Transcript Slide 1
Education for Sustainability: Relevance to Corporations
NESDEC Meeting January 31, 2008 Bob Willard [email protected] www.sustainabilityadvantage.com
UN Decade of Education for Sustainable Development (DESD), 2005-2014
• • • • • • UN General Council Resolution Dec 2002 UNESCO is the lead, coordinating UN Agency Mainly up to each country / state Government, NGO, corporate , etc. collaboration Touches formal, non-formal, informal education 4 major thrusts of ESD 1. Public awareness and understanding 2. Access to quality basic education 3. Reorienting existing education 4. Training programs for all sectors
Math problem: Early 1960s
Problem: A logger sells a truckload of lumber for $100. His cost of production is four-fifths of this price. What is his profit? Answer: $20 The Evolution of Teaching Math, Virginia Department of Education web site
Math problem: Early 1970s
Problem: A logger sells a truckload of lumber for $100. His cost of production is four-fifths of this price, or $80. What is his profit? Answer: $20 The Evolution of Teaching Math, Virginia Department of Education web site
Math problem: Late 1970s
Problem: A logger exchanges a set, " L ", of lumber for a set, " M ", of money. The cardinality of set " M " is 100. Each element is worth one dollar. Make 100 dots representing the elements of the set " M ." The set " C ", the cost of production, contains 20 fewer points than set "M.“ Represent the set " C " as a subset of set " M " and answer the following question: What is the cardinality of the set " P " of profits?
Answer: 20 The Evolution of Teaching Math, Virginia Department of Education web site
Math problem: 1990s
Problem: A logger sells a truckload of lumber for $100.
His cost of production is $80 and his profit is $20.
Rewrite and underline the “$20.” Answer: $20 The Evolution of Teaching Math, Virginia Department of Education web site
Math problem: 2014?
Problem: By cutting down beautiful trees and desecrating the precious forest, a logger makes $20.
What do you think of this way of making a living?
Topic for class participation: Do a role play of how the forest birds and squirrels and the logger’s children - feel as the logger cuts down the trees.
The Evolution of Teaching Math, Virginia Department of Education web site
UN Decade of Education for Sustainable Development (DESD), 2005-2014
• • • • • • UN General Council Resolution Dec 2002 UNESCO is the lead, coordinating UN Agency Mainly up to each country / state Government, NGO, corporate , etc. collaboration Touches formal, non-formal, informal education 4 major thrusts of ESD 1. Public awareness and understanding 2. Access to quality basic education 3. Reorienting existing education 4. Training programs for all sectors
Sustainability 3-Legged Stool Sustainability
Economic Leg Good Jobs Fair wages Security Infrastructure Fair Trade Environmental Leg 0 Pollution & Waste Renewable Energy Conservation Restoration Social Leg Working conditions Health services Education services Community & Culture Social justice
Quality of Life / Genuine Wealth / Genuine Progress
Corporate Sustainability 3-Legged Stool Sustainability – Sustainable Development (SD) Environmental, Social, Governance (ESG) Corporate Social Responsibility (CSR) Corporate Responsibility (CR) Triple Bottom Line (TBL) – 3Es – 3Ps E
conomy -
P
rofits Growth, Jobs, Taxes Products Services
E
nvironment -
P
lanet Eco-efficiencies Eco-effectiveness Restorative
E
quity -
P
eople Employees Community / Culture World
Smart Business 3-Legged Stool Asset Management
Financial Capital Built Capital Natural Capital Human Capital Social Capital
Sustainable Enterprise Academy (SEA)
Mission To assist business in the transformation to corporate sustainability by providing senior executives with the vision, education, tools and support necessary to champion sustainable development in their organizations .
