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The Business Case for Sustainability

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Sustainability – as a conceptual framework for the organization of priorities and allocation of resources – provides a unique platform for reducing costs, identifying and managing risk, enhancing ...

Sustainability – as a conceptual framework for the organization of priorities and allocation of resources – provides a unique platform for reducing costs, identifying and managing risk, enhancing brand, and driving innovation. No other business priority offers as rich a set of benefits over time - benefits that create, enhance and preserve lasting value for all stakeholders.

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  • Top Speaking Points: 1. Brightworks as Sustainability Advisors2. Brightworks ‘elevator pitch’• Brightworks helps organizations integrate sustainability into their strategic and operational planning processes.• They are a business-centric consulting firm – they understand how businesses think, make priorities, and make decisions.• Their approach is to help firms use sustainability strategically - to save money, reduce risk, improve positioning and enhance brand.
  • BP has agreed to pay a $15 million penalty to resolve Clean Air Act violations at its scandal-plagued refinery in Texas City, Tex., federal regulators announced Thursday.The settlement — the largest ever recovered for Clean Air Act violations at a single facility — addresses violations stemming from fires and a toxic leak in 2004 and 2005. It brings to $137 million the amount recovered by the federal government from BP in criminal, civil and administrative fines for safety and environmental violations at the Texas City refinery.That final report said the release of chemicals had gone on for 959 hours, until May 16. Among other pollutants, the plant had released 17,000 pounds of benzene; 37,000 pounds of nitrogen oxides, which can cause respiratory problems; and 186,000 pounds of carbon monoxide. Another 262,000 pounds of various volatile organic compounds also escaped. http://green.blogs.nytimes.com/2010/09/30/bp-to-pay-record-fine-for-refinery-violations/Waste: With the three landfill sites in the city full to the brim and every resident continuing to account for at least half-a-kilogram of municipal waste everyday, Delhi is staring at a sanitation crisis. It mentioned that the MCD had demanded more land to process 400 metric tonnes of solid waste which is generated daily. http://www.indianexpress.com/news/landfill-sites-full-need-dda-nod-for-new-sites-govt/848988/
  • Texas:Cotton crops affected, beef and wheat prices expected to skyrocket, and there is no end in sight.China:Divert at least six trillion gallons of water each year hundreds of miles from the other great Chinese river, the Yangtze, to slake the thirst of the north China plain and its 440 million people. The engineering feat, called the South-North Water Diversion Project, is China’s most ambitious attempt to subjugate nature. It would be like channeling water from the Mississippi River to meet the drinking needs of Boston, New York and Washington. Its $62 billion price tag is twice that of the Three Gorges Dam, which is the world’s largest hydroelectric project.http://www.nytimes.com/2011/06/02/world/asia/02water.html?pagewanted=all
  • Ethanol: The Agriculture Department this week estimated that farmers will harvest 12.5 billion bushels of corn this year, the third-largest crop on record, but that was 3 percent less than the USDA had forecast a month earlier.With corn supplies tightening, the USDA also estimated usage for feed would be reduced. About 4.7 billion bushels of this year's crop is expected to be used for livestock feed, down from 5 billion bushels for the 2010 harvest.http://www.usatoday.com/money/industries/food/story/2011-09-18/corn-prices-ethanol-mandate/50417146/1Fuel Delivery to Nome:Renda, Russian tanker follows Coast Guard Icebreaker Healy through thousands of miles of sea ice for an emergency delivery of gasoline and diesel fuel to Nome. No local resources for energy, logistical issues caused shortage.http://www.nytimes.com/2012/01/10/us/icebreaker-slowly-carves-path-for-tanker-to-bring-emergency-fuel-to-alaska.html?
  • Urgency of sustainability- Current issues and opportunities for us
  • One framework for looking at the Business case
  • Another framework…
  • Another framework…more for assessing the relative sustainability of a project/initiative
  • What is the goal of sustainability?One important way to describe the differences is that ‘green’ involves incremental changes to the old ways of doing things.True ‘sustainable development’ is transformative and brings our economy into a paradigm whereby future generations can expect the planet to be the same or healthier than we find it.
