Winning Strategies for Using Sustainability and Partnerships to Give

Winning Strategies for 2010 Using Sustainability and Partnerships to Give Your Business a Competitive Edge Participant’s Workbook Winning Strategies for 2010 Using Sustainability and Partnerships to Give Your Business a Competitive Edge Participant’s Workbook iii www.2010CommerceCentre.gov.bc.ca Table of Contents Introduction to the Workshop Our Goal Why this is Important Defining Sustainability Economic Benefit Environmental Sustainability Social Responsibility Aboriginal Participation Defining Partnerships Module One: Sustainability The Business Case for Sustainability Key Trends Trend #1: Company Performance Trend #2: Consumer Preferences Trend #3: Ethical Investing Trend #4: Reporting Benefits of Sustainability Challenges of Sustainability Becoming a Sustainable Business Internal Processes External Credibility Module Two: Partnerships Types of Partnerships between Businesses 1. Combining complementary skills, products or services 2. Combining assets to develop and deliver a product or service 3. Distributor partnering 4. Franchising and/or licensing agreement 5. Pooled purchasing 6. Supplier partnering 7. Research and development (“R&D”) partnership and/or consortia Structuring Partnerships 1. Non-equity strategic alliance 2. Equity strategic alliance 3. Joint Venture Why Partner? Potential Advantages 1. Increased capacity 2. Increased access to existing or new markets and/or product distribution 3. Increased ability to address regulatory and/or cultural needs in new markets 4. Shared financial risk 5. Reduced production costs 6. Reduced marketing costs and/or increased marketing resources 7. Improved access to capital 1 1 1 2 3 3 3 3 3 5 5 5 5 6 6 6 7 8 9 10 12 15 15 15 15 15 16 16 16 16 17 17 17 17 17 17 18 18 18 18 18 18 iv www.2010CommerceCentre.gov.bc.ca What to Watch out for - Potential Risks of Partnerships 1. Loss of individuality 2. Erosion of brand and image 3. Leakage of proprietary technology and/or intellectual property 4. Inadvertent disclosure of non-alliance information to alliance partners 5. Possibility of the alliance partner becoming a future competitor 6. Investment of time and management resources to establish and manage the partnerships Mitigating Risk by Choosing the Right Partner and the Right Agreement 1. What to Look for in a Partner 2. What to Look for in an Agreement Where to Find Potential Partners 3. Exposure to an international audience 4. Partnering and network opportunities 5. Sustainability Information and References 6. Exclusive invitations 7. Control of your image Wrapping it Up… And Taking it Home to Your Business Appendix 1: Case Studies Case Study #1: C Restaurant and the Vancouver Aquarium’s Ocean Wise Program Case Study #2: Edible Planet Catering Company Case Study #3: Frogfile Office Essentials Case Study #4: Homescape Building and Design Case Study #5: Kootenay Knitting Case Study #6: Novex Delivery Solutions Case Study #7: Spirit Ridge Vineyard Resort & Spa Case Study #8: Small Potatoes Urban Delivery (SPUD) Appendix 2: Links and Resources Guides to Implementing Sustainability in the Corporate Environment General Sustainability Environmental Sustainability Social Responsibility Aboriginal Participation Sustainable Purchasing – What to Do and Where to Go Sustainability Resources/Funding Partnerships – Where to Find Partners Appendix 3: Sample Sustainability Policies Adera Development Corporation Environmental Policy Mountain Equipment Coop Sustainability Policy Placer Dome Sustainability Charter VANOC’s Sustainability Performance Objectives Appendix 4: VANOC Supplier Code of Conduct for Social and Environmental Compliance Appendix 5: VANOC’s Buy Smart Program Questionnaire 19 19 19 19 19 19 19 20 20 20 21 21 21 21 22 22 23 25 25 26 27 28 30 31 32 34 37 37 37 37 38 38 38 39 39 41 41 41 42 43 45 47 v www.2010CommerceCentre.gov.bc.ca vi www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 1 www.2010CommerceCentre.gov.bc.ca Introduction to the Workshop Our Goal Welcome to the 2010 Winning Strategies Workshop Participant’s Workbook. This two and a half hour workshop was developed by the BC Olympic and Paralympic Winter Games Secretariat’s 2010 Commerce Centre, and is being presented at locations throughout the province in advance of 2010. This workbook is designed to complement the workshop by reviewing and expanding upon some of the concepts presented. However, the real value of the workshop will be in how it applies to your unique business environment. Therefore, you are encouraged to record your thoughts and ideas in the accompanying power point slide handout. At the end of the workbook, in the Appendixes section, you will find a number of tools to guide you, such as sample policies, links to resources, etc. Also included in your workshop package is the document Striving for Excellence: Your guide to business opportunities for the 2010 Winter Games. This guide is a valuable tool for anyone looking for good practical information on how to take advantage of the upcoming event. It’s a good example of the business resources related to Vancouver 2010, the Olympic Games and other major sporting events that you can find at www.2010CommerceCentre.com. The goal of the workshop is to give small and medium sized businesses (SMEs) practical tools and resources for increasing their competitive advantage in the marketplace and profitability through sustainable practices and partnerships. Why this is Important Businesses are getting into sustainability because there is evidence that not addressing it is impacting profitability. In a recent study by the Economist1, it was determined that companies who rated their sustainability efforts highly saw annual profit increases of 16 per cent, whereas those that rated themselves worse reported growth of only 7 per cent. Close to home, we can point to two good examples of the growing need for businesses to address sustainability: the procurement policies of the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Games (VANOC) and those of the B.C. Government. VANOC has already proven itself as a significant source of business opportunities. It is expected to directly spend $1.7 billion on goods and services as it prepares for the Games. As February 2010 approaches and VANOC’s purchasing activities intensify, opportunities will abound for SMEs, particularly in working with VANOC contractors to fill in gaps or extend their product or service offer. VANOC and its contractors will be guided by its Buy Smart Program, which places importance on selecting suppliers that meet VANOC’s sustainability-based Code of Conduct (see Appendix Four) or that have their own, similar established code of conduct. VANOC is just the tip of the iceberg in terms of business opportunities in the 2010 Winter Games environment. Other companies, such as sponsors, broadcasters, sport associations/delegations and competition venues, in addition to athletic teams and visitors are expected to spend in excess of $2 billion. Many companies will be from out of province (or out of country) and looking to form alliances with B.C.