Organisational Sustainability

Organisational Sustainability

6. A Sustainability Maturity Rating System

Networking & References

2.What do we mean by sustainability?

4. Example of “maturing” Organisational Sustainability

Purpose

5. Planning to make it happen

1. Business is destroying the world

3. A Sustainability Maturity Model

Version 5

Purpose

The purpose of Organisational Sustainability is:

To describe a way organisations, both private and public sector, can :

a) Improve theirs and others sustainability, and in doing so also

b) Show how their progress can be measured in economic, community, and

environmental terms .

Main Headings:

1. “Business is destroying the world”

2. What do we mean by sustainability?

3. A Sustainability “Maturity” model



6. How to assess Governments & Industries Sustainability Maturity

Copyright David Alman 2011


“Business is destroying the world”: What are you doing about it?

Quote from The ecology of commerce by Paul Hawken



*Rephrasing of a quote by Herman Daly, Senior Economist , World Bank (1988-1994) in The Consumption Dilemma. Report by Deloitte Touch Tohmatsu and the World Economic forum. January 2011

Basically, environmental and social costs are growing faster than the benefits of economic growth, making us poorer not richer.*

Unlimited Economic Growth

Civilisation in danger

Population explosion

Green house effects

Famine & growing regional conflict /

terrorism /refugees

Depletion of biosphere & mineral

resources



Slide 1 with 12 supporting slides from “Interconnectness of world problems” by Fritjof Capra

Actually it is more like this (too much for one slide!)



But there are businesses that are

working on changing from wasteful

and destructive practices to restorative

practices, cutting costs and finding

competitive advantage.

The way to becoming a Sustainable

Organisation is difficult and involves

changes to mindsets and innovation.

The Interface Model from Mid- Course Correction by Ray Anderson


2. What do we mean by Sustainability?

2.1 Sustainability defined2.2 Translating sustainability into organisational terms2.3 Brief explanation of organisational sustainability terms2.4 Internal & External Sustainability issues and costs


2.1 Sustainability Defined:

Organisational Sustainability An Organisation’s ability to achieve its goals and increase long-term stakeholdervalue by integrating economic, environmental and social opportunities into itsstrategies.Adapted from “Symposium on Sustainability – Profiles in Leadership,” NYC, Oct. 2001.

UN Based DefinitionMeeting the present generation’s needs in ways that are not only economicallyviable, environmentally sound and socially equitable but will also allow futuregenerations to do the same .Based on an explanation in the Brundtland Report “Our Common Future” United Nations WorldCommission on Environment and Development, 1987




Thick ValueTo achieve social, environmental, and economic (SEE) sustainability by optimisingthe value of resources and outcomes value to stakeholders (Organisational Health).Thin Value

To achieve organisational sustainability by minimising waste in the use of resources (inputs) and optimisingthe value of services/products (outputs)(Financial Health).

2.2 Translating Sustainability into Organisational termsDeveloping Organisational Sustainability means shifting from a single - “thin” onedimension – to a “thick” three dimension - approach, and recognising each dimensionalso affects the other in achieving sustainable value.


“Thin” & “Thick” Value are terms coined by Umair Haque in The New Capitalist Manifesto


Social

EconomicEnvironment

Well-being

ProductivityResources


2.2 Translating Sustainability into Organisational terms

Internal Organisational termsSustainability Terms


2.3 Brief explanation of Organisational Sustainability terms: Productivity



2.3 Brief explanation of Organisational Sustainability terms: Resources.Energy & Materials Usage. Diagram below illustrates changes in materials usage.

Figure 4 from World Economic Forum report Redesigning business value: A roadmap for sustainable consumption



2.3 Brief explanation of Organisational Sustainability terms: Well-being

1. Well- being covers: Employee SatisfactionCost of disengagement in 2007 in Australia is estimated as $42.1 billion(Ref: Gallop Q12 Employee Engagement Poll 2008 Results)

2. Well-being covers: Employee HealthThe World Health Organisation (WHO) and International Labour Organisation (ILO) define the aims of occupational health as:The promotion and maintenance of the highest degree of physical, mental, and social well-being of workers in all occupations by prevention of departures from health, and controlling risks.

