Eric Johnson with Alderspruce Sustainability Consulting Group.
The is introduction has a clear message: sustainability shows us fascinating new ways to move toward opportunities for greater profit maximisation rather than away from risks. Pause to read, if you wish.
The next two slides explain that most sustainability efforts focus on the technical or environmental side of the triple bottom line, often ignoring the fact that the human side of change comes first, because motivating people to think differently, see the world differently and act differently is what drives technical changes to be implemented. We must build awareness, commitment, and engagement, all while measuring business more effectively, and more realistically.
“Curtis Carlson, the CEO of SRI International in Silicon Valley. Carlson’s Law states that in a world where so many people now have access to education and cheap tools of innovation, innovation that happens from the bottom up tends to be chaotic but smart. Innovation that happens from the top down tends to be orderly but dumb” (Lawrence, 2011).
The two key drivers for thinking about “green” business or sustainability is to reduce and avoid costs and secure the supply and value chain. This is the low-hanging fruit, the smallest benefit of the Sustainability for business. Business leaders have a difficult time getting past this stage because the value-adding lenses of Sustainability require a change in the way people think about business. But so does any technological change, such as computers, so this is actually familiar territory. But an unfamiliar way of using technology.
Many people believe that technology will resolve all our problems, however we understand them. We think of technological solutions as science fiction. But most radical technology is not what you think it is.
Technology is defined as “the specific methods, materials, and devices used to solve practical problems” (Dictionary.com, 2011). You can see algae farms for energy and bioplastics, air conditioning based on ant colonies, carpet design based on natural and recyclable materials, wind energy, MIT’s Daniel Nocera’sartificail leaf for distributed power generation, simple design of vehicles for durability and repairability, closed-loop systems of construction for air conditioning and heating called ground-sourced heat pumping.
The world is investing in a sustainable future. Governments, communities and businesses are using sustainability lenses to focus their plans. The US is not keeping pace (Haanaes, et alia, 2011)
This presentation is about is how value is added for organizations from the innovation that Sustainability delivers. The two main lenses are how sustainability can change the parameters of strategy & design.
Using these lenses is like seeing things in a whole new light. Like regular light versus ultraviolet light differences that we see in this picture. Ultraviolet is the spectrum that most insects see through. The human eye will see the flower on the left and insects see the same flower on the right. With appropriate technology, we can see both.
Using the technology of sustainability as a new “method to solve practical problems” (Dictonary.com, 2011), we can see business value in a whole new light. What are you noticing in this chart that matters to you? That will shed light on your own lenses, and your blind spots.
For example, this survey (Globescan/SustainAbility,websource, 2011, May 4) provides examples of how entrepreneurs are doing well by seeing the opportunities that exist through a sustainability lens. These entrepreneurs are not going it alone, they are partnering with traditional manufacturing and service organizations like Coca-Cola, Walmart, Unilever, GE, and many others.
Sustainability Strategy comes in stages, that develop concurrently based on your perception of your business. It starts with Risk mitigation, moves into taking advantage of reducing expenses, then blossoms into new strategies that expand and redefine the services of your business.
We often think that business is about making rational, logical decisions and that we have control and that this sustainability stuff is emotional and has is a distraction. However, it is the capacity to leap beyond the bounds of reason to find meaning and fulfillment that drives our decisions. David Rock (2009a, 2009b) summarizes the latest in brain research to show that we make decisions from our irrational, emotional and social brains, and subsequently rationalize our decisions.The barriers that exist for wearing the lenses of sustainability and taking action are self-imposed. This developmental exercise can help leaders examine the positive intentions that prevent them from accomplishing stated objectives (Kegan & Lahey, 2001). The answers listed are examples for one person. As you attempt this exercise you will find your own illusions illuminated, so that you can see more clearly and make better decisions. Make a quick chart on a piece of paper and take a moment to complete this exercise for yourself. Start with the first column.
Drum roll please….here are the Lenses, derived from over 100 papers, books, classes and webinars. These lenses are based on case studies and theories derived from case studies. These lenses represent real value that each company can access to improve profit and growth. There are a number of elements that we will find embedded within each lens. Throughout this presentation, pay attention to those elements that show up more than once – I have prizes for those of you who can name the full list at the end of this workshop.
