Transcript Slide 1

MAKING
SUSTAINABILITY
STICK
MAKING
ISSP Conference
2013
Kevin Wilhelm
May 9, 2013
SUSTAINABILITY
STICK
The Blueprint for
Successful
Implementation
Kevin Wilhelm
What I’m going to talk about today
•
•
•
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The 11 Steps for Successful Implementation
Common barriers your run into
How to overcome them
Illustrative and (sometimes funny,
sometimes sad) case studies
Typical Barriers that need to be overcome
• Overworked. Too much on plates already and another thing to do
• No perceived senior buy-in
• Boss doesn’t appreciate additional time away from my “job”
• People don’t know what to do. Need training to think differently
• No budget. Or issues between capital and operational
• People don’t feel empowered
• Apathy. Loss of momentum for attending events, people stop
reading communications, taking action
• Middle management, Culture, Other
Phase I
Who:
Individual
Phase II
Team/
Department
Phase III
Division/
Function
Growth $
Phase IV
Phase V
Business
System
Company
Environmental
& Social Benefits
Environmental
& Social Negatives
Type of
Change:
Random
Hero
Dominant
Characteristics: (martyr)
Incremental
Personal
Influence
Breakthrough
Metrics
Structural
Process
Collaborative
Eco-Efficiency Game changing
Systemic
Radical Collaboration
Systems view
“Team Sport”
May 2, 2013
Phase I
Who:
Individual
Phase II
Team/
Department
Phase III
Division/
Function
Phase IV
Phase V
Business
System
Company
Environmental
& Social Benefits
Growth $
Environmental
& Social Negatives
Type of
Change:
Random
Hero
Dominant
Characteristics: (martyr)
Financial
Drivers:
Incremental Breakthrough
Personal
Influence
Costs more
Systemic
Metrics
Structural
Process
Collaborative
Eco-Efficiency Game changing
Investments/ROI
Top Line
Radical Collaboration
Systems view
“Team Sport”
Value creation
May 2, 2013
1. Define Sustainability
What does it mean to
YOUR company?
Staying in
business
Saving money &
the environment at
the same time
Passing to next
generation
Attract talent,
improve retention
Human Resources
Company
Products are
organic and local
Respond to investor
questions
Investor Relations
Save on fuel and
delivery times
Fleet/Logistics
2. Business Case: External
Market Forces
• Investors
• Customers
• Supply-Chain
• Debt/Lenders
• Insurance
• Energy Prices
• Commodity Prices
• Societal Pressure
• Extreme Weather
• Employees
• Industry Leadership
• Political Instability
Public Policy
• GHG/Environment
• Energy
• Green Building
• Waste/Recycling
• Water
• Human Rights/Trafficking
• Toxins
• FTC Guidelines
• Conflict Minerals
• External Reporting
• IIRC, SASB
• ISO Standards
2. Business Case: Internal
• Focus on the top line
Bottom Line (CFOs)
• Compliance
• Risk mitigation
• Cost savings
Top Line (CEOs)
• Opportunities
• Revenue enhancement
• New products/services
• Competitive advantage and differentiation
– Cost leadership
– Differentiation
– Market segmentation (focus)
Cautionary Tale
• Client asked by Wal-Mart to evaluate LCA of product
• Did not view as priority and did not provide data in time
• Lost contract from a competitor who jumped to respond
3. Materiality and Stakeholder Engagement
“If you want to go fast, go alone. If you want to go far, go
together.”
How do they
define
sustainability?
What do they care
about in regards to
your business?
What’s important to them
(socially, environmentally,
financially) and what is not?
Primary groups
• Customers
• Employees
• Suppliers
• Investors
• Community partners &
• donor recipients
Secondary groups
• Media
• Government
• NGOs
• Industry associations
The “Perfect Storm” of Risks
Pollution
& Health
Climate Change & Energy Crisis
Poverty &
Social Injustice
Food &
Water Crises
Overharvesting &
Species Extinction
Tangibles
/ Financials
Governments
Regulators
Intangibles
/Reputation
/Goodwill
What’s happening with valuations
1978
95%
5%
1981
83%
17%
1998
2010
25%
29%
71%
Tangibles
/ Financials
Intangibles
/Reputation
/Goodwill
75%
4. Baseline and assessment
“You can’t know where you are headed unless you know
where you are!”
A sustainability baseline will help you:
• Know where you are having the biggest
impacts
• Identify your “hotspots”
• Understand where your greatest risks and
opportunities exist
• Determine low-hanging fruit so you can take
action
• Identify your barriers to implementation
Current
State
Desired
State
GAP
Reporting &
External
Communications
Corporate Vision
& Governance
Environment
Social Policies &
Community
Vendors &
Suppliers
Fleets
Employee
Engagement
Product Design &
Responsibility
Evaluation and
Compensation
Case Study: Financial Institution
• Prior to calculating emissions
assumed paper was the largest
source of emissions
• GHG inventory revealed that
business travel was the largest
source
Action
Results
• Utilized teleconferences for 3 out
of 4 branch manager meetings
each month
• Moved all Board meetings to
Washington State to eliminate air
travel
• Saved money during a down
economy
• Encouraged board and managers
to truly walk the talk
• Reduced GHG emissions by 41.2
MT tons year over year (75%
reduction)
5. Set goals and vision
Patagonia “Build the best product, cause no
unnecessary harm, and use business to inspire and
implement solutions to the environmental crisis.”
