Sustainable businessHrönn Hrafnsdóttir

Planet Earth

• Spaceship Earth (Boulding 1964)

• Earth as a closed system

Rockström et al 2009

Sustainable Development

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs"

Brundtland Commission “Our common future” 1987

Sustainable Development

5

The environment and the economy

30. apríl 2013 Hrönn Hrafnsdóttir – fyrirlestur hjá Leiðtoga Auði6

Win-win or Win-lose?

30. apríl 2013 Hrönn Hrafnsdóttir – fyrirlestur hjá Leiðtoga Auði7

External drivers to environmental management

The Natural Environment

Social Drivers (Ch 6)

text

Environmental NGO’sThe Press

The Courts

Religious InstitutionsThe CommunityAcademia

THE FIRM Resource Drivers (Ch 4)

Resource Drivers (Ch 4)

Market Drivers (Ch 5)

Coercive Drivers

(Ch 2&3)

Buyers Insurance Companies

SuppliersBanks

Shareholders / Investors

ConsumersTrade Associations

CompetitorsConsultants

Domestic RegulationsInternational Regimes

• Corporations part of a larger picture

• Influenced by different driving forces

Source: Hoffman, A. J. (2000), Competitive Environmental Strategy – A Guide to the Changing Business Landscape, p. 29.

GEMI on value creation1. Value in compliance2. Value in operations3. Value in risk management4. Value in investment5. Value of Market growth6. Value in Strategic direction7. Value of Technology strategy

• Process development• Product design• Or process development and product design at the same time

The Value Chain

Porter

Does sustainability initiatives benefit companies?

• ‘High-sustainability companies significantly outperform their counterparts over the long-term, both in terms of stock market as well as accounting performance.’ The Impact of Corporate Sustainability on Organizational Processes and Performance , Eccles and Serafeim, Harvard Business School, November 2011

• “Our empirical results, based on a French employer–employee survey from 5220 firms, reveal that firms that have adopted environmental standards enjoy a one standard deviation higher labor productivity than firms that have not adopted such standards.” Magali A. Delmas, Sanja Pekovic (2012) Environmental standards and labor productivity: Understanding the mechanisms that sustain sustainability.

Does sustainability initiatives benefit companies?

• Review of 159 studies 1972-2010

• Companies which invest in sustainable initiatives do have a better performance.

Peloza, 2010, Network for Business Sustainability

Example: HR• Why do we put emphasis on environmental protection?

• Popular workplace

• Higher purpose

• Knowledge of environmental issues, education

WBCSD, Human Resources and Sustainable Development

EMS

Environmental Strategy in PracticeRedefining:• Who are your competitors? • How “green” is your

competition?• Who are your partners?• Who are your customers? • Through what channels do

you reach the customers?

With the environment in mind!

• What is your product?• What are your raw

materials?• Biomimicry

• What is your waste?• Money in your trash

• How sustainable are your competitive advantages?

• Etc..

EMS tools and standards

•EMAS• ISO family

•ISO 14001, ISO 26000 CSR, ISO 14024 ecolabels,

•Green business models•Simple EMS systems• Internal vs external EMS systems

Principles and guidelines

•UN Global Compact•CERES Principles•Principles for Responsible Investment (PRI)

•Polluter pays principle, precautionary principle etc.

Reporting and transparancy

Skýrslur um sjálfbærni

(sustainability)

Skýrslur um Visthagkvæmni(eco-efficiency)

Félags-vistfræðilegir mælikvarðar

Vistfræðilegsjónarmið

Umhverfisskýrslur (environmental

reporting)

Efnahagslegsjónarmið

Félagslegsjónarmið

Félags-efnahagslegir mælikvarðar

Mælikvarðar um visthagkvæmni

Heimild: Fet, A. M.,

og Michelsen, O. (2003)

Number of GRI Reporting

Source: GRI, 2013

Fortune 250 survey from KPMG• 95% of G250 now release CR data

• 2005 - up from 37% in 2005• Increasingly driven by economic concerns

• 64% of top 100 US companies• vs. 24% in 1999

• GRI is used by:• 77% of G250• 69% of top 100 in 22 countries

Norm for larger companies

In a nutshellTowards the triple bottom line!

• Triple bottom line "3BL" or "People, Planet, Profit” an expanded spectrum of values and criteria for measuring organizational success based on: • Economic, environmental and social considerations• Integrated management of economic and environmental interests

• Strategic environmental management; strategic opportunity in environmental protection.

Green marketing

Green consumption• Organic food and drink amounted to US$ 46 billion in 2007, a

threefold increase since 1999.

• US organic food sales alone accounted for 3.5% of the nation’s food market and increased by 15.8% in 2008

• Sales of certified ‘sustainable’ forest products quadrupled between 2005 and 2007.