Backcasting is a model from The Natural Step (n.d.). It starts with the healthiest vision of the future, then builds strategy to make the dream come true.
Backcasting moves backwards from the vision to the present – from the wild imagination of the healthiest scenario possible.
Backcasting takes into consideration the increase in population and the decrease in ecosystem services due to our impact on the planet.
This is the traditional, linear way of imaging business. It worked well for hundreds of years when populations were low and resources were abundant.
Economist Herman Daly reframed how the business system actually works to help us see that our mechanisms of exchange that we know as economics and business are activities that occur within social and environmental systems. The limits to the social and environmental systems are therefore the limits to the economic and business systems (Meadows, Randers, & Meadows, 2004). Backcasting has us building strategy and designing products and services with the constraints of the Environmental and social spheres first
A recent report by Accenture/CECP (2011) examines the new choices available to CEO’s and their organizations for sustainably building value. Researching new opportunities and “rigorously analyzing the root causes of existing core business challenges” (p.2), is a key competency for sustainable businesses. This represents a focus on the physical and technical side of sustainability throughout the supply chain. In association with the backcasting lens, this can help an organization uncover hidden value in choosing more effective and efficient supplies, processes, and products.
Creating Shared Value or Sustainable Value Creation is the strategic ability to look beyond the four walls of the business and collaborate with stakeholders. For example, the concept of fair trade has created multiple new opportunities for businesses to gain competitive advantage. Pepsico’s manufacturing in Mexico had expensive supply chain problems with access to corn because the Mexican corn was substandard quality. So they invested in training farmers and agricultural equipment and supplies to improve the corn supply, while improving the quality of life for the entire community (Backus, 2011). I have a growing list of case studies, if you are interested we can talk more about them. Nestle is developing water supply to secure the supply chain and to improve the communities of impact of their business.
“Where companies struggle when it comes to making sustainability an integral part of the business is often not so much with the technical side of things but with the human dimension of managing it” (BCG & MITSloan, 2011, p.15). The ability to collaborate with others in the value chain is a key competency of business leadership, and each these stakeholders has the ability to add or take away value for a company.Large organizations are leading the way in sustainability by building collaborative networks, especially to secure their supply chain. (BCG & MITSLoan, 2011). Stakeholder engagement can transform your business. How are you, and your company, engaging these stakeholders in your business operations? How are you measuring positive impacts on each of them through your business operations and the impacts of your products and services?
Collaboration amongst your stakeholders about your reputation and product’s or service’s quality has increased dramatically. The market has increased in transparency. Are there business ideas that can help improve transparency and build stronger relationships to stakeholders?“If big-headline news stories can hurt leading brands, they are also facing a reputation landscape that has become more risky, since the instant and global nature of online communications means grassroots activists, bloggers and disgruntled consumers now have the tools to make their voices powerful. And as the world becomes more developed, growing numbers of it population have access to communications technology, increasing expectations of transparency” (BCG & MITSloan, 2011, p. 10).
(WRAP.org.uk, 2011)(Environmental Leader, 2010)
“This ratio can be seen as a special case of ROR -- the ratio of productive output to what Bruce Cranford of US DOE labeled “non-product output” (NPO) -- all the stuff that companies produce but don’t sell, and ship out instead to smokestacks and sewer lines and “waste” dumps.Comparing the proportion of output identified as "product" (or "intended result") vs. "non-product" (or "unintended result") is most usefully conveyed as the ratio of product to total output (P / (P+NPO)). The result is always sobering, and often staggering. The ratio for the US economy as a whole is 6% product, 94% 'non-product' according to Robert U. Ayres, National Academy of Engineering.The ratio varies by industry and by company, of course, but it my experience is always far worse than companies estimate. And confronting the stark reality of this ratio is one of the most powerful change drivers I’ve seen, since it becomes obvious to environmental managers and financial managers alike that producing NPO makes no business sense at all. (In fact, we’ve seen this single metric convince companies to adopt “zero waste” policies” (Friend, 2004)
Each one of these represents ways to add value to the organization, real value, measured in new ways that are becoming valuation tools for investors. Many of these values may need to be converted to economic values to build motivation to change for some business leaders.
