Triple Bottom Line slides from Jan 2010
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Transcript of Triple Bottom Line slides from Jan 2010
SEATTLE
SUSTAINABLE
a catalyst and resource - locally and globally
Triple Bottom Line ReportingPort of Everett - January 2010
Roadmap for the Day
Introduction
What, who, where and why?
History
The Path to CR and an exercise
Frameworks
TBL report exercise
Tips and takeaways
Lunch
Best Practices
TBL revisited based on AI
What is working at the Port?
Mapping and metrics
What could be going on- Dream
What should be going on? - Feasible
What are the next steps?
Recap, lessons learned, final words
Introduction:
Commissioner Michael Hoffman
IntroductionsName Tents Please!
Laura Musikanski, JD,MBA, CEM, CELR
Executive Director of Sustainable Seattle
What, who, where and why?
What is TBL accounting?
Who is issuing TBL reports?
Where do they show up?
Why are entities accounting for the TBL?
What is TBL reporting? Triple Bottom Line reporting is accounting for environmental, social and economic performance.
Internal External
Triple Bottom Line Reporting is Voluntary
Financial Reporting is required by law
Environmental reporting - Required under some environmental regulations
Defining Triple Bottom Line Reporting
Defining Triple Bottom Line Reporting
Most commonly accepted definition of sustainability:
“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
United Nation’s Brundtland Commission
SecuritySecurity
OceansOceans
Urban Urban GrowthGrowth
IndustryIndustry EnergyEnergy
Species & Species & EcosystemsEcosystems
Population & Population & Human Human
ResourcesResources
Food Food ScarcityScarcity
EconomyEconomy
Sustainable Sustainable DevelopmentDevelopment
Areas of focus in Our Common Future, 1987
Defining Triple Bottom Line Reporting
Sustainability is practiced by managing environmental, social and economic impacts.
SocialSocial
EconomicEconomic
EnvironmentalEnvironmental
SYNERGY
Community
Natural and Built Environment
Individuals
Establishing a common language
Equity
Economy
Ecology
PeoplePeople
ProfitProfit
PlanetPlanetSYNERGY
Establishing a common language
Three Legged Stool
EconomyEconomy
Jobs, Jobs, Prosperity, Prosperity, Wealth Wealth creationcreation
EnvironmentEnvironment
Natural Natural Resources Resources BiodiversityBiodiversity
SocietySociety
Social Social EquityEquity
Sense of Sense of communitycommunity
Healthy Healthy EcosystemsEcosystems
Thriving Thriving Local Local Economy Economy
SUSTAINABLE SUSTAINABLE
DEVELOPMENDEVELOPMENTT
Establishing a common language - Graphics
Establishing a common language- graphics
EnvironmentEnvironment
EconomyEconomy
SocietySociety
SocialSocial
Economic Economic
EnvironmentalEnvironmental
And the issue of establishing a common language….
How do we do this?
An EcosystemAn Ecosystem
Triple Bottom Line Reporting
Accountability
You can’t manage what you don’t measure
You don’t care about what you don’t measure
Terms
Triple Bottom LineTriple Bottom Line
Corporate Responsibility
CitizenshipReportsCorporate
SocialResponsibility
EMS
AccountabilityEnvironmental,
Social and Economic
Stewardship CommunityReports
Terms Accountability
Stewardship
Agenda 21
Stakeholders Community
Engagement
Green jobs Conservation,
Restoration and Adaptation
The Natural Step Cradle to Cradle Life Cycle Analysis Full Cost Accounting Industrial Ecology Natural Capitalism Community
Capitalism
Bottom of the PyramidBottom of the Pyramid Clean ProductionClean Production
Design for EnvironmentDesign for Environment BiomimicryBiomimicry Green DesignGreen Design
Eco-efficiencyEco-efficiency Zero WasteZero Waste Smart growthSmart growth
Ecological Foot PrintEcological Foot Print
Carbon FootprintCarbon Footprint Renewable resourcesRenewable resources Sustainable TechnologySustainable Technology Take Back Take Back Closed loopClosed loop Systems ThinkingSystems Thinking Restorative BusinessRestorative Business
Triple Bottom Line Reporting
Who is issuing TBL reports?
Where do they show up?
Why are entities accounting for the TBL?
