bob willard bobwillard@sympatico sustainabilityadvantage
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Championing Sustainability … even if you’re not the CEO. LSF / IRIS / W3 / EASO Talk-Back Speaker Series November 23, 2010. Bob Willard [email protected] www.sustainabilityadvantage.com. The “Sustainability Imperative”. - PowerPoint PPT PresentationTRANSCRIPT
Bob Willard [email protected] www.sustainabilityadvantage.com
LSF / IRIS / W3 / EASO Talk-Back
Speaker Series
November 23, 2010
Championing Sustainability… even if you’re not the CEO
The “Sustainability Imperative”
David A. Lubin and Daniel C. Esty, “The Sustainability Imperative,” HBR May 2010
Megatrend: “A fundamental shift in the competitive landscape that creates
inescapable threats and game-changing opportunities ... profoundly affects companies’
competitiveness and even their survival.”
Over the last 10 years, the “Sustainability Imperative” has emerged,
magnified by escalating public and governmental concern about climate change, industrial pollution, food safety,
and natural resource depletion, among other issues.”
Significant CEO Mindset Shift
Survey of 766 worldwide CEOs, including 50 in-depth interviews UN Global Compact and Accenture study, “A New Era of Sustainability,” June 2010
… fully embedded into company strategy and operations
CEOs Agree /Strongly Agree that sustainability should be ….
… discussed and acted on by boards
… fully embedded into subsidiaries’ strategies and operations
… embedded throughout the global supply chain
… the basis for industry collaborations and multi-stakeholder partnerships
… incorporated into discussions with financial analysts
2010 Increase Over 2007
Stakeholders Driving Sustainability
Survey of 766 worldwide CEOs, including 50 in-depth interviews UN Global Compact and Accenture study, “A New Era of Sustainability,” June 2010
Stakeholders who CEOs believe will have the greatest impact on the way they manage societal expectations
Consumers
Employees
Governments
Communities
Regulators
Media
Investment Community
Suppliers
NGOs
Boards
Organized Labor
Other
CEOs: Sustainability Drivers
Survey of 766 worldwide CEOs, including 50 in-depth interviews UN Global Compact and Accenture study, “A New Era of Sustainability,” June 2010
Brand, trust, and reputation
Potential for revenue / growth / cost reduction
Personal motivation
Consumer / customer demand
Employee engagement and recruitment
Impact of development gapson business
Governmental / regulatory environment
Pressure from investors / shareholders
Top 3 drivers of CEOs’ action on sustainability issues
Sustainability 3-Legged Stool
Sustainability
Economic LegGood JobsFair wages
SecurityInfrastructure
Fair Trade
Social Leg Working conditions
Health servicesEducation services
Community & CultureSocial justice
Environmental Leg0 Pollution & WasteRenewable Energy
ConservationRestoration
Quality of Life / Genuine Wealth / Genuine Progress
Corporate Sustainability 3-Legged Stool
Sustainability = Sustainable Development (SD)= Environmental, Social, Governance (ESG)
= Corporate Social Responsibility (CSR)= Corporate Responsibility (CR) = Green= Triple Bottom Line (TBL) = 3Es = 3Ps
Economy - ProfitsGrowth, Jobs,
TaxesProductsServices
Equity - People Employees
Community / Culture World
Environment - PlanetEco-efficiencies
Eco-effectiveness
Smart Business 3-Legged Stool
Asset Management
FinancialCapital
BuiltCapital
NaturalCapital
Human Capital
Social Capital
Sustainable Value Creation
5-Stage Sustainability Journey
5. Purpose/Passion Values-driven senior leader
4. Integrated Strategy Enhanced organizational value
3. Beyond Compliance Eco-efficiencies
PR crisis Regulatory threat
2. Compliance Regulatory enforcement
1. Pre-Compliance
Lead It Like Any Culture Change
1. Walk-the-talk as senior leadersIntegrate into vision - mission – strategies
