Prof.

Materia

Green Sustainability Conference Asia 2011Going Green – Profiting From Sustainability

Ravi Fernando for CIMA Malaysia July 12th 2011

Prof.

Materia

Why go green?• Global Sustainability Challenges

How to profit from Sustainability• Strategic Corporate Sustainability

Ravi Fernando for CIMA Malaysia

3Prof.

Global Sustainability Challenges

• Climate Change

• Global Warming

• Environmental Pollution

Fresh Water

Clean Air

Health

• Natural Resource Shortage Food

• Poverty

• Migrants - Economic and environmental

4Prof.

Water , Water everywhere .. not a drop to drink!

• 97% salt water

• 3% Fresh Water

5Prof. RAFJuly 2011

6Prof.

2010 @ 30.2gT worst ever Co2 emissions +2c –BBC 30th May

7Prof.

Business will shape the World Economy..not

Nations..Global GDP 62t

Country/Corporation GDP/Sales ($ million)

1 United States 14.8 t (92%)

2 China 5.4t

3 Japan 5.3t (?)

4 Germany 3.3t

5 France 2.7t

6 UK 2.2t

7 Italy 2.1t

8 Brazil 1.9t

9 Canada 1,6t

10 Russia 1.6t

11 Spain 1.4t

12 India 1.4t

13 Australia 1.236t

20 WALMART 350,000

28 Exxon Mobil 213,199.00

29 South Africa 212,777.30

30 Greece 203,401.00

31 General Electric 195,645.20

32 Finland 186,597.00

35 Ford Motor 164,496.00Ranking based on corp. revenue data from Fortune Magazine, October 1, 2005; and GDP data from World Bank World Development Indicators (WDI)

Report 2005.

Country/Corporation GDP/Sales ($ million)

36 GE 200,000

40

41 Malaysia 117,775.80

42 Israel 117,548.40

43 ChevronTexaco 112,937.00

49 ConocoPhillips 99,468.00

50 Colombia 97,383.93

51 Pakistan 96,114.84

52 Citigroup 94,713.00

53 Chile 94,104.94

54 Intl. Business Machines 89,131.00

57 American Intl. Group 81,300.00

60 Hewlett-Packard 73,061.00

62 Peru 68,394.96

63 Verizon Communications 67,752.00

64 Ukraine 65,149.34

65 Home Depot 64,816.00

66 Berkshire Hathaway 63,859.00

67 Altria Group 60,704.00

69 Bangladesh 56,844.49

•Top 100 World Economic entities

•2005 –42

•2007 –51

•2010 –65

•2020 -80

Wal-mart in Top 20

8Prof.

Awakened Public –Green Consumers

+ Greenhouse gases + Weird weather + Rising oil prices + Globalization

• 70-80% of consumers say they are switching to “green” companies; 20% actually did in 2006

9Prof.

Triple Bottom Line Concept

“To reach sustainability, one must achieve

not only economic ‘bottom line’

performance but environmental and social

performance as well.”

British Economist John Elkington - 1997

10Prof.

New

Paradigm

SustainableValue Creation

Business Strategy for Sustainability

EconomicEnvironmentalSocialTBL1997-Elkington

EconomicEnvironmental1992 Rio

Economic

Triple Bottom Line

Sustainable Business

Business and

environment

on separate tracks

START (1963)

Operations

Marketing

Sales

R&D

Breaking

down the

Green Wall

Breaking

down the

business

walls

Business-Driven

Strategic

Environmental

Management

Integrated Value Chain

Six Sigma

Balanced Score Card

Total Quality

Cycle-Time Reduction

From Share holder value to Stake holder value

The Sustainable Company - Chris Lazlo 2003

11Prof.

ld happen if we don’t?

2011 Global Sustainability leaders SustainAbilty and Globescan survey

12Prof.

Strategic Corporate Sustainability

•Environment

•Social

Corporate Strategy = Sustainable Differentiation

Corporate Responsibility = Commitment to Sustainable Business

“Commitment to implementing strategies for Sustainable Business which differentiates the organization, whilst impacting all stakeholders which are in its sphere of influence.” © Ravi Fernando July 2008

13Prof.

Strategic Corporate Sustainability

Economic Sustainability

-Operational excellence

-Innovation

-Differentiation

-Corporate Governance

-SUSTAINABILITY REPORTING

•Environmental sustainability-Carbon foot print- Renewables strategies-Green Business-Recycling strategy-Water

Social Sustainability-Labour

Employees

-Community

- Human Rights

- Society

14Prof.

Sustainability - Differentiation

Environment – Toyota Prius Hybrid)

Environment - Re-use & Re- cycling 98% of material

Environment – Eco magination – green technology

Social – Ready mix water purifier ‘Pur’

2

Environment – Life Cycle Analysis of Products

Environment - Sustainable Products , Sustainably made

15Prof.

What’s Sustainability Worth?

