Social Change & Environmental Sustainability

1. Social Change &Environmental Sustainability Will O’Brien Graduate School of Management August 2010

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

3. Topics • Background: • Agenda 21 • UN Global Compact • Social Change & UN Millenium Goal #7 • My Focus = Business & Environmental Sustainability • Business Challenges & Opportunities • Strategy, Innovation & Operations • Examples of Business Leadership • Sustainability Reporting • Additional Information

4. Agenda 21 • Agenda 21 is a comprehensive plan of action to be taken globally, nationally and locally by organizations of the United Nations System, Governments, and Major Groups in every area in which human impacts on the environment. • Agenda 21, the Rio Declaration on Environment and Development, and the Statement of principles for the Sustainable Management of Forests were adopted by more than 178 Governments at the United Nations Conference on Environment and Development (UNCED) held in Rio de Janerio, Brazil, 3 to 14 June 1992. • The Commission on Sustainable Development (CSD) was created in December 1992 to ensure effective follow-up of UNCED, to monitor and report on implementation of the agreements at the local, national, regional and international levels. It was agreed that a five year review of Earth Summit progress would be made in 1997 by the United Nations General Assembly meeting in special session. • The Global Compact was first announced by the then UN Secretary-General Kofi Annan in an address to The World Economic Forum on January 31, 1999, and was officially launched at UN Headquarters in New York on July 26, 2000. • The full implementation of Agenda 21, the Programme for Further Implementation of Agenda 21 and the Commitments to the Rio principles, were strongly reaffirmed at the World Summit on Sustainable Development (WSSD) held in Johannesburg, South Africa from 26 August to 4 September 2002. Source: www.un.org/esa/dsd/agenda21/

5. UN Global Compact – 10 Principles The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment and anti-corruption: Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.   Labor Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labor; Principle 5: the effective abolition of child labor; and Principle 6: the elimination of discrimination in respect of employment and occupation.  Environment Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.    Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. 

6. Millenium Development Goal #7 Ensure Environmental Sustainability: • Target 7A: Integrate the principles of sustainable development into country policies and programs; reverse loss of environmental resources • Target 7B: Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss • Target 7C: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation(for more information see the entry on water supply) • Target 7D: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum-dwellers Source: Wikipedia

7. Social Change Social change refers to an alteration in the social structure of a social group or society, i.e., a change in the nature, social institutions, social behaviors or social relations of a society. Source: Wikipedia

8. Drivers of Social Change “Systemic social change delves behind immediate problems…. • Environmental sustainability, such as climate change, water scarcity, biodiversity and depletion of natural resources, global warming, oceans and waste (general and nuclear) Source: The Skoll Foundation http://www.skollfoundation.org/skollawards/index.asp

9. Questions Which organizations are the target audience of the UN Global Compact? Why? If we are to achieve “social change” in support of Millenium Development Goal #7... • what do we have to change? • which organizations are most capable of achieving the required changes?

10. My View & Approach • Which organizations? Corporations are the best positioned to impact social change as it relates to Environmental Sustainability. • How? Prepare our future business leaders to be environmental stewards and change agents by education and real-world experience.

11. Background & Output • Since 2008, a course called “Business Sustainability” or “Greening the Corporation” has been delivered to 150 graduate students at: • Bentley University • Clark University • MA Maritime Academy • Student teams has developed and delivered Sustainability Plans to 40+ organizations including: • Corporations • Municipalities • Non-Profits

12. Areas of Focus • Organizational Mission • Integrated into Operational Strategy • Foster Sustainable Behavior • Specific Initiatives: • Energy Use • Water Use • Waste & Recycling • Travel & Transportation • Supply Chain Management & Purchasing • Information Technology > “Green IT” • Building Design • Product & Service Design

13. Fostering Sustainable Behavior • “Leading Change….” by John P. Kotter • “Fostering Sustainable Behavior” by Douglas McKenzie-Mohr: • Set goals • Identify barriers • Plan and Implement • Evaluate • Revise and refine

14. Examples of Sustainability Plans www.greenprof.org

15. Definitions & Systems

16. 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)

17. 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

18. 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

19. Business & Environmental Sustainability

20. 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

21. Industrial Pollution

22. 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

23. 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

24. 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.

25. Business is Providing Leadership

26. 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

27. 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)

28. 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

29. Stakeholders

30. 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/

31. 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

32. Sustainability Drives Innovation

33. 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

34. 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

35. Examples of Sustainability Driving Innovation

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

37. 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

38. 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.

39. 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.

40. 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

41. Business Operations

42. 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

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

44. 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

45. 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

46. End-of life Product Management

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

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

49. Green Information Technology • “Going green — or the ability to be green — is definitely increasing in importance, not just from a power perspective but also from how we, as good corporate citizens, dispose of all this equipment and our electronic waste. We are all waking up to the realization that nothing, from electricity to the quality of the environment, is free or infinite.” • John Humphreys, IDC Enterprise Platform Group

50. Lean Manufacturing Look at the “waste” and impact in the overall system • Production process • Inventory • Material choice (recycled vs. virgin) • Energy usage of the product • Product impact on the local community • “Waste” is defined as anything more than absolutely necessary so any environmental residual is bad.