THE

GOOD NEWS
ABOUT THE
NEW SU$TAINABILITY
IMPERATIVE

2014 Kaleidoscope Conference

Algonquin College
May 13, 2014

bobwillard@sympatico.ca
CORPORATE SUSTAINABILITY

TRIPLE BOTTOM LINE

y
Eco fts /
nom

Peo it
Equ/
y
Pro

ple
Planet Environm
/ ent
CORPORATE SUSTAINABILITY

GREEN +CSR

ic

Soc
no m

ial
Eco

Environment
al
CORPORATE SUSTAINABILITY

ESG

anc

Soc
ern
e

i al
Gov

Environmenta
l
CORPORATE SUSTAINABILITY

ASSET MANAGEMENT

Cap tured
l

Hum ial
ncia

Soc
Cap
i t al
ufac
/
Fina

an /
ital
Man

Natural
Capital
 AC S-E-E FRAMEWORK

http://www3.algonquincollege.com/sustainability/overview-2/our-framework/
THE REAL REAL WORLD
NESTED INTERDEPENDENCIES
FIVE-STAGE SUSTAINABILITY JOURNEY

5. PURPOSE & PASSION

4. INTEGRATED STRATEGY

3. Beyond
Compliance
2. Compliance

1. Pre-Compliance
 Over the last 10 years,
the Sustainability Imperative has emerged,
magnifed by escalating public and
governmental concern about climate change,
industrial pollution, food safety, and
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
 ENABLERS vs. ONE MORE GOAL
Proft Access to
Share price capital
Brand value Talent wars
Revenue Productivity
growth Innovation
Market share Quality
Expenses Risk
SUSTAINABILITY
ROI management
Supply security
(SUSTAINABILITY) STRATEGIES
 SUSTAINABILITY BUSINESS CASE
Opportunities Income Risks
Revenu
Statement
1. Increased 9%

7.Reduced revenue
e
revenue

and increased
2. Reduced energy 75
%

Expenses
3. Reduced waste 20

expenses
4.Reduced %
10
materials %
5.Increased 2%
productivity
6.Reduced 25
turnover +51
%
SUSTAINABILIT
to PROFI -16 to
Y CAPITAL
RESERVE +81 T -36%
 Large,
Small
Manufactu
Professi
Company Data Profile ring &
onal
Distributio
Services
n
Revenue $1,000,00 $500,000,00
0 0
Energy expense $20,000 $10,000,000
Materials and water $50,000 $150,000,00
expense 0

Total salary / payroll $300,000 $150,000,00

expense
Potential profit 0
51% 81%
Proft increase $70,000
- $35,000,000
-
Potential profit at risk
Average salary 16%
$50,000 36%
$40,000
 60-employee manufacturing
company
42 projects between 2006-2008
58% reduction in electricity usage
90% reduction in natural gas usage
Reduced annual CO2 emissions by 115 tonnes
Increased profits by 76%.
Invested $46,186 to yield energy savings of
$89,152
Average pay-back period of 6.3 months
Manufacturer finds lighting energy efficiency convenient, Green Manufacturer, March 1, 2010
GREEN BUILDING BENEFITS: TO WHOM?

Slower depreciation
Higher occupancy
rate
Easier fnancing Reduced downtime
Rapid ROI Lower operating costs
Higher market value Lower maintenance
costs
Lower refurbishment
Lower design costs Increased
and Corporate image /
construction prestige productivity
costs Compliance with
Faster sales regulations

Adapted from Cleland Robertson, Lead Manager, Sustainable Construction & Infrastructure Group,
Sustainable Business Solutions, PwC Chile. Based on World Green Building Council.
GREEN BUILDINGS: PRODUCTIVITY

World Green Building Council, The Business Case for Green Buildings, March 2013
 Profit could
increase by 51-
81%
BottomLine
BusinessCase
Profit could
drop by 16-
36%
Expect the Unexpected: Building business value in a changing world, KPMG, 2012
 RISKS TO REVENUE
% Rev. % Probability
Potential Revenue Erosion at Risk within 5 yrs

Risk from poor reputation on energy and carbon

5% 25%
management

Risk from poor reputation on water management 5% 25%

Risk from poor reputation on materials and waste

5% 20%
management

Risk from poor reputations of suppliers or customers 5% 10%

Risk from poor reputation on eco-system damages 5% 1%

Risk from less competitive prices 10% 10%
Risk from sudden disruptions in the value chain 2% 5%

Revenue at risk 5%
 RISK OF ESCALATING EXPENSES
% % Probability
Potential Escalating Expenses Potential within 5 yrs
Impact
Risk of higher cost of energy 10% 75%
Risk of a price on carbon ($20/T x 300T/$1M Rev.) 100% 25%
Risk of higher cost of waste 5% 70%
Risk of higher cost of water and materials 5% 75%
Risk of higher cost of capital (Debt = 30% of Rev.) 0.60% 75%
Risk of higher employee voluntary turnover 5% 25%
Risk of lower employee productivity 1% 10%

Potential increase in expenses 11% to 31%

Impact on profit from revenue and expense risks -16% to -36%

 GLOBAL RISKS 2014
10-year outlook
31 global risks with the
potential to cause signifcant
negative impact across entire
countries and industries
Five classifcations:
Economic,
Environmental
Societal
Geopolitical
Technological
All are interconnected.

World Economic Forum (WEF), Global Risks 2014, January 2014.

RISK LIKELIHOODS AND IMPACTS

World Economic Forum (WEF), Global Risks 2014, January 2014.

RISK INTERCONNECTIONS

World Economic Forum (WEF), Global Risks 2014, January 2014.

 OECD RISKS BY 2050
1.80% increase in world energy demand, with 85%
from fossil fuels; 50% increase in GHGs (685
ppm)
2.Urban air pollution / ground-level ozone is top
cause of mortality, ahead of dirty water and lack
of sanitation.
3.Global biodiversity declines by a further 10%,
mature forests shrink by 13%.
4.Global water demand increases by some 55%;
competing demands put water use by farmers at
risk; 40% of the global population live in river
basins under severe water stress

OECD, Environmental Outlook to 2050.

 A weakening of the pillars of our
planetary infrastructure
a stable climate, clean air and
water, healthy biodiversity, and
abundant resources is costing
business real money

If this hotter, scarcer, more

transparent, and unpredictable
world is the new normal, then how
must companies act to ensure a
prosperous future for all, including
New companies will be morethemselves?
resilient, robust, and
able to thriveThats the Big Pivot
in fast-changing and its
times
nonnegotiable.
Andrew Winston, The Big Pivot, HBR Press, 2014
7-STEP CHANGE PROCESS

Embed and align

changes
Mobilize
commitment
Build case(s) for
change
Develop Continuously
Learn and
Assess current
strategies Adapt
realities
Inspire shared
vision(s)
Wake up and
decide
 THE
GOOD NEWS
ABOUT THE
NEW SU$TAINABILITY
IMPERATIVE

2014 Kaleidoscope Conference

Algonquin College
May 13, 2014

bobwillard@sympatico.ca