Relative performance of the 2006 Global 100 companies back-tested against the MSCI World Index (2000-2005)

Source: Global100.org

Shareholder Value

• Global 100 – top 100 most Sustainable companies (Davos MSCI - world index designed to measure global developed market equity performance (Morgan Stanley Corp.index)

It’s Demonstrated Positive Impact on Shareholder Value:

16Prof.

NASDAQ OMX CRD Global Sustainability 50- DJSICompany Name Security Symbol Company Name Security Symbol

3M COMPANY ABBOTT LABORATORIES

AGILENT TECH INC

ALLERGAN INC

ASTRAZENECA PLC ADS

BANCO BILBAO ARG SA

BANCO BRADESCO ADS

BANCO SANTANDER

BANK OF MONTREAL

BANK OF NOVA SCOTIA

BAXTER INTL INC

BHP BILLITON LIMITEDBRISTOLMYERS SQUIBB

CITIGROUP INC

CREDIT SUISSE GROUP

DELL INC

DEUTSCHE BANK AG

DOW CHEMICAL

E N I SPA ADR

EXXON MOBIL CP

GLAXO SMITHKLINE PLC HESS CP

HEWLETT PACKARD CO

HSBC HLDGS PLC ADS

INFOSYS TECH LTD

MMM

ABT

A

AGN

AZN

BBVA

BBD

STD

BMO

BNS

BAX

BHP

BMY

C

CS

DELL

DB

DOW

E

XOM

GSK

HES

HPQ

HBC

INFY

INTEL CORPINTL BUSINESS MACH JOHNSON AND JOHNS DC JOHNSON CONTROLS INC JP

MORGAN CHASE CO

LILLY ELI CO

LM ERICSSON COMPANY

MERCK CO INC

MOTOROLA INC

NEWMONT MINCP(HLDG)

NOKIA CP ADS NOVARTIS AG ADS NOVO NORDISK A S PETROLEO BRASILEIRO

POTASH CP SASKATCHEW

PRAXAIR INC

PROCTER GAMBLE COSANOFI-AVENTIS SA

SAP AG ADS

STATE STREET CP

TELEFONICA SA

TEXAS INSTRUMENTS

TORONTO DOMINION

UBS AG (NEW)

UNILEVER PLC AMER

INTCIBM

JNJ

JCI

JPM

LLY

ERIC

MRK

MOT

NEM

NOK

NVS

NVO

PBR

POT

PX

PG

SNY

SAP

STT

TEF

TXN

TD

UBS

ULRAF July 2011

17Prof.

The Crisis – Magnitude and Urgency

�Global demand on earth resources exceeds regenerative capacity by 30%

� By 2030 three planet Earths are needed to meet the demand

� Excessive over consumption undermines Trusteeship

Source: Living Planet Report 2008

18Prof.

Unsustainable development

… three planets!!!

19Prof.

RESPONSIBLE COMPETITIVENES RANKING – July 2007

• Basis - Sustainability : Govt. Policy drivers business action , social enablers 108 Ranked

1.) SWEDEN

2.) DENMARK

3.) FINLAND

4.) ICELAND

5.) UNITED KINGDOM

6.) NORWAY

7.) NEW ZEALAND

8.) IRELAND

9.) AUSTRALIA

10.) CANADA

11.) GERMANY

12.) NETHERLANDS

13.) SWITZERLAND

14.) BELGIUM

15.) SINGAPORE

16) AUSTRIA

17) FRANCE

18) USA

19) JAPAN

20) HONG KONG

MALAYSIA (25) ,SRI LANKA (68), INDIA (70) , CHINA ( 87)

BANGLADESH (106)

20Prof.

Requirements for Sustainability

Sustainable Policy

Sustainable

Consumption

Sustainable

Business

/Economy

21Prof.

One planet, one human race…

Strategic Corporate Sustainability…the way!

Thank you!

22Prof.

2010 Global EconomiesJune 24th USA today

Country GDP ($) Deficit(%) Gross debt (%)

USA 14.8t. 11 92.6China 5.4t. NA NAJapan 5.3t. 9.8 227.3Germany 3.3t. 5.7 76.7France 2.7t. 8.2 84.2UK 2.2t. 11.4 78.2Italy 2.1t. 5.2 118.6Brazil 1.9t. 2.9 42.8Canada 1.6t. 5.1 82.3Russia 1.6t. 4.3 NASpain 1.4t. 10.4 72.8India 1.4t. 5.8 NAGreece 300b. 8.7 129.1

23Prof.

UN Millennium Development Goals & UN Global Compact

1.Eradicate extreme poverty and hunger

2.Universal primary education

3.Empower Women

4.Reduce Child mortality (75%>Children Under 5y)

5.Improve Maternal Health

6.Combat HIV/Aids and Malaria

7.Environmental Sustainability

8.Develop Global partnerships for development

•HUMAN RIGHTS

•LABOUR

•ENVIRONMENT

•ANTI-CORRUPTIONRAF July 2011

24Prof. (C) Ravi fernando 2006

July

ECO LABELS FAIR TRADE LABEL ETHICAL MANUFACTURE

M&S