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The Evolving Sustainability Agenda of Business

The Evolving Sustainability Agenda of Business. February 3, 2017 Neil L. Drobny, PhD Fisher College of Business The Ohio State University Board Member: International Society for Sustainability Professionals. What is Sustainability in the Business Context?.

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The Evolving Sustainability Agenda of Business

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  1. The Evolving Sustainability Agenda of Business February 3, 2017 Neil L. Drobny, PhD Fisher College of Business The Ohio State University Board Member: International Society for Sustainability Professionals

  2. What is Sustainability in the Business Context? Strategies and practices that embody acute stewardship of energy, water, materials, and natural resources which enable durable enterprises to deliver a prosperous, safe, healthy and just world for all.

  3. Triple Bottom Line – “Cornerstone” Concept

  4. What do you think? • Every year in the US, we bury enough aluminum in landfills to manufacture how many jetliners? • How many planet Earths would we need if everyone consumed as much as the average US citizen?

  5. We bury enough aluminum to make.. every year in the US. 25,000 Jetliners

  6. What do you think? • Every year in the US, we bury enough aluminum in landfills to manufacture how many jetliners? • How many planet Earths would we need if everyone consumed as much as the average US citizen?

  7. We would need.. if everyone on the planet consumed as much as the average US citizen. 5 Earths

  8. Consumption as the Driver of Economic Well Being “Our enormously productive economy demands that we make consumption our way of life that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction in consumption. We need things consumed, burned up, replaced and discarded at an ever accelerated rate.” • Economist Victor Lebow before Congress, 1955

  9. Dow Jones: Enterprise Sustainability “a business approach that creates long-term shareholder value by embracing opportunities and managing risks that derive from economic, environmental and social developments.” - Dow Jones Sustainability Indices

  10. Sustainability Has a Pre-requisite • Resilience: The capacity to withstand and recover from shocks. • To be strong over the long term it is necessary to survive the short term.

  11. Evolution of Sustainability

  12. Business Case for Sustainability

  13. The Corporate Sustainability Team • Operations – availability of energy, water and other inputs. • Sales and marketing -changing consumer preferences • Risk management – investor scrutiny and evolving insurables • Supply chain – supplier resilience and impacts • Finance – cost and availability of capital • HR – talent acquisition and retention • Every employee as “Head of Sustainability” (Unilever)

  14. Strategic Principles for Sustainability in Business 1.Copy nature In nature there is no waste. “Waste” = Food 2. Close loops From “take, make, waste” to the circular economy 3. Manage the supply chain Look beyond the plant; life cycle assessment 4. Transparency & Disclosure Integrate investor and consumer values Image: GFOSS, 2015

  15. Creating Wealth in a Sustainable World • Create wealth based on use of resources in unlimited supply - renewable resources. • Avoid wealth creation that destroys nature’s life support systems -ecosystems • Create shared value

  16. Corporate Leaders

  17. Largest modular carpet manufacturer in the world • CEO/Founder Ray Anderson committed the company to achieve zero waste and zero environmental impact by 2020 (mid 90’s). • Cost savings $433 million – 1st 15 years. • Personally led the effort • Framed as a journey up Mt. Sustainability. http://www.interfaceglobal.com/Sustainability/Our-Journey/7-Fronts-of-Sustainability.aspx

  18. Emerging Business Paradigms • Handprints vs. footprints • Biomimicry • B-Corporation • Collaborative consumption • Products as a service • Extended Producer Responsibility • By-Product Synergy • Industrial Symbiosis • Materiality in reporting • Smart Networks • Commitment to Renewables • Design for X (DfX) • Employee engagement • Impact Investing • Precision agriculture • Manage for stakeholders vs. shareholders

  19. Leave Handprints vs. Footprints Footprints – the damage we do as we go about our business Handprints – the good we can do as we go about our business

  20. Managing for Stakeholders,Not Just Shareholders Sustainable Living Plan • Help more than a billion people to improve their health and wellbeing. • Halve the environmental footprint of their products. • Source 100% of their agricultural raw materials sustainably and enhance the livelihoods of people across its value chain.

  21. By Product Synergy

  22. Precision Agriculture • Use only what is needed, where it is needed, when it is needed

  23. DfX: e.g. X = Sustainability • Buildings • Products

  24. B – (Benefit) Corporations

  25. Commitment to Renewables • Deutsche Bank vows to end new coal lending, in line with Paris Agreement • A week after the election, out of over 170 members of the Business Renewables Center,144 felt there would be no change in corporate renewables market and only five felt there would be less engagement.

  26. Biomimicry

  27. Contact Information Dr. Neil L. Drobny Fisher College of Business The Ohio State University (614) 268-6100 Drobny.3@osu.edu

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