Transcript Slide 1

Sharing Recipes for Staying Competitive Sustainability
ECR
Thailand, October 2008
John Jackson, Accenture
Copyright © 2008 Accenture All Rights Reserved.
Accenture’s 2 moments of truth
Understanding High
Performance
Current
State
Identi
fy
Indus
try
Driver
s
Descriptive
Enabling High Performance
Synt
hesiz
e
Drive
rs to
Clien
t
Diagn
ose
Gaps
Conn
ect to
Soluti
ons/
Offeri
ngs
Complete
Transform
ation
Journey
Prescriptive
• We examine more than 6,000 companies, including more than 500 that meet our criteria as high performers.
• Our understanding includes the specific drivers of high performance across 34 industries
Copyright © 2008 Accenture All Rights Reserved.
High
Performance
Our High Performance research programme
has been recognized by the Harvard
Business Review as one of the most
important thought leadership initiatives
Accenture High Performance
Business Framework
Harvard Business Review
recognized Accenture’s High
Performance Companies
viewpoint as Top-10 research in
the area of business
performance
Source: Harvard Business Review Jul-Aug 2005
“[Accenture] now matches McKinsey’s share of
the thought leadership market with 9% of the
total”
Source: White Space (Arkimeda)
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High Performance = Outperforming Industry
Peers to Create Enterprise Value
Long-Term Perspective
• Economic cycles
• Industry cycles
• Leadership generations
Performance Dimensions
• Growth
• Profitability
• Future positioning
• Longevity
• Consistency
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4
We know what it takes to be a high
performer…our understanding is based
on analysis of over 6,000 companies.
Copyright © 2008 Accenture All Rights Reserved.
Sustainability is not the driver of high
performance, but leaders create value
by aligning around three key building
blocks.
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Changing business context is making
it more difficult by impacting both
supply and demand.
War for talent
Emerging consumers
The flow of capital
Economic
openness
The new map of innovation
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Technology
Size & reach of
multinationals
The battle for resources &
sustainability
Expectations are reshaping industry
strategies and operating models as we
reach a global tipping point.
• Knowledge of specific consequences is growing and becoming
mainstream
• Governing bodies are mandating action at various levels
• Institutional investors are demanding visibility into climate change-related
activities
• Major banks are factoring carbon risks into their lending, valuation and
underwriting criteria
• Employees and potential employees are favoring employers who take
action
• Leading companies are naming Chief Climate / Sustainability Officers
• Customers are favoring suppliers who take action
Addressing climate change is increasingly viewed as “pro-growth”
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Shoppers are concerned… in Asia
as much as in the West.
98%
Level of
environmental
concern
81%
78%
73%
85%
Level of effort
required in my
country
Individuals must
address climate
change
76%
73%
72%
82%
Germany
63%
US
54%
63%
71%
Accenture End-Consumer Survey on Climate Change, 2007
Nordic, France, Ger, Italy, Neth., Spain, UK, Canada, US, Japan, Australia, Brazil, India,
China
Copyright © 2008 Accenture All Rights Reserved.
UK
82%
Individuals who
already take
concrete action
Source:
Note 1:
China
90%
Average 14
Countries1
93%
84%
86%
81%
86%
And they will take action.
“What actions do you take personally, to address
environmental concerns?”
Returning recyclable goods
63%
46%
Purchase products with less packaging
Frequent environmentally friendly retailers
40%
28%
Do not use plastic bags
Purchase locally sourced products
Purchase re-cycled products
Source:
24%
21%
Use public transport / avoid travelling by
car
17%
None, consciously
8%
Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of
~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.)
Copyright © 2008 Accenture All Rights Reserved.
~45% of China’s shoppers ‘buy green’.
“Did you consciously purchase any environmentally friendly
products in the last 60 days? What products did you purchase?”
200
No, 40%
Don't know,
10%
No response,
5%
154
Top three
categories
150
122
114
100
47
42
Furniture
50
Yes, 45%
Costume
67
# of 591 respondents
Source:
Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of
~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.)
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Packaging
material
Household
appliance
Household
goods(Inclding
cosmetic)
Fresh food
0
China’s shoppers lack information.
“Why don’t you purchase more environmentally friendly products?”
• Shoppers claim retailers don’t
provide information about a
product’s ‘greenness’.
250
200
• Retailers agree – they claim they do
not have reliable data from suppliers
in order to make green claims1
150
100
205
• Only 5% say it is because:
Source:
Note 1:
23
9
No such
products
available
Others
No green
mark
0
31
Too
expensive
50
– Environmentally friendly
products are too expensive
– No ‘green products’ are available
at all
Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of
~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.)
Interviews with Chinese grocery retailers, March 2008.
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However, most shoppers are still
price-oriented.
“When choosing your retailer, how important are the
following considerations?”
Price
4.6
Customer service
3.7
Products
3.6
Location and convenience
3.4
Environmental record
3.1
Availability of environmentally friendly
products
2.7
0
Source:
1
2
Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of
~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.)
Copyright © 2008 Accenture All Rights Reserved.
3
4
5
6
Average score.
