Sustainability's next frontier: Walking the talk
on the sustainability issues that matter most
Webinar
19 December 2013
1
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Presenters
David Kiron Ph.D. is executive editor of
MIT ...
2
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Introduction to the BCG-MIT Sloan Management Review
part...
3
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Although a large majority of companies rate sustainabili...
4
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
... most companies still aren't profiting from their
sus...
5
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
One reason: they are unable to convert their efforts int...
6
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
More tangible sustainability issues (e.g., employees, en...
7
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
The significant sustainability issues also vary across i...
8
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
The significant sustainability issues also vary across i...
9
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
But there is a substantial disconnect between thought an...
10
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Based on thought and action, we identified three groups...
11
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
"Walkers" close the gap between thought and action by f...
12
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Closing that gap pays off!
(with resource-intensive ind...
13
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
From paper manufacturer to fiber innovator
US paper man...
14
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Similarly, Avis Budget anticipated change in future mob...
15
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Even arch rivals can exploit synergies when dealing wit...
17
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Companies don't have to go it alone – and shouldn't!
In...
18
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
The five key take-aways from this year's sustainability...
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Sustainability's next frontier

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Although a majority of executives say sustainability is necessary to be competitive, most companies still aren't profiting from their sustainability efforts. BCG and MIT Sloan Management Review present the results of their 2013 sustainability survey, including a look at companies that "walk the talk" when it comes to sustainability issues.

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Sustainability's next frontier

  1. 1. Sustainability's next frontier: Walking the talk on the sustainability issues that matter most Webinar 19 December 2013
  2. 2. 1 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Presenters David Kiron Ph.D. is executive editor of MIT Sloan Management Review’s Big Ideas Initiatives. David Kiron Holger Rubel Holger Rubel is Senior Partner and Managing Director in the Frankfurt office of the The Boston Consulting Group, and Global Sustainability Lead.
  3. 3. 2 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Introduction to the BCG-MIT Sloan Management Review partnership on corporate sustainability The BCG-MIT SMR Partnership Joint undertaking Started in 2009 Focuses on how challenges and opportunities of sustainability affect corporate strategy 2013 study fifth in the series 201120102009 2012 Core of the study is the sustainability survey: • >5,300 executives, managers and thought leaders responded • 118 different countries represented • Companies from 1 to more than 100,000 employees Beside the survey the study incorporates insights from interviews, case studies and academia 2013 1 2 3 4 5
  4. 4. 3 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Although a large majority of companies rate sustainability as necessary to be competitive – today or in the future ... "Is pursuing a sustainability-oriented strategy necessary to be competitive?" Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis.
  5. 5. 4 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. ... most companies still aren't profiting from their sustainability efforts "How do you believe your company's sustainability actions have affected profitability?" Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis.
  6. 6. 5 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. One reason: they are unable to convert their efforts into value "Has your company developed a clear business case for sustainability?" Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis.
  7. 7. 6 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. More tangible sustainability issues (e.g., employees, energy efficiency) perceived as more significant Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis. Those issues rather on the distant horizon (e.g. climate change) score much lower "What are the significant social, environmental and economic issues for managers?"
  8. 8. 7 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. The significant sustainability issues also vary across industries Social issues Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis. "What are the significant social issues for managers?"
  9. 9. 8 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. The significant sustainability issues also vary across industries Environmental issues Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis. "What are the significant environmental issues for managers?"
  10. 10. 9 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. But there is a substantial disconnect between thought and action on the significant sustainability issues Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis.
  11. 11. 10 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Based on thought and action, we identified three groups of companies: All rate sustainability issues as significant ... Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis. ... but only "Walkers" fully or largely address them, whereas "Talkers" don't
  12. 12. 11 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. "Walkers" close the gap between thought and action by forging ahead along various fronts Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); BCG analysis.
  13. 13. 12 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Closing that gap pays off! (with resource-intensive industries on top) Source: BCG-MIT SMR 2013 Sustainability Survey (based on commercial data-set with 1,847 responses); Orbis; BCG analysis.
  14. 14. 13 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. From paper manufacturer to fiber innovator US paper manufacturer Domtar is a prime example of a walker Domtar developed BioChoice Lignin in 2013 • US-based $6+ billion paper manufacturer faces a daunting sustainability threat: Producing paper in a world that wants to become paperless! • Domtar discovered new opportunities from its ability to sustainable source and manage the tree-fiber supply chain • Domtar explored lignin as an alternative to petroleum and fossil fuels in e.g. adhesives, agricultural chemicals, coatings, and resins • Domtar successfully launched BioChoice Lignin in May 2013 resulting in financial success, public awareness and favourite talent recruitment Source: Interview data; BCG research and analysis
  15. 15. 14 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Similarly, Avis Budget anticipated change in future mobility behavior with its acquisition of Zipcar in 2013 From traditional car renting to car sharing Avis Budget Group acquired Zipcar in 2013 • Zipcar is a membership-based car sharing service providing automobile reservations to its members, billable by the hour or day • Zipcar members can reserve a car on-line or over the phone and then open it with their Zipcards • Compared to car-owners, Zipcar members save more than $500 per month • Every car shared can replace 15 to 20 owned cars and eliminate the need for up to three parking places Source: Interview data; BCG research and analysis
  16. 16. 15 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Even arch rivals can exploit synergies when dealing with sustainability issues in a collaborative manner Ocean Spray partnered with its competitor Tropicana to reduce transportation costs, delivery distances and CO2 emissions Ocean Spray cut transportation costs by >40% - Greenhouse gas emissions cut by 65% Challenges and opportunities • Tropicana, to supply its markets in the Northeast, ships orange juice by train from Florida to New Jersey. After the boxcars were unloaded, Tropicana was paying to send them back — empty! • Ocean Spray had recently established a new distribution center in Florida to meet growing demands for its products in the southern U.S. One Solution • One of Tropicana’s logistics suppliers realized that the companies could partner to fill the empty trains • The supplier offered to set up a road-and-rail line for Ocean Spray that included a competitive price for Tropicana’s empty boxcars Source: Interview data; BCG research and analysis
  17. 17. 17 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Companies don't have to go it alone – and shouldn't! In 2011 they launched a new platform for corporate sustainability leadership – The Global Compact LEAD The United Nations Global Compact (UNGC) is dedicated to promote corporate sustainability New platform for corporate sustainability leadership with >50 participants • Founded in 2000, under guidance of the United Nations • Largest global corporate sustainability initiative: >12,000 signatories in 145 countries • Endorsed by CEOs and Boards of world's largest organizations, e.g. Unilever, Coca-Cola • Extensive network with private, public organizations and academia • Participants of UN Leaders Summit in 2013 incl. Queen of Belgium, Gordon Brown, Kurt Bock (Chairman of the Board BASF SE) etc. Source: Interview data; BCG research and analysis
  18. 18. 18 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. The five key take-aways from this year's sustainability study Companies seem to have harvested the low-hanging fruits of sustainability and struggle to move to the next level of corporate sustainability Focusing on the issues that matter most is key to achieve the next level – and it pays off! However, there is a substantial disconnect between thought and action on the material sustainability issues Companies can close that gap and walk the talk on the material sustainability issues by: • Having a sustainability strategy • Top management support • Developing a sustainability business case • Measuring sustainability performance • Business model innovation Companies don’t have to go it alone – and shouldn't! 1 2 3 4 5

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