Source: Natural Capitalism: The Next Industrial Revolution (Hawken et. al., 1999)

2. INTERFACE CARPETS Source: Natural Capitalism: The Next Industrial Revolution (Hawken et. al., 1999)

3. Interface Carpets • Interface carpets aims to be the world’s first sustainable corporation • Traditionally, old-fashioned broadloom carpet is replaced every decade because it develops worn spots, causing major disruption to an office • Over 5 billion pounds of the carpet now in landfills has Interface’s name on it • Chairman Ray Anderson realised that not throwing more energy and money into holes in the ground represented a major business opportunity • Interface launched a transition from selling carpet to leasing floor-covering services

4. Selling services not products • Interface owns the carpet and leases it to customers • Interface is responsible for monthly inspections and maintenance if required • Benefits: • Carpet tiles used so only worn parts are replaced – usually 10-20% of area shows 80-90% of the wear • Increases net employment (less manufacturing but more upkeep) • Eliminates disruption, since worn tiles are seldom under furniture. Because the carpet is laid in the form of tiles, glue fumes are also significantly reduced or possibly eliminated. The customer’s former capital investment becomes a lease expense • Cost savings to customers

5. Creating new products • Interface has developed a new polymeric material to create a new kind of floor-covering service, called Solenium, that can be completely remanufactured back into itself. All worn materials can and will be completely separated into their components, fibre and backing, and each component remade into an identical fresh product. • Benefits: • production process is simpler • less wasteful: manufacturing upper surface produces 99.7% less waste than normal carpet, and the other 0.3% gets reused. • provides better service - highly stain-resistant, does not mildew, easily cleaned with water, 35% less materials-intensive, four times as durable (using sevenfold less massflow per unit of service) and is acoustically and aesthetically improved • suited to renewable feedstocks • manufacturing cost substantially reduced and margin increased

6. Overall benefits of new approach • Overall reduction in the net flow of materials and embodied energy by 97% • If a satisfactory quality of service isn’t being delivered, the problem can be addressed directly and immediately • Service cost can be fully deducted from taxable business income, just like any other normal operating expense • Product’s value doesn’t have to be capitalised, as capital cost is entirely off balance sheet and onto that of the firm that leases it – giving manufacturing firm an incentive to minimise capital requirements per unit of service flow

7. Other points • Higher performance and competitive advantage did not evolve through incremental improvement, but rather from a deliberate effort to redesign the flooring business from scratch so as to close all loops, take nothing away from the earth’s crust, and add nothing harmful to the biosphere • Future goal – all fossil fuel use to be ultimately eliminated

8. SYDNEY WATER Source: Sydney Water’s website

9. Sydney Water • Manages the water supply and sewage infrastructure for the greater Sydney region, servicing four million customers in Sydney, the Illawarra and the Blue Mountains • Delivers over 1.6 billion litres of water and collects and treats more than 1.3 billion litres of wastewater daily • Is involved in activities such as stormwater management and land management • Has 3,630 staff • Has an annual capital works program of around $500 million • Manages $3 billion of assets, including 10 water filtration plants, 30 sewage treatment plants and more than 40,000 kilometres of pipes • Owns 3,155 hectares of land, of which some has undisturbed vegetation

10. Sydney Water and Sustainability • Sydney Water committed to sustainable operations • Develops an annual sustainability report. (Towards Sustainability Report 2002 can be viewed at http://www.sydneywater.com.au/html/environment/tsr/tsrpdfs.html • Has developed a comprehensive educational package for employees to build their understanding of sustainability and Sydney Water initiatives in this regard, including on-line and face-to-face components

11. Sydney Water and the Environment • Initiatives: • Programs to reduce water wastage, including periodic upgrading of sewage treatment systems and other infrastructure • Program to fix leaks in water system using acoustic devices – already saving 22 million litres per day, estimated will be 50 million litres a day when program completed

