The Sustainability Revolution: Impact on Business, Impact on HR Gil Friend, CEO Natural Logic Inc. HR Forums March 7, 2008

Tipping point 2005 –General Electric –Goldman Sachs –JPMorganChase –Katrina & Wilma –Boeing –Wal-Mart 2006 –Inconvenient Truth 2007 –Stern Report –IPCC –US CAP 2008-

Central focus Climate change –Carbon footprint Zero waste –From Subaru to LA Water –Unlike energy, not substitutable PBTs –EU changing the game

Wall Street & Sustainability Make It Faster Make More Money Reduce Risk 340%  60% 

Risk & Uncertainty Collision course: trends incorrectly boundaried, not adequately assessed, poorly understood –Regulatory futures –Energy futures –Climate futures –Toxics & balance of flows –Oceans, biodiversity &… “Inevitable surprises” –WEEE readiness 40+% unprepared, with one-third of industry revenues on the line –Oil - Price, supply, peak What happens to your business if oil prices continue to rise? –What’s next? EU standards? Debt? Trade balance? Sea levels? Find certainty within uncertainty –How? Principle-based strategies

Fiduciary Responsibility Boards and executives exposed –Avoidable risk Significant business opportunities, not just cost avoidance –Brand value –New assets –Future-proofing

Premise: Only two things

US Economy: Material Flow Product 6% NonProduct 94%

Effective demand, burden: P x A x T Resource capacity Margin for action ?

Principles Business –Buy low, sell high –Build value, build relationship –Don’t make what you can’t sell Ecological –Renewable –Cyclical –Edible –Profitable –Don’t buy/make/sell what can’t be metabolized by living systems Reality-based –Ignore the regulations

Implement Expand the scan Stand on bedrock Integrate into strategy Reject “tradeoffs” Be agile in the face of uncertainty Embed into operations Everyone on the same page Strategic partnerships Dashboards and billboards

The issues for HR Recruitment Engagement Capacity Enrichment Autonomy Reward Retention

Self-Control To be in a state of self-control, a person must know: –what he [or she] is supposed to do –what he [or she] is actually doing –what choices [or she] has to improve results wherever necessary “If any of these three conditions are not met, a person cannot be held responsible.” –JM Juran, 1948

Personal questions What are you really here to do? –(How good are you willing to have it?) Can you do it? Can you afford it? How can you do it? What promises will you make? What can we do together?

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