1. Sustainability: Its Meaning and ImportanceBy
Bill Blackburn
June 10, 2009
Action for a Sustainable America-Seattle
Green Power Conferences
Grand Hyatt Seattle
William Blackburn Consulting, Ltd.
Web:
Phone:
© Copyright 2009: William R. Blackburn
How many of you would go to the drive through of a fast food restaurant, consume the burger and malt on the road, then toss the bag out onto the roadside? Seems highly irresponsible now, but for those of us old enough to remember the 60s, we can tell you it was common practice then. Why don’t we do that now? Because public awareness and expectations changed, the definitions of right and wrong changed, and business changed too. No longer is it acceptable to pollute rivers to the point they catch fire or to dump drums of toxic waste on the back Now we find ourselves in the midst of more change in public expectations about corporate environmental and social behavior—the most profound change I have witnessed in the 3 ½ decades I’ve been involved in this area. And with this change has come a whole new vocabulary. Who had heard fo fair trade coffee, ethical sourcing and of course the term “Sustainability?”

2. Why are companies (even small ones) going Green??

3. Top Reasons For Increased Focus on Sustainability by Companies (Source: 2007 Conference Board study of 18 major corporations. )
Reputation, brand
Stakeholder pressure (esp. customers)
Reduce waste (and costs), increase productivity
Employee morale, motivation and recruitment
Peer pressure (competitors, high-visibility companies)
WHY?
7% growth in natural food sales in Dec 09
No of sustainable product launches if 4 times faster in 2009 as last year---- (500) in Q1 is about same as for all of 2008.

4. Two Benefits for Organizations in Proactively Seeking Sustainability
Long-term financial viability
Loyalty of key stakeholders
DuPont, Dow and 3M saved $1 billion from P2
GE $50 million from safety, Intel $30 mil from contractor safety programs.
Baxter $800 million cumulative over 12 years
Raytheon saved $10 mil in electricity costs in 2007 from energy reduction efforts

5. Business Needs the Loyalty of Key Stakeholders to Be Successful
Other
Companies
Investors
Our
Company
Government
Communities
Carbon Disclosure Project
Customers
Rating
Groups
Activists
General
Public

6. Building Stakeholder Loyalty
Transparency
Credibility
Stakeholder
Loyalty
Stakeholder
Engagement
Strategic communications (reporting; engagement); no “greenwash”
Working in the “discomfort zone” on the toughest issues
“See ourselves as others see us”
Econ, Env, Soc
Performance

7. Large corporations are beginning to see the strategic importance of sustainability.
e.g., Wal-Mart vice president of strategy & sustainability, 2005; senior vp, 2007
Some years ago a McKinsey study funded by Wal-Mart showed it had lost 8% of shoppers due to its bad social and environmental reputation
Company also began to see they could drive down costs while boosting green reputation.
2007 made position senior vp.

8. Wal-Mart Packaging Initiatives
Environmental Sustainability Packaging Summit
45 major packaging suppliers
2,000 attendees
Sustainable Packaging Value Network
200 global packaging leaders from government, academia, NGOs, and industry
5% Packaging Reduction Goal
60,000 suppliers
$11 billion savings ($3.5 billion to Wal-Mart)

9. What is sustainability??

10. General Definition of Sustainable Development UN Brundtland Commission (1987)
“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

11. General Definition of Sustainability Triple Bottom Line (Elkington 1997)
Meeting the bottom line of not just economic (financial) performance, but social and environmental performance as well.

12. General Definition of Sustainability 2R’s (Blackburn 2007)
Respect: respect for people and other living things
Resources: the wise use of economic and natural resources
---for the purpose of promoting the long-term well-being of the organization and society.
Write this down:

13. Sustainable Products & Services
Improve the efficient use of natural and economic resources along the product life cycle
Provide greater respect and accommodation for the needs of people and other living things along the product life cycle

14. A Corporate Commitment to Sustainability (A Sample Sustainability Policy)
It is within the best interests of our company and society as a whole that our company move along the path to sustainability. To that end, we will strive to achieve the following vision of performance:
1. Economic success: the wise use of financial resources
a. Company Economic Prosperity
Our business is positioned to survive and prosper economically.
b. Community Economic Prosperity
We are helping our community survive and prosper economically.

