1. Sustainability Planning Thinking Clearly in a Climate of Fear November 14, 2008 US National Whitewater Center Tom Lannin, PhD

2.  Sustainability and Planning  Carbon Footprint Analysis  Risk Disclosure  Due Diligence Process  Strategy Execution Topics

3. Sustainability and Planning

4. Panic in the (Wall) Streets

5. Panic or Reality? “The world is at severe risk of a global systemic financial meltdown and a severe global depression.” -- Nouriel Roubini

6. The Three Aspects of Sustainability Environmental Social Economic

7. Sustainability Drivers Regulatory Compliance Energy Efficiency Innovation Consumer Image

8. We need a rational, balanced, triple bottom line approach that considers the major drivers. What We Must Do

9. We must dedicate our intellectual and financial capital toward creating far more sustainable cultures and societies, especially our own. What We Must Do

10. To become more sustainable, we must design, plan, and build systems with both the human network and natural system in mind. What We Must Do

11. The Real (and Big) Problem “Climate change is the most severe problem we are facing today.” -- Sir David King

12. Nature-Network Interaction 1. Fragmentation 2. Depletion 3. Pollution 4. Erosion 5. Extinction As we create great wealth, we must deal with the problems we create.

13. Carbon Footprint Analysis

14. Beyond Compliance We must do more than just comply. We must analyze carbon data in order to design a truly sustainable future.

15. What the Data Tells Us about the Carbon Problem carbon in millions of tons yearly

16. Carbon Emissions

17. New software enables us to measure our carbon footprint and make smart decisions about sustainable design and development. How to Measure Our Carbon Footprint

18. Carbon Footprint Analysis Organizations must first Establish context for analysis Determine the source and drivers Avoid simple spreadsheets Use data to decide, not just report

19. Carbon Footprint Analysis Organizations must then Forecast Create a scenario Be transparent about the data Use clear methods and processes Report honestly and be fully compliant

20. Formula for Calculating GHG Emissions

21. SAS for Sustainability Management Good data in = good data out

22. SAS for Sustainability Management

23. Largest CO2 Footprints by City CO2 Emissions by City: Pounds per Employee Annually City and Employee Data

24. Facility Performance Data

25. Risk Disclosure

26. Cap-and-trade systems create a financial incentive for emission reductions. Risk Disclosure Cap and Trade Basics

27. An environmental regulator establishes a “ cap ” that limits emissions from a designated group of polluters.

28. The emissions allowed under the new cap are divided up into individual permits that represent the right to emit that amount. Risk Disclosure Cap and Trade Basics

29. Because the emissions cap restricts the amount of pollution allowed, permits that give a company the right to pollute take on financial value. Risk Disclosure Cap and Trade Basics

30. Companies can now buy and sell permits in order to continue operating in the most profitable way possible. Risk Disclosure Cap and Trade Basics

31. Risk Disclosure Environmental Application Capacity usage is a risk factor Capacity usage is linked to goods and services that have some CO 2 emissions The environment generates value-at-risk numbers (VaR) in terms of dollars and CO 2 production

32. Risk Disclosure CO 2 Exchange European Climate Exchange (ECX) manages the marketing and product development for ECX Carbon Financial Instruments (ECX CFIs).

33. Chicago Climate Exchange (CCX) is the world’s first--and North America’s only-- voluntary, legally binding integrated trading system to reduce emissions of all six major greenhouse gases. Risk Disclosure CO 2 Exchange

34. Due Diligence

35. Corporate Social Responsibility (CSR) agenda Environmental, social, and ethical equity are now on par with economic equity Companies not practicing sustainability due diligence are at risk Due Diligence

36. Businesses who don’t perform due diligence with the triple bottom line in mind miss out on the potential benefits. For example, a business could miss out on a premium that could be attached to the business’ sale price based on the value of its sustainability initiatives. Due Diligence

37. The Value” of Due Diligence Environmental waste clean-up and “greenwashing” have a price A company’s corporate responsibility record has value and can be considered a bona fide asset This asset should be factored into deal price negotiations

38. Strategy Execution

39. Solid Strategy Requires… Sustainability vision (triple bottom line) Sustainable risk and performance management Sustainable process management Customer satisfaction

40. Sustainability Vision

41. Sustainability Process Management

42. Sustainable Risk and Performance Management

43. Customer Satisfaction

44. Strategy Execution How They Work Together

45. A Call for Reason Like a well-run bank, society cannot liquidate its natural resources (assets) to meet the demands of those operating strictly on faith, fear, and speculation.

46. Time for Sustainable Change We must replace a “greed is good” mentality with a “green is good” ethic throughout our culture, and especially in business.

47. Reduce, reuse, recycle is the new business mantra. And the triple bottom line is replacing purely economic metrics. -- William McDonough

48. Questions? www.chestnutconsultingllc.com 704.906.5116