The Business Case for Sustainability: A financial model and strategic analysis for Cummins, Inc.

Problem Statement:  Cummins (CMI): diesel engine and power company with more than $6 billion in annual sales  Despite CSR reports, company has yet to embrace sustainability as a corporate strategy  Company executives and high level decision makers question spending scarce resources on sustainability initiatives without detailed analysis of business case  General need across companies for standardized procedures/template to assess viability of sustainability strategy

Goals:  Conduct a specific analysis of divisions within Cummins.  Assess the viability of design for the environment and design for disassembly.  Create a template that can be used by other companies to conduct a business case for sustainability analysis. `

Research Questions  How do you put together a financial model that demonstrates whether being a good corporate citizen benefits the company’s bottom line?  Can the company save money while being a good corporate citizen? If so, how?  What’s the business case for caring about product life cycle?  What would a sustainability infrastructure for CMI look like?  What would make people in CMI care about sustainability?  Is a financial case enough to persuade a company to move towards sustainability, or is a corporate culture change necessary to facilitate that shift?

Research Methods  Literature review  Company surveys  Key stakeholder interviews  Financial modeling  Lifecycle analyses Expertise Needed  Financial modeling  Lifecycle analyses  Non-market strategy/Policy analysis  Project management  Client relations

Tentative Timeline Summer 2005:  Literature review  market assessment  product evaluation Fall 2005:  Finalize financial model  analysis of results  initial draft reports Winter 2006:  Finalize Report  presentation to company executives