• Between April 2008 and March 2009, the global market for eco-labelled fish products grew by over 50%

• In 2008-09, several brand owners and retailers added ‘ecologically-friendly’ product attributes to their major consumer brands including Mars (Rainforest Alliance cocoa), Cadbury (Fairtrade cocoa), Kraft (Rainforest Alliance Kenco coffee), and Unilever (Rainforest Alliance PG Tips).

http://www.teebweb.org/

Green consumers

S.C. Johnson/Roper, 1993

Green consumption

http://sinsofgreenwashing.org

Green consumption

http://sinsofgreenwashing.org

“Green wash” the seven sins

1. Hidden trade-off• Organic food / transport

methods

2. No proof

3. Vagueness

4. „All natural“• Poisounous is also

natural

http://sinsofgreenwashing.org/

“Green wash” the seven sins4. Worshiping false labels

5. Irrelevence• „CFC free!“ (it is already banned by law)

6. Lesser of two evils• Organic cigarettes

7. Fibbing / false

Eco-labels

What is Eco labelling?• Labelling systems for food and products

• Make an easier choice for customers

• Sustainability measurement

• Aims toward a more sustainable consumption

• Part of market forces• Stimulates both producers and consumers

Source: The Environment Agency of Iceland

The jungle of the labels

Types of Ecolabels

Type I Voluntary, multiple-criteria-based, third-party program that awards a license that authorizes the use of environmental labels on products indicating overall environmental preference of a product within a particular product category based on life cycle.

Type II Informative environmental self-declaration claims.Type III Voluntary programs that provide quantified

environmental data of a product, under pre-set categories of parameters set by a qualified third party and based on lifecycle assessment, and verified by that or another qualified third party.

ISO-defined voluntary label schemes.

Main types of ecolabelling• Environmental label type I (as defined in ISO 14024)

Example: EU Ecolabel (The Flower), Green Seal, The Nordic Swan

• Energy labelsExample: TCO, Energy Star

• Organic labelsExample: Tún, Krav, EKO

• Fair Trade labels

• Other labelsExample: Green flag, Blue flag

• Non eco-labelsExample: Recycling label, the Panda

Source: The Environment Agency of Iceland

Examples: Consumer products (type I)Name Description Picture

Nordic Swan

The Swan checks that products fulfill certain criteria using methods such as samples from independent laboratories, certificates and control visits.

EU Ecolabel

A voluntary scheme designed to encourage businesses to market products and services that are kinder to the environment and for European consumers - including public and private purchasers - to easily identify them.

The Blue Angel

Initiated by the German government and awarded by an independent Jury to products that are environmentally friendlier than others serving the same use.

Source: http://www.ecolabelindex.com/ecolabels/

Examples: Consumer products (type I)Name Description Picture

Bra Miljöval Referred to as "Good Green Buy" or "Good Environmental Choice" in English. This label focuses on fairly widely used products and services that have a major impact on the environment. Before a product or service is allowed to display the Good Environmental Choice ecolabel it must meet certain criteria.

Green Seal Green Seal utilizes a life-cycle approach to ensure tangible reductions in the whole environmental footprint. They are ANSI-accredited and meet ISO and GEN requirements. Products only earn Green Seal certification after a rigorous evaluation, including an on-site audit.

Source: http://www.ecolabelindex.com/ecolabels/

Examples: Electronical devicesName Description Picture

Energy Star

ENERGY STAR distinguishes what is efficient/better for the environment without sacrificing features or performance. Products that earn the ENERGY STAR mark prevent greenhouse gas emissions by meeting strict energy-efficiency guidelines set by the U.S. Environmental Protection Agency. 

EU Energy label

By law, the European Community Energy Label must be displayed on all new household products displayed for sale, hire or hire-purchase. . Products are generally rated from ‘A’ to ’G’, with ‘A’ being the most efficient (‘A+’ and ‘A++’ for the most efficient fridges and freezers).

TCO TCO Certified is an international sustainability certification for IT products and includes a wide range of criteria ensuring that the manufacturing, use and recycling of IT products is carried out with regard to environmental and social responsibility.

Source: http://www.ecolabelindex.com/ecolabels/

Eco labels vs EMS systems

Ecolabel type I• Label of product or service

• Concrete and strict criteria

• Some labels, as the Nordic Swan limits the share of labeled products in the market

EMS system• Certification of procedures

and policies

• Self decleared goals

• No limit values regarding environmental performance

• All companies in the market can have an certified EMS system

SME´s and sustainability

Size of companies• SMEs produce around 70% of the total global pollution (Smith

and Kemp, 1998), 60% of the total carbon emissions (Marshall, 1998), and the sum total of SMEs’ environmental impacts outweighs the combined environmental impact of large firms (Hillary, 2000).

Source: J.A. Arago’n-Correa et al., (2008) Journal of Environmental Management 86 88–103

SME´s way to ISO 14001• The Individual approach

• hire a specialized consulting firm

• The Collective Approach• Have a help from organization, such as the federation of Industries or

Chamber of Commerce

• The Progressive Approach

• Break the certification process into three successive levels.

Network for Business Sustainability, 2012

Development stages

Source: C. Hunt and E. Auster,1990, as cited on pg 180 in Hoffman

WBCSD, Marketing and Sustainable Development, p. 19