1. Set your North Star
FUTURE
PRESENT
3. Integrate and communicate
progress - employees need to
know when you get there
4. Align KPI, Sustainability Goals with Corp Goals
5. Assign Responsibility and Accountability
6. Management Support
People need to see, hear, and feel
Leadership support
• Showing up and making yourself visible
• Providing budget
• Providing time and resources
• Walking the talk and reinforce your message
• Providing “air cover” so people can prove things out
7. Change Management
• Understanding change
– Understand your people
– Understand your culture
Collaborate Oriented
• Group brainstorming sessions
Create Oriented
• Social media and crowd sourcing
for new ideas
Control Oriented
• Existing policies for
opportunities for sustainability
Compete Oriented
• Use competitive means for
project idea generation
• Breaking down silos and coordinating across departments
• Engage the Naysayers and Skeptics
– What’s going to go wrong with this plan?
– “What has to happen for this to work?”
– At every stage of work flow – “What could go wrong in this
step?”
Engage the Skeptics
Position
Typical comment
Maximize
shareholder value.
Response
The DJSI has outperformed the S&P
500 for 10 years.
Accounting
This is going to cost
more
Sustainability initiatives tend to save
money both short/long term
Legal
Don’t want to
disclose
You don’t. But you should track, it’s
risk mitigation
Operations
I know how to do
my job !
Yes, but this is how it’ll be different,
easier, save $
Sales
Market unproven,
fad
Ability to sell new products to top
line.
PR
Don’t want to
greenwash
Opp to leverage all company efforts
SupplyChain
We’re too small to
influence change
Just start the conversation. Create
procurement guidelines
HR
Can’t afford benefits
Look at what you offer, you could
switch to options/flex.
Investor
Relations
Phase I
Who:
Individual
Phase II
Team/
Department
Phase III
Division/
Function
Phase IV
Phase V
Business
System
Company
Environmental
& Social Benefits
Growth $
Environmental
& Social Negatives
Type of
Change:
Random
Hero
Dominant
Characteristics: (martyr)
Financial
Drivers:
Incremental Breakthrough
Personal
Influence
Costs more
Systemic
Metrics
Structural
Process
Collaborative
Eco-Efficiency Game changing
Investments/ROI
Top Line
Radical Collaboration
Systems view
“Team Sport”
Value creation
May 2, 2013
8. Employee Engagement
Gallop Study showed that actively engaging employees can…
• 16% in profitability
• 12% in customer loyalty
•
18% in productivity
• 37% in absenteeism
•
49% in turnover for lowturnover companies
• 60% in quality (defects)
(those with 40% or lower annualized
turnover)
“….engaging employees in sustainability
initiatives can improve a business’s bottom line
and help it reach its sustainability goals.”
National Environmental Education Foundation
“The (sustainability) campaign brought people together like
we’ve never been able to before or since”
Ken Hopper of Scandic Hotels
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Training and opportunity
Tie it to the job, day to day
Make it personal: engage the head, heart & hands
Intrapreneuring
9. Implementation
Prioritize – focus on what matters
Incorporate into decision making and policies
Systems to support sustainability: Kaizen, LEAN
Add purchasing/supplier requirements around sustainability
Align with other corporate efforts –including philanthropy,
investments, marketing and communications
• Protection when sponsor leaves
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Topic area
Department
Community Relations with supplier
Supply-Chain/Merchandising
Philanthropy and community donations
Foundation or Community Affairs
Community Volunteerism & Pro-Bono Work
HR
Sustainability/CSR
CSR Department or Green Team
Green product benefits
Sales
Actions the company has taken internally
PR
Market for green consumers
Marketing
Things you can do in your job
Department
Things you could do
Finance
Look into investing a portion into SRI
Facilities
Combine all cost saving ideas
Accounting
Start tracking sustainability/carbon data
Office Mgr
Look at all office purchases
Travel Coordinator
Look at costs, what trips could be eliminated
Sales
Look for new sales opportunities
Supply Chain
Begin to ask questions to your value chain, ask for
their support in what you are doing
Human Resources
Environmental or Wellness Benefits
Tax
Research available rebates, incentives
10. Institutionalize
• Job descriptions and on-boarding
– Potential employees, existing employees, board members
• Align benefits, evaluation and compensation
– Results Only Work Environment
• Rewards and recognition
• Gamification
– Measure progress and keep the competition real with data
– Kilowatt crackdown, Talking Trash, etc
11. Communications
External
• What report is right for you?