  • This is one example from our work which actually qualifies as regenerative design. In Portland’s South Waterfront Redevelopment - a 40 acre urban infill redevelopment of an industrial area - it was all graded down to just gravel, rock and dirt when we first got there, it looked like this picture on the slide. We helped get the development plan changed to include what's called a “bioswale” - a dedicated area of engineered drainage and vegetation - to treat all of the public storm water coming off the site, and then a man made waterfall takes that water into the Willamette River, which runs through downtown Portland. A permit from the Army Corps of Engineers was required to do that instead of taking all the storm water through pipes to outfalls or a waste treatment plant.  It turned out that the cost of the bioswale was equivalent to the cost of the technical system that was originally in the plan. But what was done there was a re-creation of the pre-development ecological function. So we took an area that was a former shipyard, and then a former industrial site, and along the waterfront edge, replicated the storm water treatment function that was there pre-development, and it's now a dense high-rise developed area with 15-17 storey buildings with a water treatment system that looks like a garden. That's the one example I can point to of regenerative design that we've had.
  • Experts in the field of sustainability recognize the value (tied to economic payback) in sustainability initiatives.
  • There are generally 6 drivers of Sustainability:
  • An important class of “assets” are the employees of any firm. The firm that has the ability to attract and retain better employees have a distinct advantage over their competition.According to the 2011 Report by SHRM, 80-90% of employers recognize that sust. is important
  • Urgency of sustainability- Current issues and opportunities for us
  • Top Speaking Points: 1. Brightworks as Sustainability Advisors2. Brightworks ‘elevator pitch’• Brightworks helps organizations integrate sustainability into their strategic and operational planning processes.• They are a business-centric consulting firm – they understand how businesses think, make priorities, and make decisions.• Their approach is to help firms use sustainability strategically - to save money, reduce risk, improve positioning and enhance brand.

The Business Case for Sustainability The Business Case for Sustainability Presentation Transcript

  • Green Building Sustainability and LEED® Planning Education Sustainable Workforce Training GBCI and AIA Credential Maintenance Professional DevelopmentPortland | Cleveland | Los Angeles | New York | San Francisco | Seattle The Business CaseThis presentation is protected by US and International copyright laws. Reproduction, for Sustainabilitydistribution, display and use of the presentation without written permission of the speaker isprohibited ©Brightworks 2012
  • The Business Case and BeyondHow Deep Integration of Sustainability Thinking Creates Lasting ValueBrightworks Sustainability Advisors19 April 2012 The Business Case for Sustainability
  • Agenda  Business As Usual  Sustainability  Business Strategy and the Business Case 7 - Cost savings - Asset value improvement - Risk mitigation - Brand enhancement - Innovation driver - Employee attraction and retention - Market opportunity  Tools  Beyond the Business Case The Business Case for Sustainability
  • Objectives At the end of this course, you will be able to: 1. Provide context for the two key drivers for Sustainability, the “Ethical Case” and the “Business Case”. 2. Provide an understanding of Sustainability and Business Strategy. 3. Provide an understanding of the business benefits of green building and LEED from a tactical and prescriptive approach. 4. Provide an overview of the tools and techniques necessary to develop a successful business case for sustainability. The Business Case for Sustainability
  • Business as Usual The Business Case LEED NC Workshop for Sustainability Brightworks 2008
  • The Business Case for Sustainability
  • from www.droughtmonitor.unl.edu The Business Case for Sustainability
  • The Business Case for Sustainability
  • Sustainability The Business Case LEED NC Workshop for Sustainability Brightworks 2008
