MIS 201 Introduction to MIS Fall 2010 Chapter 8 The Business Rationale for Sustainability

1. Peter Senge, The Necessary Revolution:Working Together to Create a Sustainable World (Random House/Broadway Books, 2008, 2010) MIS 201 Introduction to MIS Fall 2010 Chapter 8 The Business Rationale for Sustainability Martha Grabowski Le Moyne College Rensselaer Polytechnic Institute grabowsk@lemoyne.edu 9 September 2010 http://www.darden.virginia.edu/uploadedImages/ News/Peter-Senge222.jpg, retrieved 29 Aug 2010

2. The Business Rationale for Sustainability Risk vs. opportunity Can’t have a fishing industry without fish Can’t have a beverage company without fresh water http://bostonlocalvores.org/wp-content/ uploads/2009/07/cod61-300x195.jpg, 9/11/10 Environment Society Businesses need to realize that “the economy is the wholly-owned subsidiary of nature, not the other way around.” Economy • Ray Anderson, CEO of Interface, Inc. • (Quoting Gaylord Nelson, US senator):

3. The Business Rationalefor Sustainability -- Google Purchasing renewable energy Green data centers Consumes enormous power to operate servers Avoiding collisions between global warming and sustainability http://http://3.bp.blogspot.com/_7ZYqYi4xigk/ \S98N8Pf9ziI/AAAAAAAAF_4/UH15N4CBPv0/ s400/ashtabula.jpg, retried 9 Sept 2010 Environment

4. The Business Rationalefor Sustainability – Google CO2 Emissions for Every Day Activities http://www.google.com/corporate/green/datacenters/index.html, 9/11/10 Tracking Data Center PUE = Power Usage Effectiveness http://www.google.com/corporate/green/datacenters/measuring.html, 9/11/10

5. The Business Rationale for Sustainability -- GE Jeffrey Immelt, CEO, GE: “Five years ago, I started to see technology that I felt really, for the first time, didn’t make this about compromise, it made it more about opportunity. If we made the right investments in renewable energy, conservation, water desalination, then we could earn money and solve a societal issue at the same time.” http://business-ethics.com/wp-content/ uploads/2010/07/GE_Immelt_3.jpg, 9/10/10 Environment http://www.smartplanet.com/business/blog/smart-takes/ge-water-sustainability-chief-jeff-fulgham-we-need-a-price-on-water/9808/

6. The Business Rationale for Sustainability – GE Drivers Customers were demanding sustainable products, processes Scale, scope 300,000 employees 5 million shareholders Operations in 100 countries Annual revenues $156B Renewing Responsibilities (July 2010) Corporate social responsibility report www.ge.com/citizenship http://www.ge.com/citizenship/_files/images/ content/homepage-header_healthy-planet.jpg, 9/10/10

7. The Financial Industry Does a U-Turn Financial industry making massive commitments to environmental movement Citigroup, Inc. $50B green initiative, $10B Committed Reducing the carbon footprint in its 14,500 offices worldwide http://www.citigroup.com/citi/environment/ , retrieved 10 Sept 2010

8. The Financial Industry Does a U-Turn: Citigroup’s Drivers Activists target the supply chain Rainforest Action Network targets Boise Cascade’s customers Home Depot phases out wood products not certified to come from well-managed forests Target financial sources To influence policy and CEO’s, follow the money Environmental liabilities are a risk factor BankTrack—network of financial institutions ‘doing well and doing good’ (HSBC’s Jon Williams)

9. Business Risks in an Interdependent World Ignoring social and environmental costs puts investment capital at serious risk Carbon Disclosure Project (CDP) Global climate change reporting system 2400 companies, on behalf of 315 institutional investors (2007) www.cdproject.net https://www.cdproject.net/CDPResults/CDP-TransportReport.pdf, 9/10/10

10. Competitive Advantage, Innovation and Growth Only 20% of a company’s value is reflected in its accounting statements Vast majority of company’s value is brand & reputation Co-Operative Bank survey (UK, 2005): ‘ethical consumerism’ increased 11% to £30B ‘Mainstream activism’ 45% of US population (2007) Most likely to act on their expectations of companies High levels of education and high income Producing environmentally friendly products is a brand attribute Employees are making career choices by brand as well http://royaldutchshellplc.com/wp-content/themes/primepress/rotating.php?image=74

11. The Business Rationale for Sustainability Significant money to be saved DuPont slashed greenhouse gases, energy savings $3B, while growing business 30% GE Industrial saved $12.8B by upgrading lighting Ford has radically changed car painting – 3 coats applied simultaneously 15% reduction in CO2 emissions Significant money to be made General Mills burns Cheerios’ oat hulls, Recycled 86% of its solid waste Green building construction $12B in 2008, $60B in 2010

12. The Business Rationale for Sustainability Create customers’ competitive advantage Cost of powering & cooling computers > hardware IBM Project Big Green – reduce server cooling costs http://images.businessweek.com/mz/08/13/pop_0813_60indep.gif

13. The Business Rationale for Sustainability Sustainability is a competitive differentiator 50% of Enterprise Rent-a-car’s fleet > 28 mpg Shape the future of your industry BMW and Sony Europe played leadership roles in sustainability BP and Shell’s stance on climate change

14. The Business Rationale for Sustainability Become a preferred supplier CostCo identifies preferred, sustainable suppliers Sustainability a condition for doing business Change your image and brand GE’s Eco-imagination BP’s stance on climate change Wal-Mart’s focus on packaging Producers, Service Providers Customers Suppliers Distributors Retailers

15. From Compliance to Innovation http://4.bp.blogspot.com/_JsAU6pu5Yk4/RgAttssbxBI/ AAAAAAAAAGs/neKhJvT48NE/s320/Willard%27s+5-stages.png