FMA International: R Boller

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Jackson Family Wines How to Make Sustainability Management Integral to Your Organization Presented February 3, 2010 by Robert Boller

Transcript of FMA International: R Boller

Jackson Family Wines

How to Make Sustainability Management Integral to Your

Organization

Presented February 3, 2010 by Robert Boller

What is Sustainability?

Planning and activity that takes into account the long-term maintenance and well-being of environmental, social and economic demands.

Sustainability

Workplace

Community

Economic

• Energy & Water• Recycling & Waste• Land Use

• Health & Safety• Welfare• Diversity

• Integration with society

• Philanthropy

• Customer satisfaction• Competitive &

profitable• Cost Savings

Corporate Social Responsibility (CSR)

What is Sustainability?

Environment

CSR Management:

Work in tune with corporate goals

Justify the CSR program

Bring invaluable improvements / insight to your operation

Maintain momentum with job cuts and budget tightening

Strategy / Objectives

CSR Management: Tactics

3. Build momentum and maintain relevance: Resource maximization

2. Provide value to multiple stake holders: Extend reach - embedded throughout organization

1. Establish the sustainability mission:Leadership to gain the competitive edge

4. Persistent Communication: Be the information resource to each unique audience

Establish the Sustainability Mission: Leadership

Demonstrate leadership to gain marketable benefit now

Help transform how the organization thinks about itself and it’s objectives

Build the case through focusing on data and case studies

Don’t reinvent the wheel, use information from leading companies and markets (domestic and international)

Access to 23,000 CSR reports: http://www.corporateregister.com

Dive deep for trends, competitive claims, independent research and third-party certifications

Source: Corporate Register, Corporate Climate Communications Report 2008

1992

1994

1996

1998

2000

2002

2004

2006

2008

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

EnvironmentSocial / CommPhilanthropyEnv / H&S / CommEnv / H&SEnv / SafetySustainability

Reporting Types: H&S -> Environ -> Sustainability

Reporting Trends

Source: KPMG International Survey of Corporate Responsibility Reporting 2008

Companies have CSR reporting (52% in 2005)80%

U.S. Companies have CSR reporting (37% in 2005)74%

Management systems based on third-party standards & metrics77%

Study of 2,200 Leading Global Companies including Fortune G250 and N100 across 22 countries

Implemented ISO 1400151%

The question has shifted from “Who’s Reporting” to “Who’s Not Reporting?”

Dow Jones Sustainability Indexes: BMW

Program Framework

Specific Initiatives

Dow Jones Sustainability Indexes: BMW

CSR Management: Tactics

2. Provide value to multiple stake holders Extend reach - embedded throughout organization

Cost Savings

Government Relations

Market Share Improvement

Shareholder Value

Supplier Relationships

Risk Management

Employee Productivity

Innovation & Learning

Reputation or Brand

Economic Considerations

Ethical Considerations

0% 10% 20% 30% 40% 50% 60% 70%

17%

21%

22%

29%

32%

35%

52%

55%

55%

68%

69%

CSR Business Drivers

Source: KPMG International Survey of Corporate Responsibility Reporting 2008

CSR Business Drivers

Corp. Gov.

Marketing / PR Sales

FinanceOperations

Sr. Exec. Team

The most effective projects provide value to multiple stake holders

Communicate the personal benefit to each audience

Embedded throughout organization

Corp. Governance

Marketing / PR Sales

Finance

Operations

Sr. Exec. Team

Source: Natural Marketing Institute 2007

Consumer Purchasing Drivers

• Have rewarded companies with sustainable practices through purchase

46%

• Have punished companies with non-sustainable practices through non-purchase

55%

Producer not Product

Top Three Drivers

Pre-Recession Now Post-Recession0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

35%47%

33%

42%32%

37%

23% 21%30%

GreenQualityPrice

Source: JWT & Penn, Schoen, Berland & Associates 2009: Top 3 Drivers

Consumer Purchasing Drivers

Source: Cone Communications, Natural Marketing Institute, WSJ 2007(MonsterTrak ), Stanford Univ. 2003, Deloitte 2008

