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
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
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
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