(Wallace, 2011, slide 13)
New metrics are not just lagging measurements that monitor if you are doing well, but leading indicators that will tell you what to do to make the changes to a high performing business (Pojasek, 2009, Spring; 2009, Summer). Using leading indicators, and taking the action they prescribe, will improve the sustainability of your organization.
Organizational leaders are familiar with making investments to build the value of the organization and enable growth. Sustainability opportunities are no different. Investing in communities, education systems, They are excellent asset management. Let my professor, Bob Willard, tell you about it (Willard, 2007).
Here is how Nike has crafted the sustainability value proposition
The Prius attributes high sales to “competitive greenness” which plays on the social nature of how our brains work, but with a sustainability goal driving the behaviors
Encana donated a couple hundred thousand dollars to a local community college. Sure there was the big check ceremony - but the real reason was to fund new programs to teach specific trades that are needed in the field.(Versen, 2011).
Increasing business value through sustainability? Get use to it, because the big companies are making it happen, and it will impact your business operations in many ways; through new customer demands, new regulations, and new products. This is Walmart’s bid to earn their social license.(Walmart, 2009)
Excellent steps have already been taken in businesses through various process improvements especially Lean Manufacturing. These systems, however, have limited focus either within the traditional boundaries of the organization. The thinking that makes these processes work will make cyclical systems thinking work, so they are foundational.
When we look for new ways to close the loops on resource use, we find new business opportunities. Take minute and see if you can find a new opportunity in your business if you look at your company or industry through this lens. Does the innovation save money, increase revenue or grow the business?
Hereis another exercise.
Hereis an example of a new business model. They have found a way to recycle the packaging that is not currently being recycled, for a profit.
Here’s another: now this is innovation by looking at the waste stream! The Opportunity: Knowaste has also found that the use of disposable nappies has increased over the past 20 years. Each baby will use about 6000 diapers before it is potty trained. In the UK alone, 3 billion are used each year, contributing about half a million tonnes of waste. Because people are living longer, the use of adult incontinence diapers is also on a rise and 50% of nursing home residents in the UK suffer from incontinence. In the UK alone, 18 million women use sanitary protection which generate over 200,000 tonnes of waste per year. The Innovation: The UK is of course a relatively small country, which makes the statistics mind-boggling when you consider the implications for larger countries. The potential for scale-up of their business model is huge. Knowaste has pioneered a process that turns AHP waste into plastic pellets which can then be transformed into various materials like roof tiles and plastic tubing. Over the next five years, the company plans on opening five absorbent hygiene recycling plants in the UK. This will significantly reduce the 1.1 billion pounds of diaper waste that currently get sent to landfills each year.Come on people! Vijayaraghavan, A. (2011, September 22). UK company turns used diapers into roofing material. Retrieved from TriplePundit at: http://www.triplepundit.com/2011/09/uk-company-turns-diapers-roofing-material/.
Lifecycle responsibility opens new opportunities in savings and revenue. Because Coca-Cola (Backus, 2011) measured the value of the entire lifecycle of its bottles, it discovered that recycling is a source of raw materials, so they…
…are able to extend the value of those bottles by closing the loop with their customers and making bottles in a new way, using waste from corn, for now, soon to be citrus, and eventually algae as well. This is birthing new businesses in the economy and for Coca-Cola they are new lines of business – new revenue streams, because they recognized that half of their actual product is bottles, not just what is in them (Backus, 2011).
Services of a product – do you want a car or convenient transportation? Carpet or a soft, hygienic, good looking floor? (Anderson, 1998)
Focusing on the durability and repairability of products can change your business to a service business and aftermarket sales business. One of the hurdles to being competitive is initial cost of a product. Some organizations find new ways to finance, providing customers with a breakdown of lifetime costs to show how their product will save money, time and effort over the life of the customer. Are you in the business of solving your customers needs for their life time, or for the life of the product? Reframe your life cycle focus and improve quality.
