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Page 1: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Creating Sustainable Corporate Creating Sustainable Corporate

Advantage Advantage through through

Corporate Environmental Corporate Environmental

ResponsibilityResponsibility

Jose PDCorporate Policy and Strategy Area

Indian Institute of Management Bangalore

jmjjmj

Page 2: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Sustainability: Should Corporations Really Care ?

Page 3: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Factors That Drive Reputation& Competitive Advantage

Business Practices

Employee Treatment

Community SupportSocial responsibility factor

Traditional purchase driver

Quality

Service

Price

Environment

Stability

Convenience

Page 4: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Ford

• Recall Costs:

• Legal Costs*:

• Effects on

Sales:

• $1 billion

• $590 million

• 15%-20%

on Explorers

Firestone

• $390 million

• $360 million

• 40% Decrease

in Sept. & Oct.

*Legal costs: figures until end of 2000.

Source: University of Notre-Dame

Page 5: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Bridgestone

FordFord

Source: University of Notre-Dame

Page 6: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

The European Contamination The European Contamination CrisisCrisis

The European Contamination The European Contamination CrisisCrisis

Recall cost Coca-Cola Enterprises an estimated $103 million dollars.

Source: University of Notre-Dame

Page 7: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Source: University of Notre-Dame

Page 8: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Royal Dutch Shell & Brent SparRoyal Dutch Shell & Brent SparRoyal Dutch Shell & Brent SparRoyal Dutch Shell & Brent Spar

Source: University of Notre-Dame

Page 9: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

McSpotlight.Org

Page 10: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Tobacco Litigation & SettlementTobacco Litigation & Settlement

C o n f i d e n t i a l

Page 11: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Cell Phones or Gorillas ?

Cell Phones or Gorillas ?

Page 12: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Creating Creating Sustainable Sustainable Corporate Advantage …Corporate Advantage …Challenge #1Challenge #1

Using the Gorillas to sell the Cell Phones ?

Page 13: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of
Page 14: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Required Business Response

Environmental StewardshipEnvironmental StewardshipCorporate EnvironmentalismCorporate Environmentalism

(beyond compliance approaches)

Risk ManagementRisk Management(Evaluating Risk-Return Trade-

offs - perceived & Real)Market DevelopmentMarket Development

Page 15: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Strategic Environmental Exposure

Strategic Environmental Exposure

ProductTechnologyRegulationsCustomers

Stakeholders

Relevant Ecological

Environment

Stakeholder Environment

alExposure

CorporateEnvtl.

Exposure/Risk

Source: Jose, 1996

Page 16: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Transforming Risks to Competitive Advantages

Transforming Risks to Competitive Advantages

DuPont3MPatagoniaVolkswagonMonsanto

Page 17: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Reducing the Footprint at DuPont

Electronic MaterialsAgriculture ProductsLycraAuto FinishesCorianTyvek

High EarningsHigh Cash FlowHigh R&D/Capital

PETNylon

Conoco

Invest & Grow

Sell & Redirect

Improve & RepositionSVA lb

Pounds of Materials Used

Source: Stuart Hart, 1999

Invest & Grow

Page 18: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Mar

ket A

ttra

ctiv

enes

s

LO

HI

Environmental AttractivenessHI LO

1951-79

Agro-Chemicals

Ind. chemicals

Pharmaceuticals

Zinc Cells

Source: Jose, 1996

Page 19: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Mar

ket A

ttra

ctiv

enes

s

LO

HI

Environmental AttractivenessHI LO

1980-95

Agro-Chemicals

Ind. chemicals

Bio-fertiliser

Zinc Cells

Seeds

Tissue cultureDrip irrigation

Source: Jose, 1996

Page 20: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Mar

ket A

ttra

ctiv

enes

s

LO

HI

Environmental AttractivenessHI LO

2000 +Source: Jose, 1996

• Waste Management• Solar Energy• Afforestation• Land& Water Mgmt.

• Bio fertilizer

Page 21: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Mar

ket A

ttra

ctiv

enes

s

LO

HI

Environmental AttractivenessHI LO

Source: Jose, 1996

Page 22: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Environmental AttractivenessM

arke

t Att

ract

iven

ess

LO

HI

HI LO

• R&D, Innovation• Resource Substitution• Pollution Control

• P

rodu

ct D

iffe

r en t

i at i

o n•

Co s

t Re d

u cti

on• F

o cu s

Source: Jose, 1996

Page 23: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Sustainability Approaches: Chemical Industry

Conoco DuPont Pioneer Hi-Bred Dow Dow-Elanco

Solutia Monsanto Multiple Acquisitions Ciba-Geigy Sandoz Novartis ICI Astrazeneca

Chemicals Hoechst Chemicals Rhoune-Poulenc Aventis

Today . HC Divestiture

Yesterday . HC Investments

Today . Life Science Invst.