Business strategy vs. philanthropyEarn credibility – Avoid “green-washing” hypeVisible support – speeches, questions, actions
2. Educate / engage the whole companySolicit employee ideas - help
3. Align with measurement & reward systems
7-Step Sustainability Change Process
Step 3: Assess Current Realities
Step 4: Develop Strategies
Step 6: Mobilize Commitment
Step 7: Embed and Align
Step 1: Wake Up and Decide
Step 2: Inspire Shared Vision(s)
Step 5: Build Case(s) for Change
ContinuouslyLearn &
Adapt
7-Step Sustainability Change Process
Step 3: Assess Current Realities
Step 4: Develop Strategies
Step 6: Mobilize Commitment
Step 7: Embed and Align
Step 1: Wake Up and Decide
Step 2: Inspire Shared Vision(s)
Step 5: Build the Case(s) for Change
The 3 R’s of Justifying Sustainability
RISKS
RESPONSIBILITIES
REWARDS
BUSINESS CASE
+
+
Based on Alan AtKisson, The IRIS Agreement, p. 127
Risks to Corporate Capitals / Assets:Big-5 Sustainability Storm Fronts
Poverty and Social Injustice
Species Extinction and Overharvesting
Food and Water Crises
Waste, Toxicity,
and Health
The 3 R’s of Justifying Sustainability
RISKS
RESPONSIBILITIES
REWARDS
BUSINESS CASE
+
+
Based on Alan AtKisson, The IRIS Agreement, p. 127
Risks to Social Capital:Stakeholders’ Rising Expectations
Waste, Toxicity, and Health
Poverty and Social Injustice
Species Extinction and Overharvesting
Food and Water Crises
Employees
Customers
Media Economists
(Scientists)
(NGOs)
Competitors
Markets
Governments Insurers
The Public Investors
BanksRisks to Reputation re Corporate Responsibilities
Social license
to operate
The 3 R’s of Justifying Sustainability
RISKS
RESPONSIBILITIES
REWARDS
BUSINESS CASE
+
+
Based on Alan AtKisson, The IRIS Agreement, p. 127
One More Goal … or an Enabling Strategy?
Innovation
Speed to market
New markets
Talent wars
Productivity
Motivation
Brand image
Managing risks
Compliance
Supply security
Profit
Share price
Growth
Revenue
Customer care
Expense savings
Competition
Market share
Leadership
Governance
RELEVANC
E
The 3 R’s of Justifying Sustainability
RISKS
RESPONSIBILITIES
REWARDS
BUSINESS CASE
+
+Large
Companies:At least 38%more profit
SME Companies:At least 66%more profit
Potential Improvements
1. Reduced recruiting costs
2. Reduced attrition costs
3. Increased employee productivity
4. Eco-efficiencies: savings in energy, water, materials, waste handling
5. Increased revenue / market share
6. Lower insurance & borrowing costs
… yielding a profit increase of +66%
-1%
-2%
+6%
-10%
+5%
-5%
RE
PU
TA
TIO
N
The 3 R’s of Justifying Sustainability
RISKS
RESPONSIBILITIES
REWARDS
BUSINESS CASE
+
+
At least 38% to 66% more Profit
Climate Change &Energy Crises
Employees
Customers
Economists
(Scientists)
(NGOs)
Markets
Governments Insurers
Investors
7-Step Sustainability Change Process
7
DERAI
LERS
7 P A R A D O X E S
7
PRACTI
CES
3. Assess Current Realities
4. Develop Strategies
5. Build the Case(s) for Change
6. Mobilize Commitment
7. Embed and Align
1. Wake Up and Decide
2. Inspire Shared Vision(s)
7 Leadership Practices
Assess Current Realities
Develop Strategies
Build Case(s) for Change
Mobilize Commitment
Embed and Align
Wake Up and Decide
Inspire Shared Vision(s)
Get Credible, Stay Credible
Meet Them Where They Are
Practice “Planful Opportunism”
Influence the Influencers
Dialogue
Collaborate, Educate, Network
Piggyback Existing Initiatives
True Dialogue
Asking
ClarifyingInterviewing
Telling
AssertingExplaining
Observing
BystandingSensing
DIALOGUE
Exploring eachother’s assumptions to generate meaning
A d
v o
c a
c y
I n q u i r y Low High
Low
High
Based on Peter M. Senge et al., The Fifth Discipline Fieldbook, Doubleday, 1994
Collaborate, Educate, Network
Customers
Networks in OtherDepartments
Your Inner Circle
NGOs
Government Agencies
Senior ExecutiveNetwork
Suppliers
Meet Them Where They Are
Asset Management
Economic / FinancialCapital