  • DefinitionsUNITED NATIONS DEFINITION Sustainable Development is development which meets the needs of the present without compromising the ability of future generations to meet their own needs. World Commission on Environment and Development (The Bruntland Report 1987) The Business Case for Sustainability
  • Sustainability 101TRIPLE BOTTOM LINE (TBL) “People, Planet, Profit” or “Economy, Environment, Equity” The Business Case for Sustainability
  • DefinitionsCRADLE TO CRADLE (C2C): Biological and TechnicalNutrient Cycles www.mbdc.com The Business Case for Sustainability
  • DefinitionsTHE NATURAL STEP: Four “System Conditions” ofSustainability In a sustainable society, nature is not subject to systematically increasing... ...concentrations of substances extracted from the Earth’s crust, ...concentrations of substances produced by society, ...degradation by physical means, and, in that society... ...people are not subject to conditions that systematically undermine their capacity to meet their needs. www.naturalstep.org The Business Case for Sustainability
  • Sustainable vs. Green What’s the Difference? VS.green green sustainable60 miles per gallon Zero emissions“40% better than code” 100% renewable powerRecycling Zero wasteLess toxics Zero pollution The Business Case for Sustainability
  • Portland’s South Waterfront Redevelopment Regenerative Design 2002 to today The Business Case for Sustainability
  • Sustainability &Business Strategy The Business Case LEED NC Workshop for Sustainability Brightworks 2008
  • “more than 70 percent of surveyrespondents said that their companyhas not developed a clear businesscase for sustainability.”Whereas 50 percent of the expertswe surveyed said that their companyhad a compelling business case forsustainability, only 10 percent of thenovices we surveyed did. Further,when asked about the logicunderlying their organization’sinvestments (or lack thereof) insustainability initiatives, 68 percent ofexperts cited improved financialreturns compared with only 32percent of novices. The Business Case for Sustainability
  • The Business Case1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case THE SEVEN DON’T CHANGE, BUT THEIR RELATIVE IMPORTANCE VARIES Risk Mitigation Risk Mitigation Asset Value Cost Savings Brand Asset Value Improvement Enhancement Improvement Employee Brand Attraction and Enhancement Retention Employee Cost Savings Innovation Attraction and Retention Driver Market Opportunity Market Innovation Opportunity Driver• RETAIL PRODUCT VENDOR• MANUFACTURING COMPANY WITH• CARGE OR IN OSTLY WCOMPETITIVE L OMPANY C HIGHLY ASTE STREAM TALENT MARKET• OWNER-OCCUPIED BUILDING, OR• SPEC BUILDING The Business Case for Sustainability
  • The Business Case 1 Cost Savings1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 1 Cost SavingsOHSUCENTER FOR HEALTH ANDHEALINGPortland, Oregon$140 million construction cost$2 premium for sustainable features• 5 gas-fired microturbines• massive PV array on S. façade• membrane bio-reactor, on-site waste treatement• eco-roof $500,000 SDC charge offset $1.3m tax credits (state + federal) $600,000 projected annual operating cost savings The Business Case for Sustainability
  • The Business Case 1 Cost Savings “Interface began its journey to sustainability by focusing on the elimination of waste. At Interface, we define waste as anything that does not provide value to the customer. This includes traditional forms of waste such as off-quality and scrap, as well as nontraditional forms of waste such as overuse of materials, inventory losses, etc. The cumulative avoided costs from waste elimination activities since 1995 are calculated to be over $433 million…”source: www.interfaceglobal.com The Business Case for Sustainability
  • The Business Case 2 Risk Mitigation1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 2 Risk Mitigation The Business Case for Sustainability
  • The Business Case 2 Risk Mitigation The Business Case for Sustainability
  • The Business Case 2 Risk Mitigation The Business Case for Sustainability
  • The Business Case 3 Innovation Driver1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 3 Innovation Driver“In 2005 Cisco designated the recyclinggroup as a business unit, set clearobjectives for it, and drew up anational P&L account. As a result, thereuse of equipment rose from 5% in2004 to 45% in 2008, and Cisco’srecycling costs fell by 40%.“The unit has become a profitcenter that contributed $100 millionto Cisco’s bottom line in 2008.” The Business Case for Sustainability