15. 2. Social responsibility: respect for people
a. Respect for Employees
We treat our employees in a respectful, fair, non-exploitative way, especially with regard to compensation and benefits; promotion; training; open, constructive dialogue with management; involvement in decision-making; working conditions that are safe, healthy and non-coercive; rights of association, collective bargaining and privacy; employment-termination practices; and work-life balance.
b. Diversity, Fair Hiring Practices
We promote diversity and use hiring practices that are fair, responsible, non-discriminatory, and non-exploitative for our employees, board members, and suppliers.
c. Responsible Governance
We manage our risks properly, use our economic power responsibly and operate our business in a way that is ethical and legal.
d. Respect for Stakeholders
We are transparent, respectful and fair to local populations, investors, suppliers and other stakeholders outside our organization who may be affected by our operations. We work collaboratively with our communities, governments and supply chain to enhance the well-being of others.
e. Fair Dealing With Customers
We are honest and fair with our customers, competing fairly for their business, anticipating their needs, respecting their privacy, and providing them safe and effective products and services under the conditions we promise.

16. 3. Environmental responsibility: respect for life; the wise management and use of natural resources
a. Resource Conservation
We conserve our use of natural resources to the extent practicable.
b. Waste Prevention and Management
We reduce to the extent practicable the volume and degree of hazard of the wastes we generate from our operations, and handle them in a safe, legal and responsible way to minimize their environmental effects.
c. Environmental Risk Control and Restoration
We minimize the risk of spills and other potentially harmful environmental incidents, restore the environment where damaged by us, and enhance it to better support biodiversity.
d. Supply Chain Impacts
We work with others in our supply chain to help assure environmental impacts and risks associated with our products and services are reduced and properly controlled.
e. Collaboration With Communities
We collaborate with our communities to protect and improve the environment.

17. Examples of Economic Topics
Sales
Profits
Dividends
Cash flow
R&D investment
Capital expenditures
Debt and interest
Wages
Market share
Retained earnings Liabilities
Return on investment
Community donations
Taxes
Tax subsidies
Local purchasing
Credit rating
Brand strength

18. Examples of Social Topics
Ethics Workplace safety Employee shared values
Product usefulness Corporate governance Employee work-life balance
Product quality Employee relations Human rights (security policies, etc.)
Product safety Product labeling Fair advertising and labeling
Union relations Board diversity Impacts on local cultures
Producer responsibility Supplier diversity Employee diversity
Consumer privacy Employee privacy Employee training and development
Emergency preparedness Non-discrimination policies Employee wellness programs
Child labor Community outreach Employee assistance programs
Forced labor Employment Employee turnover
Disciplinary practices Transparent public reporting Employee layoff policies
Flexible work options Dependent care benefits Anti-sexual harassment policies
Charitable donations Bribery and corruption Political contributions
Antitrust practices Securities regulation Helping the disadvantaged
Occupational health Industrial hygiene Food product nutrition
Bioterrorism Worker violence Support for community services
Indoor air pollution Indigenous rights Access to healthcare by the poor
Legal compliance concerning the above topics

19. Examples of Environmental Topics
Waste disposal Air pollution Water pollution
Chemical spills Greenhouse gases Ozone-depleting substances
Water conservation Energy conservation Natural resource usage
Pollution prevention Recycling Biodiversity
Packaging reduction Soil contamination Product take-back
Natural habitat restoration Wetlands protection Wildlife conservation
Animal rights Product energy use Customer disposal of products
Precautionary Principle Spill prevention Renewable energy and materials
Endangered species Soil erosion/depletion Environmentally sensitive design Compliance with environmental laws and permits

20. Some Observations About Sustainability
Sustainability is not about one thing.
The business case for sustainability is really the business case for a process that looks at sustainability trends and issues and prioritizes among the opportunities and threats to an organization to select those for action that contribute the most value.