Responses ranked from 1 to 6 (6 being the
most important)
Yet they expect to pay a little more.
“What would you be prepared to pay for a more environmentally
friendly product (food, apparel and appliances)?”
Food
Customers are prepared to
pay a greater premium for
environmentally friendly
household appliances than
apparel or food.
40%
32%
28%
25%
22%
Apparel
19%
16%
Household
appliance
13%
4%
Over
50%
more
Source:
For all products, most
respondents’ acceptable
price 1~10% more
expensive than the price
for a similar, less
environmentally friendly
product.
45%
3%
7%
9%
10%
10%
5% 5%
2%
30- 50%
more
10-30%
more
5-10%
more
Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of
~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.)
Copyright © 2008 Accenture All Rights Reserved.
1-5%
more
2%
2%
Nothing more Expect it to be
less
And they expect you to tackle these
issues…
“Who would you trust to give you
“Whose responsibility is it to tackle
guidance on how to make a difference?”
environmental problems?”
5.1
Governm ent
4.2
Media
General
public
2.7
General public-personal
Independent
NGO
2.7
Media
2
3
4.1
Independent NGO
Academ ia
1
4.3
Academ ia
3.1
0
5.4
Enterprise
3.4
Enterprise
Source:
Governm ent
4
5
6
2.5
2.4
2.4
0
1
2
3
4
5
Average score.
Average score.
Responses ranked from 1 to 6 (6 being the
most important)
Responses ranked from 1 to 6 (6 being the
most important)
Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of
~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.)
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6
And they expect you to tackle
these issues…TOGETHER.
Farms
Head Office
Waste & Recycling
Storage & Dist
Packaging
Materials
3%
12%
Milling &
Processing
Centres
14%
kWh / unit
29%
Packaging
Production &
Packaging
39%
kg-km per item
Raw Materials
Retailers have
Indirect Control
and little or no
visibility of flow,
process or data
Supplier /
Consolidator
DC
Supplier /
Consolidator
DC
Retailer DC
Total Carbon
Footprint
Stores
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Offic
e/
Trave
Retailers have
Direct Control
and very good
visibility of
process and
operating data
Sustainable development has become a
burning platform for the Retail &
Consumer Goods high performers.
Manage Risk – regulatory and operational
Grow Revenue – new/differentiated products &
services
• Green and fair trade products are still a niche opportunity
(£285m market UK in 2006 for the latter) but can command
premium prices
• New products such as Health and wellness product lines
respond to modern lifestyle demands and growing obesity
issues (health and wellness product global sales expected
to reach US$127 billion by 2010)
Increase positive
• Consumers in emerging markets including fast growing
middle class and ‘Bottom of the pyramid’ (4 billion people
with an economy of $13 trillion PPP)
• Increasing global, national and regional regulation
(Kyoto Protocol & post EU ETS targets phase II (2012))
• Sustainable sourcing extends the supply chain beyond tier
1 suppliers
Less Certain / Long Term
Reduce negative
• Reductions in operational costs, for example through
Carbon and energy management, and waste management
• Collaboration with local governments and communities is
fundamental to secure licence to operate, especially in
emerging markets
• Eco-labelling is in its infancy but is being piloted by CGS
companies and retailers
Certain / Short-term
Reduce Cost – increase resource efficiency,
lower emissions
• Management of stakeholder and investor expectations
(The Carbon Principles, Dow Jones SI, FTSE 4 Good)
Build intangible assets – brand reputation,
networks
• War for Talent - attract and retain high calibre sustainabilityconscious employees (75% of MBA students from top
schools were willing to accept 10-20% lower salary to work
for a ‘responsible’ company)
• Reputation - building and maintaining consumer trust
Copyright © 2008 Accenture All Rights Reserved.
Sustainable Market Focus & Position…
for your company or for your brands.
“Whole Foods, Whole People, Whole Planet”
“Pao de Acucar Verde”
Enabling Consumers to be Green
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Distinctive Capabilities…
imbedding sustainability in your
processes and practices
Energy conservation infrastructure
Global Mass Retailer
Eco-labeling
Network consolidation to
reduce carbon footprint
Supply Chain Efficiency
European Electronics Retailer
Copyright © 2008 Accenture All Rights Reserved.
Performance Anatomy...
culture, leadership, people.
Do No Evil
China Computer Recycling
Accenture Development Partnerships
and Eco-teams
Copyright © 2008 Accenture All Rights Reserved.
How will you turn sustainability
trends into competitive advantage?
Strategic Framework for Sustainability
New products,
brand and
marketing etc
Increase positive
Revenues:
Intangible
assets:
Reputation,
networks, license to
operate / innovate
etc
Competitive Strategy options
Go it alone
Collaborate in partnerships
and clusters
Certain / Short-term
Eco-efficiency,
productivity gains etc
Reduce negative
Cost reduction:
Less Certain / Long Term
Risks:
Regulatory, physical,
supply chain, product
etc
Sources: Accenture Research, Dan Esty - ‘Green to Gold’
Copyright © 2008 Accenture All Rights Reserved.
Collaborate at an industry level
Shape regulation and policy