%)5. Reduced expenses at commercial sites -20%

(energy, water, consumables)

6. Increased revenue / market share +5%7. Reduced risk, easier financing -5%

7 Benefit Areas … % Improvement

… yielding a Profit increase of +38%

7 Benefit Areas … Relative Sizes

Recruiting

Attrition

Productivity

Manufacturing

Commercial Sites

Revenue

Risk, Financing

10 Market Forces

10 Market Forces5 Mega-Issues 5 Demanding

StakeholdersClimate Change Green

ConsumersPollution & Health

Activist Shareholders

Globalization Backlash

Civil Society / NGOs

Energy Crunch

Government Regulators

Erosion of Trust Financial Sectors

Sea ChangeOf

RisingExpectations

The Perfect Storm … of Opportunities

Innovation

ProductivityGrowth

Brand

Image

CompetitiveAdvantage

$aving$Revenue

+38% Profit

10 Market Forces5 Maga-Issues 5 Demanding

StakeholdersClimate Change Green

ConsumersPollution & Health

Activist Shareholders

Globalization Backlash

Civil Society / NGOs

Energy Crunch Government Regulators

Erosion of Trust

Financial Sectors

1. Reduced recruiting costs -1%2. Reduced attrition costs -2%3. Increased employee productivity +10.5%

4. Reduced expenses in manufacturing -5% (-2.5%)5. Reduced expenses at commercial sites -20%

(energy, water, consumables)

6. Increased revenue / market share +5%7. Reduced risk, easier financing -5%

7 Benefit Areas … % Improvement

… yielding a Profit increase of +38%

1. Reduced recruiting costs -1%2. Reduced attrition costs -2%3. Increased employee productivity +10.5%

4. Reduced expenses in manufacturing -5% (-2.5%)5. Reduced expenses at commercial sites -20%

(energy, water, consumables)

6. Increased revenue / market share +5%7. Reduced risk, easier financing -5%

What if …

… yielding a Profit increase of +38%

-2%

+35%

1. Reduced recruiting costs -1%2. Reduced attrition costs -2%3. Increased employee productivity +10.5%

4. Reduced expenses in manufacturing -5% (-2.5%)5. Reduced expenses at commercial sites -20%

(energy, water, consumables)

6. Increased revenue / market share +5%7. Reduced risk, easier financing -5%

What if …

… yielding a Profit increase of +38%

+4%

+23%

1. Reduced recruiting costs -1%2. Reduced attrition costs -2%3. Increased employee productivity +10.5%

4. Reduced expenses in manufacturing -5% (-2.5%)5. Reduced expenses at commercial sites -20%

(energy, water, consumables)

6. Increased revenue / market share +5%7. Reduced risk, easier financing -5%

What if …

… yielding a Profit increase of +38%

-2%

+4%

+20%

An Overview of the

Triple Bottom Line

Approach

Bob Willardwww.sustainabilityadvantage.com