12. Sydney Water and the Environment • Initiatives: • Influencing demand through water pricing. Although Sydney has experienced significant and steady population growth, water consumption has been relatively stable, particularly due to the introduction of usage-based pricing which provides a direct incentive to conserve water • Productive wastewater reuse schemes. In one project in south-western Sydney, dry weather flows are treated and used for agricultural and tree-farming activities, reducing nutrient, sediment and organic material discharged into the sensitive Hawkesbury-Nepean River system. Irrigation demands are now starting to outweigh availability of treated wastewater (continued)

13. Sydney Water and the Environment • Initiatives: • Distribution of ceramic mugs to head office staff and a cost differential for drinks served in foam cups to reduce use of foam cups in the cafeteria – resulting in a saving of 140,000 cups, and $11,000, a year • Program to encourage rainwater tanks in urban areas, such as provision of practical information such as sizing of tanks and efficient use of water. Backflow prevention devices have been provided free to customers purchasing tanks since June 2002. A model home including a rainwater tank has been exhibited at trade shows and home display centres, and work with other government agencies has been undertaken to simplify policies and procedures (continued)

14. Sydney Water and social issues • Initiatives: • Provision of flexible work options to maximise retention of skilled staff and reduce staff absenteeism eg. two long-day childcare centres in Sydney providing affordable care for children of employees and the community to address low levels of female participation in the Sydney Water workforce • A ‘Give as you earn’ scheme - staff can automatically donate money from their pay to tax-deductible charities in Australia. Sydney Water matches each new and additional donation above existing ones dollar for dollar. More than $31,583 was donated between July and December 2001, matched by Sydney Water

15. Sydney Water and social issues • Initiatives: • A Youth Employment Strategy to address the fact that only 4.5% of employees were aged 15-24. This strategy includes work experience placements, sponsorship, scholarships, graduate and undergraduate programs, an apprenticeship program and disability traineeships (continued)

16. Sydney Water and social issues • Initiatives: • A performance management system to foster staff development by increasing employee knowledge, skills and experience and e-learning and leadership training for senior managers • A program to improve the health and safety culture through a range of programs for employees and selected topics. Training includes manual handling, construction training, ergonomics and risk management. The ‘Be Safe, Mate’ program encourages employees to take responsibility not only for their own personal safety but also that of their colleagues (continued)

17. Sydney Water and social issues • Sydney Water engages the community in projects such as the rehabilitation of Smalls Creek, which eventually leads to the Hawkesbury River. The creek has Aboriginal sites, a remnant vegetation community and several endangered species of flora. The local community participated in early planning workshops to identify and prioritise issues, and later in five full-day working bees to remove weeds and undertake bush regeneration and revegetation. The community are now taking an active role in the management of this area • Sydney Water runs a Speaker’s Program where staff present about Sydney Water’s activities and water conservation initiatives to interested community groups (continued)

18. Insurance Australia Group (IAG) Source: Corporate Sustainability: an Investor Perspective. The Mays Report (Mays, 2003)

19. Sustainability and the insurance industry • The insurance industry has an affinity for sustainability because a range of environmental, social and economic factors influence its core business challenge of calculating risk and setting appropriate premiums. They also influence its core purpose of helping people to manage and reduce risk • Weather-related risks, influenced by climate change, are major drivers of claims costs for the insurance industry in big-ticket areas like home and motor cover • Natural disasters like hailstorms, floods, cyclones and bushfires represent a major driver of losses – both insured and non-insured – for the community and the economy. An inability to underwrite such risks would not only have ramifications for individual insurance companies, but global economies

20. IAG Hazard table Source: Mills et al, (2001) page 72, prepared for IAG

21. Insurance in Australia • Australia has enormous potential to suffer from impending climate change. More than 80% of its population resides within 50 km of the coast with increasing concentrations in regions already vulnerable to weather hazards (CSIRO, 2002) • In addition, $1,500 billion of Australia’s wealth is locked up in homes, commercial buildings, ports and other physical assets (ABS, 2002). This is equivalent to nine times the current national budget or twice our gross domestic product • The insurance industry currently underwrites the risk to the bulk of these assets from weather events but climate change threatens its ability to do so as effectively in the future