NA’s premier executive education program on sustainability Based at the Schulich School of Business, York University Schulich is consistently ranked among the top 3-5 business schools in the world at teaching sustainability A 3 ½ day intensive residential seminar Targeted to senior executives of multi-national corporations 30-50 participants at each session : Level is strategic, not managerial or technical
SEA Seminar Outline
Company Value “Iceberg”
Balance Sheet
Tangibles Financials Intangibles - Nonfinancials
Brand Image - Reputation Stakeholder Relationships Market Capitalization
Company Value “Iceberg”: 1981
Balance Sheet
Tangibles Financials 83% Intangibles - Nonfinancials
Market Capitalization Arthur D. Little,
The Business Case for Corporate Citizenship
, 2002
17%
Company Value “Iceberg”: 1998 Tangibles Financials Intangibles Nonfinancials 29% 71%
Arthur D. Little,
The Business Case for Corporate Citizenship
, 2002
Sea of Demanding Stakeholders Financials
NGOs The Public Competitors Media Customers Employees
Nonfinancials
Banks Governments Economists Global Markets Insurers Investors Scientists
Sea of Demanding Stakeholders
Two-Part Business Case Financials
NGOs The Public Competitors Media Customers Employees
Nonfinancials
Banks Governments Economists Global Markets Insurers Investors Scientists
Water Crisis
Mega-Issue Storm Clouds
Pollution & Health
Climate Crisis
Other … Pandemics
Energy Crisis
Erosion of Trust NGOs Employees Economists Media Global Markets The Public Customers Banks Insurers Investors Competitors Governments Scientists
The Debate is Over …
Awakened Public - Consumers The “Goracle factor” + Hurricane Katrina
($125B, 1,833 deaths) + Weird weather globally + Rising gas prices + IPCC reports + … 70 80% of consumers say are switching to “green” companies 20% actually did in 2006; LOHAS sector: $200B in 2007; $420B by 2010; $845B by 2015
Warnings from Economists
Stern Review Report (Oct 2006) Former World Bank chief economist, Nicholas Stern Quantified warnings in the 1997
Economists’ Statement on Climate Change
1. Cost of climate change mitigation:
1% of annual global GDP by 2050 if we act now; 5-20% if we act later
2. Benefits of $2.5T
if we act now; global depression if we do nothing
3. Must stabilize GHGs:
Use carbon taxes and / or a cap-and-trade system; deploy low-carbon technologies; remove barriers to energy efficiency
Risk of Becoming a “Risky Investment” Carbon Disclosure Project Institutional Investors Value of Assets Held Companies Surveyed
2003
35 $4.5T
2007
315 $41T FT500 2,400 Q. Revenue, regulatory, or physical risks to value from climate change?
A.
Carbon-intensive manufacturers their market value; Banks could lose 40% could lose 29% of of value
Two-Part Business Case Financials
NGOs The Public Competitors Media Customers Employees
Nonfinancials
Banks Governments Economists Global Markets Insurers Investors Scientists
One More Goal … or an Enabling Strategy?
Profit Share price Growth Revenue Customer care Expense savings Competition Market share Leadership Governance Innovation Speed to market New markets Talent wars Productivity Motivation Brand image Managing risks Compliance Supply security
Typical Large Company Benefits
Revenue Profit Workforce Avg. Employee Salary Avg. Manager Salary $44,000,000,000 $3,000,000,000 120,000 $60,000 $70,000 Potential profit increase: +38% + Energized employees + Improved corporate image + Competitive advantage + Positioned for the future
Lead It Like Any Culture Change
1.
Walk the talk as senior leaders Integrate into vision - mission – strategies Business strategy vs. philanthropy Avoid “green-washing” hype 2.
Educate the whole company Solicit employee ideas - help 3.
Align with measurement & reward systems
7 Benefit Areas
1. Reduced recruiting costs 2. Reduced attrition costs 3. Increased employee productivity 4. Reduced expenses in manufacturing 5. Reduced expenses at commercial sites 6. Increased revenue - market share 7. Lower insurance & borrowing costs … yielding a profit increase of +38%
Potential Improvements
1. Reduced recruiting costs 2. Reduced attrition costs 3. Increased employee productivity -1% -2% +10% 4. Reduced expenses in manufacturing -5% 5. Reduced expenses at commercial sites -20% 6. Increased revenue - market share 7. Lower insurance & borrowing costs +5% -5% … yielding a profit increase of +38%
Two-Part Business Case Financials
NGOs The Public Competitors Media Customers Employees
Nonfinancials
Banks Governments Economists Global Markets Insurers Investors Scientists
In Summary …
Sustainability is smart business New market forces - risks are in play Public expectations are rising Talk business language Show relevance to existing priorities You are not alone ; find partners Opportunity for leadership
CEO Besieged by important stakeholders 9 AM – 5 PM
Financials
NGOs Economists The Public Employees Media
Nonfinancials
Customers Banks Global Markets Insurers Investors Competitors Governments Scientists
Sustainability “Pincer Strategy”
9 AM – 5 PM “CEO” 24/7 “Daddy” Besieged by important stakeholders Besieged by family / kids
Education for Sustainability: Relevance to Corporations
NESDEC Meeting January 31, 2008 Bob Willard [email protected] www.sustainabilityadvantage.com