Sustainability Training

Transcription

1 Sustainability Training Skills, Traits and Needs for the Near Future 1

2 The Surprising Solution for Many Large Industrials on Sustainability, Growth & Innovation This is about linking leadership with sustainability and innovation toward the shifting values of society Which directly ties to corporate performance on Revenue Reputation Reporting Global Market Access Risk of Business Obsolescence Why focus on Sustainabl e Innovation? Margin Improvement Competitive Differentiation 2

3 Are your teams ready for this curve? Emerging Drivers of Social Response Capitalism Emerging Capital Markets (e.g., China, Brazil, Indonesia, Ireland, Scotland, Australia) Climate Change & Environmental Protection Energy Diversity & Security Terrorism We now must compete on PRICE, Quality and SOCIAL RESPONSE 3

4 From where comes this new growth? By being like Ben Franklin: Competitive, frugal, inventive, diplomatic So much for industry, my friends, and attention to one s own business; but to these we must add frugality, if we would make our industry more certainly successful. - Benjamin Franklin, The Way to Wealth We need to become like Ben Franklin all over again frugal, inventive and diplomatic, instead of war-like. Franklin was one of the first global citizens, who saw multiple universal truths in social capital. The true purpose of money is social. Important to realize that doing more with less is the mark of success in this century. 4

5 New Thinking on the Purpose and Role of Business There is an opportunity to transform thinking and practice about the role of the corporation in society Shared value gives rise to far broader opportunities for economic value creation Shared value thinking will drive the next wave of innovation, productivity growth, and economic growth Shared value will reignite a whole new generation of management thinking Businesses acting as businesses, not as charitable givers, are arguably the most powerful force for addressing many of the pressing issues facing our society A transformation of business practice around shared value will give purpose to the corporation and represents our best chance to legitimize business again * Courtesy Michael Porter 5

6 The Surprising Solution Why This Matters to You and Your Firm The best and growing corporations have linked corporate strategy to both growth, innovation, and sustainability. This is not purely financial. That is the new approach to growth in near future. 1. The swiftness of the information economy has allowed more citizens to expect corporate changes on a global scale 2. This is a social shift, driven by attitudes and world view not just regulations and taxes. The book The Pope s Children. 3. The severity of the global marketplace is cleansing-out those that resist this new wave of understanding. 4. About two thirds of the firms are hurting from this S Frontier pressure, but not most of our Corporate Affiliates. 6

7 The Business Case for Sustainability 7

8 Sustainability Forcing Factors for the Modern Company Increased Globalization Increased Transparency of Impacts The Growth of Voluntary Industry Initiatives Pressures from Customers and Suppliers Instantaneous Communication and the Rise of Social Media Customer Trust and Brand Loyalty Resource Constraints Aggressive NGO s Governments seeking quick and popular wins The Growth of Reporting Standards 8

9 Why Sustainability Matters In a recent PwC survey for the Principles of Responsible Investment poor performance on ESG factors can reduce a company s valuation for M&A by 10% In a Deloitte 2012 Sustainability study, 61% of CFO s expect to increase their involvement in sustainability demonstrating that sustainability is at the nexus of financial materiality In a 2014 report by Pure Strategies, 70% of consumer product companies engaging in product sustainability have realized business value by reduced costs, improved employee engagement, risk mitigation and improved reputation 9

10 Why Sustainability Matters Source Eccles, et.al. Harvard Business Review,

11 What Companies are Saying About Where Sustainability Matters? Percent Respondents Very / Extremely Important REPUTATION STRATEGY MARKETING DEVELOPMENT REGS STRATEGY OPS MGMT INVSTMNT PLNG SUPPLY CHAIN TALENT Over 50% of company executives consider sustainability extremely or very important 76% see sustainability as creating company value 60% see sustainability as important to overall corporate strategy Only 30% say that their companies actively seek opportunities to engage in sustainability Source: McKinsey Global Survey: How Companies Manage Sustainability

12 Leading Companies are Embracing Sustainability as a Competitive Advantage 12

13 CAT as an Exemplar of this New Business Model In summary then: *courtesy of CAT 1. This is the new approach to business growth and success 2. Doing more with less is the success 3. Making others in business look better is a key part of this strategy in a hot crowded severe world! 13

14 Assessing the bottom line Reputation is at the forefront in valuation Regard your good name as the richest jewel you can possibly possess -Socrates Company and Stock Reputation affect If you lose money for the firm, I ll be understanding. If you lose reputation for the firm, I ll be ruthless. -Warren Buffett Reputation: You only know what it s worth, when it lies in tatters. -Financial Times Reputation Customers Employees Investors Legislators Journalists NGOs Adopted by AHC Group from Ipsos Public Affairs