By tracing parts and components, the product must first be designed better. Better design parameters can reduce costs by using fewer parts and less material. Tracing components and the product can improve recycling, bringing the components back to the manufacturer as new raw materials. This focus on recycling can improve reputation, and strengthen the relationship with stakeholders.
Manfred Max-Neef (1991) identified human needs that are satisfied in different ways. Finding healthy ways to satisfy the needs that do not degrade other needs, or are pseudo-satisfiers, will enable the development of sustainable systems. Materialism is an example of a pseudo-satisfier. What need is being satisfied by an overly large home? What need is being satisfied by owning a vehicle that spends most of it’s life sitting there doing nothing?Do you satisfy any of your own needs in ways that conflict with other needs, or the needs of others? Is there a better way?
Prahalad (2005) and London & Hart (2011) have found a better way and a huge business opportunity for new markets, new products, and new ways to scale the growth of your business. Most of the people in world are relatively poor. A good example of innovative opportunity from the BoP is Galanz manufacturing, the largest microwave oven producer in the world. By adapting the oven design to be smaller and more affordable for the Chinese market, they sold and experienced economics of scale to grow the business while making more efficient microwave ovens that have a smaller eco-footprint and use much less energy than other forms of cooking (Hart, 2010).
Here are some specifics to consider. How might you redesign your product or service to fulfill human needs of those at “the bottom of the pyramid” (Hart, )?
Because we know that our brains have us decide and act as social and emotional creatures first (Rock, 2009a, 2009b), who then rationalize subconscious decisions, we are organic meaning-making machines. Rock (2009a, 2009b) created the SCARF model – Status, Certainty, Autonomy, Relatedness, Fairness.Martin Seligman (2011) former Executive Director of the American Psychological Association, has found strong correlation between happiness and what he calls, PERMA - Positive emotions, engagement, positive relationships, meaning, accomplishments. These ideas can help us manage employees more effectively to create sustainable cultures that reduce turnover and attract the best talent.
Interface FLOR carpet uses biomimicry to design the carpet squares so that no two squares look alike, but are similar so that when one square is replaced, the new square will match the older squares.
Paradox is the ability to hold two apparently opposing viewpoints at the same time. Not as equal, but in tension.
What we pay attention to in our daily lives will determine what decisions we make and what actions we are willing to take. Who pay attention to will frame those decisions and action. Each one of these perspectives is a way of framing how you see your daily life, and how you set your priorities. How we prioritize these world views will drastically affect your decisions, especially your business decisions. Take a moment and write down how you prioritize these perspectives when you are making business decisions, day in and day out.
You’ve all heard this phrase. By understanding how global systems work, and recognizing how international commerce affects your personal life and your community, you can find new opportunities to improve life and health, environmentally, socially and economically. For example, Carbon trading is becoming a more popular global concern that can have an pronounced effect on every business that seeks to operate internationally. We us technology, broadly understood, to understand the global perspective so we can act locally (László, 2006) Remember, technology is not just gadgets, language is a technology, new thinking is a technology, and new economics are a technology. Technology will save the world.
For an example of Centralized & distributed value additions, think about how our electrical grid works. It is already distributed around the US with multiple generation stations. If we further distributed generation via solar, wind, and microwater sources at homes and buildings, we will still need the centralized power centers of large scale centralized generation facilities. Power companies have two services that are being decoupled, generation and delivery. We need energy companies to manage the overall, systemic supply of energy, probably owning most of the distributed systems. There is one solar company that installs roof-top systems for a flat monthly rate, eliminating your monthly power bill, but they own and maintain the system.
You can add value incrementally to products and services through extending and enhancing the quality or reach of your products and services. When you change how you perceive your products and services, you transform them. An historical example is carpeting. Carpeting was sold to homeowners after the purchase of their home. A transformation occurred when a carpet company partnered with construction companies to pre-install wall to wall floor covering. This is a good example of stakeholder collaboration, but not through a sustainability lens. This was transformational, but not sustainable, more carpet sold, but carpet was essentially toxic and taking up landfill space because it was the cheapest carpet available that had low durability and was replaced quickly,
Systems-based design considers the entire system of commerce and production and consumption, like we saw in Backcasting. The environmental and social spheres require longer term thinking than economic spheres. The redesign of plastic bottles is an excellent example, changing production, relationships and consumption patterns in a healthy direction by thinking about lifecycle of plastic bottles in the context of the overall system of their use. Here’s an exercise: What is the system context for your products and services? What is the lifecycle? If you were to shift your products and services toward a sustainable goal, what would be your timeframe for thinking? You will have to balance your short-term and long term investments, with the long term as a goal.
