Flexible fees from a strategic sustainability perspective


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From Karl-Henrik Robért, founder of the Natural Step, on flexible fees and strategy.

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Flexible fees from a strategic sustainability perspective

  1. 1. Flexible fees from a strategic sustainability perspective Logics revolving around defined purpose Karl-Henrik Robèrt Blekinge Institute of Technology, Karlskrona Sweden The Natural Step, Stockholm Sweden © 2011 The Natural Step September 2011
  2. 2. Sustainable Development - A Dynamic ChallengeThe ’funnel ’of declining potential to sustain human society Systematic decline Forests Agriculture Fisheries Ground water Climate Metals POP’s Eutrophy Hormones Loss of trust Segregation Corruption time Epidemias Poverty ... © 2011 The Natural Step
  3. 3. Profitable Also in Loneliness Opportunities Resource management Waste management Tax, legislation, insurance, loans New markets Innovation/design Trust Productivity, Transaction costs Brand Stories of meaning Team building time Community … © 2011 The Natural Step
  4. 4. So, what’s the problem? © 2011 The Natural Step
  5. 5. 1. The power of old paradigm assumptions © 2011 The Natural Step
  6. 6. Cylinder vs Funnel paradigm An Impact perspective A Systems perspective It is believed that... In reality......sustainable development is to fix ...costs move towards infinity so S.D social/ecological damage when the costs is to strategically eradicate the systemic for this are lower than the economic utility errors at the best prize....the incetives to undertake measures ...the incentives to undertake measures are mainly based on ethics are ethical and self-beneficial...competetive edge is lost when ...role models get competetive advantage measures are not launched with and create momentum for international international agreements and policies agreements and policies © 2011 The Natural Step
  7. 7. 1. The power of old paradigm assumptions2. Reductionism © 2011 The Natural Step
  8. 8. ate s clim alth ue” ” distru ol cause ” ue effect? he iss use re sc ” n ption or t a reenho the n no he g Cf “Etha g n mi ron out t to -PV r wa e i ol han l nw ter? ba r win Et o Ca Gl “ clea “ “ rming wa or nu G lobal proces s” ural tion is a nat s extinc “Specie or health” “PVC ” en -house gases “Whole list of gre “Electric cars tooReductionism expensive.” “Mankind can not save ev ery other beetle”getting lost in the leaves © 2011 The Natural Step
  9. 9. No unifying framework Reductionism © 2011 The Natural Step
  10. 10. Unifying frameworkStructured overview, like in a clinical conference © 2011 The Natural Step
  11. 11. Backcasting from PrinciplesPrinciples for success • Necessary • Enough • General • Concrete • Non-overlapping time © 2011 The Natural Step
  12. 12. Unique deliverables of such principles • Systematic and strict, yet open ended approach • Trade-offs manageable • System boundaries are set by purpose • Resource potentials calculable • Avoiding unknown problems • Effective cooperation across value chains and stakeholders • Community building • Optimization of bottom line chances © 2011 The Natural StepCopyright © 2004 The Natural Step
  13. 13. Testning i bolag... © 2011 The Natural Step
  14. 14. Billions earned…“ It was not until at least ten years later we understood how much money Electrolux had saved and earned from applying the framework to foresee changes on the market and in legislation. ” © 2011 The Natural Step
  15. 15. Billions earned…“ As we climb mount Sustainability, with the four sustainability principles at the top, we are doing better than ever on bottom line business. This is not at the cost of social or ecological systems, but at the cost of our competitors who still haven’t got it. ”Ray AnderssonPresident, Founder and CEO, Interface. Inc.Portland US, October 2007, © 2011 The Natural Step
  16. 16. Clinical conference from value chains to communities and cities… © 2011 The Natural Step
  17. 17. Hundreds of Municipalities/Cities Hu• Övertorneå • Ottawa• Robertsfors • Saskatoon• Morbegno • Wolfville• Valtellina • Madison• Livigno • Ashland• Dublin • Portsmouth• Whistler • Lawrence Township• North Vancouver • Twin Ports• Canmore • Duluth• Halifax • County of Hawaii • ... time © 2011 The Natural Step
  18. 18. “This simple, science- and systems- based framework is the best out there. It needs to become part of a new common language, as well understoodKen Melamed worldwide as the rules of soccer”.MayorWhistler, Canada © 2011 The Natural Step
