sustainability: why it resonates – and why it doesn’t – within corporations sustainability:...

Sustainability: Why It Resonates – and Why It Doesn’t –

Within Corporations

Sustainability: Why It Resonates – and Why It Doesn’t –

Within Corporations

February 29, 2012

Copyright 2012 SustainEdge www.SustainEdge.com

Greg StinePresident &

CEOSustainEdge

Megatrends

Business Philosophy Development & Evolution

Current Events

Elements


Elements


Environmentalism Quality

Corporate and Individual Philanthropy

(Merck, Gates)

Globalisation

Financial Malfeasance

Risk: Securities Insecurity

Systems Thinking

Governance (Sarbanes-Oxley, etc)

Internet

Performance Measurement

Strategic Planning

Corporate Financial

Dominance

Culture and Social Trends (e.g. The 99%, Millenials)

Asking WHY Is Much

More Important!


The CSR Alignment Matrix

Socially Responsible

Socially Irresponsible

Profitable

Not Profitable

Drivers for Sustainability

Brand/Corporate Reputation

Cost Savings Market Opportunity Customer Expectations Statement of Intent Executive ‘Worldview’


Legislation NGO/Watchdog Activities Compliance and Risk

Exposure Higher Return on Capital Investor Demands/Activism Climate Change

Barriers to Sustainability Investments

Organizational Inertia Fiduciary Responsibility Competing Priorities or

Expenditures Conceptual Disagreement Short-Term Thinking - Quarterly

Earnings and Growth Expectations Fear of the Unknown Non-Exposure to Concepts Misinformation or Bias


Lack of Expertise Up Front Costs Lacking “Conditions”

Legislation Investor Demands/Activism NGO/Watchdog Activities Executive ‘Social

Alignment’ Customer Expectations Marketing “Catastrophe”

Barriers to Sustainability Investments


The {wimp} Factor

“gentle”

“safe”

“healthy”

“mild”

“strength”

“power”

“toughness”

“Manly”Traditional

Sustainable

(The Sustainability Liability: Potential Negative Effects of Ethicality on Product Preference, Luchs, Michael G., Naylor, Rebecca W., et al, Journal of Marketing – September 2010)

Recent Data Supports Sustainability

A recent Harvard Business School longitudinal study of 180 companies between 1993-2010 indicates that:

→High Sustainability companies significantly outperform their Traditional firms over the long-term

→ Overall Financial Performance (23%)→ Stock Price (47%)

→The outperformance is stronger in sectors where the customers are individual consumers instead of companies,

→ Consumer product companies compete on the basis of brands and reputations→ Suppliers and manufacturers significantly depend upon extracting large amounts

of natural resources

(The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance, Robert G. Eccles, et. al, Harvard Business School – November 2011)


Case Study: Apple (or “What happens when you ignore sustainability”)

Ranking

– Ranked 117th in Newsweek’s 2011 Green 500 list.

Key Apple Financials

2011 Revenue: $128 billion2011 Net Income: $33 billion2012 1st Quarter

Revenue: $44 billionNet Income: $13 billion


Case Study: Apple

Sustainability Issues Facing the Company Transparency Supply Chain

Availability of Raw Materials Human Rights

Toxic Substances in Products (e.g. arsenic, BFRs, PVC) Environmental Footprint Public Relations Sustainability Nazis


Distribution of World Oil Reserves


Distribution of Rare Earth Metals Deposits


Case Study: Apple

Sustainability Issues Facing the Company Transparency Supply Chain

Availability of Raw Materials Human Rights

Toxic Substances in Products (e.g. arsenic, BFRs, PVC) Environmental Footprint Public Relations Wrath of the Sustainability Nazis


Apple - Scenario Planning


Equitable Treatment of Workers

Financial Performance



Equitable Treatment of Workers

Sustainable Operations



Sustainable Operations

Financial Performance

Best Part: It Is Hard to Screw This Up


About SustainEdge


Basics– Formed in St. Louis in 2008.– Offices in St. Louis & New York City Metro– Only Sustainability Firm in: MO, KS, IA, OK, AR, TN, KY– Selected by Institutional Investor Magazine to Provide Case Studies

on Corporate Sustainable Performance

Products & Services– Strategic Sustainability Planning – Return on Sustainability (ROS®)– Sustainability Performance Measurement (Metrics & Technology)

Sample Clients


Greg StinePresident/CEO, [email protected]: 314.808.1104

28Copyright 2012 SustainEdge www.SustainEdge.com

SustainEdge100 Chesterfield Business Parkway, Suite 200Chesterfield, MO 63005314.596.2764


Harvard Study Sustainable Company Criteria

sustainability: why it resonates – and why it doesn’t – within corporations sustainability:...

Documents

high sustainability

consumer product companies

social trends

corporate behavior

product preference

individual consumers

individual philanthropymerck

risk exposurehigher