  • The Business Case 3 Innovation Driver The Business Case for Sustainability
  • The Business Case 4 Market Opportunity1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 4 Market Opportunity The Business Case for Sustainability
  • The Business Case 4 Market OpportunityREQUIRED BY REGULATION The Business Case for Sustainability
  • The Business Case 4 Market OpportunityAIM Environmental Technology ProgramCalPERS $600 million Environmental TechnologyProgram Board targets investments inenvironmental technology solutions that aremore efficient and less polluting than existingtechnologies… The Business Case for Sustainability
  • The Business Case 5 Asset Value Improvement1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 5 Asset Value Improvement The Business Case for Sustainability
  • The Business Case 5 Asset Value Improvement The Business Case for Sustainability
  • The Business Case 5 Asset Value Improvement The Business Case for Sustainability
  • The Business Case 6 Brand Enhancement1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 6 Brand Enhancement The Business Case for Sustainability
  • The Business Case 6 Brand Enhancement The Business Case for Sustainability
  • The Business Case 6 Brand EnhancementRespondents Cited–by a Large Margin–an Improved Image as the Principal Benefit of Addressing Sustainability The Business Case for Sustainability
  • The Business Case 7 Employee Attraction and Retention1 Cost Savings 5 Asset Value Improvement2 Risk Mitigation 6 Brand Enhancement3 Innovation Driver 7 Employee Attraction and Retention4 Market Opportunity The Business Case for Sustainability
  • The Business Case 7 Employee Attraction and RetentionSource: SHRM – Advancing Sustainability: HR’s Role The Business Case for Sustainability
  • The Business Case 7 Employee Attraction and Retention The Business Case for Sustainability
  • The Business CaseTo sustain high levels of performance Requires high levels of well-being - Peter Senge The Business Case for Sustainability
  • Tactical &Prescriptive Tools The Business Case LEED NC Workshop for Sustainability Brightworks 2008
  • Sustainability Tools:Rating Systems The Business Case for Sustainability
  • Sustainability ToolsChange Management “Change requires you change something.” - Bill Reed The Business Case for Sustainability
  • Beyond theBusiness Case The Business Case LEED NC Workshop for Sustainability Brightworks 2008
  • Beyond the Business CaseGlobal Ecological Crises“…2009 was tied for the second Ethical Case: Thewarmest year in the We can see the limits of a modern record, anew NASA analysis of global surfacetemperature shows. healthy planet and must change course if we wish to…in the Southern Hemisphere, 2009 prosper.was the warmest year since modernrecords began in 1880.…when we average temperature overfive or ten years to minimize thatvariability, we find that global warmingis continuing unabated,“said JamesHansen, the director of GISS The Business Case for Sustainability
  • Beyond the Business CaseValue Creation for Total Shareholder Return The Business Case: Sustainability can affect all the levers companies use to create value. The Business Case for Sustainability
  • The Value Proposition The Ethical Case + The Business Case The Value Proposition for Sustainability The Business Case for Sustainability
  • ResourcesRESEARCH ARTICLESMIT Slone Report : The Business of Sustainability (three reports)http://sloanreview.mit.edu...I, http://sloanreview.mit.edu...II, http://sloanreview.mit.edu/...IIICoStar Report: Value of Green Buildingwww.costar.com/josre/doesGreenPayOff.htmCost of Green Revisitedhttp://www.davislangdon.com/USA/Research/ResearchFinder/?c=362,334HBR: Sustainability As a Key Driver of Innovationhbr.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation/ar/1SHRM: Advancing Sustainability – HR’s Rolehttp://www.shrm.org/...Harvard: The Impact of a Corporate Culture of Sustainability on Corporate Behaviour and Performancehttp://www.hbs.edu/research/pdf/12-035.pdf The Business Case for Sustainability
  • Thank you! Questions? Green Building & LEED® Sustainability Planning WorkshopsPortland | Cleveland | Los Angeles | New York | San Francisco | Seattle The Business CaseThis presentation is protected by US and International copyright laws. Reproduction, for Sustainabilitydistribution, display and use of the presentation without written permission of the speaker isprohibited ©Brightworks 2011