  19. 19. 1. The power of old paradigm assumptions2. Reductionism3. Also with very clever systems thinkers and strategic planners: pace of transition too slow* * Learning curve, scale, market-assumptions etc. © 2011 The Natural Step
  20. 20. Examples of outreach from proactive corporations – knowledge in combination with pragmatism – • Asking for higher tax • Asking for tougher legislation • Complementary currencies (local, regional, global) Differentiated fees... © 2011 The Natural Step
  21. 21. © 2011 The Natural Step
  22. 22. Strategic Sustainable Development and Flexible Fees• The current new-paradigm incompetence amongst our leaders implies an unexploited competitive opportunity also within current economic system.• However, new economic means are needed to increase pace of S.D, and to move latecomers.• No silver bullet, but combined with robust sustainability on the table and a balance between magnitude and timing of prizing, flexible fees offers an elegant pragmatic means for policy making to support strategic sustainable development.• Flexible fees would benefit from:(i) Further exploration of underpinning assumptions e.g. a fairer outline of green taxes.(ii) Exploration of other objectives than those linked to flows e.g. halting encroaching and mismanagement of fertile land and waters, and a "humanization" of the economy. You cannot play chess against one principle of checkmate at a time.(iii) Exploration of the landscape for policy making, and how this could be improved for © 2011 The Natural Step the implementation of flexible fees.
  23. 23. “Would you tell me, please, which way Iought to go from here?” asked Alice.“That depends a good deal on where youwant to get to,” said the cat. “I don’t muchcare where,” said Alice. “Then it doesn’tmatter which way you go,” said the cat. © 2011 The Natural Step
  24. 24. Applying the Framework in four steps - ABCD planning process The funnel A Understanding sustainability Brainstorm C solutions Vision Mission Vision within Core values sustainability Strategic goals principles Today Baseline analysisB Whereisare we today? Prioritization & action planning What the gap? D • Right direction? • Flexible? • Economic enough? © 2011 The Natural Step
  25. 25. Modelling… from the Globe downinto Drillholes A B C C ... ... B D ... ... ... ...  J  && m2u3 +  m2 rw + && φ = ci u1 − ci u3 + k iu1 − ki u3 ... & &  rw  Actions © 2011 The Natural Step
  26. 26. © 2011 The Natural Step
  27. 27. Forecasting: Planning from trends in rear-view mirror, minus problems (”Cylinderparadigm”) •”Nothing is harmless” •”Little harm as possible” •”X% better than before” •”More science needed” ”Expert-drift” and detachment from leadership © 2011 The Natural Step
  28. 28. Backcasting: Success in wholesystem through front screen (Funnelparadigm) • ”These are our objectives…” • ”This is the gap…” • ”We have done this…” • ”We are going to do this…” Leadership from overview (vision), community (shepard) and support (coach) Begin game immidiately Celebrate early wins Gray areas from experience Develop tools as needed (and ask masters students for help) © 2011 The Natural Step
  29. 29. Indicators METAL IN TOP WEATHERING MINING FOSSIL F (M+F) / W SOIL (W) (M) (F) (MG/KG) (KTON/YEAR) (KTON/YEAR (KTON/YEAR) ) Al 72 000 1 100 000 18 000 34 000 0,047 Fe 26 000 390 000 540 000 34 000 1,5 Ti 2 900 44 000 2 500 1 700 0,095 Cr 54 830 3 800 34 4,6 Cu 25 380 9 000 55 24 Pb 19 290 3 300 85 12 Cd 0,35 5,3 20 3,4 4,4 Hg 0,09 1,4 5,2 10 11 (table from Azar, C., J. Holmberg and K. Lindgren. 1996. Socio-ecological indicators for sustainability. Ecological Economics 18: 89-112, listed in Course Outline: Additional Readings) © 2011 The Natural Step
  30. 30. Put into Clinical Conference in International Research: Real Change Volume: from 1 to10 M USD in 3 years Not counting education Product-Service Innovation (Sweden) Not counting partners input New Research Alliance launched Business development (Sweden)Eco-efficiency (Finland) Algae biomass (Australia) Energy systems (Sweden) Conflict resolution (Israel) Traffic systems (Sweden) Industrial metal flows (Norway) Rainforest ecosystems (Brazil) Green Science / Chemistry (USA) Water management (Netherlands) © 2011 The Natural Step
  31. 31. • Purpose: To explore, test and share unifying framework.• International NGO• Role models• Areas of action: – Research – Training – Coaching – Advice © 2011 The Natural Step