Sustainability Makes Dollars & Sense: The Business Case ... · /1 Sustainability Makes Dollars &...

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/1 Sustainability Makes Dollars & Sense: The Business Case for Sustainability Mark Pezarro Earthvoice Strategies Sustainability Dialogue Series City University in Canada (Vancouver) 21 November 2018

Transcript of Sustainability Makes Dollars & Sense: The Business Case ... · /1 Sustainability Makes Dollars &...

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    Sustainability Makes Dollars & Sense:The Business Case for Sustainability

    Mark PezarroEarthvoice Strategies

    Sustainability Dialogue SeriesCity University in Canada (Vancouver)21 November 2018

    https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=https://developer.ibm.com/bpm/blog/2014/10/5-stages-organizational-alignment-bpm-scott-simmons/&ei=lGglVajpLYSqogTD24CwBQ&bvm=bv.90237346,d.cGU&psig=AFQjCNG4IPp1oWCu_qmF3ORJ8D44VfgpPQ&ust=1428601199253619

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    Sustainability

    ● Ability to operate and perform well over the long term through a business model that

    enhances financial prosperity, reduces

    environmental impact and increases

    contribution to the surrounding community

    ● Core strategy for the world’s most forward-thinking companies. By working holistically

    through rapid challenge and change, these

    leaders are redefining business—and reaping

    the benefits

    ● Earthvoice Strategies works with companies that are ready to make this change

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    Why Sustainability Matters –

    Dawn of the Anthropocene Era

    • The earth has been evolving for

    billions of years, yet over the

    past 50 years humans have

    changed ecosystems more

    rapidly than during any

    comparable period of time in

    human history.

    • Human activity driving species

    change around the world

    – Sarah Otto, UBC researcher

    • Rates of species loss 1,000

    times higher than pre-

    Anthropocene

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    ● Driven by:

    ❑ Climate change

    ❑ Carbon regulation

    ❑ Peak resources

    ❑ Global population growth

    ❑ Changing expectations

    A World of Change

    Change in Arctic sea ice at

    summer’s end over 30

    years, 1972-2012

    - NASA

    Wholesale shift in how:

    ❑ Products are created

    ❑ Markets are developed

    ❑ Value is created

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    ● Humanity has wiped out 60% of mammals, birds, fish and reptiles since 1970

    ● Equivalent to emptying North America, South America, Africa, Europe & Oceania

    ● Many scientists believe it’s the onset of the 6th mass extinction & the first caused by a species – us, Homo Sapiens

    ● If destruction halted today, would take 5-7 million years for the natural world to recover

    ● Destruction of nature as dangerous as climate change

    A World of Change – Biodiversity

    WWF

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    • The number of conscious consumers is growing

    Growth of Conscious Consumerism

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    Ecological Footprint

    ● Impact of a person or

    community on the environment,

    expressed as the amount of

    land required to sustain their

    use of natural resources and

    dispose of their waste

    ● Today humanity uses the

    equivalent of 1.7 planets to

    provide the resources we use

    and to absorb our waste

    ● If everyone on the planet used

    the earth’s resources at the

    same rate as North Americans,

    we would need 5 planets!- Professor William Rees & Dr. Mathis Wackernagel, UBC

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    The Sustainability Payoff

    ● Enhanced employee recruiting, productivity and

    retention

    ● Lower costs & higher efficiency

    ● Reduced risk

    ● New revenue opportunities & competitive

    advantage for early adopters

    ● Inspires innovation – breaks down silos

    ● License to operate

    Embedding sustainability in your operations can

    deliver a 30-40% improvement to the bottom line

    The Sustainability Advantage:6 Key Benefits

    https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=https://developer.ibm.com/bpm/blog/2014/10/5-stages-organizational-alignment-bpm-scott-simmons/&ei=lGglVajpLYSqogTD24CwBQ&bvm=bv.90237346,d.cGU&psig=AFQjCNG4IPp1oWCu_qmF3ORJ8D44VfgpPQ&ust=1428601199253619