15 Sustainability Fad or Strategy Why is sustainability so hard? Unsure definition means different things to different people Unfocused approach companies often have multiple focus topics (2/3rds of S&P 500 companies report up to 30 focus topics) Lack of defined roles and responsibilities whose in charge? Disconnection from the firm s purpose seen as box ticking rather than strategic Focus on process rather than outcomes 15

16 The Meaning Of Sustainability Has Been Clarified Over The Last Two Decades Meeting the needs of the present without compromising the ability of future generations to meet their own needs Gro Harlem Brundtland, Norwegian Prime Minister in 1987 first usage Thriving in perpetuity through four coequal components: Economic Environmental Social Cultural Operating profitably first among equals Protecting and restoring the ecosystem Acting as if other people matter Protecting and valuing cultural diversity.adapted from Strategy for Sustainability, Adam Werbach, Harvard Business Press, 2009 Source: McKinsey Global Survey: How Companies Manage Sustainability

17 Senior Executives often define sustainability as the long-term health and success of the enterprise. Companies integrate sustainability elements into business practice to create value, maximize profits and manage risk. Reducing energy, waste and water use lowers costs Ethical business practices and strong safety, health, environmental and human rights practices help mitigate judgments and remediation costs Effective capacity building gives entrée to business opportunities Productive engagement with government can help shape legislation and minimize uncertainties In a world where carbon has a cost, low emitters winn profit 17

18 Moving to a Sustainability-based Business Strategy Compliance- Based Strategy Excellence- Based Strategy Differentiation Based Strategy Sustainability - Based Strategy Main Thrust EHS = cost EHS = core company value EHS = opportunity SR = business investment EHS/SR = a key aspect of company business strategy Objectives Compliance Safety EHS excellence Business cost savings Competitive advantage Differentiation EHS/SR innovation to position company for future growth Processes Basic management systems Sophisticated management systems Reputational management Total cost and life cycle management Social responsibility mgt. Sustainable dev. mgt. Organizational Alignment EHS managed by functional staff EHS integrated into line organization Line org. an EHS champion Supply chain partnerships Strategy-driven alignment between EHS/SR goals and business decisions Stakeholder Engagement Mainly regulators Regulators Local communities Customers Engagement with a broad range of stakeholders Partnerships with stakeholders EH & S EHS & CSR CSV / Sustainability

19 Sustainability Training The Missing Link 19

20 Sustainability is at the intersection of Business Functions Sustainability 20

21 Growth in Sustainability Training Academic Institutions Harvard University Oxford University Cambridge University Columbia University Univ. of Illinois Univ. of Vermont University of San Francisco Southern New Hampshire University Commercial and Non-Profit Organizations Sustainability Learning Center Center for Sustainability Excellence GEF Institute SGS Green Leaders KPMG DuPont Examples of organizations offering training courses, degrees and certificates in Sustainability 21

22 Sustainability starts with Training Corporate Training the missing piece Desired corporate objectives have always had a strong internal training component Safety Information technology Quality Diversity By internalizing training and not relying solely on higher education and professional certification, companies make the subject relevant to company goals, business strategy, operations and employee jobs 22

23 Traits needed for Successful Sustainability Leadership 1. Understanding the broad context. 2. Managing complexity, coping with uncertainty 3. Systems thinking 4. Working beyond boundaries. 5. Leading change. 6. Enabling innovation 23

24 LEADERSHIP SKILLS CORPORATE EXECUTIVE START-UP CEO BOARD MEMBER Strategic Change Agent Team Builder Relationship Builder Analytical Insightful Communicator Face to shareholders Execution Find + grow talent Global Drive Diversity Move with speed Deal with high ambiguity Persuader Fund raiser Lead rapid change Curious Global from day1 Strategic + tactical Find + reward talent Execution Drive Diversity Governance and Oversight Strategic Questioner Continuous learner Team player Independent Global CEO succession Diversity VELOCITY OF CHANGE IS IMPACTING ALL OF THESE ROLES WHAT SKILLS ARE REQUIRED IN THE NEAR FUTURE TO SUCCEED? Source: Sandra Beach Lin 24

25 Failures, Fallacies and Fables The Myth of the Superstar Leaders are Born, not Made Training is too expensive we all have day jobs 25

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28 Model Training Elements 1. Sustainability Leadership Monetizing soft benefits The importance of reputation 2. Exercising judgment and managing complexity Understanding external risk Predicting future trends 3. Making the case in your company 4. Achieving breakthrough performance 5. Measuring performance and success 6. The power of partnerships 28

29 Change Management and Training Future Leaders 1. Do you have tomorrow s leaders ready to lead your company into the future? 2. What if you needed to be replaced tomorrow? Is your replacement ready? 3. Have you prepared your replacement so they can build on your legacy 4. Succession planning is your responsibility. How would you grade yourself? 5. Consider the skills you have developed have you done what is needed to develop your replacement s skills? 29

30 Thank You Bruce Piasecki President and Founder AHC Group, Inc. Gerald Bresnick Senior Associate AHC Group, Inc. 30

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