Date post: | 21-Jan-2015 |
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Sustainability Frameworks
Bruce Starcher
2011
Sustainability Value Creation
Commerce Justice
Economic Environmental Social
Market Cap = Eliminate Toxins Basic Needs Food
+ Revenue Neutralize Carbon Shelter
- Cost Sustainable Lifestyle Sustainable Living Health
+ Brand Positive Change Wellness
+ Employees Education
- Financing Financial Security
- Risk Community Workplace
Social
Political
World
Ecosystem
Industry
Suppliers
Company
Value Creation
PersonCode of Conduct
Industry Association
X-Sector Groups
Open Platforms
Economic Value
Envi
ronm
enta
l, So
cial
val
ue
Beyo
nd
Asse
ssm
ents
Colla
bora
tion
Activ
ism
Shared Value
Enga
gem
ent
Total Rewards
Linear to Closed Loop Systems
• Systems diagram here …
CSR Maturity
Defensive Compliance Managerial Strategic Cooperative
Pre-2006 2006 - 2010 2011 - 2015 2015 - 2018 2018+
Employee Engagement None I’m aware of the message I understand the message I believe I am committed to act
Focus Deny practices, outcomes or responsibilities
Adopt a policy-based compliance approach as a
cost of doing business
Embed the societal issue into core management
processes Integrate the societal issue
into core business processes Connecting externally with
organizations to drive broader change
Activities No ActionOne or two projects
Green-washNo strategy
Bundle of Projects Management System Full Integration
Embedded No No Business ProcessesLeadership and
Management Processes, Strategy, Employee
Engagement
Strategy, Financing, Reputation, Brand
The “why”To defend against attacks to their reputation that in the short term could affect sales, recruitment,
productivity, and the brand.
To mitigate the erosion of economic value in the
medium term because of ongoing reputation and
litigation risks
To mitigate the erosion of economic value in the medium term and to
achieve longer-term gains buy integrating
responsible business practices into their daily
operations.
To enhance economic value in the long term and to gain
first mover advantage by aligning strategy and process innovations with the societal
issue
To enhance long term economic value by
overcoming any first mover disadvantages and to realize
gains through collective action.
Source: Simon Zadek, “The Path to Corporate Responsibility”
CSR Landscape
Economic Environmental Social Governance
Financial PerformanceEconomic Benefit
Supply Chain ResponsibilityManufacturing Agreements, Supplier Code of Conduct, Supplier Audits, Supplier SRE Training, Transparency, NGO Collaboration, Verification and AssuranceMinimal WasteReuse, Recycle, Repair, Rethink, Recover, Compost, Producer ResponsibilityEnvironmental SustainabilityMarketing Communications, Operations, Manufacturing, Logistics, Product Use, EH&S, Resource EfficiencyClimate and EnergyScope 1, Scope 2, Scope 3Sustainable DesignCompliance, Design for the Environment, Lifecycle Analysis (LCA), Accessibility, Zero Waste System
EmployeesDiversity and Inclusion, Balancing work-Life, People Development and Advancement, Employee and Global Citizenship, Employee Engagement, Compensation and Benefits, Promoting Wellness, Health and Safety.Human RightsOpen door policies, Diversity Policies, Human Rights and Labor Policies, Standards of Business Conduct.Supply Chain ResponsibilitySustainable Sourcing, Supplier Social Responsibility, NGO Collaboration, Transparency, Supplier DiversityCommunityEmployee Volunteerism, Corporate Philanthropy, Community Engagement, Economic ImpactPrivacy
Metrics and MeasurementChange ManagementCSR AssessmentsCSR Program Management
How to look at CSR
People Responsible Product Climate & Energy Minimal Waste Purpose Governance
Communities Product Carbon Management Waste to Landfill Ethics Metrics & Measurement
• Employee Volunteering• Community
Engagement• Corporate Philanthropy• Economic Impact
• Legal• Safe• Environmental• Sustainable• Ethical
• Scope 1• Scope 2• Scope 3
• CSR Metrics• CSR Measurement
Employees Process Waste to Water Values driven leadership CSR Assessments
• Diversity & Inclusion• Employee Engagement• Health Safety &
Wellness• Human Rights• Total Rewards• People Development• Work Life Programs
• Environmental Marketing Strategy
• Product Material Audit• Supplier Management• Design for Environment• Lifecycle Analysis
• CSR Self-Audit• SCORE assessment
Supply Chain Waste to Air Change Management
• Integrate CSR in Sourcing
• Supplier Social and Environmental Responsibility
• Transparency• Supplier Diversity
• Communications• Training
CSR Program Management
Responsible Product
I am following the law
I will not harm our consumers
I will not harm the environment
I will meet this generation’s needs but not at the expense
of tomorrow’s generation
I will do the right thing for our stakeholders
The first platform speaks to the core of our business – our products.
We want to evolve from simply meeting our externally mandated / legal and safety requirements and move towards providing ethical products – products that do the right thing for our stakeholders.
LEGAL SAFEENVIRONMENTA
LSUSTAINABL
EETHICAL
Minimal Waste
Zero Waste is an inspiring and achievable long term vision and closely resembles the TQM mantra of zero defects. It focuses on redesigning systems and process for a total product lifecycle.
Waste represents costs, both to our shareholders and to our environment.
The approach is an iterative one based on setting a set of goals and then educating, assessing, prioritizing, auditing, identifying potential actions, implementing, reporting and then repeating the process until the goal is achieved.
Discard into the natural environment. Litter, dumping, burn barrels
High temperature destruction of material
Capture useful material for waste to energy program; saves energy and CO2 in the long term.
Discarded items are separated into materials that can be used again
Previously discarded items have value in another process or company
Buy less and use less
Waste as a resource
DEVASTATE
INCINERATE
GENERATE
RECYCLE REUSE REDUCERETHIN
K
Climate & Energy
Carbon is the common denominator for all energy sources. Whether you believe that carbon is a contributor to global warming or not, we do know that the byproduct of carbon based processes are pollution and growing costs.
As we understand and track our carbon footprint over time, we will be able to set aggressive goals to pursue with both environmental and economic benefits.
People
Brands exists because of people - our employees, our partners’ employees and the communities in which we operate.
COMMUNITY
Employee VolunteerismCommunity EngagementCorporate PhilanthropyEconomic Impact
SUPPLY CHAIN RESPONSIBILITY
Integrate CSR in sourcing operationsSupplier social and environmental responsibilityNGO CollaborationTransparencySupplier Diversity
EMPLOYEES
PurposeEmployee EngagementDiversityHuman RightsTotal RewardsPeople developmentWork-Life programsHealth, safety and wellness
Governance
GOVERNANCE
Metrics and MeasurementChange ManagementSustainability AssessmentsSustainability Program Management
Governance focuses on “how” we lead Sustainability across the organization and beyond. These are topics that require leadership and change management to affect how conducts business.
The Business of Sustainability
To be among the industry leaders in Corporate Social Responsibility
ConsumerCustomer
Product
Packaging
Post Sales
Category Specific Attributes
Minimal Waste Minimal Material WasteMinimal Process WasteReduce, Reuse, Rethink,…
Climate and Energy Carbon ManagementPeople Responsible Supply Chain
CommunityEmployees
Governance Metrics and MeasurementChange ManagementSustainability Program Management
Marketing SupplyChainR&D HR Communi-
cationsFinanceComplianceSales Investor Relations
Objective
Offering
Operations
Functional Strategies
Charac-teristics
Brand
Cost and environmental impact reductions across products and processesStrategy
Brand Vision
How do all these pieces fit together – from Sustainability Objectives to Functional strategies?
Over time, we will be moving from a project driven structure to a structure where Sustainability is integrated into each function and business.
