Introducing Sustainable Development in the Financial Services Sector

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Introducing Sustainable Development in the
Financial Services Sector

• A PP4SD Programme

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PP4SD

• Working with professionals to integrate
  sustainable development learning into continuing
  professional development
• Partnership approach
• Managed by the Environment Agency, the
  Institution of Environmental Sciences, The
  Natural Step and RSPB

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Introduction

• Course Objectives
• help participants understand how social and
  environmental considerations will have an
  increasing impact on the activities of the
  Financial Services Sector
• give participants an understanding of this new
  business reality and the associated risks and
  opportunities
• provide delegates with tools to respond
  positively to this developing agenda

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Introduction

• Course design
• to be challenging
• to be interactive
• to stimulate discussion and debate
• to be fun

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Space Ship
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Space Ship

• Congratulations!
• You are going away for a long weekend in space
  with everything provided think the Paris Ritz
  in space.

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Space Ship

• Your Task
• in teams, decide on the 10 items that you will
  take on this special weekend.
• Food, water and spacesuits provided

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Space Ship
Disaster Strikes!
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Systems thinking
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Systems thinking
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Systems thinking
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The Business Funnel
Increasing costs
Customer Requirements
Shareholder Pressure
Protecting brand value
Legislation
Employee expectation
Risk Management
NGO pressure
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The reality
World population actual and projections
Sources UN median projection 2025
Politics of the Real World
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The reality

• Global consumption of water is doubling every 20
  years
• 10 used by people
• 65 used by industrial agriculture
• 25 used by industry
• 1 billion people already suffer from a shortage
  of fresh water
• If everyone adopted a western lifestyle we would
  need five earths to support us!

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The reality

• The 20 of people living in the rich countries
  consume 80 of the world resources
• The top 1 of households have more wealth than
  the entire bottom 95

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How has business responded?

• Corporate Social Responsibility (CSR)
• winning businesses of the 21st century should
  not only add value to themselves but to the rest
  of society as well
• David Irwin - Encouraging Responsible Business

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How has business responded?

• 94 of company executives believe that the
  development of a CSR strategy can deliver real
  business benefits. (Source Ernst Young survey)
• 1 out of 3 international sales executives think
  social responsibility initiatives will increase
  sales. (Source Hill Knowltons
  Corporate Reputation Watch)
• 86 of investors believe that social and
  environmental risk management improves a
  companys market value in the long term.
  
  (Source CSR Europe/Taylor Nelson Sofres)

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How has business responded?

• 73 of top European business leaders believe that
  sustained social/environmental engagement can
  significantly improve profitability
• (Source Business in the Community's FastForward
  Research)
• 27 of consumers across 25 countries have
  punished companies for being socially
  irresponsible and another 21 have considered
  doing so
• (Source Environics International's Annual CSR
  Monitor)
• 80 of employees would not work for an
  organisation with values they didn't believe in
• (Source Work Foundation, 'Corporate Nirvana)

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How has business responded?

• 60 of banks are now publishing declarations on
  environment (or included as part of financial
  reports)
• 59 of banks have an environmental policy
• Steady growth of financial products geared to the
  environment
• Sustainable Finance and Banking Marcel Jeucken

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How has business responded?

• UNEP Agreement on the financial sector
• Financial Organisations Review and Guidance on
  the Environment (FORGE)
• ICC Business Charter for SD
• The London Principles

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Case Study Review

• Review good practice examples of how some
  organisations have responded to this agenda.

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Case Study Review

• Process
• Read case study and prepare feedback containing
  the following
• Background on the company 10
• What they say they have done 30
• What can we learn from the case 60

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Case Study Review

• What are the common positive elements?
• What are the areas for improvement?
• 3. What is appropriate for your own business
  context?

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The 5 Capitals

• Background
• Natural Capitalism (Amory Lovins, Paul Hawken,
  L.Hunter Lovins)
• http//www.natcap.org/
• Project Sigma
• The 5 Capitals
• http//www.projectsigma.com/

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The 5 Capitals

• Natural Capital
• Human Capital
• Social Capital
• Manufactured Capital
• Financial Capital

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Natural Capital

• What does it mean?
• the natural resources (energy and matter) and
  processes needed by businesses to produce
  products and deliver services
• Why is it important?
• everything will draw on or impact on the natural
  environment in some way

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Human Capital

• What does it mean?
• the health, knowledge, skills, intellectual
  outputs, motivation and capacity for
  relationships
• Why is it important?
• businesses depend on individuals to be motivated
  and skilled to be successful

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Social Capital

• What does it mean?
• value added to a business from human
  relationships, partnerships and co-operation
• Why is it important?
• economies rely on social interactions to achieve
  their objectives

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Manufactured Capital

• What does it mean?
• material goods and infrastructure which
  contribute to production or service provision
  (tools, technology)
• Why is it important?
• important that how things are developed /
  delivered is sustainable - using innovation

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Financial Capital

• What does it mean?
• productive value of the other capitals which
  exist in a form of currency which can be owned or
  traded
• Why is it important?
• this is the traditional and primary measure of
  business performance.

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Mapping Exercise

• Draw a systems diagram for a product, mapping
  inputs and outputs and highlighting impacts on
  the capitals.
• See the following examples

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Mapping Exercise
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Mapping Exercise
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Situational Exercise
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Sphere of influence
Sphere of concern
Sphere of influence
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Action Planning
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Action Planning

• Reflect on this course and identify 3 things that
  you can do/start doing to contribute to this
  agenda
• write them down
• talk them through with a colleague to ensure they
  are achievable but stretching
• Have the colleague question and feedback what
  they have heard

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Action Planning

• Transfer the smarter targets to a postcard
• Complete your name and address on the postcard
• Give the postcard to the course facilitator

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Evaluation and Close

• Many thanks