Agenda

1. Agenda • Statements of Work......each team • Millipore & Bank of America Cases • Lecture: Energy Efficiency & Management.......O'Brien • Lecture: "Greening the Corporation".................O'Brien

2. Greening the Corporation Will O’Brien Graduate School of Management September 2011

3. "What we take for granted may not be here for our children." - Al Gore

4. Our Grandchildren

5. Topics • “The Sustainability Imperative” • Definitions & Systems • Business Challenges & Opportunities • Strategy & Environmental Stewardship • Sustainability & Innovation • Sustainable Business Leader: Invensys, PLC • Operations • Additional examples of Business Leadership • Sustainability Reporting • Students & Sustainability Planning • Worcester Sustainable Business Leader Program • Additional Information

6. Definitions & Systems

7. Definition: Sustainable Development Sustainable development seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future. Far from requiring the cessation of economic growth, it recognizes that the problems of poverty and underdevelopment cannot be solved unless we have a new era of growth in which the developing countries play a large role and reap large benefits. Our Common Future, 1987 The Brundtland Commission (UN World Commission on Environment & Development)

8. Environmental Footprint • An environmental footprint is a measure of the amount of resources consumed and the amount of pollution; e.g., green house gas and waste created by an entity and by the firms that serve the entity, usually summarized by the equivalent are of land needed to assimilate these impacts. • Examples: • Starbuckshttp://www.starbucks.com/aboutus/beantocup.asp • Xerox’ Sustainability Calculator • http://www.betanews.com/article/How_big_is_your_environmental_footprint_asks_Xerox/1206561464 • Weyerhaeuser • http://www.betanews.com/article/How_big_is_your_environmental_footprint_asks_Xerox/1206561464 Source: “Measuring Environmental Footprint: A Financial Services Industry Case Study”, 2008, UNC

9. Earth’s Systems Complexity, Cycles & Interconnections • A system is a collection of interdependent parts (with flows and stores) enclosed within a defined boundary. • The earth has four major systems • Lithosphere – soil, rock • Hydrosphere - water • Biosphere – living organisms • Atmosphere – air • Human activity is disrupting these systems in complex, ways Dave McKay, 2009

10. Carbon Footprint Source: New Zealand Business Council for Sustainable Development

11. Business & Environmental Sustainability

12. Business Has Traditionally Assumedan Infinite Capacity Planet • Business principles based on assumption of infinite natural resources and waste absorption capacity • “The concept of multiple industries collaborating on a ‘whole systems’ approach, recycling each other’s outputs into inputs is completely antithetical to the cult of the individual and the pioneer myth that so deeply characterizes American corporate culture.”* • US antitrust legislation has not allowed “collaboration” *Oliver Kellhammer, MBA Student, Bainbridge Graduate Institute

13. Industrial Pollution

14. What is in a Landfill? • 22 billion disposal diapers in landfill/year • 100 million cell phone put out of service/year • 2 million tons of e-products disposed/year • 63 million computers in the U. S. became obsolete in 2005 • Circuit boards - lead & cadmium • Flat screen & switches - mercury

15. 80% of Toxic Wastes are from Electronics Products • The electrical and electronic waste (WEEE) law, in 2005, EU authorities introduce legislation for free take back of waste goods by final owners and ensure that equipment producers are responsible for financing the collection, treatment, recovery and disposal of all waste. • 30% of Fortune 500 companies’ business are in Europe • Silicon Valley Toxics Coalition • http://www.svtc.org/ecomaps/svtc_ecomaps/index.html • Oregon Natural Step • Zero-waste Coalition • Green IT

16. Industrial Ecology Industrial ecology focuses on the redesign of manufacturing. The design idea is to mirror production in nature. Nothing in a production process is "waste" and everything that comes out of the process is either a product for sale or an input for another manufacturing process. Another term for this is cradle-to-cradle manufacturing.

