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Drivers for sustainability - Apple, Exxon Mobil, Nestle
- 1. Global and Industry Comparison ENBUS 601 August 26, 2016 Presenters: Oussama Benkabbour | Savita Benkabbour | Manpreet Dhillon | Josephine Pham Top Drivers for Sustainability
- 2. Objective • Compare business drivers for sustainable development (SD) across three industry leaders. 2
- 3. • Beyond Reputation • Global Drivers • Industry Leaders o Apple Inc. o Exxon Mobil o Nestlé • Industry Comparison • Insights & Recommendations • Q&A 3 Agenda
- 4. Beyond Reputation 4 0 20 40 60 80 100 % Embedded % Not embedded Why have companies embedded sustainability practices?% Source: McKinsey, 2011
- 5. Global Drivers: Why Sustainability? 5 Human Rights Access to Markets/ New Build Customer Attraction & Retention Media/NGO Pressures Continuous Improvement Increase “Eco” –Efficiencies Due Diligence Protection/Assurance Source: Ethical Corporation, 2015
- 6. Apple Inc. – Think Different • Multinational technology company • Revenue: $233.7B USD (2015) • Market Cap: $700B USD (2015) • Employees: 110,000 (2015) • Strategy: Hardware, Software and Services • Products: iPhone, iPad, Mac, iOS, iCloud, Apple TV, Apple Watch 6
- 7. Apple – Priorities and Issues 7 • Climate Change: Use of renewable energy sources and energy efficiency in products and facilities. • Waste: Conserve precious resources • Safety: Use of safer materials in products and processes. • Supply Chain: Create fair employment and safe working conditions throughout supply chain
- 8. Exxon Mobil – Taking on the world’s toughest energy challenges • Global energy company • Segments: Upstream, Downstream and Chemicals • Revenue: $259.5B (2015) • Market Cap: $356.5B (2015) • Employees: 73,500 (2015) • Subsidiaries: Esso, Imperial Oil, Superior Oil, Syncrude, Mobil 1 8
- 9. Exxon Mobil – Priorities and Issues • 39 identified materiality metrics • Key Risks • Political: Protectionism of markets • Economical: weak global economies – low oil prices • Social: Rising public concerns about the safety of their products • Technological: Increased innovation of alternative energy sources • Environmental: Seasonal weather patterns, climate change and greenhouse gas restrictions 9
- 10. • World’s largest food company • Revenue: $92.1B USD (2015) • Market Cap: $232.4 B USD (2015) • Employees: 335,000 (2015) • Strategy: Nutrition, Health and Wellness • +2,000 Brands Sales Contribution (2015) 10 Nestlé – Good Food, Good Life
- 11. Nestlé – Priorities and Issues 11 Five major issues relating to Nutrition, Water, Regulation, and Environment
- 12. Industry Comparison 12 Due Diligence Protection/Assurance Access to Markets/ New Build Customer Attraction & Retention Increase “Eco”–Efficiencies Human Rights Media/NGO Pressures Product Innovation
- 13. 13 INSIGHTS 1. Focus on Mitigation Initiatives 2. Information Availability and Transparency 3. Public Perception towards SD 4. Differentiation vs. Competition RECOMMENDATIONS 1. Focus on Adaptation Initiatives 2. Implement Consistent Approach for SD Metrics 3. Enhance Communication/ Awareness at POS 4. Translate Impact to Dollars – sdEffect
- 15. Appendix: Global Sustainability Trends 15 What should we watch for in 2016-2017?
Editor's Notes
- Show of hands: How many of you use iPhones, purchase gas at an Esso or have had a Kit Kat/Nescafe? And now, show of hands again: Did you consider their sustainability practices before making your purchase?
- We’re here to talk to you about business drivers for sustainable developments, and compare across 3 industry leaders. This is a topic that wasn’t on the list provided, but we chose it because we wanted to explore the relationship between different sectors when it comes to sustainability. The companies were selected based on market capitalization and their influence at a global scale
- Today we’re going to take you through: Sustainability beyond brand and reputation Some global drivers Then we’re going to profile 3 companies, representing the technology, energy and food sectors. We’ll do some industry comparisons based on our research And share some of our insights and recommendations as a group. We’ll end off with a 5 min Q&A when we’ll welcome questions.
