Sustainability What It Is, What It Isn’t and How by fjt11572

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									         Sustainability
         What It Is, What It Isn’t
and How to Make it Work for Your Company


              A Presentation By:
        Dr. Mark W. McElroy
                Executive Director
        Center for Sustainable Innovation
                 Jed Davis
           Director of Sustainability
          Cabot Creamery Cooperative
     Let’s First Define Some Terms

• Sustainability - The study of human impacts on vital
  capitals as needed for human well-being
     Let’s First Define Some Terms

• Sustainability - The study of human impacts on vital
  capitals as needed for human well-being
• Vital Capitals - Key resources required for human
  well-being: natural, human, social, and material
     Let’s First Define Some Terms

• Sustainability - The study of human impacts on vital
  capitals as needed for human well-being
• Vital Capitals - Key resources required for human
  well-being: natural, human, social, and material
• Triple Bottom Line - Organizing principle for
  managing sustainability impacts on:
   – The environment
   – Society
   – The economy
     Let’s First Define Some Terms

• Transparency - Visible to inspection from the outside,
  openness
     Let’s First Define Some Terms

• Transparency - Visible to inspection from the outside,
  openness
• Stakeholders - Groups with an interest in the
  performance of an organization
     Let’s First Define Some Terms

• Transparency - Visible to inspection from the outside,
  openness
• Stakeholders - Groups with an interest in the
  performance of an organization
• Metrics - A measure of performance
       Let’s First Define Some Terms

• Sustainability Measurement and Reporting - The
  process of calling attention to an organization’s triple
  bottom line performance
   –   Transparency
   –   Responsiveness to stakeholders
   –   Regulatory compliance
   –   Reputation
   –   Risk management
  Why Disclose Your Sustainability?

• A business imperative!
  Why Disclose Your Sustainability?

• A business imperative!
• Calls attention to:
   – Your positive impacts on society and the environment
   – Steps to improve your sustainability performance
  Why Disclose Your Sustainability?

• A business imperative!
• Calls attention to:
   – Your positive impacts on society and the environment
   – Steps to improve your sustainability performance
• Active commitment to transparency
  Why Disclose Your Sustainability?

• A business imperative!
• Calls attention to:
   – Your positive impacts on society and the environment
   – Steps to improve your sustainability performance
• Active commitment to transparency
• Reputation and risk
        What Sustainability Is Not!

• Eco-efficiency - Incremental improvements in energy
  and material use
   – Less unsustainable, not sustainable
   – Unsustainability in slow motion
        What Sustainability Is Not!

• Eco-efficiency - Incremental improvements in energy
  and material use
   – Less unsustainable, not sustainable
   – Unsustainability in slow motion
• Green - Sexier way of saying “eco-efficient”
   – Non-toxic, organic, biodegradable, etc.
   – “Green products” versus manufacturing processes – not the
     same things
                Context is Key!

• Actual social and environmental conditions
                Context is Key!

• Actual social and environmental conditions
• Context sets standards of performance
                Context is Key!

• Actual social and environmental conditions
• Context sets standards of performance
• “Vital capitals” and human well-being
                  Context is Key!

•   Actual social and environmental conditions
•   Context sets standards of performance
•   “Vital capitals” and human well-being
•   Managing for sustainability requires context!
                     Daly’s Rules

• To be sustainable, a social system (e.g., an organi-
  zation) is one:
   – Whose rate of renewable resource use should not exceed rate
     at which such resources are regenerated
                     Daly’s Rules

• To be sustainable, a social system’s (e.g., an organi-
  zation’s):
   – Rate of renewable resource use should not exceed rate at
     which such resources are regenerated
   – Rate of non-renewable resource use should not exceed rate
     at which renewable alternatives are developed
                     Daly’s Rules

• To be sustainable, a social system’s (e.g., an organi-
  zation’s):
   – Rate of renewable resource use should not exceed rate at
     which such resources are regenerated
   – Rate of non-renewable resource use should not exceed rate
     at which renewable alternatives are developed
   – Rate of waste emissions should not exceed rate at which such
     wastes can be assimilated by the environment
Here’s the Dupont
   report with
 context missing!
Here’s the Dupont
report with actual
  context added
                     Let’s Review

• Concept of vital capitals should underlie
  sustainability program in its entirety
   – It’s not sustainability management if capitals missing!
• Is the basis of Triple Bottom Line (TBL) reporting
• …and of GRI, the leading sustainability standard in
  the world
    How To Measure Sustainability

• Measure social and economic aspects of TBL, not just
  environmental
    How To Measure Sustainability

• Measure social and economic aspects of TBL, not just
  environmental
• Don’t ignore sustainability context
   – Triple Top Line reporting!
    How To Measure Sustainability

• Measure social and economic aspects of TBL, not just
  environmental
• Don’t ignore sustainability context
   – Triple Top Line reporting!
• Don’t mistake eco-efficiency reporting for
  sustainability reporting
Do Mainstream Reports Do the Job?

• Global Reporting Initiative (GRI):
   – Clear proponent of context
Do Mainstream Reports Do the Job?

• Global Reporting Initiative (GRI):
   – Is a clear proponent of context
   – Fails to provide guidelines
Do Mainstream Reports Do the Job?

• Global Reporting Initiative (GRI):
   – Is a clear proponent of context
   – Fails to provide guidelines
   – Is usually top-line only in content
Do Mainstream Reports Do the Job?

• Global Reporting Initiative (GRI):
   –   Is a clear proponent of context
   –   Fails to provide guidelines
   –   Is usually top-line only in content
   –   Is really standards-based greenwashing
Do Mainstream Reports Do the Job?

• Global Reporting Initiative (GRI):
   –   Is a clear proponent of context
   –   Fails to provide guidelines
   –   Is usually top-line only in content
   –   Is really standards-based greenwashing
• Ecological Footprint Method
   – Is rarely used in business
   – Narrowly focused
    How To Measure Sustainability

• Always think in terms of three bottom lines:
   – Environmental (impacts on vital capitals)
   – Social (impacts on vital capitals)
   – Economic (impacts on vital capitals)
    How To Measure Sustainability

• Always express impacts in context:
   – Environmental conditions in the world
   – Social conditions in the world
   – Economic conditions in the world
    How To Measure Sustainability

• Set standards, then measure against them
   – Impacts on vital capitals
   – Human well-being
   – Sustainability = meeting your standards
Enter Sustainability Quotients




              Normative Impacts
               On Vital Capital
Measure Actual Impacts


           Actual Impacts
           On Vital Capital

          Normative Impacts
           On Vital Capital
Compute Sustainability Performance


                       Actual Impacts
                       On Vital Capital
   Sustainability
                  =
   Performance
                      Normative Impacts
                       On Vital Capital
    Example - DuPont’s Water Use


             2001
 Gallons
Consumed
Per Capita
             3.01   Sustainability       3.01
(millions)          Performance      =          =   1.36
                                         2.21
 Gallons
Available
Per Capita
             2.21
(millions)
          Footprint Models Work

• Ecological Footprints
   – Measure human impacts on natural capital against norms
     for what such impacts ought to be
   – Norms grounded in ecological limits or thresholds
   – Do not cross ecological thresholds
   – Live within our ecological means
   – Footprints have denominators, not just numerators
   – Not eco-efficiency…sustainability
              Footprint Models Work

•   Carbon Footprints (4 kinds)
    1.   Top line only, nothing else
    2.   Carbon intensity variant (emissions per economic unit)
    3.   Bottom Line Type 1 (emissions relative to ecological limits)
    4.   Bottom Line Type 2 (emissions relative to social norms or
         expectations, such as Kyoto)
           Footprint Models Work

• Recall Ecological footprints – vital capital is fixed and
  non-anthropogenic:
   – Must live within our ecological means
   – Cannot increase supply – must manage our use of it
           Footprint Models Work

• Recall Ecological footprints – vital capital is fixed and
  non-anthropogenic:
   – Must live within our ecological means
   – Cannot increase supply – must manage our use of it
• Social footprints – vital capital is not fixed and is
  anthropogenic:
   – Can produce it at whatever levels we require
   – Since we can increase the supply, should produce and
     maintain it to ensure human well-being
    What Does This Mean To You?

• Operationalizing your Triple Bottom Line
• Be clear about your standards – specify them:
   – In ways grounded in social and environmental context
   – For each of the three bottom lines
• Base your sustainability program on this approach
              A Quick Case Study
• Ben & Jerry’s
   – A social footprint
   – To what extent is Ben & Jerry’s contributing towards
     returning greenhouse gas concentrations to safe levels?
              A Quick Case Study
• Ben & Jerry’s
   – A social footprint
   – To what extent is Ben & Jerry’s contributing towards
     restoring greenhouse gas concentrations to safe levels by
     investing in vital capitals required to do so?
   – Measurement was based on a specific climate change
     mitigation scenario known as WRE350
   – Actual CO2 emissions by B&J were used as an indicator of
     investments made in related vital capitals
   – If B&J’s actual emissions were consistent with the WRE350
     scenario, its investments were considered adequate
         B&J’s Sustainability Quotient

                            Actual carbon emissions
   Sustainability
                              at Ben & Jerry’s (tC)               6,279
   performance
                  =                                           =
(carbon emissions
                           Maximum carbon emissions               6,146
  through 2006)
                      allowed in order to return greenhouse
                          gas emissions to safe levels (tC)


                                    1.022
                    Another Case

• Cabot Creamery Cooperative
   – Strong commitment to the vital capitals approach
                     Another Case
• Cabot Creamery Cooperative
   – Strong commitment to the vital capitals approach
   – Focusing on all three bottom lines, not just ecological
                    Another Case
• Cabot Creamery Cooperative
   – Strong commitment to the vital capitals approach
   – Focusing on all three bottom lines, not just ecological
   – Working closely with supercenters and more traditional
     retailers
                       Another Case
• Cabot Creamery Cooperative
   –   Strong commitment to the vital capitals approach
   –   Focusing on all three bottom lines, not just ecological
   –   Working closely with Wal-Mart and other customers
   –   Developing a social contract that will specify all of its triple
       bottom line responsibilities
                      Another Case
• Cabot Creamery Cooperative
   – Strong commitment to the vital capitals approach
   – Focusing on all three bottom lines, not just ecological
   – Working closely with Wal-Mart and other customers
   – Developing a “social contract” that will specify all of its triple
     bottom line responsibilities
   – Collaborating with its owner/farmers to create a Vital
     Capital Scorecard
 Footprinting Possibilities Are Many
• UN Millennium Development Goals
   – Extent to which an organization is meeting its share of the
     burden to achieve them
• Local, Regional, National Issues
   –   Healthcare
   –   Education
   –   Housing
   –   Infrastructure
   –   The economy
• Internal affairs
   – Work/family balance
   – Livable wage
    Dos and Don’ts for Sustainability

• Don’ts
  – Don’t confuse with eco-efficiency
  – Don’t fall prey to greenwashing
  – Don’t begin without context
                    Dos and Don’ts
• Dos
  – Embrace the vital capitals principle, and base your
    sustainability program upon it
  – Ensure a full triple bottom line approach to your operations
        • Environmental, social, economic
  – Tell the world what you’re doing – call attention to what you
    are doing well, and take credit for, it
  – Define your own standards of performance before others do
    it for you
  – Leverage sustainability to your full advantage in the
    marketplace
                Thank You!

Dr. Mark W. McElroy
mmcelroy@vermontel.net
www.sustainableinnovation.org


Jed Davis
Jdavis@cabotcheese.coop
www.cabotcheese.coop

								
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