Employee Recruitment

• Of all workers would prefer to work for a sustainable company

77%

• Of recent graduates would prefer to have a job with a direct positive impact

80%

• Of recent graduates would prefer to work for sustainable company92%

• Average salary MBA graduates would sacrifice to work at socially responsible firm

$13,700

• Of companies have implemented CSR programs to increase ability to attract talent

93%

Source: Deloitte 2008 , Society for Human Resource Management 2009, Kenexa Research Institute 2007

Employee Productivity & Retention

• Of companies found increased morale due to implementing a CSR program

46%

• Of companies improved employee health due to implementing a CSR program

75%

• Of companies found improvement in workforce productivity due to CSR

87%

• Of all employees have higher willingness to stay at a company with strong CSR culture

60%

• Of companies have implemented CSR programs for greater employee retention

81%

• Increase in employee productivity due to implementing a CSR program

2%

CSR Direct Benefits

Energy Use (reduction)30%

Water Use (reduction)40%

Solid Waste (reduction)60%

Worker Productivity (increase)2%

Employee Turnover (reduction)25%

Compliance Violations (reduction)70%

Standard Results Forecast

$4M

$1.5M

$500K

$3M

$1.5M

$500K

Total $11M

CSR Direct Costs

Employee Costs

Facility/BUs Local Projects Support

CRS Mgmt Systems / Consulting

Certifications (LEED/ISO 14001)

Renewable Energy Certificates

$500K

$500K

$250K

$100K

$150K

Total $1.5M

Standard Results Forecast

CSR Cost / Benefit

Direct Benefits

Direct Costs

Total

YR1

YR2

YR3

$1.5M $1.25M $1M

$5.5M $11M $12M

$4M $9.75M $11M

100%

100%

Direct Benefits

Direct Costs

-33%

+33%

Total $1.63M $5.6M $6.6M

$2M $1.66M $1.33M

$3.63M $7.26M $7.92M

CSR Cost / Benefit

Direct Benefits

Direct Costs

Total

YR1

YR2

YR3

$1.5M $1.25M $1M

$5.5M $11M $12M

$4M $9.75M $11M

Indirect Benefits?

PR Value (existing program) $1.5M

Brand Equity/Loyalty/Trial $10M Gross Revenue

50%

2%

CSR Management: Tactics

3. Build momentum and maintain relevance: Resource maximization

CSR Recession Trends

Source: GlobeScan October 2009, organizations with existing CSR programs

CSR Budget

Communications

Demonstrate ROI

0% 20% 40% 60% 80% 100%

50%

66%

73%

47%

30%

19%

3%

1%

8%

IncreaseStay SameDecrease

Managing Through Job Cuts and Budget Tightening

CSR Recession TrendsManaging Through Job Cuts and Budget Tightening

Focus on projects with strong ROI

Utilize resources outside the budget

Internal resources:• Find “partners” in other departments who can offer time• Use the opportunity to strengthen the CSR teamExternal resources:• Government support and funding• Utilize consultants to reduce headcount• Programs with trading partners who have funding• Build alliances with the competition to pressure suppliers

CSR Recession TrendsManaging Through Job Cuts and Budget Tightening

Work on projects that take time, but not money

• Enhance skill base with training and personal certifications• Develop the structure for 3rd-party certification (ISO

14001/LEED)• Develop CSR Report outline and other communications

pieces• Demand response program for energy curtailment with no

cost and good payments

CSR Management: Tactics

4. Persistent Communication: Be the information resource to each unique audience

Persistent Communication

Once the program catches on, if your not talking about it -others will do it for you

Broadcast the successes, project status updates and sustainability mission to all employees over and over

Focus on opportunities with stakeholders

Corp. Governance

Marketing / PR Sales

Finance

Operations

Sr. Exec. Team

Don’t be the “green” guy or gal:• Focus on added value• “Greening the planet and our bottom line”

Questions & Answers