Eric Johnson with Alderspruce Sustainability Consulting Group.
The main driver for sustainability in business has been the profit margin or expense reduction motive, traditionally highlighting the expense side of the spreadsheet. Recently, the opportunities that sustainability can present for the revenue side of an organization‟s accounting are becoming strong motivators for change.“Companies leading the way in such innovations, like Levis and its new water-efficient manufacturing process used in its Waterless Jeans line, Clorox Company and the reformulated cleaning products that make up its Green Works brand, and Coca-Colas PlantBottle -- the first ever recyclable PET plastic beverage bottle made partially from plants -- have all reaped the benefits of improved sales and improved reputation through these efforts” (Viera, 2011).This presentation explains the opportunities of sustainability in the language of business, through the many ways a business reduces costs, mitigates the risk of future costs, increases revenue, and grows the overall value of the company.The message is this: The business, as a legal entity, only cares about two things; profit and growth of the finances. Legally, nothing else matters. Some researchers are attempting to make changes to the economic and legal system to broaden what the business entity cares about, such as B Corporation licensing (bcorporation.net). The people in a business care about many more things, but are required to make decisions as part of the business system to increase growth and profit. Sustainability in business must focus on the economic benefits; the profit and growth motives.Most business leaders place their attention on the cost or expense benefits of sustainability, things like securing the supply chain, reducing operational expenses, etc. That is only half the story of sustainability for business. And it is actually less than half when measured economically. Much less. Expense control and risk management are where we get the short-term financial results from sustainability. It is low-hanging fruit. It prepares the way for reaping the real benefits of increasing revenue and adding value.This presentation looks through the lenses of Sustainability to see innovations that will increase revenue for the business. It shows how Sustainability adds value to the business. It focuses on the
By going through this presentation as a half-day workshop, and completing the exercises, you will: Find new growth opportunities for your business that you can act on to build value for your organization Uncover hidden costs that you can decrease or avoid in the near future Improve the culture of your organization to increase effectiveness Increase the value of your products and services Build stronger collaborative relationships with your stakeholders
Frameworks of sustainable development provide reasons for changing objective phenomena in the world such as materials, water, energy, toxicity and pollution, global temperatures, etc. That is a one sided perspective. There are two things that need to change; the technical processes and things used in those processes and the human consciousness that drives decisions and behavior that determines those technical processes. Leadership that drives human understanding, commitment and engagement toward developing sustainable systems will have the greatest impact to change the global systems of production, commerce and consumption (Meadows, 2008; Doppelt, 2003).On the human side of change, dissonance and challenge can trigger changes. Leaders want to head off problems, mitigate risks, decrease costs, and adjust quickly to new regulations or influence how regulation is developed. The competitive foundation of business fosters a metaphor of war in the mindsets of people and culture (Klimek, 2011) that is ultimately destructive as a process - emotionally as well as physically.The other side of change is appreciative and creative. It taps into the positive flow of energy and draws people into the future. This is the opportunity and innovation side of sustainability change. This presentation is primarily about the new opportunities that can be seen through the lenses of sustainability. This side of change builds reputation, improves collaboration to build shared value (Porter & Kramer, 2011; Accenture/CECP, 2011), discovers new product and service markets, and reinvents the systems of production and commerce. This perspective builds confidence in the the fact that there are more benefits than drawbacks to business sustainability – you just have to look at it through the right lenses to see the opportunities.When contemplating how to lead change toward sustainability, we consider cultural and personal Values that drive decisions and behavior (Hall, 2002; Trompenaars & Hampden-Turner, 1998). People will view sustainability differently based on their cultural background and personal experiences. Change toward sustainability of systems as a goal requires leaders to adapt their communication to the values and worldviews of their stakeholders (Brown, 2006). A person‟s view of the world is developed as that person makes meaning of their circumstances, through their own life experience (Hall, 1987). How a person perceives existence then affects how they take action. Meaning making in individuals, as an interactive act between the inner world of the person and the outer world, therefore controls how those individuals shape the world around them. By reframing how a person understands how life functions in a healthy, sustainable way, that person will have influence through their decisions and actions to create healthy, sustainable systems of production and exchange.