Who is issuing TBL reports? KPMG
International Survey of Corporate Responsibility Reporting 2005
- 52% of Global Fortune 500
- Economics is the primary driver
International Survey of Corporate Responsibility Reporting 2008
- 80% of Global Fortune 250
- 74 of 100 top revenue producing companies in 22 countries
- Ethics & Economics are the drivers
Corporate Register: 24031 reports from 5931 entities
2006: 2378 reports recorded
2007: 2714 reports recorded
2008: 3270 reports recorded
Global Reporting Initiative 1,101 reports recorded for 2009
KLD Research & Analytics Independent investment research firm75% of S&P 100 companies have section of web sites
dedicated to social and environmental performance in 2006- 34% increase from 2005
- 46 issued CSR reports (one document)
Siran - Sustainable Investment Research Analyst Network Analyst network - 150 North American social investment
research analysts - 30 investment firms, research providers, and affiliated investor groups.
A little under 50% of S&P 100 companies in 2006One Third use GRI
Who is issuing TBL reports?
A few ports issuing TBL reports:
Portland, OR
Oakland, CA
Los Angeles
Pittsburgh
Houston
San Francisco
Massachusetts
Associated British Ports Holdings
Most Airports in EU, Many in Canada
Most ports in Australia (Queensland includes TBL in annual financial report)
Growth in reporting:
27 to 2,500 from 1992 - 2007
Subject areas: Subject areas:
Environmental: from 78% to Environmental: from 78% to 15%15%
Sustainability and CSR - 70% Sustainability and CSR - 70% in ‘07in ‘07
Source: CRRA CRReportingAwards07, Global Winners & Reporting trends March 2008
Triple Bottom Line Reporting
How is performance reported?Document: Hard copy, PDF
-Stand alone single document
- Integrated into financial annual report
-Stand alone multiple documents
On-line
Pamphlets
Internally – management structure
Within (Financial) Annual Report
Other Communications (media, ads, etc)
Why Issue a TBL report?
SocialSocial
EconomicEconomic
EnvironmentalEnvironmental
Reduce Costs & Increase RevenuesReduce Costs & Increase RevenuesEmerging markets Emerging markets
Manage risksManage risks
Resource LimitationsResource LimitationsRegulations & Laws Regulations & Laws
Attract & retain quality talent Attract & retain quality talent License to operateLicense to operate
ReputationReputation
HIGHEST POTENTIAL
EthicsEthicsQuality of Quality of
LifeLife
Long term valueLong term valueAlignment with OrganizationAlignment with Organization
First to MarketFirst to MarketGoodwillGoodwillBrandingBranding
Departmental and Agency DirectivesDepartmental and Agency Directives
Stakeholder ExpectationsStakeholder Expectations
Shareholder ResolutionsShareholder ResolutionsRegulations and RequirementsRegulations and Requirements
Laws, Regulations & Lawsuits Greenhouse gas emission Laws and Regulations
• Federal Level: HR 2454
• Regulating Authority : EPA under Clean Air Act
• State Level: HB 2815
• Regulating Authority: Department of Ecology – Proposed Ch. 173-441WAC- Reporting of Emissions of Greenhouse Gases
• Quasi-governmental body: Climate Registry
Lawsuits
• Petition for Writ of Mandate at 2, People v. County of San Bernardino, No. 07 Civ. 329 (Cal. Super. Ct., County of San Bernardino Apr. 13, 2007) – CA counties must consider GHG emissions in comprehensive plans
And other lawsuits speaking to other TBL performance areas and the local global connect…Kasky, Doe, Wiwa
Directives
Executive Order 13423: Strengthening Federal Environmental, Energy, and Transportation Management
Conduct environmental, transportation, and energy-related activities environmentally and economically sound, integrated, continuously improving, efficient, and sustainable manner.
3% GHG emissions reduction 2015, Baseline 2003.
