Sustainability as a business strategy

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Sustainability as a business strategy

• Presenter Ron Stuart

9th May 2008
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• Sustainability is more than a vision of a
  distant culture. Sustainability is the core of
  our corporate strategy.
• Source Dr Norbert Reithofer, Board Member BMW AG

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• The drive for sustainability is now as
  inevitable as the sun comes up each morning. Any
  business that misses the point is missing one of
  the main drivers of the success of the global
  economy and consumer accountability. The
  important message for New Zealand from Britain is
  that there is a huge opportunity for the right
  products
• Lord Jones, Minister for Trade and Investment
  Great Britain 5 April 2008

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Sustainability - a part of an organisations
strategy or an add-on?

• Many people talk about sustainability as an
  add-on to an organisations strategy but our
  hypothesis is that by making sustainability an
  integral part of strategy the organisation will
  achieve real bottom-line benefits

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What is business sustainability?

• Rather than just being another thing-to-do,
  business sustainability is an over arching
  concept that involves doing everything better and
  more efficiently from a sustainability
  perspective
• Our view
• It is the establishment of practices that enable
  the operation of a business or organisation in a
  manner that meets or exceeds the ethical, legal,
  commercial and public expectations of society

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Dimensions of Sustainability

• A sustainable business development strategy is
  one which enhances long-term stakeholder value by
  delivering, through its core business functions
• Economically sustainable outcomes,
• Technologically sustainable outcomes,
• Institutionally sustainable outcomes
• Culturally sustainable outcomes,
• Socially responsible outcomes, and
• Environmentally sustainable outcomes
• Source (Dimensions of Sustainability) Bernard
  Cheng, PhD thesis title Quantification of
  sustainability in industry sectors a New
  Zealand electricity power sector case study.

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The business case for sustainable organisational
development

• Sustainability is a journey, not a destination
• By integrating sustainability into core
  business practice, organisations have the
  opportunity to create competitive advantage,
  unlock new routes to growth and in the public
  sector unleash the potential of their
  organisations to add value directly to New
  Zealand society.

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The business case for sustainable organisational
development

• The business case for Sustainable Organisational
  Development has a number of key value
  propositions
• Improved operational performance and efficiency
• Improved attraction and retention of the
  workforce
• Reduced business risk
• Enhanced business opportunities
• Competitive advantage
• Cost savings
• Enhanced reputation
• Improved capability to plan strategically

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Go beyond the business case

• By implementing sustainable organisational
  development strategies organisations will then
  also provide societal benefits through
• Improved work/life balance
• Enhanced resource conservation
• Enhancement of biodiversity

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The business case for sustainable organisational
development

• How do these value propositions differ from the
  development of any organisations strategic
  business plans?
• The answer is that they do not

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How an organisations sustainability strategy
supports the business strategy
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Some things to think about in terms of developing
business strategies based on sustainability

• For the next set of slides I want to acknowledge
  Russell Craig, Executive Advisor, IBSC, Cisco
  Systems these slides were extracted from his
  recent presentation to the GOVIS conference where
  he spoke eloquently about Sustainable Government
  through ICT.

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ICT's impact on CO2 varies by industry
Refrigeration Manufacturing / Logistics
Travel ICT Buildings
Source IBSG
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Conferencing solutions enable collaboration
without travel
Integrated audio/ webconferencing
Webconferencing with video
TelePresence immersive in-person conferencing
Capabilities/richness of user experience
Source Cisco IBSG, 2008
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TelePresence is a dramatic leap forward
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TelePresence is a dramatic leap forward
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• Next presenter is Alan Barrett, Starfish
  Value Chain Capability Lead

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Sustainability as a business strategy

A pragmatic approach

• Presenter Alan Barrett

9th May 2008
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What if?

• Government wished you to embrace a sustainable
  approach to providing goods and or services
• Possible options
• Ignore
• Comply
• Embrace the opportunity
• Consumers, customers and /or clients wished to
  buy or receive goods only from organisations that
  were committed to sustainable practices

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So is it to be denial or an opportunity?

• Faced with the choice between changing one's mind
  and proving that there is no need to do so,
  almost everyone gets busy on the proof. 
• John Kenneth Galbraith

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Case study - How this worked in practice?

• Agreed approach Strategy must equal execution
• Supplier segmentation
• Assessment and metrics
• Measurement
• Leading to the definition of the Operational
  How
• Process
• Training
• Support
• Communication

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Approach making it clear

• Categorisation of projects according to their
  complexity.
• Classification of suppliers into, supplier
  types.
• Define levels of sustainability measurement for
  suppliers.
• Assign weightings for supplier evaluation which
  include elements of sustainability.
• Setting the project type/ supplier category/
  sustainability measurement level matrix.

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Step 1 Complexity affects procurement approach

• Urgent
• Scheduled
• Maintenance
• Project
• Facility
• Other

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Step 2 - Supplier segmentation make it clear
for all

• Potential
• Actual
• Preferred
• Panel
• Partner

Benefit required Clarity for all parties.
It is efficient and effective
giving a uniform approach that is easy to
administer.
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Step 3 - How to select suppliers based on their
sustainability credentials?

• What to look for
• What questions to ask
• How to categorise them
• How to rate them , and
• How to use this information in a pragmatic way

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What to look for

• Sustainability varies by complexity impact
• Starfishs 6 categorise for sustainability
• Social
• Environmental
• Economic
• Ethical
• Institutional
• Technological

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What questions to ask
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How to categorise them
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How to rate them

• Each of the 6 dimensions of sustainability have a
  level of maturity level 1 through 5
• Answers to questions allows a rating to be made

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How to use this rating
Create a Sustainability Matrix
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Step 4 Assigning weightings for evaluation

• Institutional
• Technical
• Ethical
• Economic
• Social
• Environmental

Metrics and measurement are a matrix between
category or type of need and sustainability
impact
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Step 5 Setting the sustainability matrix
Know what is required
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How this works in practice
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• Change is inevitable - except from a vending
  machine.  Robert C. Gallagher

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