1. © 2009 MIT Sloan School of Management Strategies for Sustainable Business: Challenges and Opportunities Prof. Sarah Slaughter MIT Sloan School of Management World Federation of Exchanges Nov. 23, 2009

2. © 2009 MIT Sloan School of Management Sustainability Interdependent Social, Economic and Environmental Systems Opportunity to Transform –Organizations –Markets –Communities http://www.americansouthwest.net/ california/photographs700/talltree.jpg

3. © 2009 MIT Sloan School of Management Framework for Sustainable Business Strategies How do we do what we do? Sustainable Operations 31 Tannery, NJ, USA – Net Zero Sustainable agriculture Where do we do what we do? Sustainable Communities What do we do? Sustainable Products/Services,Markets Green Fuel Technologies

4. © 2009 MIT Sloan School of Management Setting the Baseline and Monitoring What resources are we currently using? Normal vs peak? Upstream processes (e.g., design, procurement) that impact sustainability? What is our supply chain? Vulnerabilities? Existing or emerging standards? How will we track our progress? Predicted - and unpredicted - outcomes? Internal vs. external reporting? MIT Energy Map MIT Water Map

5. © 2009 MIT Sloan School of Management Sustainable Operations: Waste What is our waste stream? –Infrastructure and facilities (e.g., water leaks)? –Production process inputs (e.g., offcuts)? –Production process outputs or byproducts? Opportunities to redirect as input into another process or system? End-of-life of our products?

6. © 2009 MIT Sloan School of Management Example of Waste-to-Input: Kalundborg, Denmark Source: Ecodecision, Spring 1996: 20

7. © 2009 MIT Sloan School of Management Sustainable Operations: Efficiency How can we increase the efficiency of our resource use? –Production process improvements? –Built facilities and infrastructure (e.g. insulation)? –Supply chain (e.g., sourcing, transport)? –Human resources (e.g., training, health)? Living Buildings Challenge: Omega Center, Rhinebeck, NY www.jetsongreen.com/2009/07/ocsl-leed-platinum-living-building.html

8. © 2009 MIT Sloan School of Management Example: Efficient Data Centers 1. Identified No/low cost changes 2. Established monitoring methodology 3. Reduced electricity use by 20% in pilot project MIT LGO Student: Jeremy Stewart, 2010

9. © 2009 MIT Sloan School of Management Sustainable Operations: New Sources How can we best use potential new sources (e.g, water, power, material, transport, etc.)? –Relative social, economic environmental performance? –Availability? –Emerging policies, processes and technologies? Potential capture/re-use as “new source”? GM PPA with PV Sugarcane Bagasse for paper

10. © 2009 MIT Sloan School of Management Sustainable Product or Service Redesign or reformulate existing product/service? –Reduce lifecycle environmental, economic and social impacts? –Increase re-use or recycling in natural or industrial systems? Increase service portion? New sustainability products/services or markets? Green Fuel Technologies Nike Considered Design Index

11. © 2009 MIT Sloan School of Management Carbon Sequestration through Afforestation (USBCSD) Focus: Alluvial Land with Cottonwood/Oak Forests –Revenue: carbon sequestration credits, hunting leases govt subsidies, timber harvests –Opportunity cost: Revenue from crops –Economic feasibility relative to carbon market prices Forestry Carbon Offset Industry –Offset aggregators –Firm-sponsored projects –CCX

12. © 2009 MIT Sloan School of Management Sustainable Communities How can we best strengthen the community and region in which we operate? –Special need/vulnerability matches our competency? –Potential partners to strengthen/improve sustainability in communities? University of Sao Paolo, Brazil E-waste Project

13. © 2009 MIT Sloan School of Management Example of Sustainability in New Market: WaterHealth New technology – filtration with proprietary UV treatment New Business Model: –Provide community financing –Design/build modular units –Train local personnel to operate, maintain New Market –Franchised “water stores”, replaces water trucks http://www.waterhealth.com/ http://blog.acumenfund.org/2007/06/

14. © 2009 MIT Sloan School of Management Opportunities for Sustainable Business Transformation of –Organizations –Industries –Communities Realms of Influence –Sustainable Operations –Sustainable Product/Service –Sustainable Communities Aluminum – extraction vs. recovery

15. © 2009 MIT Sloan School of Management Links for Additional Information MIT Sloan Sustainability: http://mitsloan.mit.edu/sustainability/ http://mitsloan.mit.edu/sustainability/ Sustainable Business Lab (download project final reports and posters): http://actionlearning.mit.edu/s-lab/index.php http://actionlearning.mit.edu/s-lab/index.php MIT S-Lab (on Open Courseware): http://ocw.mit.edu/OcwWeb/Sloan-School-of- Management/15-992Spring- 2008/CourseHome/index.htm http://ocw.mit.edu/OcwWeb/Sloan-School-of- Management/15-992Spring- 2008/CourseHome/index.htm

16. © 2009 MIT Sloan School of Management Sustainability Investments “Sustainable City Finance”, New York City, January 7, 2010 (http://www.nyas.org/Events/Detail.aspx?cid=2 ecbfc47-95f7-4b9f-bcac-59cf41182e52) World Federation of Exchanges report: “Exchanges and sustainable investment” (August 2009)