This document discusses creating sustainability plans to maximize profits and differentiation. It defines sustainability as balancing environmental, social and economic concerns. A sustainability plan comprehensively measures a company's impacts and allows them to prove their sustainability credentials. Developing a plan involves collecting and analyzing data on impacts, then using that information to guide business decisions and reporting. Integrating sustainability into strategic planning, operations and stakeholder engagement can strengthen brands and the industry overall.

1. ©Copyright Kennedy and Coe, LLC 2014. ©Copyright Kennedy and Coe, LLC 20 A1l4l .r iAglhl trsig rhetsse revseedr.v ed.
Creating a Sustainability Plan to Maximize Profits and Create Differentiation
Emily Johannes, Kennedy and Coe
Ryan Heuer, Novozymes

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What we will talk about today…
•
What is sustainability?
•How can a sustainability plan maximize profits and create differentiation in the marketplace?
•How can we get there?

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Is this sustainable?

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Or… is this sustainable?

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Crop yields and natural resource pressures
•
More extreme temperatures
•
Unusual events
•
Unpredictable and more extreme precipitation
Source: EPA

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Water stress and ethanol production
•
Water stress in the high plains region of the U.S.
•
Over $1.6 million annual value of ethanol production is at risk.
Source: Ceres, June 2014

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Nitrogen pollution and ethanol production
•
Sixty corn ethanol refineries with $8.8 billion in annual production capacity are within watersheds of “high” or above delivery of nitrogen pollution to local waterways.
Source: Ceres, June 2014

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Constraints and Pressures
Increasing Population
Extreme Weather Events
Expanded Buying Power and Shifting Consumer Preferences
Supply Chain Disruptions
High Volatility
Higher Cost of Doing Business
Sustainability = Resilience

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Defining sustainability…
•
Environmental performance, social contributions, economic health
•Business and industry viability
•Competitive advantage
•Resilience and reliability
•Brand and industry integrity
BALANCE PEOPLE, PROFIT, PLANET

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The Enabling Factor: Big Data

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What is a sustainability plan?
•
Comprehensive measurement and projection of product and non-product attributes.
•
Powerful tool for proving your story.
•
But it is not:
–
Advertising
–
Outside of or additional to internal business planning

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Sustainability Plan = Political Insurance Policy
•
Differentiation and value via sustainability plans can help demonstrate industry best practices and innovation.
•
Proactive engagement on sustainability issues resonates with D.C.

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Sustainability Plan = Long-term Thinking
•
The reality: the world, and in particular, the U.S. will need to feed 9 billion people in 2050.
•
Through sustainability planning, ethanol can demonstrate the longevity of the industry in a way that is compatible with food production.
•
Sustainability doesn’t mean choosing food or fuel, rather it assesses resource use for fuel, food, and fiber!

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How are sustainability plans created?
•
Sustainability is a journey, not a destination.
•
Analytical processes, such as ResourceMax™, are used to design, assess, and analyze company information for maximum value and sustainability reporting opportunities.
Discovery
Assessment and Data Collection
Data Analysis and Benchmarking
Value Strategies and Reporting

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Outcomes of ResourceMax
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Aggregate, analyze and benchmark data
•
Manage what you are measuring – materiality
•
Ability to report metrics to customers and stakeholders as needed
•
Enhance internal decision- making and business planning

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Integrating sustainability plans
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Board of Directors / Executive Management Level
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Annual and Strategic Planning
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Procurement requirements and supplier codes
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Budgeting
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Modeling and Projections
Source: MIT Sloan Management Review, 2013

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Sustainability  profitability
Source: MIT Sloan Management Review, 2013

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Leveraging sustainability for brand and industry differentiation
Enhanced brand and industry value and reputation
Meet internal goals and external expectations
Non-product and product sustainability attributes
Collecting data and information
VS

19. How to Get There Ryan Heuer - December 11, 2014 At Kennedy & Coe’s Ethanol Leaders’ Summit

20. 1.
Build business – place sustainability at the heart of your business strategy
2.
Integrate, integrate, integrate – cross-functional, high-level and day-to-day oversight
3.
Link goals to bonus schemes – integrate sustainability targets into bonus schemes
4.
Don’t underestimate training – build sustainability competences across the organization
5.
Make success measurable – measure progress through targets and indicators
How to Organize Sustainability In Business

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“We imagine a future where our biological solutions create the necessary balance between better business, cleaner environment, and better lives.”
MAKE IT CENTRAL MAKE IT YOUR VISION

22. NGOs
Suppliers
Community
How to Engage Stakeholders

23. Key Stakeholders: The Customer
+

24. SAME QUALITY – CO2 SAVINGS
Beer has traditionally been produced from malted barley With Ondea Pro, great beer can be produced from un-malted barley Avoiding malting reduces CO2 emissions and barley losses
Greenhouse gas emissions can be reduced with 8%* and 7% less land is required to produce a hectoliter of beer.
* 8% of beer production, primary packaging, and upstream processes, e.g. barley (distribution and retail not included)

25. ACROSS INDUSTRIES
Cereals:
110 kg CO2
per ton of bread
Detergent:
100 kg CO2
per ton of laundry
Animal feed:
80 kg CO2
per ton of feed
Textile: 1100 kg CO2 per ton of fabric
Agriculture: 15 kg CO2 per ton of corn
Beverage:
25 kg CO2
per 1000 litre of beer
Leather:
100 kg CO2
per ton of hide
Paper making:
150 kg CO2
per ton of pulp
Vegetable oil:
44 kg CO2
per ton of oil
Dairy:
230 kg CO2
per ton of mozzarella
Cosmetics:
190 kg CO2
per ton of fatty
acid ester
Margarine: 23 kg CO2 per ton of hardstock

26. What’s in it for the …
Consumers World Industry
Other Stakeholders: Partners
With a unique blend of microorganisms farmers can improve the efficiency of chemical fertilizer, fight insects and disease, and deliver higher yields
Stable prices
Reduced cost
Higher yields
Cleaner water environment More food pr. acre
More stable food prizes

27. How to Prepare for a Sustainable Strategy

28. Corporate Sustainability
28
Source:
Unilever Sustainable Living Plan Progress Report 2014,Internal analysis
Help more than a billion people to improve their health and well-being
Halve the environmental footprint of its products across the value chain
Source 100% of its agricultural raw materials sustainably and enhance the livelihoods of people across its value chain
Unilever as a Model Example

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THANK YOU
Novozymes Contributors:
Arlan Peters – Head of Sustainability
Jesper Kloverpris – Manager, Sustainability
Chris Bender – Head of Public Affairs & Communications