The Triple Bottom Lineof Business

Joe KresseSteve Attinger

San Jose State UniversityDecember 2, 2003

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Agenda

• History of “Sustainability” and the“Triple Bottom Line”

• CERES and GRI

• Models for Sustainability

• The Triple Bottom Line Business Case

• Sustainability Ladder

• Case Examples

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History of Sustainability

• 1962: Rachel Carson publishes “Silent Spring”

• 1970:– First Earth Day celebration – April 22nd– Nixon establishes EPA

• Fueled by industrialization and overpopulationimpacts

• 1972: First UN conference on the Human Environment in Stockholm, Sweden

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History of Sustainability

• 1983 – UN establishes World Commissionon Environment and Development– Purpose: examine world’s critical environment and

development problems and formulate solutions

• 1987: Brundtland Commission Report– 3 components of Sustainable Development:

Environmental protection, Economic growth,and Social equity

– Defined Sustainable Development as…

“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

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History of Sustainability

• 1992: Rio Earth Summit– Over 178 governments adopted…

• Agenda 21: a global blueprint and plan of action for sustainable development in the 21st century

• The Rio Declaration on Environment and Development– 27 principles that express the rights and responsibilities of

nations as they pursue human development and well-being• The Forest Principles

– A guide for the management, conservation, and sustainable development of all types of forests

• 2002: Third UN conference on Environment and Development, Johannesburg, South Africa

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The Triple Bottom Line

• People, planet, and profits• Equity, environment, economy• TBL coined by John Elkington of “SustainAbility”

(UK) in 1995– Cannibals With Forks: The Triple Bottom Line of 21st

Century Business (1997)

– The Chrysalis Economy: How Citizen CEOs and their Corporations Can Fuse Values and Value Creation (2001)

– www.sustainability.com

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CERES

• Coalition for Environmentally Responsible Economies (1989)– 10 principles for environmental management– Endorsing companies

• American Airlines, B of A, Ben & Jerry's, Coca-Cola, Fleet Boston Financial, Ford, GM, Interface, Nike, Polaroid, The Timberland Co., and others

• Launched Global Reporting Initiative (1997)

– www.ceres.org

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The CERES Principles

1. Protection of the Biosphere2. Sustainable Use of Natural Resources3. Reduction and Disposal of Wastes4. Energy Conservation5. Risk Reduction6. Safe Products and Services7. Environmental Restoration8. Informing the Public9. Management Commitment10. Audits and Reports

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GRI

• Global Reporting Initiative (1997)– Voluntary globally applicable sustainability

reporting guidelines– 341 organizations in 31 countries– Europe vs. US

– www.globalreporting.org

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Reports per Year

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Type of Reports in 2002

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Reports per Country

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Models for Sustainability

• The Natural Step www.naturalstep.org

– 4 system conditions• McDonough Principles www.mbdc.com

– Cradle-to-cradle design– Waste = Food

• Natural Capitalism www.natcap.org/

– Radically increase resource productivity – Redesign industry on biological models with closed loops

and zero waste – Shift from products to services– Reinvest in natural capital

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The TBL Business Case

• Short-term cost reduction– Energy efficiency and waste reduction

• Longer-term return on investment– Investment in building improvements

• Value creation - Existing markets

• Value creation - New markets

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Sustainability Ladder

1. Products and services

2. Processes

3. Business model

4. Company focus

5. Brand identity of company

6. Supplier web and value chain

7. Industry leadership and advocacy role

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Case Examples

• Dupont• BP• Shell• Agilent• HP

• Interface• Nike• Chaparral Steel Company• Johnson & Johnson• IdleAire Technology Corp.• Lighting Components and

Design Inc.

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Dupont

An international corporation that manufactures healthcare products, electronics and other goods

• Developed a “sustainable growth” mission• Reduced consumption of raw materials and energy• Used scientific and technical knowledge to create more

environmentally-friendly products• Engaged stakeholders of the corporation• Created a “Carpet Reclamation Program” where they have reclaimed

and recycled 90 million pounds of carpet• By combining the recycling and sorting process in one location,

Dupont has vastly reduced both energy consumption and costs Source: The BSD Global website

http://www.bsdglobal.com/viewcasestudy.asp?id=123

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HP

• Packaging Initiative– Lighter paperboard sleeve for ink cartridges

• Reduced packaging weight by 34%, reducing costs by more than $700,000 a year

– Reusable transit packaging for inkjet cartridges• Reduced waste by 2,400 tonnes in 2002, saving $1.5M

– Bulk packaging for desktop computers• Reduced waste by 86%, saving $1.1M in 2002• Expected savings of $4M in 2003

http://www.hp.com/hpinfo/globalcitizenship/gcreport/products/packaging.html

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Interface Corporation

• The largest commercial carpet manufacturer in the world

• Vision:To be the first company that, by its deeds, shows the

entire industrial world what sustainability is in all its dimensions: People, process, product, place and profits — by 2020 — and in doing so we will become restorative through the power of influence.