22. IAG • Insurance Australia Group (IAG) is Australia’s leading general insurer • IAG provides personal, compulsory third party (CTP) and commercial insurances as well as retirement solutions in Australia and New Zealand. The Group comprises a number of brands, including NRMA insurance, SGIO and CGU Insurance • IAG serves a significant portion of the Australian and New Zealand market with about 11 million policies in place

23. IAG (continued) • IAG has taken the first steps to incorporate sustainability into its business model • At the organisational level, IAG has implemented staff development programs and increased eco-efficiencies • At the product level, it has assessed how to incorporate sustainability principles into products • IAG is further enhancing brand and reputation through participating in community programs and focusing on its corporate climate change position and research

24. IAG (continued) • A key business objective is to reduce the size, frequency and ultimate cost of claims • Being more proactive in areas such as preventing workplace accidents, mitigating against climate change and promoting safer communities can translate directly into a lower claims burden • ‘As an insurance group, our business is to pay claims. But to fulfil this role we must stand for more. We need to be able to help our customers and the community beyond just paying claims. To do this, we need to share our experience and knowledge with the community to help manage and reduce risks. We also need to build a culture which allows our people to develop and work to the best of their abilities. We must ensure that our business is sustainable and can deliver ongoing value to our shareholders’ – an IAG perspective

25. Priority Areas • Three priority areas that align IAG’s business interests with societal interests: • safety – pursuing a strong safety culture within IAG’s own workplace to anchor its role as Australia’s leading provider of worker’s compensation services • environment – improving environmental performance starting with the in-house ‘basics’ such as recycling, energy efficiency, less paper use and reduced travel, but extending to the entire value chain through supplier and customer relationships • community – supporting communities in an effort to reduce risk, including being safer and cleaner, thus reducing the potential for claims

26. Potential benefits of initiatives • These initiatives: • support premium pricing (through enhancing brand and reputation) and growth through increasing volumes and improving product mix • reduce claim frequency and size, and cost of claims processing • improve employee culture and therefore productivity as well as the ability to recruit and retain the best people • decrease operating expenses e.g. lowerenergy costs, reduced workers’ compensation costs

27. Practical examples • IAG has become a signatory to the United Nations Environment Programme’s Finance Initiative (UNEP FI), which requires incorporation of environmental considerations into day-to-day activities • IAG conducted extensive research into its sustainability ‘baseline’ including workplace safety and environmental performance • IAG developed and implemented corporate safety and environmental targets that focus on reducing injuries and accidents, and also cutting its paper, fuel and energy use, and minimising carbon dioxide (CO2) emissions. For the 2003/04 financial year targets included reductions of: • energy and paper consumption by 15% • fuel (tool-of-trade cars) and air travel kilometres by 5% • carbon dioxide emissions by 15%

28. Practical examples • Customer and consumer-focussed initiatives include the web-based Green Safe Car Profiler, a user-friendly tool on the Internet that allows easy comparison of new vehicle models in terms of their safety and environment attributes including fuel efficiency • Other current initiatives include working with a network of Preferred Smash Repairers to improve their overall business performance, including environment and OHS [occupational health & safety] modules, with the ultimate combined benefit of improved service to IAG’s customers, better outcomes for the wider community and business gains as well • IAG also has begun to ‘sustainability road-test’ a number of initiatives and ideas by engaging a broad range of external stakeholders from business, government and civil society, including organisations covering environment, consumer advocacy, social welfare and other fields that attract significant community support

29. Going forwards... • Reducing the extent of possible climate change through policy strategies and innovative product offerings, e.g. products or policies that aim to reduce car emissions by offering cheaper insurance premiums for lower usage and support for the public transport system. Benefits include: • improved air quality • decreased road congestion (which would reduce aggressive driving, a factor that is responsible for half of all accidents in the USA)

30. Going forwards... • Assess differentiating factors, such as relationship between distances travelled in an insured vehicle and average number and severity of claims, to allow insurers to factor the extent of vehicle usage (with environmental consequences) into insurance premiums. Benefits include: • better costing of premiums • encouragement for people to use public transport, with a reduced contribution to global warming and lessened long-term variability of climate change (continued)