• Use of social media
• Transparency builds trust,
creates value and
reduces risk
Internal
• Continuous communication &
reinforcement of what & why
• Share the good and the bad
• Sharing best practices
11 keys for successful
sustainability implementation
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Define Sustainability
Make the Business Case
Stakeholder Engagement – What’s important to them
Baseline - Measure what matters, metrics and KPIs
Aligned Vision and Goals
Mgmt Support & Resource Commitment (Time, Money, People)
Understand your Org & People – How best to “do change”
Employee Engagement: Train, empower, intrapreneur
Implement: Create policies and procedures
Institutionalize: Job descriptions, evaluations, compensation
Communicate
Most importantly, HAVE FUN!
COME ASK ME HOW
WE CAN HELP YOU !
Kevin Wilhelm,
Sustainable Business Consulting
MAKING
SUSTAINABILITY
STICK
www.sustainablebizconsulting.com
[email protected]
The Blueprint for
Successful
Implementation
Kevin Wilhelm
Example Questions
• How important is it to you that we take into consideration and
actively address environmental/social initiatives?
• What specific sustainability issues are most important to you?
(environmental, social, economical)
• Which specific initiatives would you like to see us participating
in or putting more resources towards within the next 1-3 years?
– What are we doing that you like?
– What should we be doing that we aren’t?
• Are there any aspects of your relationship with us that could be
improved through better environmental or social practices?
Before starting…
• Get the right people in the room
• Explain why the baseline is important
• Ensure people understand the outputs, what you are trying to do
with the final result
• Determine your boundary, what is in and what is outside of
“your company”
• Delegate tasks (assign responsibility) and continuously check in
on data gathering
• Let them know this won’t be a one-time exercise, so they start
building processes for gathering this data the first time they
look for it.
• Make sure you get sign off from the key decision makers so data
isn’t delayed
Keys to setting your sustainability goals
• Clarity: Clear, concise, goals with one unified vision that people
understand
• Strategic Intent: Determine focus areas, make a commitment,
develop metrics for success
• Alignment: Goals aligned across all departments - internally,
collaboratively, and diagonally
• SMART: Need to be Specific, Measurable, Actionable, Results
Oriented & Time Specific.
• Listening: Engage skeptics, listen to issues and anticipate
obstacles
• Accountability: Who’s responsible for achieving the goal
• Reinforcement : They need to be constantly communicated and
reinforced
9. Implementation
• Prioritize – focus on what matters
• Incorporate into decision making and policies
• Systems to support sustainability
– Kaizen, Toyota LEAN, Microsoft Personal Carbon
Allowance
• Align Sustainability with other corporate efforts –including
philanthropy& investments
Financial
Environmental
Objective
Achieve cost
savings in
internal
processes
Reduce GHG
emissions
Measure
Target
% reduction in 10% reduction
costs of goods by 2015
sold
Per employee 10% reduction
GHG emissions by 2015
Initiative
Identify cost saving
measures in internal
process across all lines
of business
Launch alternative
commuting program
Things you can do in your job
Department
Things you could do
Finance
Look into investing a portion into SRI
Facilities
Combine all cost saving ideas
Accounting
Start tracking sustainability/carbon data
Office Mgr
Look at all office purchases
Travel Coordinator
Look at costs, what trips could be eliminated
Sales
Look for new sales opportunities
Supply Chain
Begin to ask questions to your value chain, ask for
their support in what you are doing
Human Resources
Environmental or Wellness Benefits
Tax
Research available rebates, incentives
SWOT and GAP analysis
Opportunities
• Where is there a growing gap
where we can create new
solutions for environmental
challenges?
Strengths
• What are unexpected ways we
can apply our strengths to
environmental challenges?
Threats/Consequences
• Where are environmental
challenges creating broad
threats to future business
value?
Weaknesses/Risks
• Who else has similar
weaknesses or faces similar
risks from environmental
challenges?
Adapted from the WRI’s Sustainability Swat (sSWOT) tool
2. Business Case
Demonstrate the business value it will bring to your
company over the short and long term
External
Market Forces
Public Policy and
Regulation
Internal
Top line
Competitive
Advantage
What to include
For the baseline to be successful, you have to include those areas that:
• Have the biggest social and environmental impact
• Are most material to your company
• You have the most control over – either operationally or financially
• Customers and stakeholders are most likely to ask about
• Could prevent your company from operating if something drastic were
to occur (market collapse, natural disaster, etc)
Reporting &
External
Communications
Corporate Vision &
Governance
Environment
Social Policies &
Community
Vendors &
Suppliers
Fleets
Employee
Engagement
Product Design &
Responsibility
Evaluation and
Compensation
Employees have different learning Styles
Extroverts
Introverts
Enjoy generating energy and ideas from
other people. Prefer socializing and
working in groups.
Prefers to listen, watch and reflect.
They enjoy quiet, solitary work and
prefer to solve on their own
Jump right in without guidance from
others
Choose to observe others before
attempting a new skill
Willing to lead, participate and offer
opinions
Like to think about things before
attempting to try a new skill.
Different types of Learners
Auditory – hear
Visual – See
Verbal – Say
Kinesthetic – Touch
Social
Solitary