Stuart School of Business Action Plan for Sustainability and Environmental Responsibility Presentation to the National Association of Wholesaler-Distributors by George P. Nassos October 15, 2008

Stuart School of Business The Need for Sustainability – The Environment’s Big Three Energy – Depleting Fossil Fuels Water – Growing Shortage Global Warming: 3-5º F., 2050, 60-80%, 1990

Stuart School of Business Take Your Choice! CERES Principles 4 R’s Energy Efficiency Adopt Sustainable Strategies

Stuart School of Business More Choices! Apply Systems Approach – Tunneling Climate Strategy Green Buildings

Stuart School of Business Can Start With Quick Fix – Adopt the CERES Principles Protection of the Biosphere Sustainable Use of Natural Resources Reduction and Disposal of Wastes Energy Conservation Risk Reduction

Stuart School of Business CERES Principles (cont’d) Safe Products and Services Environmental Restoration Informing the Public Management Commitment Audits and Reports

Stuart School of Business Four R’s Analyze waste streams 1 – Determine waste value and Reduce 2 – Identify alternatives and Reuse 3 – Recycle 4 – Redesign

Stuart School of Business Energy Efficiency Eco-efficient vs. Eco-effective Initially, Focus on Efficiency Then, Focus on Renewable Energy

Stuart School of Business Adopt Sustainable Strategies The Natural Step

Stuart School of Business The 4 Conditions of The Natural Step Do not systematically increase concentration of substances extracted from the Earth’s crust Do not systematically increase concentrations of substances produced by society Do not systematically mismanage the ecosphere Resources are used fairly and efficiently in order to meet basic human needs worldwide

Stuart School of Business Adopt Sustainable Strategies The Natural Step Servicizing

Stuart School of Business Servicizing Redefine commerce to deliver service and value, not material Maintain control over product life cycle Produce more cost efficient products

Stuart School of Business Application of Servicizing Strategy Incandescent Light Bulbs Interface – Commercial Carpeting Electrolux – Washing Machines duPont & Ford – Auto Assembly Paint Shop

Stuart School of Business Adopt Sustainable Strategies The Natural Step Servicizing Biomimicry

Stuart School of Business Learn From Nature – Biomimicry Solar panels Abalone Spider’s silk Bi-valves Cow’s enzyme Rhinoceros horn

Stuart School of Business Adopt Sustainable Strategies The Natural Step Servicizing Biomimicry Base of the Pyramid

Stuart School of Business The Global Pyramid Low-Income Markets (BOP) Emerging Middle Class Wealthy Purchasing PowerPopulation in Millions >$15,000 $1,500 – 15,000 <$1, ,500 4,000

Stuart School of Business The Great Leap Downward Bottom of the Top Base of the Pyramid

Stuart School of Business Driving Innovation from the Base of the Pyramid Honda LEDs Phones Nirma Galanz

Stuart School of Business Adopt Sustainable Strategies The Natural Step Servicizing Biomimicry Base of the Pyramid “BHAG”

Stuart School of Business Toilet Lid Sink

Stuart School of Business Advantages of Vertical Farming Year-around crop production No weather problems All food grown organically Eliminates agricultural runoff Farming in urban centers Reduces fossil fuel use Converts black and gray water

Stuart School of Business Vertical Farm

Stuart School of Business Tunneling Diminishing Returns Interface House Insulation

Stuart School of Business Climate Strategy Chicago Climate Exchange Integrating Carbon Trade

Stuart School of Business Integrating Carbon Trade Cap-and-Trade Market

Stuart School of Business Cap-and-Trade System

Stuart School of Business Integrating Carbon Trade Cap-and-Trade Market Offset Exchange

Stuart School of Business Offset Exchange System

Stuart School of Business Integrating Carbon Trade Cap-and-Trade Market Offset Exchange Cap-and-Dividend

Stuart School of Business Climate Strategy Chicago Climate Exchange Integrating Carbon Trade U. S. Climate Action Partnership

Stuart School of Business U.S. Climate Action Partnership Companies trying to influence government Six principles –Account for climate change –Create incentives –Be environmentally effective –Create economic opportunity & advantage –Be fair to impacted sectors –Reward early action

Stuart School of Business Green Buildings -- LEED USGBC LEED Certification EB – NC – CI – CS – H – ND

Stuart School of Business Measuring Your Success – With GEMI What is material 1. Understand context 2. Assess issues 3. Develop key objectives What and how to measure 4. Define key performance indicators and metrics How to assure effectiveness 5. Evaluate and communicate metrics 6. Evaluate integration and improvement

Stuart School of Business Why Do Companies Seek Sustainability? Economics Image Marketing Social Consciousness Concern for the Environment Achieve Competitive Advantage Survival

Stuart School of Business The Importance of Commitment Board Commitment Officer Commitment Manager Commitment Employee Commitment

Stuart School of Business What Are Some Companies Doing – Or Not Doing Acquiring Sustainable Companies General Electric Panasonic (Matsushita) Interface USCAP – or -- CEED Shell Terra Choice Study

Stuart School of Business Why Sustainability Has Not Made a Breakthrough “There is an important job to be done, and Everybody expects that Somebody would do it. Anybody could do it, but Nobody did it. Somebody gets angry about that because it is Everybody’s job. Everybody thinks that Anybody should do it, but Nobody realizes that Everybody would not do it. It ends up that Everybody blames Somebody when Nobody does what Anybody has to do.”

Stuart School of Business Thank you for this opportunity! George P. Nassos