Sustainability Your Business and Change Professor Ken Peattie Director, BRASS Research Centre

What Does “Sustainability” Mean ? Sustainable Development : “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Report, 1987 “Our Common Future”) It means developing societies, economies and companies that can be sustained in economic, social and environmental terms. More than anything else, it means innovation.

How Many Habitable Planets Do We Know Of ? How Many Planets Would We Need to Extend the British/Welsh Lifestyle to All ? Add two more if we make that American ….

What Does it Mean for Business ? A concept of progress that companies, NGOs and policy makers can agree upon; An emphasis on concepts such as Equity (for example the rise in FairTrade); Futurity; Limits (social and environmental); Needs (particularly within poorer countries); Biodiversity (the richness of nature); Global environmental systems; Opportunities as well as potential threats;

What Does it Mean for Business ? A growing market for greener goods & services (e.g. organic food, eco-tourism); Supply-chain pressures from customers requiring ISO or similar: New social and environmental regulations; New niche & cause related marketing opportunities; New opportunities for partnerships; A fresh set of business trends such as : re-localisation, low-carbon systems, rising costs of waste disposal, increased social & environmental reporting requirements;

The Porter Hypothesis In 1995 Porter and van der Linde proposed that contrary to popular belief, tougher environmental regulation benefited business because : Regulations create new markets for some firms (e.g. pollution abatement equipment); Pollution & waste represent inefficiencies that companies are motivated to address; The challenges involved encourage innovation;

Our Economy : unnatural, linear, inefficient, wasteful, polluting. TakeMake Waste Only 6% of material in- flow ends up in products Source: Hawken, Lovins, Natural Capitalism Takes “natural capital” - structured valuable material, and processes it into unusable waste Buy/Use

The Path to Sustainability ‘The goal ought not to be “less bad”, but “how good?”, or 100% sustainability. The way to 100% sustainability is innovation.’ Professor William McDonough, University of Virginia, US

Making Progress: The ‘Four Steps’ Model Source : Professor Martin Charter, Centre for Sustainable Design

Four Approaches: Arthur D. Little “Top-liner” Product / Service Innovation “Bottom-liner” Process Innovation eco-efficiency drives down costs Extrovert Business Innovation Transformer Organisational innovation new products and services grow revenues and market share better strategy, staff alignment and learning improves work performance new partnerships secure license to operate, innovate, and grow Innovation Sustainable Innovation

Electrolux (Green Range) - 16% of sales - 28% of gross margins Philips (Green Flagship Products) - Bill of materials-5% - Market share+2% - Price premium+3% Varian Medical Systems - clean design approach reduced part count by 65 % and saved £162 k Business Benefits from Sustainable Innovation

So What Will it All Mean ??? Ultimately - changes to the way we produce, consume, live and do business; the current situation is unsustainable. Making progress will involve a range of changes, innovations and opportunities including :

Meeting Needs More Efficiently VS.

Developing More Integrated Production Systems

Natural Sources of Inspiration

Changes for the Better Like from this: To this: