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An Overview of the Triple Bottom Line Approach. Bob Willard www.sustainabilityadvantage.com. Agenda. Terminology The bottom line The catch 7 benefit areas What if’s. Terminology. “Sustainability”. “Sustainable Development (SD)”. “Corporate Social Responsibility (CSR)”. 3Es. - PowerPoint PPT Presentation
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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