Strategy and sustainability

1. Strategy and sustainability MIM 511/BA 548 Winter 2011 Scott Marshall

2. Strategy and sustainability Sources of Creative Tension on Each Axis From Hart & Milstein, 2003

3. Strategy and sustainability • Emissions and Effluents reductions • Toxics reductions • End of Life • Natural resource dependencies • Health care • Gender equity • Poverty The Triple Bottom Line • Ecosystem Services and Health

4. Strategy and sustainability The Natural Step – Four System Conditions In a sustainable society, nature is not subject to systematically increasing: concentrations of substances extracted from the earth's crust; concentrations of substances produced by society; degradation by physical means and, in that society. . . human needs are met worldwide.

5. Strategy and sustainability • “Coevolutionary theory argues that the concurrent operating of adaptation and selection explains the processes of [organizational] change and renewal.” (Flier, Van Den Bosch and Volberda, 2003, p. 2164) • Competitive success depends on • External situation analysis • Strategic planning • Core competency focus • Innovation and Organizational Change • Resource efficiency • And, Luck! Know what to adapt to… Figure how to adapt… Adapt based on strengths… Change products, processes, systems, structures, etc.… Do it well.… So, hope for some luck along the way.…

6. Strategy and sustainability • Global100 – Most Sustainable Corporations in the World • First, let’s find out about some background. • Who’s conducting the benchmark study? • For what purpose? • Link – http://www.global100.org

7. Strategy and sustainability • Global100 – Most Sustainable Corporations in the World • Second, let’s investigate the methodology… • Methodology Overview • Criteria and Weights

8. Strategy and sustainability • Global100 – Most Sustainable Corporations in the World • Third, let’s take a close look at the Global 100 Lists • 2005, 2008 and 2010…

9. Strategy and sustainability • Global100 – Most Sustainable Corporations in the World • Next, let’s explore the sustainability-related strategies of some of the companies (in the food and beverage industry) that consistently make the Global100 Benchmark – in particular, stakeholder engagement and transparency. • GroupeDanone • Sainsbury Plc. • Coca Cola Company

10. Food and beverage • Hunger and malnutrition Number of Hungry, 2010 Number of Hungry, 1969-2010

11. Food and beverage • Hunger and malnutrition

12. Food and beverage Organic and Fair Trade • Asia Pacific Consumers • lead the world when it comes to intention to purchase organics, 47% compared to global average of 40% • who buy organics, do so because they view organics as healthier, 82% vs. global average of 76%) and more nutritious (57% vs. 51%) • who will not go organic are most likely to cite higher costs and taste preferences. • Availability of fair trade products at grocery store was important to 40%, the highest of any region. North American Consumer - most likely to buy organics to avoid toxins (71%), promote environmentally-friendly organic farms (59%), help small farmers (58%), avoid genetically-modified products (45%), do the right thing (38%) and vote against modern farming methods (23%).

13. Food and beverage Organic and Fair Trade

14. Food and beverage • Organic and Fair Trade • FairTrade Network of Asian Producers • Let’s explore the producers, importers, exporters…that is, the product and trade flow

15. Food and beverage Sustainable Food Security in Asia Three Dimensions of Sustainable Food Security Source: Regional and Sustainable Development Department-Agriculture, Rural Development and Food Security Unit

16. Food and beverage • Strategy and sustainability - Food and beverage/Organic and Fair Trade/Asia • There’s pressure to adopt different practices… • Palm oil and Indonesia and Nestle • Fish Farming in China and Trade

17. Food and beverage • Strategy and sustainability - Food and beverage/Organic and Fair Trade/Asia • Fair Trade Tea • Organic World Congress in South Korea

18. Exercise Discussion: Nestle and Sustainable Value Framework Split into four large teams. I’ll assign one of the four quadrants from the Sustainable Value Framework to each team. Work as a large team to complete one quadrant – share all ideas, discover what you may not have seen before, make it comprehensive. One representative from each team will write the answers on the board and share with the entire class.

19. Strategy and sustainability • Summary of Today • Strategy and sustainability • External pressures are increasing • Internal dynamics and tensions create opportunities for innovation • Competitive advantage is being achieved but isn’t always easy • Food and beverage • Major issues – hunger and malnutrition • Issues will likely be heightened by climate change and urbanization • Solutions are being developed • Nestle and Sustainable Value Framework • ???