Built / ManufacturedCapital
NaturalCapital
Human CapitalSocial Capital
Sustainable Value Creation
Influence the Influencers
You
Influencer
Influencer
Important Senior Leader
“Yes”
“Yes”
“Yes”
You
Important Senior Leader “No”
Ineffective Approach Effective Approach
7 Leadership Practices
Assess Current Realities
Develop Strategies
Build Case(s) for Change
Mobilize Commitment
Embed and Align
Wake Up and Decide
Inspire Shared Vision(s)
Get Credible, Stay Credible
Meet Them Where They Are
Practice “Planful Opportunism”
Influence the Influencers
Dialogue
Collaborate, Educate, Network
Piggyback Existing Initiatives
7 Leadership Paradoxes
Assess Current Realities
Develop Strategies
Build the Case(s) for Change
Mobilize Commitment
Embed and Align
Wake Up and Decide
Inspire Shared Vision(s)
7
PRACTICES
You Have to Do It Yourself;
You Can’t Do It Alone
Things Need to Get Worse Before They Can Get Better
Go Small to Go Big
Go Slow to Go Fast
To Get “Hard Results,” Work on the “Soft Stuff”
Motivators Inhibit Commitment
One Person’s Dream Is Another Person’s Nightmare
Do it Yourself; You Can’t Do It Alone
YouKindredSpirits
KindredSpirits
TheirNetworks
TheirNetworks
Whole Company
Whole Company
WholeIndustry
WholeIndustry
AllIndustries
AllIndustries
The
World?
“Give me a lever long enough and a fulcrum
on which to place it, and I shall move the world.”
― Archimedes
“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed,
it's the only thing that ever has.”― Margaret Mead
Go Small to Go Big
Small Moves Big
Shifts
“You can get away with anything if you call it a pilot”
7 Leadership Paradoxes
Assess Current Realities
Develop Strategies
Build the Case(s) for Change
Mobilize Commitment
Embed and Align
Wake Up and Decide
Inspire Shared Vision(s)
7
PRACTICES
You Have to Do It Yourself;
You Can’t Do It Alone
Things Need to Get Worse Before They Can Get Better
Go Small to Go Big
Go Slow to Go Fast
To Get “Hard Results,” Work on the “Soft Stuff”
Motivators Inhibit Commitment
One Person’s Dream Is Another Person’s Nightmare
7 Potential Derailers
Displaying Hubris
Failing to Produce Results
Getting Off to a Bad Start
Changing Everything at Once
Mishandling Office Politics
Being a “Problem Child”
Succumbing to Stress
7 P A R A D O X E S
7
PRACTICES
Assess Current Realities
Develop Strategies
Build the Case(s) for Change
Mobilize Commitment
Embed and Align
Wake Up and Decide
Inspire Shared Vision(s)
Sustainability Champion’s Guidebook
Step 3Assess Current Realities
Step 4Develop Strategies
Step 5Build the Case(s) for Change
Step 6Mobilize Commitment
Step 7Embed and Align
Step 1Wake Up and Decide
Step 2Inspire Shared Vision(s)
Get Credible, Stay Credible
Meet Them Where They Are
Practice “Planful Opportunism”
Influence the Influencers
Dialogue
Collaborate, Educate, Network
Piggyback Existing Initiatives
7
DERAILERS
Displaying Hubris
Failing to Produce Results
Getting Off to a Bad Start
Changing Everything at Once
Mishandling Office Politics
Being a “Problem Child”
Succumbing to Stress
7 P A R A D O X E S
7
PRACTICES
You Have to Do It Yourself; You Can’t Do It Alone
Things Need to Get Worse Before They Can Get BetterGo Small to Go BigGo Slow to Go Fast
To Get “Hard Results,” Work on the “Soft Stuff”
Motivators Inhibit Commitment One Person’s Dream Is Another Person’s Nightmare
Troubleshooting Complex Change
Vision Incentives Resources Action Plan Change
Confusion
Anxiety
Gradual Change
Frustration
False Starts
Skills
Kevin Brady, Five Winds International, based on “A Framework for Thinking About Systems Change,” by Knoster, Villa, and Thousand
Incentives Resources Action PlanSkills
Vision Incentives Resources Action Plan
Vision Resources Action PlanSkills
Vision Incentives Action PlanSkills
Vision Incentives ResourcesSkills
In Summary …
Lead it like any culture change
Can protect & enhance organizational value
