SUSTAINABILITY: THE NEW BUSINESS IMPERATIVETHE NEW ... · the ‘Sustainability Imperative’ has...

SUSTAINABILITY: THE NEW BUSINESS IMPERATIVETHE NEW BUSINESS IMPERATIVE

Chile-Canada Chamber of CommerceJuly 30, 2013

bobwillard@sympatico.ca www.sustainabilityadvantage.com

COMPANY SUSTAINABILITY

TRIPLE BOTTOM LINETRIPLE BOTTOM LINE

EnvironmentPlanet /

COMPANY SUSTAINABILITY

GREEN CSRGREEN +CSR

Environmental

COMPANY SUSTAINABILITY

ESGESG

Environmental

COMPANY SUSTAINABILITY

ASSET MANAGEMENT

N l C i lNatural Capital

FIVE-STAGE SUSTAINABILITY JOURNEY

5 PURPOSE & PASSION5. PURPOSE & PASSION

4. INTEGRATED STRATEGY

3. Beyond Compliance

2. Compliance

1. Pre-Compliance

“Capitalism is under siege … The purpose of a business must be redefined p p

around creating shared value (CSV)…How to reinvent capitalism—and p

unleash a wave of innovation and growth”

Michael Porter and Daniel Kramer, HBR, Jan-Feb 2011

CAPITALISM 2.0Capitalism 1.0 Capitalism 2.0

Purpose of the Maximize shareholder Creating shared stakeholder value, Firm value; Short-term including the Environment; Long termLegitimate capitals Financial Financial, Natural, Social, Human

B tt li P fit P fit Pl t P lBottom lines Profit Profit, Planet, People

Source of financial capital

Stock market; Big financial institutions;

Stock market; Smaller financial institutions; Customers; Employees;capital financial institutions;

Absentee ownersinstitutions; Customers; Employees; Local communities

Market focus Global Local

Negative impacts Externalized Internalized

Accountability The firm The firm’s value chain, yboundaries

,over its products’ life cycles

Transparency As little as possible Naked

Business model Take-Make-Waste; Linear

Borrow-Use-Return; Circular, Cradle to Cradle; Closed loop

““Over the last 10 years, the ‘Sustainability Imperative’ has emerged,ifi d b l i bli d lmagnified by escalating public and governmental concern

about climate change, industrial pollution, food safety, d l d l iand natural resource depletion,

among other issues.”

David Lubin and Daniel Esty, HBR, May-June 2010

“Expect the Unexpected: Building business value in a changing world,” KPMG, 2012

Profit could increase by at least 51-81%

within 3 5 yrs

Bottom-line b i ?

within 3-5 yrs

business case?

“Expect the Unexpected: Building business value in a changing world,” KPMG, 2012

51-81% more Profit

What if Lenders and Investors

start to really care aboutstart to really care about ESG performance?

“Expect the Unexpected: Building business value in a changing world,” KPMG, 2012

10 TRENDS FOR 20131. Companies take stock of natural capital

2 Sustainability becomes a matter of risk and resilience2. Sustainability becomes a matter of risk and resilience

3. Corporate reporting gets integrated

4 The sharing economy makes its mark4. The sharing economy makes its mark5. Commerce gets localized

6 M2M enables the rise of greener machines6. M2M enables the rise of greener machines7. Sustainability goes app crazy8 Materiality becomes material for investors8. Materiality becomes material for investors

9. Companies look past their (earlier) goals

10 P k t i bilit th t t10. Peak sustainability threatens corporate progress

“State of Green Business 2013,” GreenBiz, Feb. 2013.

SUSTAINABILITY: THE NEW BUSINESS IMPERATIVETHE NEW BUSINESS IMPERATIVE

Chile-Canada Chamber of CommerceJuly 30, 2013

bobwillard@sympatico.ca www.sustainabilityadvantage.com