The four elements affecting employee well-being are therefore:Environmental factors; Physical health; Mental (psychological) health; and Social health.Information drawn from Creating Healthy work organisations edited by Cooper & Williams

Cost of workplace stress in Australia (inc Presenteeism and Absenteeism) $14.81 billion a year(Ref: The cost of workplace stress in Australia. August 2008. Medibank Private).

Economic cost of work related injury and illness in 2005-6 in Australia was $57.5 billion(Ref Australian Safety and Compensation Council quoted by Safe to Work)




External Stakeholder IssuesInternal Organisational Issues

Sustainability

Productivity (efficiency & effectiveness)

Resources (Energy and materials usage/waste)

Employee (Wellbeing)

Economic progress

Environmental protection, restoration, & regeneration

Community well-being

2.4 Internal & External Sustainability Issues



External Stakeholder Costs

Internal Organisational costs

Sustainability

Productivity inefficiency (waste time)

Resources (Energy & material waste)

Employee (incompetence, injury inc stress)

Product/service waste causing health & environment impacts e.g. diabetes, cancer, heart disease. Higher Taxes to cover community costs.

“Clean up” of environmental damage, non-renewable/finite resource over usage (water, natural resource & fossil fuel usage): Regulation and Penalty charges.

Education costs, medical costs, family and community costs. Higher taxes to cover welfare and unemployment costs.

2.4 Internal & External Sustainability Costs

3. A Sustainability “Maturity” Model


3.1 A Sustainability “Maturity” model – 4 Levels3.2 Level 1 Foundation3.3 Level 2 Rebuilding3.4 Level 3 New value chains3.5 Level 4 Balanced systems

Adapted from the World Economic Forum Report Redesigning Business Value: A Roadmap for Sustainable Consumption

The first step is to firm up the foundation, as the current leading business practices of today



3.1 A Sustainability “Maturity” model – 4 Levels

Level 4. Balanced systems: Stakeholder driven sustainability. In which innovation drives sustainable value chains and value is redefined for all stakeholders as partners.

Level 1. Foundation: Sustainability Reports available. Demonstrated mindsets, statements, and plans

Level 2. Rebuilding: Breakthrough innovative improvements. Organisations integrate sustainability across all operations. Viable new operating and business models developed.

Level 3. New value chains: Zero waste and no harm performance. Integrating sustainability across entire value chains to achieve “no harm” and zero net waste.





3.2 Sustainability “Maturity” model – Level 1 Foundation

Level 1. Foundation: Sustainability Reports available. Demonstrated mindsets, statements, and plans to support continuous improvements in sustainability.

Challenges: Developing a leadership mindsetAwareness at all levelsSustainable strategy planningOrganisational (public & private sector) inertia

Enablers: Employee engagementStakeholder dialogueInternal measurement & reporting of non-financial information (e.g. Sustainable Balanced Scorecard)





3.3 Sustainability “Maturity” model – Level 2 Rebuilding

Level 2. Rebuilding: Breakthrough innovative improvements. Organisations integrate sustainability across all operations. Viable new operating and business models developed.

Challenges: Integrating sustainability into all levels of the organisationTrialling innovative new modelsCollaborative organisational changeValue chain changes

Enablers: Internal trust“Deep smarts” in knowledge and knowhowCross industry & government reporting & transparent measurementConsumer/citizen engagementEmployees enabled & empowered




3.4 Sustainability “Maturity” model – Level 3 New Value Chains

Level 3. New value chains: Zero waste and no harm performance. Integrating sustainability across entire value chains to achieve “no harm” and zero net waste”.

Challenges: Sustainably integrated across value chainsTowards zero net waste & “no harm”Major shifts to new modelsRefocus value towards all stakeholders

Enablers: Industry & government collaborationExternal trust through transparencyMarkets/policiesSustainability literate citizensCo-opetition platforms





3.5 Sustainability “Maturity” model – Level 4 Balanced Systems

Level 4. Balanced systems: Stakeholder driven sustainability. In which innovation drives sustainable value chains, and value is redefined for all stakeholders as partners.

Challenges: Continuous value chain innovationClosed value loops, zero waste, “no harm”Sustainable enriched communities & lifestyles

Enablers: Societal collaborationGovernanceRegulationEco-system replication & regenerationBusiness/government consensus and partnershipTrue cost of resources reflected in resource value.