- In 2011, McKinsey (the consulting firm) conducted a survey of about 3,000 companies across different industries. What they found was that a number of these companies have embedded sustainability practices right into their business operations. Of these practices, where most companies take action is in the reduction of energy and waste in their operations. Couple that with managing their brand and complying with regulation, and you have what they see as a direct impact to their bottom line. Sources: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/the-business-of-sustainability-mckinsey-global-survey-results https://sustainabledevelopment.un.org/sdgs https://sustainabledevelopment.un.org/topics/sustainabledevelopmentgoals http://www.sustainability.com/news/webinar-2016-global-sustainability-trends#.V7qD04-cFMs
- And now if we look at some global trends, we find that sustainability is becoming a driving force for business. To advance Sustainable Development on a global scale, these are the most common drivers. (list them) So now, let’s take a closer look, We’ll start by reviewing the technology sector, and I’ll turn it over to Oussama. http://www.ethicalcorp.com/business-strategy/top-sustainability-trends-2015 http://radar.sustainability.com/annual-trends-report/
- Apple’s reporting has little to say about stakeholders or materiality. It has no Overview for Corporate Social Responsibility so it lacks a single coherent statement. Apple does however produce 2 main reports which highlight their main priorities and issues as outlined here. Climate Change: Apple’s carbon footprint is measured via five major areas: manufacturing, product use, facilities, transportation, and recycling. In 2015, 93 percent of Apple’s energy came from renewable sources. Waste: Apple looks for ways to make the most of natural resources used in their product. They implemented recycle and reuse program, and focus on water and forestry conservation. Safety: Removal of toxins from products and processes, to help assess the impacts on health and the environment. Supply Chain: Apple’s suppliers employ more than 1.6 million people in 20 countries, and the Supplier Responsibility Report examines how the company manages social responsibility throughout the supply chain and emphasizes its responsible practices, from labour and human rights issues to health and safety.
- About company
- WHAT are the SD issues – 19 material issues (divided into 5 categories) WHAT is the company doing about this – 39 commitments (divided into 5 categories) Now that you’ve heard about the three industry leaders, Savita will now take you through the industry comparison.
- - As we compared each company with their leading drivers, we found that: 1) 2 of the companies had their top practices around Due Dillgence 2) 2 of them focused on customer attraction and retention But the most notable observation was that all three valued increase in eco efficiencies. This last point was interesting to us because given the differences in these industries there was a resounding similarity in how they view sustainable development.
- So, here are some insight: We found that all three companies focused mainly on mitigation efforts Information was readily available, and easy to access All three of these companies face stiff competition and view sustainability as a differentiator Based on these insights, we’ve come up with some recommendations: While mitigation efforts are important, adaptation should be considered a higher priority There’s a need to develop a consistent way of measuring sustainable development metrics across industries Like we saw from the show of hands, many people don’t consider sustainability as a factor Lastly, establishing a link between sustainable development and financial performance is critical
- These industry leaders have taken steps towards sustainability and even though we’ve noted many recommendations, companies should start embedding sustainability into their business practices instead of using perfection as an excuse. As a wise man once said….. Image credit: NASA Photo source: http://www.nasa.gov/multimedia/imagegallery/image_feature_1249.html Description: Apollo 8, the first manned mission to the moon, entered lunar orbit on Christmas Eve, Dec. 24, 1968. That evening, the astronauts-Commander Frank Borman, Command Module Pilot Jim Lovell, and Lunar Module Pilot William Anders-held a live broadcast from lunar orbit, in which they showed pictures of the Earth and moon as seen from their spacecraft. Said Lovell, "The vast loneliness is awe-inspiring and it makes you realize just what you have back there on Earth." They ended the broadcast with the crew taking turns reading from the book of Genesis.
- https://sustainabledevelopment.un.org/topics/sustainabledevelopmentgoals http://www.sustainability.com/news/webinar-2016-global-sustainability-trends#.V7qD04-cFMs