Talk by Stuart L. Hart on "The Sustainable Value Framework"

1. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
CEO
Breakfast:
Crea.ng
Sustainable
Value
Stuart
L.
Hart
Steven
Grossman
Chair
in
Sustainable
Business,
University
of
Vermont
S.C.
Johnson
Chair
Emeritus
in
Sustainable
Global
Enterprise,
Cornell
University
President,
Enterprise
for
a
Sustainable
World
Founder,
Emergent
InsItute,
Bangalore,
India

2. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
What
comes
to
mind
when
you
hear
the
term
“sustainability”
in
a
business
context?

3. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
The
Road
to
Sustainable
Enterprise
1945-1960s
Pollution
Denial
“Smell of money”
(oblivious)
1970-80s
End-of-pipe
regulation
“Pay to reduce
negative impact”
(trade-off)
Obligation
Mid 1980s-1990s
Greening
• pollution prevention
• product stewardship
“Eco-efficiency”
(win-win)
Opportunity
2000’s- Present
Beyond Greening
• clean technology
• base of the pyramid
“Eco-effectiveness”
(positive force)
Reorientation
Green Leap

4. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
Buzzwords
• Environmental
Management
• Corporate
Social
Responsibility
• Greening
• Industrial
Ecology
• Stakeholder
Management
• Life-­‐Cycle
Management
• PolluIon
PrevenIon
(P2)
• Sustainable
Development
• Design
for
Environment
(DfE)
• Green
Design
• Urban
Reinvestment
• Brownfield
Redevelopment
• ISO
14001
• Waste
ReducIon
• Closed
Loops
• Resource
ProducIvity
• Sustainable
Technology
• Radical
TransacIveness
• Systems
Thinking
• Corporate
Governance
• Clean
Technology
• Eco-­‐Efficiency
• Eco-­‐EffecIveness
• Biomimicry
• Triple
Bo^om
Line
• Inclusive
Capitalism
• Base
of
the
Pyramid
• Majority
Business
• Corporate
CiIzenship
• Voluntary
RegulaIon
• Social
Entrepreneurship
• Full
Cost
AccounIng
• Pro-­‐Poor
Business
• Risk
Management
• Leapfrog
Technology
• Cradle
to
Cradle
• RestoraIve
Technology
• B24B
• Take-­‐Back
• Transparency

5. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
The
Many
Faces
of
Shareholder
Value
Growth Path
Trajectory
New Skills
Repositioning
Cost &
Risk Reduction
Reputation
Legitimacy
Building Tomorrow’s
Opportunity
Managing Today’s
Business
Nurturning
Internal
Capabilities
Engaging
External
Constituencies

6. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
The
Buzzword
Sort
Tomorrow
Today
ExternalInternal
Growth Path
& Trajectory
Innovation &
Repositioning
Cost & Risk
Reduction
Reputation &
Legitimacy• Greening
• Emission Reduction
• Eco-Efficiency
• Risk Management
• Environmental Management
• ISO 14001
• Waste Reduction
• Resource Productivity
• Sustainable Development
• Pro-Poor Business
• Urban Reinvestment
• Brownfield Redevelopment
• Inclusive Capitalism
• Community Capitalism
• Civic Entrepreneurship
• Radical Transactiveness
• B24B
• Life-Cycle Management
• Design for Environment (DfE)
• Green Design
• Stakeholder Management
• Corporate Citizenship
• Full Cost Accounting
• Take-back
• Transparency
• Corporate Governance
• Eco-Effectiveness
• Biomimicry
• Leapfrog Technology
• Sustainable Technology
• Knowledge & Service Intensity
• Cradle to Cradle
• Closed Loops
• Restorative Technology
• Systems Thinking
Pollution Prevention Product Stewardship
Clean Technology Base of the Pyramid

7. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
Tomorrow
Today
ExternalInternal
Strategy:
Clean Technology
Deploy the sustainable
competencies of the future
Corporate Payoff:
Innovation & Repositioning
Strategy:
Base of the Pyramid
Co-create new business
to meet unmet needs
Corporate Payoff:
Growth & Trajectory
Strategy:
Pollution Prevention
Minimize waste and
emissions from operations
Corporate Payoff:
Cost & Risk Reduction
Strategy:
Product Stewardship
Integrate stakeholder views
into business processes
Corporate Payoff:
Reputation & Legitimacy
Sustainable
Value
Drivers
• Pollution
• Consumption
• Waste
Drivers
• Disruption
• Clean Tech
• Footprint
Drivers
• Civil Society
• Transparency
• Connectivity
Drivers
• Population
• Poverty
• Inequity
The
Sustainable
Value
Framework

8. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
What
is
Your
Porbolio?
Tomorrow
Today
ExternalInternal
Pollution
Prevention
Base of
the Pyramid
Clean
technologies
Product
Stewardship

9. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
What
is
the
Typical
Corporate
Porbolio
Today?
Tomorrow
Today
ExternalInternal
Pollution
Prevention
Clean
Technology
Product
Stewardship
Evolutionary Routines
“Six Sigma Black Belt”
Base of the
Pyramid

10. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
Base of the
Pyramid
Tomorrow’s
Opportunity
Tomorrow
Today
ExternalInternal
Pollution
Prevention
Clean
Technology
Product
Stewardship
Revolutionary Routines
“New Form of Martial Art”

11. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
Two
Levels
of
Sustainability
Focus on Existing:
products
processes
suppliers
customers
shareholders
Characteristics:
Incremental
Continuous Improvement
Rationalizes Industry
Strategies for
Greening
Focus on Emerging:
technologies
markets
partners
needs
stakeholders
Characteristics:
Discontinuous
Creative Destruction
Restructures Industry
Strategies for
Beyond Greening
Stuart L. Hart (1997) Beyond Greening: Strategies for a Sustainable World

12. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
Joseph Schumpeter
Prophet of Innovation

13. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
• Mission
– To
dramaIcally
increase
the
number
and
success
of
intrapreneurs
and
entrepreneurs
focused
on
socially
inclusive
and
environmentally
sustainable
business
development
for
the
21st
century
• Vision
– To
create
a
new
model
of
entrepreneurial
training
and
a
complete
innovaIon
ecosystem
appropriate
to
the
challenges
we
face
in
the
21st
century
www.emergentinstitute.net

14. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
University
of
Vermont
5–Principles of the SEMBA Program
--Prepare a new breed of business leaders to shape
the future of sustainable global commerce
--Deliver a full MBA toolkit to prepare students to
create profitable and sustainable business
opportunities
--Deliver a program focused 100% on sustainable
entrepreneurship
--Accelerate the return to a successful career (the
program is only 12 months long; 8 months of
classroom experience; 4 months of hands-on
practicum!)
--Learn by doing: Hands-on, true, meaningful
experiential learning with companies and
entrepreneurs here in Vermont and around the world

15. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
“The
next
20
years
will
not
look
anything
like
the
last
20…”
Chris Martenson (2010)
The Crash Course

16. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
“…global
capitalism
stands
at
a
juncture
similar
to
the
one
faced
in
1914.
Between
1914
and
1945,
world
war,
depression,
and
fascism
almost
succeeded
in
elimina.ng
capitalism
from
the
face
of
the
Earth.
The
problems
global
capitalism
now
faces
(global-­‐scale
environmental
change,
economic
inequity,
financial
meltdown)
are
no
less
daun.ng.
Construc.vely
engaging
these
challenges
will
be
the
key
to
ensuring
that
capitalism
con.nues
to
thrive
in
the
coming
century—to
everyone’s
benefit.”

17. Copyright Stuart L. Hart 2011Copyright
Stuart
L.
Hart
2015
Stuart
L.
Hart
Stuart.Hart@uvm.edu
www.stuartlhart.com
www.e4sw.org