31. Going forwards... • For the same reason, IAG are also considering the possibility of factoring the fuel efficiency of vehicles into premium calculations. Likewise eco-efficient housing lessens the impact of climate change. Better urban design has the benefits of: • lower theft and burglary rates • reduced vehicle usage & lower accident rates • lower greenhouse emissions (continued)

32. IAG and climate change • Weather and climate are ‘core business’ for the insurance industry. At its most basic, insurers underwrite weather-related catastrophes by calculating, pricing and spreading the risk and then meeting claims when they arise. A changing, less predictable climate has the potential to reduce its capacity to calculate, to price and to spread this weather related risk • IAG believes that climate change is a real threat based on the assessment of the science presented by the Intergovernmental Panel on Climate Change, its own scientific modelling work and re-insurance sector research

33. IAG and climate change • Currently IAG is developing a climate strategy which includes: • investing in world-leading research to learn more about the problem and its expected impact, using international experts to look at specific Australian scenarios such as Sydney’s hailstorms and northern Australia’s cyclones • considering possible adaptation strategies to minimise vulnerability, for example comparing the merits of rival roofing and other building materials • exploring and adopting strategies that minimise IAG’s and its customers’ contribution to climate change through innovative products and processes, and new business models that contribute towards reduced greenhouse gas emissions, and • establishing a clear public advocacy positioning and a call to action to business, governments and community groups to work together to find sustainable solutions to the challenges (continued)

34. Assessing business value creation • Business value created as a result of sustainability initiatives should be rigorously measured and financially evaluated wherever possible • As well as providing accountability and incentive, this will allow the company to understand the long-term connections between its sustainability-related initiatives and business opportunity and growth

35. Cairns Crocodile Farm and Mulgrave Central Mill Source: Queensland Environment Protection Agency website

36. Cairns Crocodile Farm and Mulgrave Central Mill • Symbiotic relationship between Cairns Crocodile Farm and Mulgrave Central Mill illustrates how one business’s sustainability problems can be another’s solution • Demonstrates how businesses working together can create solutions that have both environmental and economic benefits • Cairns Crocodile Farm has specialised in crocodile meat and leather products for the export market over the last 12 years, and has some 15,000 crocodiles • Ability to expand limited by the need to provide more warm water for crocodile ponds during colder winter months. Warm water during winter increases the appetite and growth rates of crocodiles, significantly increasing farm production rates and profits

37. Cairns Crocodile Farm and Mulgrave Central Mill • Rather than the conventional solution of investing in a new boiler, the owners asked to use the warm water produced by the sugar mill ten kilometres away • This was beneficial to the Mill as they previously had to pump water around a large cooling tower before discharging into the Mulgrave River, where there is a risk of thermal pollution. The Mill also receive an additional source of income from payment to supply the water, in addition to energy cost savings (continued)

38. Cairns Crocodile Farm and Mulgrave Central Mill • The water is now pumped to the crocodile farm and cools naturally as it runs through the crocodile ponds and then almost 6 kilometres through the farm’s wetland treatment system prior to discharge into an estuarine system • A third party has benefited from this arrangement as with the increase of the crocodile’s appetites, there has been a 30% increase in demand for poultry by-products from the local abattoir, Bartter Enterprises Pty Ltd, which has significantly reduced their waste load (continued)

39. Benefits • In the first month of piping in warm water from the Mill, the benefits far surpassed the farm’s expectations. The crocodiles required more feed than ever before, indicating a rapid growth rate • Economic, environmental and social benefits of the project have included: • estimated direct reduction of approximately 1,500 tonnes of CO2 emissions annually from Cairns Crocodile Farm by reducing the need to use the boiler • reduction of bore water usage by six million litres each week at the Cairns Crocodile Farm • reduction in poultry abattoir waste by 260,000 kg annually • creation of 13-16 new jobs over the next three years in these industries and in the indigenous community, who collect crocodile eggs for the farm