Environmentally preferable products
Waste prevention & recycling programs
High Performance and Sustainable Buildings
Fleets: reduce, hybrids
EPEAT
Risks and Liabilities
Executive Order 13423 continued:
EMS Systems
Collection, analysis, and reporting of performance
Environmental management training
Review and audit
Leadership awards
Extends to contractors for contractor operation of government-owned facilities or vehicles
Use of Renewable energies: solar, wind , biomas. solar, wind , biomas. Landfill gas, Ocean (including tidal, wave, current and Landfill gas, Ocean (including tidal, wave, current and thermal), Geothermal, Municipal solid waste, Certain thermal), Geothermal, Municipal solid waste, Certain hydroelectric generationhydroelectric generation
WWF Discussion Paper, CSR an overviewCall for legally binding global rules
Integrate sustainable development into core business strategy-Reactive to Passive to Proactive
-Risk Assessment and Branding to Change of Business Model
-Good to Services
-Win-win to strategic investments
-Marketing to Responsible Marketing
Long-term value
Brundtland Commission Report Survival of the human and
other speciesEnvironmental degradation
- Global warming
- Ozone layer
- Desertification
Poverty & InequalityPopulation growthDevelopment:
- Improving our lot in the environment in which we live
- Industrialization
New Norms of Behavior: campaigns, education and public participation
Quality of Life
1983
Triple Bottom Line Reporting
History
The Past to Corporate Responsibility
Simon Zadek
Sustainability Integration CurveP
erce
nt o
rgan
izat
ions
Sustainability Integration
Short Exercise:
6 performance areas (rows)circle one box in each row that you see as most true for the Port of Everett
TBL Frameworks:Global Reporting Initiative – top down
B-Sustainable.org- bottom up
Others
Triple Bottom Line Reporting
Global Reporting Initiative
EnvironmentEnvironment
Labor PracticesLabor Practices& Human Rights& Human Rights
CommunicationCommunicationPublic RelationsPublic Relations
SocialSocial
Service/GoodService/Good
ResponsibilityResponsibility
Economic & Economic & FinancialFinancial
Basic Basic SustainabilitySustainability
FrameworkFramework
Global Reporting Initiative
Triple Bottom Line Subject Areas
SocialSocial
EconomicEconomic
EnvironmentalEnvironmental
Financial PerformanceFinancial PerformanceProduct ResponsibilityProduct ResponsibilityConsumer IssuesConsumer IssuesCommunity Development Community Development CommunicationCommunication
MaterialsMaterialsWaste and RecycleWaste and RecycleBiodiversityBiodiversity
GovernanceGovernanceFair Operating ProceduresFair Operating ProceduresLabor PracticesLabor PracticesHuman RelationsHuman Relations
Integration
EnergyEnergyEmissionsEmissionsWaterWater
GRI
GRI
GRI
GRI
GRI
GRI
GRI
Sector Supplements
Public Agency
Air Ports
Transportation
Financial Services
Logistics and Transportation
Mining and Metals
Tour Operators
Telecommunications
Automotive
Apparel Apparel Food ProcessorsFood Processors NGOsNGOs Construction and Construction and
Real EstateReal Estate
Electric UtilitiesElectric Utilities EventsEvents Oil & GasOil & Gas
-Growing list-Growing list
Principles
GRI Principles
ContentMateriality
Stakeholder Inclusiveness
Sustainability Context
Completeness
QualityBalanceComparabilityAccuracyTimelinessClarityReliability
Triple Bottom Line Reporting
B-Sustainable:
A bottom-up approach through stakeholder
engagement
B-Sustainable.org – a web-based tool of sustainability areas, goals, indicators, data and actions.
Developed through participatory action research or grass-roots activism = community relevance.
Open Source code-base.
4 Environments: Natural Built/economicSocial Personal
23 goals: 4 in Natural environment7 in Built Environment6 in Social Environment6 in Personal Environment
189 Indicators: Upstream (causative or leading)StatusDownstream (effect or lagging)
PERSONAL ENVIRONMENT
SOCIAL ENVIRONMENT
BUILT ENVIRONMENT
NATURALENVIRONMENT
Method for identifying goals and indicators:
1.Steering Committee to ensure diverse interests and cultures represented2.Stakeholder meetings to identify goals & indicators
1. Focus Groups2. Key stakeholder meetings3. Public meetings
3.Technical Review committee to ensure robust and appropriate selection4.Data partners to report on indicators5.Iterative process to measure progress and ensure stakeholder relevance.
