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SUSTAINABILITY: THE NEW BUSINESS IMPERATIVETHE NEW BUSINESS IMPERATIVE
Chile-Canada Chamber of CommerceJuly 30, 2013
[email protected] 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
[email protected] www.sustainabilityadvantage.com