Source: Stuart Hart, 1999

Novo Nordisk

Page 24: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Creating Creating SustainableSustainable Corporate Advantage … Corporate Advantage …Challenge #2Challenge #2

Riding the Wave Vs

Changing the Trend-line?

Page 25: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0 100 200 300 400 500 600 700 800

DEVELOPING COUNTRIES AVG.IndiaChina Thailand

WORLD AVERAGE

Mexico

Argentina

South KoreaTaiwan

Greece Portugal

Spain New Zealand

Italy

Australia

United KingdomFranceBelgium

NorwayDenmark

Germany

Canada

Japan

Switzerland

USA

GDP per Capita [US$]

Brazil

Sustainability Approaches for Automobiles ?

Ownership Density - Vehicles per 1000

MORE DEVELOPED COUNTRIESAVG.

Source: Dr. Ulrich Eichhorn (2001)

Page 26: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

General Motor’s VisionGeneral Motor’s Vision

John F. Smith, Jr.Chairman, General Motors Corporation

January 8, 1997

““No car company will be able to thrive in No car company will be able to thrive in the future with 100% dependency on the future with 100% dependency on

internal combustion engines. But there internal combustion engines. But there is still no single alternative to currentis still no single alternative to current

technology. All of the technologies are technology. All of the technologies are still evolving. So our still evolving. So our strategystrategy is to develop is to develop

a portfolio of options.”a portfolio of options.”

Page 27: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Riding vs. Bucking the TrendsRiding vs. Bucking the Trends

Popln in MillionsTier 175-100

Tier 2-31500-1750

Tier 4

4000

Purchasing Power

> $2,000

> $ 1,500

> $1,500-2,000

Source: Prahlad & Hart, 1999

Page 28: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Environmental Challenges Facing Indian IndustryEnvironmental Challenges Facing Indian Industry

Envt. not seen as a source Comp. Advantage

Trade-off Between Cost & Competitiveness Market Barriers Market Failure: Policy Distortions &

Subsidies Organizational Barriers Dominance of Small & Medium Scale

Sectors

Page 29: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Creating Creating SustainableSustainable Corporate Advantage … Corporate Advantage …Challenge # 3Challenge # 3

Managing to Create Value:For ALL

Page 30: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

The Social ContractSociety’s Expectations of Business Performance

So

cial

Per

form

ance

: E

xpec

ted

an

d A

ctu

al

1960s 1990sTime

Social Social ProblemProblem

Business’s Actual Social Performance

Social Social ProblemProblem

Page 31: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Stakeholder MapsStakeholder Maps

FIRM

Local Communities

Special Interest Groups

Flora & fauna

Future Generations

Politicians

Environmentalists

Employees

Government

Media

Competitors Industry

Traders

Page 32: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

What’s right works. It really does. Cynics will tell you it doesn’t, but they’re wrong. Over the long term what’s right works

James Burke

Page 33: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

Creating Creating SustainableSustainable Corporate Advantage … Corporate Advantage …Challenge # 4Challenge # 4

The Challenge of the Triple Bottom Line

EconomicEconomicPerformancePerformance

EnvironmentalEnvironmentalPerformancePerformance

SocialSocialPerformancePerformance

Source: SustainAbility

Page 34: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

The Sustainability ChallengeThe Sustainability Challenge

Human &Physical Capital

Envtl.Assets

Envtl. Mainten.InvestmentInvestment

Consumption

Economic System Ecological Support System

+

+ + +

+

+

Residuals

Economic Output

_+

Source: Klaus North, 1996

Page 35: Creating Sustainable Corporate Advantage through Corporate Environmental Responsibility Jose PD Corporate Policy and Strategy Area Indian Institute of

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Medicare Advantage Prescription Drug Plan (MA-PD) Sponsor Part D Audit Guide … · 2019. 9. 13. · Medicare Advantage Prescription Drug Plan (MA-PD) Sponsor Part D Audit Guide,

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