www.interfaceinc.com

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Interface Corporation

The Seven Steps

1. Eliminate Waste — QUEST program

2. Benign Emissions —Elimination of molecular waste

3. Renewable Energy —Reducing overall usage; transitioning to renewables

4. Closing the Loop — Creating cyclical material flows.

5. Resource Efficient Transportation — Reducing movement of products/people in favor of data, e.g. plant location, video-conferencing, telecommuting

6. Sensitivity Hookup — A community within and around Interface that understands natural systems and our impact on them.

7. Redesign Commerce — Providing services rather than products

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Nike

• Created a “Transparency 101” Program, which ensures public awareness of Nike’s business practices

• Transparency 101 also monitors its factories in each country to make sure its practices follow Nike’s code of conduct

• Nike is phasing out the use of PVC and other harmful chemicals in its products through work with William McDonough

• Created the “Reuse a Shoe”, a program that recycles shoes

• Uses organic cotton in some of their clothing

• Has certified its Oregon buildings in an effort to decrease energy use

 

Source: The BSD Global website. http://www.bsdglobal.com/viewcasestudy.asp?id=81

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Chaparral Steel Company

Produces bar and structural steel products by recycling scrap steel

• Created Systems and Technology for Advanced Recycling (STAR)

• Collaborated with neighboring cement plant– Business opportunities for this technology in emission credit trading

• Built advanced Automobile Shredder Residue (ASR) system– Plastics can be used as a clean, efficient fuel source.

– Sale of clean plastics alone generates up to $500,000 a year.

• Looking to market ASR for mining and selling of clean plastics (waste) rather than sending them to landfills

Source: The BSD Global website http://www.bsdglobal.com/viewcasestudy.asp?id=51

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Chaparral Recycling Facility

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Johnson & Johnson

• Has made a major effort to be more energy efficient by reviewing the usage of all aspects of its buildings (lights, fans, motors, etc.)

• Received 1995 Green Lights Partner of the Year Award for large corporations

• Received 1996 Sustained Excellence Award for completing and maintaining lighting upgrades for more than 94% of its workspace

• Involved in a variety of different programs, including “ClimateWise”, “Energy Star Buildings”, and “Energy Star Computers”

Source: The BSD Global website http://www.bsdglobal.com/viewcasestudy.asp?id=76

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IdleAire Technology Corp.

• 1.3 million long-haul trucks in US waste 4.4B gals. of diesel annually when drivers leave engines idling when resting.– Represents 2.6 % of all imported oil

• IdleAire created a technology that allows trucks to heat and cool their cabs without idling their engines, thereby reducing the amount of fuel used and emissions released

• IdleAire installs individual heat and air units above parking spaces at truck stops, charging $10 for 8 hours of service

• Truck owners also save as much as 40% on fuel costs Source: Green Gazelles website

http://www.geocities.com/greengazelles/new.html

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Lighting Components and Design Inc.

Engineering company that manufactures miniature lighting components• Created cross-functional team to create a template of energy efficiency

improvements• Improved insulation of its facilities• Upgraded lighting to fluorescent lamps, including electronic ballasts• Upgraded HVAC system to reduce energy• Installed low-flow toilets and water-saving taps• Upgraded over 24 pieces of motorized manufacturing equipment with energy-

efficient motors• Winner of the EnergyStar 2002 Small Business and Congregations Award• Result? Prevented over 300,000 pounds of CO2 emissions and saved $10,300 on

utility bills per year Source: EnergyStar website http://208.254.22.7/index.cfm?

c=sb_success.sb_2002winners#lighting

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Thank you

Q & A

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GRI 2002 Guidelines - Summary

Category Aspects

Economic Direct Economic Impacts

CustomersSuppliersEmployees

Providers of capital Public sector

Environmental Environmental

MaterialsEnergyWaterBiodiversityEmissions, effluents, and waste

SuppliersProducts and servicesComplianceTransportOverall

Social Labor Practices and Decent Work

EmploymentLabor/management relationsHealth and safety

Training and educationDiversity and opportunity

Human Rights Non-discriminationChild laborDisciplinary practicesSecurity practicesIndigenous rights

Forced and compulsory laborFreedom of association & collective bargaining Strategy and management

Society CommunityBribery and corruption

Political contributionsCompetition and pricing

Product Responsibility Customer health and safetyProducts and services

AdvertisingRespect for privacy

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Committing to Sustainability

ABB Fairmont Chateau Whistler

NovoNordisk

Agilent Hewlett-Packard Placer Dome Mining

Bank of America Home Depot Rejuvenation Lamp & Fixtures

B.C. Buildings Corp. Interface Carpet Rohner Textiles

BP Jardinière Restaurants Rolltronics

CH2M HILL Matsushita Corp. Shell

DesignTex McDonald’s Starbuck’s

Dow Chemical Nike Victor Innovatex

Dupont Norm Thompson Outfitters

Whistler Ski Resort