Leading businesses toward sustainable yet flexible states requires the translation of sustainability from science and social spheres to the worldview, values and language of business. The language of business is economic, organized by spreadsheets into expenses, revenues and the valuation of assets, with measures of health of profit and growth that are often treated as goals. Willard (2007) is among many who call this translation “the business case” for sustainability. The business case does not encompass all of sustainability as system of thinking. It is the unique lens that sustainability shines through into the eyes of business leaders. Once the business case is proven, the other elements of sustainability can be discovered, such as the good feeling of enabling positive social action or the creation of healthy life environments for living beings on the planet.Clarifying the business case for sustainable development is important in order to build motivation in stakeholders to continue the sustainability journey. Anderson (1998) calls this journey the climb up “Mt. Sustainability,” because the higher a person or organization climbs, the bigger and farther the view becomes of how the world works. In mountaineering, each step becomes more difficult with the thinning air of higher altitudes. This is analogous to the receding financial benefits of actions that develop sustainability in a business and the difficulty in proving the value addition of leading indicators (Pojasek, 2009) such as reputation, employee engagement, healthy ecosystems, improving quality of life for communities of impact of a business, and others.Leading change toward sustainability means tapping into the innovative possibilities that will improve the health of a business while improving the health of the social and physical environments. A focus on creativity and opportunity leads people in positive directions, building energy and momentum to accomplish something new. If these efforts are focused through lenses of sustainability that highlight healthy, sustainable processes and relationships, people can develop institutions and rules that mirror their clearer vision.The following powerpoint presentation is an attempt to clarify that healthy sustainable vision of processes and relationships within the context of organizations. It emerged directly from the course of study and the dialogues during the Organizational Leaders, Management and Sustainability course with Fielding Graduate University, taught by Barclay Hudson, Leni Wildflower and Jeff Leinaweaver.
EXPENSE BOTH REVENUE The Four Walls Beyond the Walls Productivity of People (Willard, 2002, 2005)Decrease Costs Reputation and Resources (Porter & van derLinde, 1995) New Revenue Streams/Creating SharedAvoid Future Costs Competitive Advantages Value (Porter & Kramer, 2011)Secure Supply/Value Chain (Haanaes, et Healthier and more effective Increase Employee Engagement (Haanaes,alia, 2011) products and services et alia, 2011) More effective exchangeRisk Mitigation (Willard, 2002, 2005) mechanisms Collaborate across borders (complementary currency)Decrease Turnover; Reduced Attrition Improved Market Share (Willard, 2002, Easier Financing (Willard,Costs, Reduced Recruiting Costs (Willard, 2005) through improved differentiation 2002, 2005)2002, 2005) (Laszlo, 2008)Compliance with Regulation (Porter & Enhance value of products and servicesvanderLinde, 1995) Greater value of intangibles - NewEco-efficiency (Willard, 2002) valuations through new accounting (Accenture & CECP, 2011)Lower insurance and borrowing costs Increase sales(Willard, 2002, 2005)
1. Commitment 2. Doing/Not 3. Hidden 4. Big(Improvement Doing Competing Assumption(s)Goal) (Instead of #1) Commitment (generating Col. 2 behaviors)Conduct an Informal attention Keep control of the I am the person inaccredited given to “green” organization control – that ISustainability ideas have controlAssessment of theorganization to Debating the valueclearly define of anything “green”value options for the business
Stakeholder Collaboratio n Paradox Valuation BusinessBackcastin Sustainability Biomimicr g Strategy y & Circular Design Lifecycle Systems Human Needs
