Post on 31-May-2018
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
1/21
Confidential 1
GREEN TO GOLDHOW SMART COMPANIES USE
ENVIRONMENTAL STRATEGY TO INNOVATE,
CREATE VALUE, AND BUILD COMPETITIVEADVANTAGE
Daniel C. Esty Hillhouse Professor of Environmental Law & Policy Yale University
The UNLV/JMBM
Hotel Developers ConferenceLas Vegas, Nevada
March 12, 2008
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
2/21
Confidential 2
Book cover
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
3/21
Confidential 3
GREEN BUSINESS = BIG NEWS
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
4/21
Confidential 4
WHY ENVIRONMENT IS NOW A KEYELEMENT OF BUSINESS STRATEGY
Natural
world
drivers
Green-
oriented
stakeholder
s
Evolving
regulation
+++
Energy
Prices
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
5/21
Confidential 5
ENERGY PRICES
Oil over $100/barrel
New energy efficiency logic
Conservation calculations of thepast must be redone
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
6/21
Confidential 6
EVOLVING REGULATION
Carbon controls EU cap and trade system
Changing U.S. political landscape
Emerging interest in China
Extended producer responsibility Waste regulations
Recycling rules
Packaging restrictions
Toxic exposures
Indoor air pollution
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
7/21Confidential 7
NATURAL WORLD DRIVERS
Air Pollution Waste Management Ozone Layer
Depletion Oceans & Fisheries Deforestation
Climate Change Energy Water Quality & Quantity
Biodiversity&Land Use Chemicals, Toxics, Metals
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
8/21Confidential 8
Regulators
NGOsBanks
MediaShareholders
Insurers
B2B Buyers
Competitors
Suppliers
Acquirers
The Future(Kids)
Communities
Consumers
Rule-makers &
Watchdogs
Consumers &
Community
Investors &
Risk Assessors
CEO Peers
Employees
IndustryAssoc.
Plaintiffs Bar
Company
Players in
traditional
economic and
business
analysis
Politicians
Business
Partners
& Competitors
NEW STAKEHOLDERS
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
9/21
Confidential 9
CHANGE CREATES OPPORTUNITY
Source: Cleantech Venture Network (2006)
CleanTech Venture Capital
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
CleanTech Venture Capital
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
10/21
Confidential 10
MAINSTREAMING OF GREEN BUSINESS
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
11/21
Confidential 11
NEED TO BE STRATEGIC
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
12/21
Confidential 12
ELEMENTS OF ANECO-ADVANTAGE STRATEGY
Issue spotting AUDIO analysis
Stakeholder mapping
Stakeholder engagement evaluation matrix
Eco-Advantage plays
Manage costs & risks
Develop upside opportunities
Environmental management best practices
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
13/21
Confidential 13
ENVIRONMENTAL AUDIO ANALYSIS
Issue Aspects Upstream Downstream Issues Opportunities
Environment
1. Climate Change
2. Energy
3. Water
4. Biodiversity
5. Chemicals/Toxics
6. Air Pollution
7. Waste
8. Ozone Layer
9. Oceans
10. Deforestation
11. Other(Industry-specific)
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
14/21
Confidential 14
Issue Aspects Challenge or Opportunity
WaterGuest use, back-of-house use, and
restaurants & water features
Opportunity for low-flowfixtures; conservation instandard operating practices
Carbon
Green house gas emissions, specificallycarbon dioxide: electricity use, fuel use,transportation emissions
Carbon strategy based oncarbon audit, targets, andongoing reduction program
Energy Lighting, HVAC, kitchen, laundry Systematic energy reduction
program
Waste Food, packaging, oils, carpeting, linens Recycling, composting, and
water extraction
Air Quality
HVAC Filters not maintained, mold growth inHVAC, not enough fresh air brought into thesystem
Diligence in qualitymonitoring and changingfilters, HVAC Upgrade
Greenprocurement
Large volumes of food, beverages, linens,containers, cleaning supplies, office supplies
Systematically shifting tolower environmental impactsupplies
Green building
Increasingly required by state/localauthorities; offers operational savings &better customer experience
Re-conceptualizing with theenvironment at the center
TOP ENVIRONMENTAL ISSUESFOR HOTELS
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
15/21
Confidential 15
STAKEHOLDER ENGAGEMENTEVALUATION MATRIX
CONNECT COLLABORATE
MONITOR DEFEND
HIGHERLOWER
LOWER
HIGHER
PO
TENTIAL
FOR
COOPERATION
ISSUE INTENSITY
Source: Esty and Winston (2006); based on Savage, et al. (1991)
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
16/21
Confidential 16
1. Cut costs
2. Lower eco-risks
3. Drive revenues Green consumers
New market space
4. Promoteintangiblevalue
Brand building
ECO-ADVANTAGE PLAYS
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
17/21
Confidential 17
ENVIRONMENTAL MANAGEMENTBEST PRACTICES
CEO commitment Environmental management systems
metrics
incentives
Be willing to take risks
learn from mistakes
Sustainable procurement
Green design (buildings, production, products)
Reporting and communications
Culture of concern
Regulatory strategy Partnering
Advisory board
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
18/21
Confidential 18
Leadership
Metrics
OperationsCommunications
PropertyPrograms
KEYS TO GOOD ENVIRONMENTAL AFFAIRSMANAGMENT FOR HOTELS
EnvironmentalAffairs
Management
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
19/21
Confidential 19
WHY ENVIRONMENTAL INITIATIVES FAIL
Failing to be strategic
Misunderstanding the market
Expecting a price premium
Middle management squeeze
Silo thinking
Over-promising
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
20/21
Confidential 20
BOTTOM LINE
1. Environmental concerns are here to stay
2. Societys approach to environmental protection isevolving:
- Information Age tools and opportunities
- move towards cost internalization and marketmechanisms
- private sector as the engine of innovation
3. Corporate environmental strategy is critical tocompetitive strength
4. Its not easy being green
8/14/2019 Hosptiality Attorney with Daniel Esty on Green to Gold - How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
21/21
Confidential 21
www.yale.edu/envirocenter
www.yale.edu/cbey
www.EstyEP.com