40. ING Headquarters Source: Green Development: Integrating Ecology and Real Estate (Wilson et. al., 1998) and Natural Capitalism: The Next Industrial Revolution (Hawken et. al, 1999)

41. ING Headquarters • The International Netherlands Group (ING) bank headquarters in Amsterdam demonstrates the possibilities of good design • When the bank outgrew its original headquarters, the board of directors decided to create a new image for the bank • Their vision for the building – it would be “organic”, would integrate “art, natural materials, sunlight, green plants, energy conservation, low noise, and water”

42. ING Headquarters (continued) • This vision was refined to also require that it must use the latest technology, had to be flexible, and had to be energy efficient. Perhaps most importantly, the bank was not to cost “one guilder more” than a conventional building • The design of the building involved a multi-disciplinary team with close collaboration and took three years because all participants in the project, including employees, were involved at all stages • The site was chosen by workers because of its proximity to their homes

43. ING Headquarters (continued) • Completed in 1987, the resultant 540,000 square foot building, which is a series of interconnected towers, is one of the world’s leading examples of how buildings should be built • The building: • uses less than a tenth the energy of its predecessor and a fifth that of a conventional new office building in Amsterdam, with annual energy savings of approximately US$2.9 million (1996 dollars) • uses passive cooling with backup absorption chillers and uses no air conditioning, something extremely unusual for a building of its size • is filled with natural light, artworks, curvilinear forms and flowing water. Indoor and outdoor gardens are fed by rainwater captured from the bank’s roof

44. ING Headquarters (continued) • Employee absenteeism has dropped by 15 percent, productivity is up, and workers even hold numerous evening and weekend cultural and social events there • The bank has been elevated from fourth to second place amongst Dutch banks - uncertain how much this is the result of the new building and subsequent public image/corporate culture changes

45. PERTH CITY FARM Source: The Western Australian Department of the Premier and Cabinet Sustainability Policy Unit website

46. Perth City Farm • City Farm is a youth project run under the auspices of Men of the Trees (WA) • With limited resources, this not-for-profit organisation is involved in a wide range of sustainability issues relating to healthy urban communities and environments, including community development, land reclamation, organic food production and waste management • On a one-hectare block, fifteen minutes from Perth CBD, City Farm has transformed a derelict scrap metal yard (that had originally been slated to be a car park) into a thriving community garden, implementing permaculture principles and growing organic food • The garden includes a nursery, vegetable patches, fruit trees, native flora and poultry • City Farm also hosts an artists’ workshop

47. Perth City Farm • City Farm’s primary emphasis is on community development • City Farm’s structure and operation is ‘organic’ and egalitarian, with volunteers and coordinators taking responsibility for day-to-day tasks. It has a democratic approach to decision-making, with all volunteers having input to management issues and freedom to organise new activities and projects that they take responsibility for • The City Farm site was originally contaminated with hydrocarbons and heavy metals, and the buildings had asbestos roofs. Removal of contaminated soil was undertaken (continued)

48. Community Services • Many community groups use City Farm as a space to meet and work, as it provides resources (both human and material), courses, workshops and venues for community groups at a low cost • City Farm promotes many community arts projects, providing local artists with workshop space and organising exhibitions. Art surrounds the grounds, from funky signage, to the sculptures and painted logs. City Farm is a keen advocate of functional art. For example, its old can-crusher has been transformed into a work of art using recycled materials

49. Community Services • City Farm has been an active music venue that has fostered many local musicians over the years. It is home to the Sambanistas, Perth's biggest community arts and percussion group • City Farm promotes organic food through their community lunches and dinners. Every Thursday, City Farm cooks an organic vegetarian buffet lunch that is open to the public (continued)

50. Community Services • Education has always been a primary objective at City Farm, providing a link between urban and rural regions. It runs permaculture design courses, tours of the farm for schools covering worm farming, composting and plant propagation, and recycling workshops for primary school students • City Farm frequently runs information and workshops at festivals throughout the Perth metropolitan region. These stalls often feature compost and paper-making demonstrations (continued)