Sustainability: The Lay of the Land for 2010 Tom Eggert WI Sustainable Business Council, WI School of Business & WI Department of Natural Resources 608 267-2761 [email protected] What Matters? • Dealing with limited ecological capacity is arguably the most important business challenge facing companies in the 21st century. • Conversely, the most exciting opportunity for business in the 21st century involves developing strategies and models that allow businesses to engage customers that were never on the radar screen. Public Perception Matters • The public’s interest in “green” or “sustainability” continues to grow. • There is increasing interest within supply chains in sustainability • An increasing percent of the population factors sustainability into their actual purchasing decisions Why embrace sustainability? • The drivers of sustainability are: – Related to long term business success (they are inter-related with traditional aspects of strategy development) – Surviving the economic downturn – Consistently of interest to stakeholders • Employees value companies that commit to sustainability • Potential employees view companies with a commitment to sustainability more favorably. Sustainability initiatives should be an integral part of financial analysis • When pursuing sustainability initiatives, companies: – Unearth opportunities to reduce costs – Create new revenue streams – Attract new customers – Develop more innovative business models • The majority of Fortune 500 companies now integrate financial analysis with environmental, social, and governance (ESG) issues. • Strategically integrating sustainability into your business Companies should be creating a clear business case for sustainability. • As part of the business case, alternative business models should be developed. • A new business model might include – products of service, – sustainable mobility, – reducing transportation of raw materials and supplies, – lean manufacturing, and – the use of regional manufacturing and distribution. Environmental liabilities are real • The liabilities associated with climate change pose a threat to senior management and investors. • It is in a company’s financial interest to focus on reducing direct and indirect greenhouse gas emissions. • Companies should also be focusing on decreasing exposure to environmental liabilities, such as superfund sites, spills, toxic releases and responsibility for products after their useful life is done. Lead with your actions, not your words • “Greenwashing" has no place in a company that is serious about its future. • One way to discern the difference between a company's green rhetoric and real action is to look at the composition of its revenues. • Companies should be increasing the revenue derived from: – – – – – ecologically superior [more efficient] product lines, evolving green product lines, investments in energy security, innovative transportation and distribution strategies, and products and services designed for the developing world. Moving forward • Leading companies understand and articulate sustainability’s impact on their organization. • A robust business case for sustainability can be created. • Understanding the challenges and limitations that are facing us is really important. There is no Federal Reserve or lender of last resort for natural resources • As the financial crisis unfolded and huge institutions imploded, the response from policymakers was to print money. • When faced with the most serious economic crisis since the 1930s, the answer was, "There's an app for that." • Print and borrow money, dole it out, and save the economy. • Unfortunately, while it is possible to borrow money, at least for a while, there is not another set of ecosystems from which we can borrow ecological capacity. Environmental issues have been translated into human health concerns • Familiar toxic acronyms of the 1990s, like DDT and PCBs were replaced by new acronyms like PVC, PBDEs, phthalates and the real headlinegrabber, BPA • The connections between food and human health have given rise to an explosion of interest in organic and local food movements. • This emphasis on purity and regionalism is just starting to impact industries in other sectors. Father does NOT always know best • For once and for all, let's set aside the outdated illusion that a bunch of financiers on Wall Street really know best about everything/anything. • The fundamental economic principles underlying the risk and return assumptions governing Wall Street have changed little since World War II, yet the world is completely different today and faces a whole new set of challenges and opportunities. • New models are being explored by folks like Bill Gates and Bill Clinton. The future is now • Ecological limits are not going to happen someday. • The environment is not a subset of the economy; rather the economy is a social convention that exists within the reality of the environment. Ignoring the environment while focusing on the economy is bad for both. • From a business perspective, there will be winners and losers. Losers may whine, but ultimately will adapt or die. • Business strategies must account for ecological risks and opportunities. Available Tools • The WI DNR’s Green Tier program is a reward/recognition/support program for companies interested in sustainability. • The WI Sustainable Business Council’s Green Masters program is a reward/recognition program for companies starting down the road toward sustainability. • Focus on Energy is a statewide energy assistance program that can provide both auditing and rebates. • M-Powering Madison offers a 5 step program for companies to get started with sustainability. • The Partnerships for Sustainability program is a technical assistance and recognition program for companies interested in sustainability. THE WI DNR’s Green Tier Program • Green Tier encourages companies to think creatively about ways they can improve environmental performance while increasing productivity, lowering costs, and growing as a business. The program seeks to recognize, support and reward “leadership” companies by providing a logo that can be used for marketing purposes, providing a liaison between the DNR and the business, and identifying Green Tier companies on the DNR website and in promotional materials about the program. http://greentier.wi.gov. The Green Masters Program • The Green Masters program is an objective, points based certification program, that will allow businesses of any size and from any sector to understand what needs to be done to justifiably claim that they are “on the road to sustainability.” http://www.greenmastersprogram.com Focus on Energy • Focus on Energy works with eligible Wisconsin businesses to install cost effective energy efficiency and renewable energy projects. Focus financial incentives help to implement projects that otherwise would not be completed, or to complete projects sooner than scheduled. http://www.focusonenergy.com/Business/ Focus on Energy • Focus provides businesses in all industries the following benefits: – Cash-Back rewards for energy efficient project implementation – Support in developing a customized energy action plan – New technology research that saves you money and improves productivity – Assistance in communicating with internal audiences, contractors, and other suppliers for program implementation – Access to Focus on Energy-sponsored training programs MPower Madison • Mpower Business ChaMpions is the first program in South-Central Wisconsin that systematically ensures businesses go green effectively and efficiently. Over one year, the ChaMpion program moves businesses from intention to implementation; reducing their use of energy, water, transportation and waste through completed projects. Ultimately saving money. Participating businesses are provided with a variety of tools, from carbon calculators to energy consultants. Our approach centers on: one-on-one support, measurement, local and national resources, transparency, timely information, accountability and community. Partnerships for Sustainability • Partnerships for Sustainability provides Southeastern Wisconsin’s small businesses with practical steps that help improve top-line revenue and bottom-line efficiencies through sustainable business practices. Business leaders who are ready to roll up their sleeves, move beyond the theory and get their companies started will discover that 3T Sustainability is focused on delivering actionable sustainability resources. http://www.partnershipsforsustainability.org/ Conclusion • Businesses that understand and position themselves for the future will be winners. • There are many tools and programs to help businesses get started on their own journey toward sustainability.