Sustainability
Governance
Functional Platform Ownership
Marketing ProductDevelopment
Supply Chain Compliance HR Sustainabilit
y
ResponsibleProduct ◦ MinimalWaste ◦ ◦ Climate &Energy ◦ ◦ ◦ People Governance
Leadership Integral ◦ Peripheral
From planning to execution
Vision Identification Sponsorship Project Embedded Monitor
Ownership Sustainability Sustainability Sustainability Function Function Function/Sustainability
ActionDevelop long
term vision and roadmap
Identify projects that deliver on the long term
vision
Sponsor projects across the
organization
Function leads projects and creates the
capability across the organization
Function owns process and deliverables across the
organization
Function and Sustainability monitor the process to
ensure implementation
and ongoing performance
Sustainability Evolution
Defensive Compliance Managerial Strategic Cooperative
Responsible Product
- Packaging- Non compliant chemicals- Supplier Sustainability Compliance- Green Products
- Green Product Portfolio - Sustainable Packaging - Responsible Supply Chain - Lifecycle Analysis - PVC substitution - Ongoing Product Material Compliance
- Full understanding of all product inputs, components, processes and their impacts. - Detailed plan(s) in place to reduce or eliminate impacts, to become resource "neutral" via upcycling, alliances to create industrial nutrients (i.e. waste= food). Minimizing transport; packaging, etc.
- Continuation and extension of strategic work. Industry leadership in all product categories re: methods, R&D, manufacturing, sourcing.- Mentorship and strategic alliances outside of industry to spread knowledge.
Climate and Energy
- Carbon Management• Scope1• Scope 2• Scope 3
- Carbon Management• Scope1• Scope 2• Scope 3
- Deep understanding of the environmental impacts of ALL aspects of the enterprise by all employees AND all company activities analyzed and guided by this understanding.- Sharing of knowledge and active support of science and research institutions working in these areas.
Sustainability Evolution
Defensive Compliance Managerial Strategic Cooperative
Minimal Waste
- General Office Printing
- Site Recycling - General Office Printing - Solid Waste Reduction
- Process Redesign- 100% take back packaging guaranty, including agreements with suppliers re: packaging types, materials and transport strategy.Incentive plan(s) to actively engage customers in 's zero waste initiative.
- Approaching or achieved “Minimal waste" goal...and continuing to make adjustments to perpetuate it.- Active participation in multi-industry coalitions re: zero waste strategies around the world.
People
- Purpose- Employee Engagement- Diversity- Compensation and benefits- People development- Work-Life programs- Health, safety and wellness
- Employee Engagement- Community Engagement- Integrate Sustainability metrics in MIP and MBO objectives- Introduction of cash and non-cash (e.g. awards/recognition, time off, etc.) incentives for employee ideas or projects.- Partnering with schools (elementary through university) to develop brand awareness AND environmental/social goals.- Partnering with non-profits and community based NGOs to provide products and raise awareness of company mission & goals.
- Continuation and expansion of strategic era plans. Employee generated ideas have resulted in spin-off businesses or organizations that work with .
Sustainability EvolutionDefensive Compliance Managerial Strategic Cooperative
Governance
- Environmental Business Case- Customer Sustainability risk profile and requirement- Sustainability Baseline audit- Embed Sustainability in key processes- Customer Request process and structure
- Align around a long term Sustainability roadmap- Sustainability External Reporting- Sustainability Communications- Sustainability Training- Establish Sustainability metrics, measurement and reporting infrastructure- Public goals- Link values to behaviors and performance appraisals- Develop Company level Sustainability strategy and integrate into corporate strategy- Build external network among NGOs, leading Sustainability companies and other key sustainability players
- Develop Company level Sustainability strategy and integrate into corporate strategy- Integrate Sustainability in ’s Culture.- Increased investment by SRI and institutional investors as a result of Sustainability accomplishments and goals.- Well established e-learning systems and other internal/cultural mechanisms allow budget resources to be freed up for other uses.
- Corporate Governance- Access to SRI funding- Management compensation includes Sustainability component.-External Networks, Working Groups, External Collaboration- All Board members have familiarity and /or expertise with Sustainability goals and issues.- Company and shareholders are completely and actively aligned with regard to 's Sustainability agenda and goals.- Company is leading by example and supporting political and social policies that further environmental and social practices and initiatives.- Compensation of all employees AND selection of all suppliers, contractors and vendors have mandatory Sustainability goal requirements.