4.1 Organisational Sustainability Maturity Model

4.2 Organisational Sustainability Maturity Model Level 1. Foundation

4.3 Organisational Sustainability Maturity Model Level 2. Rebuilding

4.4 Organisational Sustainability Maturity Model Level 3. New Value Chains

4.5 Organisational Sustainability Maturity Model Level 4. Balanced Systems


Economic Sustainability

Waste reduction Value adding

Environmental & Social Sustainability

4.1 Organisational Sustainability Maturity Model: Concepts


3. Sustainability Factors (colour Coded)

2. Organisational Performance model

Internal External

Productivity:Waste efficiency

Productivity: Outcome Differentiation

Resourcese.g. waste & emissions reduction

Employee well-being

Shareholder dialogue

Resources:Supplier dialogue

Community well-being

Natural Environment

1. Sustainability “Maturity” Levels

Level 1. Foundation: Sustainability Reports available

Level 2. Rebuilding: Breakthrough innovative improvements

Level 3. New value chains: Zero waste and no harm

Level 4. Balanced systems: Stakeholder driven sustainability




Productivity:Waste efficiency e.g. process & network efficiency

Productivity: Outcome Differentiation value e.g. customer value


Employee well-being e.g. health (physical, mental, and social)


4.1 Organisational Sustainability Maturity Model


Community well-beingResources:

Supplier dialogue

Shareholder dialogue

Natural Environment





Productivity: Outcome Differentiation value e.g. Customer/ citizen value


Employee well-being e.g. Employee engagement


4.2 Organisational Sustainability Maturity Model Level 1. Foundation

Shareholder dialogue: Customers/citizens, Shareholders

Resources:Supplier dialogue on value chains






Productivity: New models of Differentiation value e.g. Customer/ Citizen value


Employee well-being e.g. Employees enabled & empowered; use of “Deep smarts”


4.3 Application of Sustainability Maturity Model Level 2. Rebuilding

Shareholder dialogue: Cross industry & government ; Consumer/citizen engagement

Resources:Supplier dialogue: On value chain change






Productivity: Major shift in models, refocus value onto all stakeholders (customers/citizens, shareholders, regulators, suppliers, environment).

Resourcese.g. Closed loops, Zero waste & emissions, “No harm” approach

Employee well-being e.g. “No harm” approach & equity


4.4 Application of Maturity Model Level 3. New Value Chains

Shareholder dialogue: Industry & government collaboration; Consumer/ citizen engagement; co-opetition platforms

ResourcesSupplier dialogue: Sustainability across value chains

Community well-being.Reduced work related health costs.

Natural EnvironmentLower service & product impact on finite environmental resources






Productivity: Major shifts in models, refocus value onto all stakeholders (customers/citizens, shareholders, regulators, suppliers, environment).

Resourcese.g. Closed loops, Zero waste & emissions, “No harm” approach. True cost of resources in valuing resources

Employee well-being e.g. Enrichment & social justice


4.5 Application of Maturity Model Level 4. Balanced Systems

Shareholder dialogue: Sustainable lifestyles, consensus business/government partnership

Natural EnvironmentEco system replication & regeneration

Community well-being.Sustainable enriched communities

ResourcesSupplier dialogue: Continuous value chain innovation. Closed loops.



5.1 Develop a Sustainability Life Cycle Assessment5.2 Develop a Sustainability Balanced Scorecard



5.1 Develop an Organisational Sustainability Life Cycle Assessment

Impact of organisation Impact in organisation Impact of organisation

Sustainability Factors

Supplier on-cost waste Process waste/value User value End Use waste

Economic • % new improvements• % inefficiency (non value adding time)

• User complaints • User satisfaction

Environmental • % of contaminants in supplies• % of hazardous chemicals supplied• % Energy used in supplies• Sustainability of supplies• Environmental damage from supplies

• Overall energy consumption• Water usage/% recycled• Solid waste/% recycled• Emissions• Hazards from materials used

• Hazards from service/products• Service/product life cycle length

• % recycled waste• % toxicity of waste•% compostable

Social •Safety hazards (flow on) costs to suppliers employees from products/services provided• Transport costs

• Network value contribution• Competency level assessments• Employee participation levels• Staff absence costs• Conflict/complaint costs• Injury/stress costs

• Community costs of health impacts• Community literacy on social/environmental issues.



