sustainability planning thinking clearly in a climate of fear
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Sustainability Planning Thinking Clearly in a Climate of Fear. Tom Lannin, PhD. November 14, 2008 US National Whitewater Center. Topics. Sustainability and Planning Carbon Footprint Analysis Risk Disclosure Due Diligence Process Strategy Execution. Sustainability and Planning. - PowerPoint PPT PresentationTRANSCRIPT
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Sustainability Planning
Thinking Clearly in a Climate of Fear
November 14, 2008
US National Whitewater Center
Tom Lannin, PhD
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Sustainability and Planning Carbon Footprint Analysis Risk Disclosure Due Diligence Process Strategy Execution
Topics
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Sustainabilityand Planning
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Panic or Reality?
“The world is at severe risk of a global systemic financial meltdown and a severe global depression.”
-- Nouriel Roubini
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The Three Aspects of Sustainability
• Environmental
• Social• Economic
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Sustainability Drivers
• Regulatory Compliance• Energy Efficiency• Innovation• Consumer Image
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We need a rational, balanced, triple bottom line approach that considers the major drivers.
What We Must Do
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We must dedicate our intellectual and financial capital toward creating far more sustainable cultures and societies, especially our own.
What We Must Do
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To become more sustainable, we must design, plan, and build systems with both the human network and natural system in mind.
What We Must Do
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The Real (and Big) Problem
“Climate change is the most severe problem we are facing today.”
-- Sir David King
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Nature-Network Interaction
1. Fragmentation
2. Depletion
3. Pollution
4. Erosion
5. Extinction
As we create great wealth, we must deal with the problems we create.
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Carbon Footprint Analysis
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Beyond Compliance
We must do more than just comply. We must analyze carbon data in order to design a truly sustainable future.
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What the Data Tells Us about the Carbon Problemcarbon in
millions of tons yearly
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Carbon Emissions
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New software enables us to measure our carbon footprint and make smart decisions about sustainable design and development.
How to Measure Our Carbon Footprint
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Carbon Footprint Analysis
Organizations must first• Establish context for analysis
• Determine the source and drivers
• Avoid simple spreadsheets• Use data to decide, not just report
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Carbon Footprint Analysis
Organizations must then• Forecast• Create a scenario• Be transparent about the data• Use clear methods and processes
• Report honestly and be fully compliant
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Formula for Calculating GHG
Emissions
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SAS for Sustainability Management
Good data in = good data out
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SAS for Sustainability Management
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Largest CO2 Footprints by City
CO2 Emissions by City: Pounds per Employee Annually
City and Employee Data
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Facility Performance Data
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Risk Disclosure
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Cap-and-trade systems create a financial incentive for emission reductions.
Risk DisclosureCap and Trade Basics
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Risk DisclosureCap and Trade Basics
An environmental regulator establishes a “cap” that limits emissions from a designated group of polluters.
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The emissions allowed under the new cap are divided up into individual permits that represent the right to emit that amount.
Risk DisclosureCap and Trade Basics
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Because the emissions cap restricts the amount of pollution allowed, permits that give a company the right to pollute take on financial value.
Risk DisclosureCap and Trade Basics
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Companies can now buy and sell permits in order to continue operating in the most profitable way possible.
Risk DisclosureCap and Trade Basics
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Risk Disclosure
Environmental Application
• Capacity usage is a risk factor
• Capacity usage is linked to goods and services that have some CO2 emissions
• The environment generates value-at-risk numbers (VaR) in terms of dollars and CO2 production
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Risk Disclosure CO2 Exchange
European Climate Exchange (ECX) manages the marketing and product development for ECX Carbon Financial Instruments (ECX CFIs).
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Chicago Climate Exchange (CCX) is the world’s first--and North America’s only-- voluntary, legally binding integrated trading system to reduce emissions of all six major greenhouse gases.
Risk Disclosure CO2 Exchange
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Due Diligence
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• Corporate Social Responsibility (CSR) agenda
• Environmental, social, and ethical equity are now on par with economic equity
• Companies not practicing sustainability due diligence are at risk
Due Diligence
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Businesses who don’t perform due diligence with the triple bottom line in mind miss out on the potential benefits.
For example, a business could miss out on a premium that could be attached to the business’ sale price based on the value of its sustainability initiatives.
Due Diligence
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The Value” of Due Diligence
• Environmental waste clean-up and “greenwashing” have a price
• A company’s corporate responsibility record has value and can be considered a bona fide asset
• This asset should be factored into deal price negotiations
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Strategy Execution
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Solid Strategy Requires…
• Sustainability vision (triple bottom line)
• Sustainable risk and performance management
• Sustainable process management
• Customer satisfaction
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Sustainability Vision
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Sustainability Process Management
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Sustainable Risk and Performance Management
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Customer Satisfaction
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Strategy ExecutionHow They Work Together
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A Call for Reason
Like a well-run bank, society cannot liquidate its natural resources (assets) to meet the demands of those operating strictly on faith, fear, and speculation.
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Time for Sustainable Change
We must replace a “greed is good” mentality with a “green is good” ethic throughout our culture, and especially in business.
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Reduce, reuse, recycle is the new business mantra. And the triple bottom line is replacing purely economic metrics. -- William McDonough
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Questions?
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