Backcasting Risk Management & Asset Management of: Environmental – resources becoming limited everyday from overuse and degradation Social – Regulation and social networking, reputation, political instability and changing lifestyle demands
BackcastingCreating Shared Value (Porter & Kramer, 2011) or Sustainable Value Creation (Accenture/CECP, 2011): Fair Trade Pepsico& Coca-Cola Nestle Including all Stakeholders in the business
Backcasting Sustainability = Resilience Starting from Constraints Business operates within Environmental and Social Systems Supply/Value Chain Creating Shared Value
Stakeholder Collaboratio n How can you improve relationships between… Customers Environment Shareholders Future Generations Employees Stakeholder Business Waves Partners Organizatio Communities n of Impact Suppliers Social Industry Media Media Insurers Government Accreditors
Stakeholder Collaboratio nWates ConstructionThe benefits of implementing these changes included:• Large financial savings throughout the business through waste reduction.• Recognized as an „Industry leader‟ for waste reduction.• Increased morale, engagement and productivity of employees.• Better working relationships and reduced cost of contracts with sub-contractors in line with Wates‟ waste measures.Moving forwardHaving worked hard to recover more of their waste, Wates is now focusingon reducing the amount of waste created. By looking at designing out waste onprojects and changing the procurement rules, Wates aim to realize cost savingswhich can be passed on to their clients.PepsiCoSeven plants in UK have Zero waste – today! More on the way.
StakeholderCollaboratio n Making the Connections - Improving Relationships Visibility = Transparency Zero Waste
Valuation 6% “Throughput Pie” Productive Output Product to Non-Product Ratio for U.S. economy, 1989 94% Non-Product Output (Adapted from Ayres,1989 in Friend, 2009)
Valuation Investment is being screened through a sustainability lens DJSI – SAM (USA) FTSE4Good &Ethibel Sustainability Index (Europe) Walmart‟s Sustainability Consortium‟s Sustainability Index (Low &Menter, 2011) Life Cycle Analysis (Low &Menter, 2011) Intangibles & Goodwill Footprints – Carbon, Water, Health & Development (UNDP, 2011)
Valuation Build Social Capital – design the brand to improve social and environmental health. (Porter & Kramer, 2011)
Valuation Investing in educational systems to develop your future employees. (Versen, 2011) Implicit consent (Common Ground Consultants, Inc., 2008)
Sustainability Index: Version 1.0 and Business Value
Valuation Return on Resources Investment in the Value Path Performance Leading Metrics Value Proposition Creating Shared Value Social License to Operate
Circular Linear Value Chain Systems MaterialsSo urcing Manufacturing Manufacturing waste Distribution Logistics Limited Recycling• Total Quality logistics wasteManagement Sales & Retail Packaging• Lean Six Sigma waste• ISO X0001 Consumption & Use Consumption / use waste Disposal Product Waste Deloitte Touche Tohmatsu & World Economic Forum, 2010)
CircularSystems Closed Loop Value Chain Deloitte Touche Tohmatsu & World Economic Forum, 2010) Closed Loop Value Chain Manufacturing Logistics waste and auxiliary products reuse Raw Materials Distribution Logistics Materials Sourcing Sales and Retail Product Recycling and Materials Recovery Consumption and Use Waste from Product and by- consumption product reuse
CircularSystems Imagine that you no longer have garbage pickup at your house or business, only recycling and composting. What would it take to make that happen? Can you see any business opportunities in that scenario?
ParadoxIncremental & Transformational Extending & enhancing current product/service Reimagining the product /serviceHomeowner purchase – Construction install – Carpet choices wall to wall Wall to Wall carpet – Carpet Squares – Carpet choices lifetime rental Financial Services – Sustainable InvestmentsCustomer type, bundling –
ParadoxShort-term & Long-term Environmen t Social Business/ Economic
Paradox Think Global, Act Local Centralized & Distributed – Energy systems Incremental & Transformational Value- added Short-term, with the Long-term in Mind Through systems-based design
Stakeholder Collaboratio n Paradox Valuation BusinessBackcastin Sustainability Biomimicr g Strategy y & Circular Design Lifecycle Systems Human Needs
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