Economic

5.2 Develop a Sustainability Balanced Scorecard – Generic Private/Public Sector Example

Social

Environmental

Financial effectivenessReturn on Capital/ Budget cost benefit

Customer/ Citizen• Complaints. •Service/product satisfaction

Process productivity• % new improvements• % inefficiency (non value adding activities)

Suppliers• % of contaminants in supplies• % of hazardous chemicals supplied• % Energy used in supplies• Sustainability of supplies• Environmental damage from supplies

• Safety hazard (flow on) costs to suppliers employees from products/services provided• Transport costs

Process waste/value• Overall energy consumption• Water usage/% recycled• Solid waste/% recycled• Emissions• Hazards from materials used

• Network value contribution• Competency level assessments• Employee participation levels• Staff absence costs• Conflict/complaint costs• Injury/stress costs

User hazards & waste• Hazards from service/products• Service/product life cycle• % recycled waste• % toxicity of waste

• Community costs of health impacts• Community literacy on social/environmental issues.


6.1 Rating Government & industry Sustainability Maturity Performance.The following Sustainable Maturity Performance Rating System examples how government and industry are interconnected and can be assessed on their Sustainability “Maturity”.

A rating system (1 to 4) is exampled as an easy way of gauging both industry and government agencies performance toward achieving full sustainability (Rating 4) to benefit stakeholders.

Stakeholders interested in making this kind of assessment on government(s) and industries could include:

Individuals;

Employees and unions;

Community & community groups;

Industries and shareholders;

Government (local, state, & federal);

Media (news, talk shows);

Social media.

6. How to assess Governments & Industries

Sustainability Maturity



Sustainability Maturity6.1 Rating Government & industry Sustainability Maturity Performance.


Sustainability Maturity Performance Rating System*

Rating 1. Foundation: Sustainability Reports available. Demonstrated mindsets, statements, and plans (including legislation) that support continuous improvement in organisations performing as Sustainable Organisations;

Rating 2. Rebuilding: Breakthrough innovative improvements. Organisations (including public sector agencies) demonstrate the application of the 3 sustainability factors across all operations, and viable new ways that show “breakthrough” innovation in improving sustainability;

Rating 3. New value: Zero waste and no harm performance. Organisations (including public sector agencies) demonstrate the integration of the 3 sustainability factors by the achievement of “no harm” and “zero waste” practices.

Rating 4. Balanced systems: Stakeholder driven sustainability. Organisations (including public sector agencies) demonstrate innovation is driving ongoing sustainability improvements in their systems (and those they influence/affect), and the value of what is done is defined by stakeholders as partners.

*Adapted from the World Economic Forum Report Redesigning Business Value: A Roadmap for Sustainable Consumption.

Sustainability maturity rating is based on the three integrated sustainability factors:Economic (productivity) e.g. Industry/public sector efficiency (minimal non valued activity – waste) and effectiveness in meeting stakeholder needs and values.Social (well-being) e.g. employee and community satisfaction and health & development (physical, mental, and social).Environmental (resources) e.g. energy/material waste, restoration, and regeneration.


Sustainability Maturity6.1 Rating Government & industry Sustainability Maturity Performance.


Economic (productivity) Financial value generated

Community Proportion of locally based suppliers used Proportion of senior management living in local community Development & impact of infrastructure investments & services provided for local benefit (commercial, in kind, pro bono). % of operations implemented with local engagement, impact assessments, and development programs. Operations with potential or actual negative impacts on local communities.