Other Frameworks for Triple Bottom Line Reports
SRI Indices – DJSI, FTSE 4 Good
ISO 26000 (2010 issue)
Principles for Global Corporate Responsibility:Bench Marks for Measuring Business Performance
Agenda 21 – ICLEI
Seven Generations – Traditional ways
Strategic frameworks: The Natural Step (TNS)
Natural Capitalism
Environmental Management Systems (EMS)
- ISO 14001, Cradle to Cradle & LCA
Bottom of Pyramid
TBL Exercise:
Groups of 3Review ReportsDiscuss in group – 3
pointsClass discussion
Tips for a writing a TBL report
Identify Scope: GRI
Time & Baseline
Data availability
Importance- stakeholders, drivers
Determine Indicators: GRI, competitors, cross-industry
Integrated triple bottom line
Interconnected :
- Internal & Across Time (Long Term) &
- Out in Environment, Society & Economy
Tips for writing a TBL report
Gather Data Internal and External
Set path for future accountability & management controls
Tell the story Quantitative and Qualitative
Visuals
Material & Reliable: Use communication channels tailored to your intended audience
Criteria
Tips for an effective TBL report
Address stakeholder interest, provide feedback loop and respond to stakeholder feedback
Look backwards- Identify challenges and root causes
Look forwards- State goal and means to measure performance, demonstrate programs for continual improvement & understanding of sustainability as a journey
Use Indicators that are relevant, comparable, and accessible to the entity, in the industry and cross industries
Include an Indicators Index, use third-party assurance & solicit and publicly respond to recommendations
Use and ;ink to online updates, supplements and references
Take-awaysPrioritize
Stakeholder interest: What is important to them?
Control and Influence: What can you really do?
Leverage Points: What are you already doing?
Quantify
Numbers – comparable and understandable
Standardize
GRI & industry practices
Verify
Message
Tell story in language & medium for audience
LunchWhen we come back:
Best Practices
TBL revisited based on AI What is working at the Port?
Mapping and metrics
What could be going on- Dream
What should be going on? - Feasible
What are the next steps?
Recap, lessons learned, final words
Best Practices: Green TeamsGreen teams are composed
of anyone in the entity who gather on a periodic basis to identify and undertake initiatives
• Green teams usually start on a voluntary basis- once a week lunches.
• Green teams usually develop into task forces or coalitions.
• They often have success with low hanging fruit and then are allocated resources – time & budget.
• Often a position emerges to take on ownership of initiatives.
• Sustainability Initiative coordinator,
• Environmental Stewardship manager
• Director of Sustainability
• Value: identify champions, initiate TBL at grass roots,employee satisfaction, public recognition
Best Practices: Establishing a Common Language
Establish a definition Adapting accepted terminology to entity
Often rooted in Brundtland Commission definition for sustainability
Establish principles Often these are an extension of existing entity principles
and reflect others within the industry
Determine indicators for measuring & managing environmental, social & economic performance areas Often starting by communicating externally what is already
being measured internally and expanding from there.
Common methods: Surveys
Sustainability training and information sessions
Consutant and/or position to keep momentum
Best Practices: Visionary Leadership
Katsuaki Watanabe, CEO of Toyota
"For us to become the genuine number one - in quality - we have to realize the dream vehicle, which makes the air cleaner, never injures people, makes people healthier and can run on a single tank of fuel between London and Istanbul."
Best Practices: Integration of Systems of Accountability
Best Practices: Top Management Compensation tied to TBL performance
Exelon CEO’s compensation tied to his ability to leverage the energy company’s position on GHG emission
Attracts investors
Best Practices: Stakeholder engagement and non-profit partnerships
Perdue formed partnerships with small nonprofit to undertake pro-active projects to address regulations and regulator concerns.
Projects were funded by agencies and Perdue.
Tips Key stakeholder identification
Build and keep trust open and transparent process and shared decision making
Keeping momentum going: one person allocated the responsibility
TBL revisited based on AI What is working at the Port?
Mapping and metrics
What could be going on- Dream
What should be going on? - Feasible
What are the next steps?
Appreciative Inquiry Developed by David Copperfield
A means to engage stakeholders, often employees
Builds on the positive
Discover
What is working at the Port?
Discover
Map it and Identify Metrics
Dream
What could be? What should be? – no limits
Design
What can be?– What is feasible?
SMART goals: specific, measurable, actionable, realistic and time-bound.
Design/Deliver
What are the next steps?
How will we measure success?
Recap exercise
Groups of 3
Discuss the day
Identify 3 points to share
Appoint a spokesperson
Back into group
TBL success factors
Leadership Buy –in
Resource Allocation
Accountability
TBL: A Shift in Accounting
TBL reporting is as much about change management as about the triple bottom line and sustainability.
Change takes time…and patience. “I have not failed. I've just found 10,000
ways that won't work” Thomas Edison
THANK YOU