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    Easier RECRUITING & Higher RETENTION

    • 51% of Canadian CEOs cite “inability to retain

    talent” as biggest threat to corporate profitability

    (Accenture study, 2006)

    • top 2 things sought by recent Canadian

    undergraduates (Universum study, 2006):

    – progressive work environment

    – employer with high ethical standards and commitment

    to social responsibility

    • 78 % of employees would leave their current jobs

    for more environmentally friendly employers

    (online poll by Monster.ca, 2007)

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    Increased PRODUCTIVITY

    • Improved working conditions from green buildings

    increase productivity from 7 - 15% (Joseph Romm,

    Cool Companies) and reduce sick leave and

    absenteeism.

    • Individual and team productivity increased by

    employee identification with sustainable

    development vision (Alcan, Cisco, Kodak)

    • Roland Nilsson, CEO, Scandic Hotels, speaking of

    employee participation in their environmental

    dialogue program:

    – “It is the first cooperative activity where they were really

    unified irrespective of where they worked in the

    company. I mean it was fantastic. Everyone loves

    taking care of the world.”

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    Reduced MANUFACTURING Costs

    • Waste = Squandered Corporate Assets

    • Americans consume 1million pounds of raw

    materials per year per person; 98-99% => waste

    • Substitute less expensive, more environmentally

    friendly materials - e.g. fly ash concrete

    • Reduce material, energy & water inputs

    • Reduce, reuse & recycle scrap material & waste

    energy

    • Reuse & recycle components & materials from

    returned products designed for disassembly &

    recovery (circular economy) - e.g. Interface Carpet

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    Lower Site OPERATIONS Costs

    • Improved waste handling

    • Energy efficiencies - e.g. IKEA NA

    • Water conservation

    • Lower landscaping costs - plant indigenous flora;

    replace lawns by meadows

    • Reduced office space & less business travel - e.g

    telecommuting

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    Increased REVENUE & MARKET SHARE

    • New product opportunities

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    LICENSE to Operate

    • Literally invaluable

    • Northern Gateway

    failed to obtain it!

    • Trans-Mountain’s

    challenges not over

    • Harvest Power

    closing in 2019

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    10%Building Operations & Some Transportation(Carbon “Toe-print”)

    15%Product TransportUsually 3rd-party

    75%Product

    All 3rd-party

    Carbon Footprint – Typical Retailer

    Raw Materials

    Product Manufacture

    TransportProduct

    Retail

    Source:

    ‒ Tyler Elm,VP, Business Sustainability,

    Canadian Tire

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    10% $10 MMBuilding Operations & Some Transportation(Carbon “Toe-print”)

    15% - $15MMProduct TransportUsually 3rd-party

    75% - $75 MMProduct

    All 3rd-party

    Carbon Risk – Typical Retailer

    Raw Materials

    Product Manufacture

    TransportProduct

    Retail

    Illustrative Example

    •Retailer with $10B in Sales

    •Carbon priced at $30/tonne

    •Carbon price risk: $100MM

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    Minimizing Carbon Price Risk

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    Pre-

    Compliance

    1

    ComplianceRegulatory

    enforcement

    2

    Beyond

    Compliance

    Eco-efficiencies

    PR crisis

    Regulatory

    threat

    3

    Integrated

    Strategy

    Enhanced

    business

    value

    4

    Purpose/

    Passion

    Values-driven

    Founder/CEO

    5

    Where is your organization today?

    Where does your firm

    aim to be in … • In 1 year

    • In 5 years

    • In 10 years

    5 Stages of the Sustainability Journey

    - Bob Willard

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    • Stage 4 & 5 sustainability

    demands vertical thinking:

    thinking outside the box

    • Example: partnership between

    Google and Ellen MacArthur

    Foundation (EMF)

    – 2 global leaders

    – EMF championing transition

    to circular economy

    – Google a global CE100

    partner savings hundreds of

    millions annually

    • Possibilities for your firm are

    ….