Social (well-being)Health & Safety

Injury rates, lost days, absenteeism Training, counselling, preventative/risk control programs. Number of incidents of discrimination & corrective action

Training Hours per employee by gender & category Programs for skills management & life long learning % employees receiving regular performance & career

development by gender & employee categoryRemuneration

Rates of basic salary & remuneration by gender & employee category

Environmental (resources) Materials: % of recycled material used Energy: Energy saved due to conservation & efficiencies Water: % & total volume recycled & re-used Emissions, effluents, & waste:

Greenhouse emissions by weight Ozone depleting substances by weight NO, SO, and other significant emissions by type & weight Total waste water discharged by quality & desalination Total weight of waste & hazardous waste. Total number and volume of spills Habitats affected by water discharge & run off

* Based on the Global Reporting Initiative (GRI). Reporting Frameworks. G 3.1 Guidelines

Biodiversity: Impact of activities, products, services on areas of high diversity value. Habitats protected or restored

Sustainability Performance indicators * that could be reported to, and rated by, stakeholders include the following:

Customer satisfaction on life cycle product/service information & labelling % of products & services subject to life cycle assessment Environmental impacts of products/services % of products & packaging reclaimable. Renewable energy based products/services Health & safety impacts of products & services Transport impacts of products, goods, materials, & services


Sustainability Maturity6.1 Rating Government & industry Sustainability Maturity Performance - Example.


Sustainability Maturity Performance Rating System

Rating 1. Foundation: Sustainability Reports available . Demonstrated mindsets, statements, and plans (including legislation) that support continuous improvement in organisations performing as Sustainable Organisations;

Rating 2. Rebuilding: Breakthrough innovative improvements. Organisations (including public sector agencies) demonstrate the application of the 3 sustainability factors across all operations, and viable new ways that show “breakthrough” innovation in improving sustainability;

Rating 3. New value: Zero waste and no harm performance. Organisations (including public sector agencies) demonstrate the integration of the 3 sustainability factors by the achievement of “no harm” and “zero waste” practices.

Rating 4. Balanced systems: Stakeholder driven sustainability. Organisations (including public sector agencies) demonstrate innovation is driving ongoing sustainability improvements in their systems (and those they influence/affect), and the value of what is done is defined by stakeholders as partners.

Rating System based on three integrated sustainability factors:• Economic (productivity) .• Social (well-being) • Environmental (Resources)

Queensland State Government

Legislation supporting Organisational Sustainability

Rating: 0

Queensland Local Government

By laws & RegulationsRating: 0

Queensland Government

Agencies Rating: 0

Queensland Local

GovernmentsRating: 0

Industry operating within Legislative & Regulatory Requirements – example industries

Civil construction inc housing & infrastructure

Rating: 0

Health services & supportRating: 0

Energy providersRating: 0

Water & effluent management

Rating: 0

Waste ManagementRating: 0

MiningRating: 0

ManufacturingRating: 0

ForestryRating: 0

FisheriesRating: 0

AgricultureRating: 0

Hospitality & tourismRating: 0

Financial ServicesRating: 0

TransportRating: 0

Social Network Acknowledgements


This PowerPoint has largely grown out of a LinkedIn group discussion on Gene Bellinger’s Systems Thinking World where Helene Finidori set up the following Thread:UN call for revolutionary thinking and action to ensure an economic model for survival... How to make this happen? Warning for global suicide and time running out, Ban ki-moon called last Friday at Davos for revolutionary thinking and action to ensure an economic model for survival. What is needed to take a global interconnected perspective on the issues and threats our planet is facing and start action? How can this gain traction and produce the desired effect?

“To make it happen we have to be prepared to make major changes – in our lifestyles, our economic models, our social organization, and our political life. We have to connect the dots between climate change and what I might call here, WEF – water, energy and food… Together, let us tear down the walls,” he declared. “The walls between the development agenda and the climate agenda. Between business, government and civil society. Between global security and global sustainability. It is good business – good politics – and good for society.”

In over 1250 posts (at time of writing) the discussion has ranged widely, been informative, and supplied many references. This Power Point covers only one perspective on a small part (Organisational Sustainability) of that much larger discussion, now being reset into Blogs at: http://www.systemswiki.org/blog/?p=285

http://www.systemswiki.org/blog/?p=285

Social Network Acknowledgements


In this respect I would like to express an especial thank you to the following for their many contributions and references as they relate to the subject area of this Power Point (while recognising that their views are not necessarily those expressed here).

