sustainability and b-schools: why should you care? [email protected] u vic gustavson faculty...
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SUSTAINABILITY AND B-SCHOOLS:
WHY SHOULD YOU CARE?
[email protected] www.sustainabilityadvantage.com
U Vic Gustavson FacultySeptember 12, 2012
CriteriaAvailability of relevant courses (25%)Student exposure / Course time (25%)
Relevant courses on for-profit impacts (25%)Faculty research (25%)
http://www.beyondgreypinstripes.org/
Biennial survey and ranking of 149 B-schools on integration of social
and environmental stewardship into curricula and research
BEYOND GREY PINSTRIPES
Rankings (2011-2012)1. Stanford (USA) 2. York (Canada) 3. IE Bus School (Spain)4. Notre Dame (USA) 5. Yale (USA) 6. Northwestern (USA)7. Michigan (USA) 8. Cornell (USA) 9. UC – Berkeley (USA)10. GWU (USA) 24. UBC (Canada) 35. U Calgary (Canada)42. Concordia (Canada)
Systems
thinkin
g
CORE SUSTAINABILITY CONCEPTS
Intergenerational
responsibility
Socio-economic
justice
SOCIETAL SUSTAINABILITY
QUALITY OF LIFE
Eco
nom
ic
Environmental
Social
CORPORATE SUSTAINABILITY
TRIPLE BOTTOM LINE
Eco
nom
y
Environment
Equit
y
Pro
fits
/
Planet /
Peop
le
/
CORPORATE SUSTAINABILITY
ESG
Gov
ernan
ce
Environmental
Social
CORPORATE SUSTAINABILITY
GREEN +CSR
Eco
nom
ic
Environmental
Socia
l
CORPORATE SUSTAINABILITY
ASSET MANAGEMENT
Fin
anci
al /
Man
ufa
cture
dC
apit
al
Natural Capital
Hum
an /
Social
Cap
ital
1. Pre-Compliance
2. Compliance
4. INTEGRATED STRATEGY
5. PURPOSE & PASSION
SUSTAINABILITY JOURNEY
3. Beyond Compliance
“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.” David Lubin and Daniel Esty, HBR, May-
June 2010
“Sustainability should be a touchstone for all innovation …
In the future, only companies that make sustainability a goal will achieve
competitive advantage. That means rethinking business models as well as products, technologies, and
processes.”
Nidumolu, Prahalad, and Rangaswami, HBR Sept.-Oct. 2009
“Why Sustainability IsNow the Key Driver of Innovation”
“Capitalism is under siege … The purpose of a business must be
redefined around creating shared value (CSV)…
How to reinvent capitalism—and unleash a wave of innovation and growth”
Michael Porter and Daniel Kramer, HBR, Jan-Feb 2011
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
CEO MINDSET IS SHIFTING
STAKEHOLDERS INFLUENCE CEOs
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
CEOs’ SUSTAINABILITY DRIVERS
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
Talent wars
Productivity
Innovation
Brand image
Quality
Compliance
Supply
security
Profit
Share price
Growth
Revenue
Market share
Expenses
SUSTAINABILITY STRATEGIES
“SUSTAINABILITY”
STRATEGIES VS. ANOTHER GOAL
Revenue
PROFIT
4.Reduced materials
1. Increased revenue2. Reduced energy
6.Reduced turnover
5.Increased productivity 7
.Red
uce
d r
eve
nu
e
an
d i
ncr
ease
d
exp
en
ses3. Reduced waste
Opportunities RisksIncome Statement
10%
9%
75%
25%
2%
20%
+51 to
+81%
-16 to -36%
Exp
en
ses
SUSTAINABILITY CAPITAL RESERVE
MORE COMPELLING BUSINESS CASE
Company Data Profile
Small Professio
nal Services Company
Large Manufactur
ing & Distribution Corporation
Revenue $1,000,000
$500,000,000
Energy expense $20,000 $10,000,000
Materials and water expense $50,000 $150,000,000
Total salary / payroll expense
$300,000 $150,000,000
Profit $70,000 $35,000,000
Average salary $50,000 $40,000
Number of employees 6 3,750
Potential profit increase 51% 81%
Potential profit at risk -16% -36%
“The possibility that
sustainable enterprises will flourish
forever.”
IN SUMMARY …
SUSTAINABILITY IS $MART BUSINESS
1. Pre-Compliance
2. Compliance
3. Beyond Compliance
4. INTEGRATED STRATEGY
5. PURPOSE & PASSION20%
CLOSE TO “TIPPING POINT?”
Based on survey of 1,251 companies, in UN Global Compact Annual Review 2010
SURVEY SAYS …
MIT Sloan and the Boston Consulting, “2011 Sustainability & Innovation Global Executive Study and Research Project,” Jan. 2012. Surveyed 4,000 managers from 113 countries.
• 70% say that sustainability was on the management agenda in 2011, and will stay there permanently.
SUSTAINABILITY AT TIPPING POINT?
• 67% said that sustainability-related strategies are necessary to stay competitive.
• 24% are “Embracers” … the Tipping Point?
MIT Sloan and the Boston Consulting Group,survey of 3,000 worldwide executives in 2010, “Sustainability: The ‘Embracers’
Seize Advantage,” Feb. 2011
“EMBRACERS”
SUSTAINABILITY AND B-SCHOOLS:
WHY SHOULD YOU CARE?
[email protected] www.sustainabilityadvantage.com
U Vic Gustavson FacultySeptember 12, 2012