Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the...
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![Page 1: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/1.jpg)
Sustainability-Related
Risks and Opportunities
for Business
Bob Willardwww.sustainabilityadvantage.com
Business Education For the Long RunApril 23, 2004
![Page 2: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/2.jpg)
Terminology / Stages
Emerging Business Risks
Emerging Business Opportunities
The catch
7 benefit areas
What if’s
Agenda
![Page 3: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/3.jpg)
Economy / Profits
Sustainable business
Profits
Taxes, R&D
Jobs
Expenditures
Training
Fair trade
Core values
Terminology
Environment / Planet
Eco-Efficiency
Manufacturing efficiencies
Operations efficiencies
Product efficiencies
Smart design
Cradle-to-cradle, take-back
Beyond compliance
Restorative to nature
Equity / People
Ethical business
Internal employees
Human rights
Health & Safety
Empowerment
Respect, Caring
Local community
Rest of the world
Sustainable Development (SD) Corporate SocialResponsibility (CSR)
Sustainability
Triple Bottom Line (TBL) 3Es / 3Ps
Corporate Responsibility (CR)
![Page 4: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/4.jpg)
5 Sustainability Stages
5. Purpose / Passion
-------------------------------
4. Integrated Strategy
3. Beyond Compliance
2. Compliance
1. Pre-Compliance
![Page 5: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/5.jpg)
5 Sustainability Drivers
3 First Wave Drivers1. Founder / CEO’s personal passion … values based
2. PR crisis … reputation / brand value / image hit
3. Regulatory pressure ... actual or threatened
2 Emerging Drivers1. “Perfect Storm” of threats to license to operate
2. Compelling, relevant business case
![Page 6: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/6.jpg)
“Perfect Storm” of Business Risks
10 Market Forces 5 Business Risks5 Mega-Issues 5 Demanding
Stakeholders
Climate Change Green Consumers
Market Risks
Balance Sheet Risks
Operating Risks
Capital Cost Risks
Sustainability Risks
+ Difficult access to capital
Pollution & Health
Activist Shareholders
Globalization Backlash
Civil Society / NGOs
Energy
Crunch
Government Regulators
Erosion of Trust Financial Sectors
![Page 7: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/7.jpg)
10 Market Forces
10 Market Forces
5 Mega-Issues 5 Demanding Stakeholders
Climate Change Green Consumers
Pollution & Health
Activist Shareholders
Globalization Backlash
Civil Society / NGOs
Energy
Crunch
Government Regulators
Erosion of Trust Financial Sectors
Sea ChangeOf
RisingExpectations
![Page 8: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/8.jpg)
A Perfect Storm … of Opportunities
Innovation
Productivity
Growth
Brand
Image
CompetitiveAdvantage
$aving$Revenue
Business Value
10 Market Forces
5 Mega-Issues 5 Demanding Stakeholders
Climate Change Green Consumers
Pollution & Health
Activist Shareholders
Globalization Backlash
Civil Society / NGOs
Energy Crunch Government Regulators
Erosion of Trust
Financial Sectors
![Page 9: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/9.jpg)
Potential profit increase: 38%
+ Energized employees
+ Improved corporate image
+ Competitive advantage
+ Positioned for the future
Benefits to “SD Inc.”