Helene Finidori

T.A. Balasubramanian

Stephen Scott Wright

http://www.linkedin.com/groups?viewMemberFeed=&gid=2639211&memberID=8365646

ReferencesModels of SustainabilityThe ecology of commerce. Paul Hawken. Harper Business.Interconnectedness of world problems. Fritjof Capra. http://bit.ly/j7qPm9 The new capitalist manifesto. Umair Haque. Harvard Business Review Press.Capitalism at the crossroads. Stuart Hart. Wharton School publishing.Redesigning business value. Deloitte Touch Tohmatsu & World Economic Forum. http://bit.ly/k35zyx

Developing Organisational SustainabilityFour steps to see sustainability as a strategic asset. Anton Breman. http://bit.ly/mdSXGV Creating Sustainable Value. Hart & Milstein. http://e4sw.org/papers/Hart_Milstein.pdfMid-course correction toward a sustainable enterprise: The Interface model. Ray Anderson. The Peregrinzilla Press.

ProductivityThe Productivity Model. Philip McGee. http://bit.ly/lMhcmjDefining and measuring productivity in the public sector: Managerial perceptions. Linna, Pekkola, Ukko, & Melkas. http://bit.ly/iWWoMFOrganisational Productivity. David Alman. http://slidesha.re/kZuPp7

Well-beingCreating healthy work organizations. Ed. Cooper & Williams. Wiley & SonsThe Gallop Q12 – Employee Engagement- Poll 2008 Results. http://bit.ly/kOBxME The cost of workplace stress in Australia. August 2008. Medibank Private. http://bit.ly/kVRIPi The cost of work related injury and illness for Australian employers, workers and the community 2005-6. Safe to Work http://bit.ly/iGExb7 Workplace conflict and how business can harness it to thrive. CPP Global Human Capital Report. July 2008 http://bit.ly/lWJXST

Sustainability MeasuresWhat is sustainable development? Kates, Parris, Leiserowitz. http://hvrd.me/jquAKTTranslating ESG into Sustainable Business Value. UNEP Finance Initiative & World Business Council for Sustainable Development. http://bit.ly/lu67WOGlobal Reporting Initiative (GRI). Reporting Frameworks. G 3.1 Guidelines. http://bit.ly/mrtHfQ

Sustainability Life Cycle AssessmentThe consumption dilemma. Deloitte Touche Tohmatsu & World Economic Forum. http://bit.ly/ij396T Life cycle-based sustainability indicators for assessment of the US food system. Heller & Keoleian. http://css.snre.umich.edu/css_doc/CSS00-04.pdf

The Balanced ScorecardThe Strategy-Focused Organization. Kaplan & Norton. Harvard University Press.Sustainable Organisation Performance. Graham Hubbard. http://bit.ly/kMwnoS The Sustainability Balanced Scorecard. Figge, Hahn, Schaltegger, & Wagner. http://bit.ly/msctCA

Sustainability BenchmarkingLists of the most sustainable companies. Bob Willard. bit.ly/isZ0KuLeadership and corporate responsibility metrics for sustainable corporate performance. Szekely & Knirsch. http://bit.ly/mrdjBs

Sustainability Futures ThinkingSystems Theory: Balancing efficiency with resilience. John Fullerton http://bit.ly/iMpkol The New Economics Foundation http://www.neweconomics.org/ Scenarios for 2040. The Challenge Network. http://bit.ly/jqIupu


http://bit.ly/j7qPm9

http://bit.ly/k35zyx

http://bit.ly/mdSXGV

http://bit.ly/mdSXGV

http://e4sw.org/papers/Hart_Milstein.pdf

http://bit.ly/lMhcmj

http://bit.ly/lMhcmj

http://bit.ly/iWWoMF

http://slidesha.re/kZuPp7

http://bit.ly/kOBxME

http://bit.ly/kVRIPi

http://bit.ly/iGExb7

http://bit.ly/iGExb7

http://bit.ly/lWJXST

http://hvrd.me/jquAKT

http://bit.ly/lu67WO

http://bit.ly/mrtHfQ

http://bit.ly/ij396T

http://css.snre.umich.edu/css_doc/CSS00-04.pdf



http://bit.ly/kMwnoS

http://bit.ly/msctCA

http://bit.ly/isZ0Ku

http://bit.ly/mrdjBs

http://bit.ly/iMpkol

http://www.neweconomics.org/

http://bit.ly/jqIupu

Travelling Companions


http://bit.ly/lB7lEm http://bit.ly/kYJRiShttp://bit.ly/kFOwpJ

http://bit.ly/lB7lEm

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