Sustainability is smart business
Relevant to existing business priorities
Important stakeholders’ expectations are rising
Many willing, helpful partners and networks
Opportunity for leadership … by example
The New Economy
• Low-carbon economy vs. fossil fuel-based economy• Local supply chains vs. global supply chains• Services vs. products• “Dematerialization” vs. physical goods, processes, or travel
using “virtual” alternatives like videoconferencing or online shopping
• Responsible consumption / thrift vs. over-consumption• Low / No-growth model vs. “grow or die” model• New ownership models: employees, customers,
co-ops, social venture funds, government funding• New company purposes: “For-Benefit / B-companies,”
“Social enterprises,” “Fourth sector,” “Hybrid organizations”
CEO #1 Challenge: Complexity Gap
Based on face-to-face interviews with 1,541 CEOs worldwide, Nov 2009 - Jan 2010 IBM CEO Survey, “Capitalizing on Complexity,” May 2010
Complexity Drivers / Systems-level challenges:• Interconnected economies, enterprises, societies and
governments; more government regulations• New economic environment: more volatile, uncertain,
complex, and structurally different• Global climate change• Geopolitical issues surrounding energy and water supplies• Vulnerabilities of supply chains for food, medicine, talent• Sobering threats to global security
CEOs biggest challenge: Rapid escalation of complexity
79% anticipate more complexity in next 5 years; 50% doubt their ability to manage it
Ranking of Most Sustainable Co’s
http://www.global100.org/
The Global 100 Most Sustainable Corporations in the World
Most proactive in managing 11 environmental, social and governance (ESG) KPIs
Top 5 in the World1.General Electric2.PG & E3.TNT N.V.4.H&M Hennes & Mauritz5.Nokia
Ranking of Sustainable Canadian Cities
Ecological Integrity
EconomicSecurity
Governance & Empowerment
SocialWell-Being
Infrastructure & Built Envir’t
Corporate Knights 4th Annual Sustainable Cities Rankings, Issue 30, Winter 2010
College Sustainability Report Card 2011Ranks 322 colleges and universities in U.S. and Canada with
largest endowments – 95% of all endowments
Ranked in 9 categories1. Climate and energy use2. Green building3. Food and recycling4. Transportation5. Administration6. Student involvement7. Endowment transparency8. Shareholder engagement9. Investment priorities
http://www.greenreportcard.org/
2011 Results16% earned “A” level grades55% earned “B” level grades23% earned “C” level grades6% earned “D” level grades
Beyond Grey Pinstripes, 2009-2010
CriteriaAvailability of relevant courses (25%)
Student exposure / Course time (25%)Relevant courses on for-profit impacts (25%)
Faculty research (25%)
Rankings1. York (Canada) 2. Michigan (USA) 3. Yale (USA)
4. Stanford (USA) 5. Notre Dame (USA) 6. UC Berkeley
7. RSM Erasmus (NED) 8. NYU (USA) 9. IE Bus School (Spain)
10. Columbia (USA) 31. McGill (Canada) 34. Concordia (Canada)
http://www.beyondgreypinstripes.org/
Biennial survey and ranking of 149 B-schools on integration of social and environmental stewardship into curricula and research
Principles for Responsible Management Education (PRME)
Promotes corporate responsibility (CR) and sustainability in business education
Launched by UN in June 2007Endorsed by more than 336 business schools and universities
from around the world (Nov 2010)
6 Principles of PRME 1.Teach students to work in a more inclusive, global economy2.Incorporate CR into academic activities and curricula3.Teach responsible leadership4.Research how corporations create sustainable value5.Partner with business executives on CR challenges6.Dialogue with all groups on critical CR issues
http://www.unprme.org/
Bob Willard [email protected] www.sustainabilityadvantage.com
LSF / IRIS / W3 / EASO Talk-Back
Speaker Series
November 23, 2010
Championing Sustainability… even if you’re not the CEO