![Page 10: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/10.jpg)
1. Show senior leadership Include SD in vision / mission / strategies
Avoid “green-washing” hype
Visibly support SD: speeches, questions, actions
2. Educate the whole company Visibly sponsor and support the sessions
3. Establish an “SD Profit Center” Led by a top person
Reinforces that it is business strategy vs. a compliance or philanthropy issue
The Catch
![Page 11: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/11.jpg)
1. Reduced recruiting costs
2. Reduced attrition costs
3. Increased employee productivity
4. Reduced expenses in manufacturing
5. Reduced expenses at commercial sites(energy, water, consumables)
6. Increased revenue / market share
7. Reduced risk, easier financing
7 Benefit Areas
Usual
focus
![Page 12: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/12.jpg)
1. Reduced recruiting costs -1%
2. Reduced attrition costs -2%
3. Increased employee productivity +10.5%
4. Reduced expenses in manufacturing -5% (-2.5%)
5. Reduced expenses at commercial sites -20%(energy, water, consumables)
6. Increased revenue / market share +5%
7. Reduced risk, easier financing -5%
7 Benefit Areas … % Improvement
… yielding a Profit increase of +38%
![Page 13: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/13.jpg)
7 Benefit Areas … Relative Sizes
Recruiting
Attrition
Productivity
Manufacturing
Commercial Sites
Revenue
Risk, Financing
![Page 14: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/14.jpg)
1. Reduced recruiting costs -1%
2. Reduced attrition costs -2%
3. Increased employee productivity +10.5%
4. Reduced expenses in manufacturing -5% (-2.5%)
5. Reduced expenses at commercial sites -20%(energy, water, consumables)
6. Increased revenue / market share +5%
7. Reduced risk, easier financing -5%
7 Benefit Areas … % Improvement
… yielding a Profit increase of +38%
![Page 15: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/15.jpg)
1. Reduced recruiting costs -1%
2. Reduced attrition costs -2%
3. Increased employee productivity +10.5%
4. Reduced expenses in manufacturing -5% (-2.5%)
5. Reduced expenses at commercial sites -20%(energy, water, consumables)
6. Increased revenue / market share +5%
7. Reduced risk, easier financing -5%
What if …
… yielding a Profit increase of +38%
+2%
+35%
![Page 16: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/16.jpg)
1. Reduced recruiting costs -1%
2. Reduced attrition costs -2%
3. Increased employee productivity +10.5%
4. Reduced expenses in manufacturing -5% (-2.5%)
5. Reduced expenses at commercial sites -20%(energy, water, consumables)
6. Increased revenue / market share +5%
7. Reduced risk, easier financing -5%
What if …
… yielding a Profit increase of +38%
+4%
+23%
![Page 17: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/17.jpg)
1. Reduced recruiting costs -1%
2. Reduced attrition costs -2%
3. Increased employee productivity +10.5%
4. Reduced expenses in manufacturing -5% (-2.5%)
5. Reduced expenses at commercial sites -20%(energy, water, consumables)
6. Increased revenue / market share +5%
7. Reduced risk, easier financing -5%
What if …
… yielding a Profit increase of +38%
+2%
+4%
+20%
![Page 18: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/18.jpg)
Sustainability-Related
Risks and Opportunities
for Business
Bob Willardwww.sustainabilityadvantage.com
Business Education For the Long RunApril 23, 2004
![Page 19: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/19.jpg)
5 Inhibiters to Next Wave
1. Lack of support from senior leaders Too busy … doing enough … too shy … not our
problem … too hard to change … credibility issue
2. Fear of backlash Green-washing accusations … open the floodgates
… guilt-by-association … skeletons in our closet
3. Lack of pressure from important people Boards … investors … customers
4. Weak business case WIIFM … short-term … perverse subsidies …
payback period
5. Mindset Negative baggage … insulting … MBA legitimacy
![Page 20: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/20.jpg)
5 Signs of Hope
1. Awakening financial markets
2. Sustainability reporting advances
3. B-school attention Beyond Grey Pinstripes … Net Impact
4. Shareholder activism
5. More compelling business case
+ sustainability indicators in GDP
![Page 21: Sustainability-Related Risks and Opportunities for Business Bob Willard Business Education For the Long Run April 23, 2004.](https://reader030.fdocuments.in/reader030/viewer/2022032611/56649e795503460f94b788d8/html5/thumbnails/21.jpg)
Mental Models
SUSTAINABLEENVIRONMENT
Sustainable Society
Sustainable Economy
Environment
ECONOMY
Society
Typical business view Sustainable view