17. Business IS Providing Leadership

18. Why is Business Part of the Solution? • Business is focused on learning and change. • Change can and does happen relatively quickly • Business is a global institution. • The challenges are fundamentally global in nature • Business is the source of technological innovation. • Technology is the proximate cause of environmental impact Dr. John Ehrenfeld, Director Emeritus, MIT Technology, Business and Environment Program

19. Triple Bottom Line The triple bottom line (abbreviated as "TBL" or "3BL", and also known as "people, planet, profit" or "the three pillars"[1]) captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. (Wikipedia)

20. Leadership Challenges • Enrolling/aligning stakeholders • Managing an environmentally responsible enterprise: • Business strategy • Investment decisions • Change management of staff • Energy management • Innovation • Product design/ life-cycle management • Supply chain management • Waste management • Reporting: internally and externally • Marketing

21. Stakeholders

22. Engaging Stakeholders • While executive support is a critical key component to business success, it is not the only form of leadership present in an organization.  Business sustainability leaders understand the value in leveraging their internal resources as well as their key business relationships. • Whether led by a sustainability executive or traditional management, the pursuit of long-term business sustainability enables: • Employees: Create incentives to lower costs, initiate process improvements, and stimulate innovation. • Customers: Establish expectations that are defining products and service attributes. • Suppliers: Align supply chain expectations to drive sustainable material requirements and efficiencies. • Local Community: Defined framework for initiatives carried out at the local level through partnership with community groups, local businesses, and governing bodies. • Investors: By comprehensive and accurate reporting; e.g., CDP, DJSI. • Others? Source: http://news.socialyell.com/878/csr-advice/engaging-stakeholders-as-a-path-to-business-sustainability/

23. Sustainable Development for Business • Sustainable development for business means “adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining, and enhancing the human and natural resources that will be needed in the future” (International Institute for Sustainable Development 1994: 4). • Sustainable business has interdependent economic, environmental, and social objectives (Triple Bottom Line) • Long-term viability depends on integrating all three objectives in decision-making

24. Sustainability Drives Innovation

25. Sustainability Drives Innovation Stages: #1 Viewing compliance as an opportunity #2 Making value chains sustainable #3 Designing sustainable products and services #4 Creating “next-practice “platforms “ Why Sustainability is Now a Key Driver of Innovation”, Harvard Business Review, 2009

26. Sustainable Entrepreneurship • Businesses that are “Green” • Solar, Wind, Hydro, Geo-Thermal Power • Recycling/Reprocessing • Eco-Friendly Products • Organic Agriculture • “Green” Non-Profits • e.g., Sustainable Methods Institute

27. Examples of Sustainability Driving Innovation

28. Audi e-Tron • Electric – 4 motors; 1 battery • 313 horsepower • All wheel drive • 0 to 62 in 4.8 seconds • Estimated range = 154 miles

29. Nokia “Green Phone” Feb. 12, 2008 , Mobile World Congress , Barcelona “Called ‘remade’, the new phone, unveiled in a short video, is actually made of no new parts. Made entirely of recyclable materials like cans and tires, it clearly targets planet-conscious customers.” http://www.marketwatch.com/news/story/reporters-notebook-android-based-phones-draw/story.aspx?guid=%7B2AA5FC69%2D24DE%2D418F%2DB26C%2D2808FD456E60%7D

30. Apple “ Green Computer” The casing is 100% recyclable. It features Apple's first mercury-free, arsenic-free display. The circuit boards are PVC and BFR free. The box will also include about half the packaging of the current Macbook line.

31. HP Ink-jet Printer Cartridge modular design Steelcase's 'Think' chair 99% recyclable. It's made without benzene, lead, mercury or solvents.The $900 chair can be disassembled with basic hand tools in about 5 minutes.

