1. Demystifying sustainability to create profound business improvement – practical insights from real experience Dr Nick Fleming, Chief Sustainability Officer CMIC Conference, 20 September 2012

2. Introduction Key messages • Sustainability issues are escalating, not diminishing • Sustainability provides a powerful lens and trigger for business improvement if approached practically and strategically • Well governed businesses are establishing a sustainable competitive advantage because they have bothered to pay attention

3. Introduction Factors influencing success InsurersFinanciers Inst’l investors Stock exchanges Shareholders Customers Governments Lobby groups Growing sustainability focusand business complexity Time Cost Quality Safety Waste minimisation Resource efficiency Carbon price Climate risk Biodiversity maintenance Community livelihoods Time Cost Quality Safety Waste minimisation Time Cost Quality Safety Time Cost Quality Project drivers 1970 1980 1990 2000 2010 2020

4. What does sustainability mean in practice? ‘Fit for purpose’ assets • Commence and remain affordable (viable) • Highly efficient and operate with a small ‘footprint’ (efficient) • Make sense as a piece in the wider infrastructure puzzle (relevant) • Are valued by stakeholders now and over their operating life (constructive)

5. What does sustainability mean in practice? ‘Fit for the future’ enterprises • Viable – compliant with laws and regulations, managing risks • Efficient – managing costs, reducing resources and eliminating waste • Relevant – producing valued goods and services ‘fit for the future’ • Constructive – contributing to social well-being, and so maintaining a ‘social licence to operate’

6. What does sustainability mean in practice? Bridging the ‘policy-practice gap’ making sustainability real Number oforganisations Policyexpression Practicalaction in operations Strategic leaders Proactivelyresponsible Managingrisks Aimingfor compliance

7. What does sustainability mean in practice? Bridging the ‘policy-practice gap’

8. Case Study Goulburn Valley Water

9. Case Study Goulburn Valley Water – embedding sustainability Policy Plan Actions

10. Case Study Goulburn Valley Water – embedding sustainability Business excellence framework Hardwiring into operations

11. Case Study Goulburn Valley Water – embedding sustainability AFTER • Aligned leadership, clear strategy • Sy = economy, society, environment (finance, customer, environment) • Customer, supplier and staff focus • Leaders guide but owned by all staff • TBL culture • Aligned operations working for continuous improvement (‘Sust. Excellence Framework’) • Shift to whole-of-life value creation • More team-work, less re-work BEFORE • Confused leadership • Sustainability = environment • No strategy • Internally focused, office-based activities • Lead by 1 person, staff cynical • Safety culture • Misaligned operations • Office and field operations silos • Little improvement focusand knowledge sharing

12. Case Study Goulburn Valley Water altered business model Buffer Zone Boundary Bruce Hammond, General Manager of Technical Services, said “It was SKM’s work with GVW that helped us realise that ‘core business’ for us is as much working with the regional community to keep it strong and prosperous, as it is providing water supply and managing wastewater. It opened our eyes and lead to the Precinct initiative.” Shepparton WWTP

13. Case Study Goulburn Valley Water altered business model Farming Biosolidsprocessing • Synergistic operations • Wastes into resources • Creating regional economic growth and jobs • Liability to income generating asset • Enhanced brand, reduced costs Aerobic Lagoon Diamond Energy Tree lots GVW biogas storage Construction Waste Recovery Veolia Env Services Kinetic Renew-ables Western Composting Farming Solar Power Shepparton WWTP

14. Concluding thoughts Observations • You can ignore sustainability as a term, but not the issues, risks and opportunities. • Is your organisation ‘fit for the future’? Well run, progressive organisations are asking themselves this question. • If approached in a pragmatic yet strategic way, sustainability can trigger and unleash substantial business benefits beyond efficiency improvement