21. Common Organizational Threats & Opportunities
-Legal
-Financial
-Reputational
-Competitive
-Operational
-Productivity, cost
-Employee relations
-Reputation
-License to operate, community appeal
-Sales, new markets, customer appeal
-Innovation, new products and services

22. 40% of the World Will Live in Water-Scarce Regions by 2025
Next 40 years ave supply of fresh water will be cut by 1/3
Threatens survival and food supply, hydro power
Source: WRI, UNEP, WBCSD, Tomorrow’s Markets—
Global Trends and Their Implications for Business, 2002;
Jeff Seabright, Coca Cola Presentation, TCB, May 31, 2007.
<0.5
4.0-10
>10
Extreme
Scarcity
Scarcity
Stress
Adequate
Abundant
Surplus
Ocean/
Inland Water
No Data
1000 m³/person/year

23. World’s Population
(Billions of people)

24. Climate Change Visible
Polar ice is melting and sea levels are beginning to rise slightly due to global warming. Also by 2030, no glaciers in Glacier Nat’l Park
Climate scientists say an unprecedented build-up of CO2 and other GHGs in atmosphere has caused an increase in ave global tempt of 1 degree over last 100 years, 5-7 degree in Alaska)
Also expected to change weather patterns in various parts of the globe, increase sea level and shift habitat of plants and animals
Tick-borne encephalitis

25. Sustainability Trends: Conditions and Responses
Opposition to Globalization
Extended Producer Responsibility
Green Products
Green Marketing/Labeling
Green Product Certification
Rise in Socially Responsible Investing
Investor Concerns about Corporate Governance
Increased Demands for Transparency/ Public Reporting
Growing Power of NGOs/CSOs
Increasing Global Terrorism
Over-consumption of Resources
Obesity; Poor Food Nutrition
Fossil Fuel Depletion
Climate Change
Deforestation
Threats to Biodiversity
Fresh Water Depletion/Water Contamination
Wetlands Destruction
Fish Depletion
Coral Reef Destruction
Spread of Hazardous Pollutants
Declining Soil Quality
Ozone Depletion
Declining Corporate Credibility
Growth in Global Business Competition
Speed of Communications/ Digital Divide
Widening Prosperity Gap (Health, Income, Services)
Population Growth
Serious Disease
Mental Health Problems
Increased Immigration; Lower Fertility in Industrialized Nations
Hunger and Malnutrition
Child and Forced Labor
Education Needs for the Disenfranchised
Urbanization
No of TNCs jumped 10x in 30 years
51 of world’s largest companies aren’t countries but companies
10% have access to internet; 50% haven’t used a phone
Extended Producer Resp: proactively control risk; hazards info, responsible for harm; take back
Light brings heat brings change; surge in reporting; stockholder resolutions
150% increase in International NGOs in 20 years

26. How do these sustainability trends affect organizations??

27. Sustainability Trends Drive Response of Organizations
Climate Change
Fossil Fuel Depletion
Energy Conservation
Carbon Footprinting
Recycling
Recycled Content
Dematerialization
Over Consumption
of Resources
Changing Population
Profile
Diversity Programs

28. Sustainability Trends Drive Response of Organizations
Ethical Sourcing
Supplier Assessments
Child and Forced Labor
Growing Concern about Toxics Contamination & Env. Problems
Spread of Toxic
Pollutants
Toxics Elimination
From Inks, Electronics, etc.
Sustainability Reporting
Green Labeling Rules
Product Certifications
Growing Mistrust of
Business

29. William Blackburn Consulting, Ltd.
Web:
Phone:
Book: The Sustainability Handbook—
The Complete Management Guide
to Social, Economic and
Environmental Responsibility
(See Web site)
Henry Kaiser: Problems are only opportunities in work clothes.