32. Ready for Carbon Labeling? Jan. 23, 2007 Tesco, the largest supermarket chain in Britain, has announced that it will begin labeling all 70,000 products on its shelves with the amount of carbon generated from the production, transport and consumption of those items. http://www.terrapass.com/blog/posts/british-superma

33. Sustainability Strategy at Invensys, PLC Steve Sacco, VP Environmental, Health, Safety & Sustainability December 2010

34. Our Businesses • Invensys is a global technology and controls company • Headquartered in London • 3 divisions • Invensys Controls • Residential & Commercial Building Comfort/Safety and Automation • Thermostats, refrigeration, dishwashers, hot water heaters, A/C & heating • Invensys Operations Management (IOM) • Hardware/software to automate/regulate refineries, power plants, manufacturing, etc. • Invensys Rail • Control and automate railway systems with hardware/software • Types of operations • Manufacturing facilities • Staging/Test centers • Offices • Projects

35. Our Customers Invensys proprietary & confidential

36. What does Sustainability Mean for Invensys? • “a good employer, supplier, customer and neighbor, and that we protect the environment” • Two key areas for us: • Internally - being more efficient with the resources we use as a business • Externally - offering new products, services, and solutions that help our customers to be more sustainable and competitive Invensys proprietary & confidential 36 36

37. Why is Sustainability important? • It is the right thing to do for ourselves, our children, our company and our planet • It helps Invensys reduce costs, minimize risks and create new value • Our customers, investors and employees are asking us about our sustainability performance and our carbon footprint • Our competitors are using it to their advantage • Government regulations are requiring it • Our Board has included sustainability as part of our business metrics Invensys proprietary & confidential 37 37

38. Sustainability Context Invensys’ Sustainability Performance Reduce Costs Minimize Risks Create Value • Efficient use of materials • Conserving energy and water • Less waste disposal • Stay in compliance • Maintain positive community relations • Avoid supply chain risk • Avoid negative press • Better image and reputation • Satisfying customer expectations • Facilitate entry into new markets • Create new and efficient products Invensys proprietary & confidential

39. UK Perspective - Factors Driving the Sustainability Agenda Regulations and reporting requirements Shifting customer behaviour Competitor activities UK business Employee expectations CR indices Investment community engagement Invensys proprietary & confidential

40. Solvent Elimination • Used in 9 manufacturing operations as a parts degreaser • Ex – Trichloroethene (TCE); Tetrachloroethene (PCE) • Environmental concerns ($90M in liabilities) & employee safety concerns • Replacements chemicals available • Identify aqueous-based replacements • Eliminated specific-operations & outsourced • All Invensys operations are now solvent-free Invensys proprietary & confidential

41. Green Product Design E2T Valve (water valve) • No hazardous substances • RoHS compliant • No Pb • Energy Efficient • Control wash temperature • Small Size • Minimum material use • Minimal packaging • Ease of Assembly and Replacement • End of Life Recyclability Invensys proprietary & confidential

42. Nokia-Siemens http://www.nokiasiemensnetworks.com/about-us/corporate-responsibility/environment

43. BREAK…..Operations

44. Operations • Business & Operations Strategy • End-of-Life Product Management • Quality & Environmental Management • Energy Efficiency • Environmental Management System (ISO 14001) • Facilities Management • Project Management • Information Technology (“Green IT”) • Leadership in Energy & Environmental Design (LEED) • Lean Manufacturing (JIT) • Supply Chain Management

45. Timeline of Competitive Priorities Cost Quality Delivery Flexibility/Customization Service Sustainability 1950s 1990s 2000s

46. Operations Strategy • Company will only do what makes economic sense • Given its concern for environment, company still to consider competition and bottom line • Early-mover advantage • Look for better solution • Service-based business model • chemical management services (Nortel) • floor-covering service (Interface) • leasing (Xerox) • printing service (HP) fractal pattern, modular design

47. Quality Management Projects per environmental concerns Environmental concerns Resource depletion Global warming Ozone depletion Human toxicity Exotoxicity (water and soil) Ground level ozone Acidification Nutrification Waste heat Odor Noise Others Percentage of projects

48. End-of life Product Management

49. Environmental Management SystemISO 14000- 14001 http://www.innovating-canada.com/iso14000.htm http://www.youtube.com/watch?v=uCjK3lQhPDc

50. Facilities Management • Energy & Greenhouse management • Water Management • Waste Management & Recycling • Biodiversity • Pollution Prevention & Environmental Risk Management • Transport • Community Awareness • Environmental Management