    Sustainability: Thinking Outside the Box

    https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=https://developer.ibm.com/bpm/blog/2014/10/5-stages-organizational-alignment-bpm-scott-simmons/&ei=lGglVajpLYSqogTD24CwBQ&bvm=bv.90237346,d.cGU&psig=AFQjCNG4IPp1oWCu_qmF3ORJ8D44VfgpPQ&ust=1428601199253619

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    Surrey’s Rethink Waste Collection

    • 3 cart system

    • Diesel trucks replaced by CNG trucks– Replacing one diesel truck equivalent to

    removing 475 cars

    – 23% reduction in GHG emissions, 90% reduction in particulates

    – 25% reduction in cost of waste collection services ($2.8M annually)

    • Biofuel facility being built at Port KellsIndustrial Park– Feedstock will be organic waste

    – Biomethane will be piped into Fortis BC’s grid to deliver green gas

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    Circular Economy• Ellen McArthur Foundation mission:

    – accelerate transition to a circular

    economy

    • Circular economy:

    – Framework for an economy that is

    restorative and regenerative by design

    • Based on 3 principles:

    – Design out waste & pollution

    – Keep products & materials in use

    – Regenerate natural systems

    • Circular Economy 100

    – a pre-competitive innovation program

    enabling organizations to develop new

    opportunities and accelerate their

    circular economy initiatives

    – Source:

    • The Ellen Macarthur Foundation

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    Circular Economy

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    Some Sustainability Leaders

    • CE100 global partner

    • 70% of materials are recyclates

    • 30 million shoes taken back for reuse

    • CE100 global partner

    • Circular economy & total cost of ownership approach

    saving hundreds of millions of dollars annually on data

    center hardware costs

    • Over $1B annually saved through energy efficiency

    • Zero waste - 100% landfill diversion

    • 100% renewable energy

    • Supply chain greening

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    • Wal-Mart Sustainability Product

    Index

    • Announced July 16, 2009

    • Single source of data for

    evaluating sustainability of

    products

    • Launches Love Earth jewellery

    made from metals sustainably

    mined by Kennecott Utah Copper

    • Catalyst Paper develops Sage

    product line

    The Walmart Effect:

    Driving Sustainability Down the Supply Chain

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    • 27 September 2010

    • Proctor & Gamble announces long term

    sustainability vision:

    – 100% renewable energy in plants

    – 100% renewable materials or

    recyclates

    – Zero waste

    – Public targets for 2020

    • Wal-Mart is 40% of P&G’s total sales

    The Walmart EffectThe Walmart Effect:

    Driving Sustainability Down the Supply Chain

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    BC Sustainability Leaders

    • Social Banking

    • Living Wage

    • Local & Social Enterprise

    • Green Materials (PVC-free, natural/organic/recycled/humane

    animal fibres, Bluesign approved)

    • Sourcing from Fair Trade Certified Factories

    • 1% for the Planet

    • Green building leader

    • Eliminated disposable bags

    • Vendor Assessment Process & Code of Ethics

    • Researching Raw Material Sources & Reducing

    Environmental Impacts

    • Human Rights & Working Conditions

    • Humane Animal Treatment Program

    • Local Purchasing

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    • Sustainability is a journey, not a

    destination

    – David Buzzelli, Former CEO, Dow

    Chemical

    • We can help no matter where you

    are in your sustainability journey

    The Sustainability Journey

    Making the commitment

    Refreshing your

    commitment

    Embedding the

    commitment

    Measuring success

    https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=https://developer.ibm.com/bpm/blog/2014/10/5-stages-organizational-alignment-bpm-scott-simmons/&ei=lGglVajpLYSqogTD24CwBQ&bvm=bv.90237346,d.cGU&psig=AFQjCNG4IPp1oWCu_qmF3ORJ8D44VfgpPQ&ust=1428601199253619

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    Let’s talk!

    Mark Pezarro

    (m) 604-785-6884

    (e) [email protected]

    Questions / Discussion