-based suppliers. At the end of the day, all of them will give weight to sustainability in some way. Changes in the procurement policies of the B.C. Government provide more evidence of the growing demand for sustainability in the corporate environment. The Climate Action Plan, introduced in 2008, includes an Energy Efficient Buildings Strategy with changes to the B.C. Building Code that require some of the highest energy efficient 1. The Economist Intelligence Unit, Doing Good: Business and the Sustainability Challenge, The Economist, February 2008, p 7. 2 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Defining Sustainability standards in Canada, and ensures that all new provincial government buildings meet LEED Gold or equivalent green standards. Although at this point in time, proof of sustainable practices is not a “must do” for businesses, it is very possible that it will increase in importance in the foreseeable future. What is clear is that the sooner companies begin to address sustainable practices, the better prepared they will be to provide proof of their company’s track record when they need to. This workshop will not only introduce you to the reasons behind sustainable practices, it will also help you with the “how-to’s” of integrating sustainability into your business plan. That is a great way to introduce our second featured business tool: partnerships. Partnerships between businesses are valuable for the quick leveraging of talent, ramping up capacity or adding needed expertise and experience to your company’s service or product in short order. For example, for companies quickly trying to incorporate Aboriginal or sustainable content, partnering with another company may bring in needed resources, know-how and contacts. In the 2010 Winter Games environment, partnering may be the tool you need to quickly advance your service or product offer to match the needs of VANOC and the associated army of businesses and individuals. Throughout the workshop and in this workbook, we will be using case studies of real B.C. small and medium sized businesses (SMEs) that use sustainability and/or partnerships to increase their competitive edge and net profit. Let us talk for a moment about what we mean by the terms sustainability and partnerships, and why we think that they could provide your business with some real advantages. We hear a lot about sustainability these days and there is no doubt that there are many different definitions of it. It is also known as Corporate Social Responsibility (CSR) or Corporate Responsibility (CR). What is clear is that sustainability has made its way into the lexicon of the business community. Businesses, large and small, are moving quickly to ensure that their product or service is seen as sustainable. To broadly define sustainability as it pertains to business, we will start with the definition of Corporate Responsibility2 developed by the International Institute for Sustainable Development: “For the business enterprise, sustainable development 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.” In breaking down the definition of sustainability into its component parts, we take our lead from VANOC’s 2006 to 2007 Sustainability Report Snapshot. We will examine business sustainability as it relates to the following: economic benefit; environmental sustainability; social responsibility; and aboriginal participation. Among its own sustainability objectives, VANOC also includes accountability and sport for sustainable living. Accountability is important to your business in ensuring that it develops internal processes as well as external credibility and will be dealt with in more detail in Module Three. Sport for Sustainable Living is VANOC’s approach to public engagement on sustainability—the idea that customers, suppliers, visitors, 2. International Institute for Sustainable Development, in collaboration with the World Business Council for Sustainable Development and Deloitte & Touch, Business Strategies for Sustainable Development, 2001 Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 3 Defining Partnerships spectators all need to be engaged in sustainable lifestyles and practices. Economic Benefit refers to how the healthy bottom line of your product, company or production improves quality of life and the environment. This includes working with your supply and distribution networks to ensure that they are employing sustainable practices as well as the use of innovation, products, services and technologies that create social, environmental and economic benefits. Corporate responsibility needs to be another tool that supports your profitability as a business. Environmental Sustainability describes how your product, company or production methods contribute to the advancement of resource conservation, habitat restoration as well as limiting the impact on the environment. It could also apply to how they showcase Canada’s natural environment, stimulating demand for environmentally sound products and services. Social Responsibility refers to how your product, company or production methods adhere to ethical sourcing with respect to human and labour rights, assist innercity revitalization, support youth and disadvantaged groups or in some other way promote improvements in society. It also refers to how your company treats its staff, relates to its stakeholders as well as the surrounding community. Aboriginal Participation speaks to how your product, company or production methods stimulate Aboriginal businesses, employment and training. It also includes the ways in which your company respects the traditions, faiths and territories of First Nations people. “Aboriginal” is defined as First Nations, Inuit and Métis. Broadly defined, a business partnership is a relationship of two or more entities conducting business for mutual benefit. Within this broad category, there are several types of legally-defined business partnerships, such as a general partnership, a limited partnership or a limited liability partnership. Each of these types of partnerships describes the corporate formation of a single business. These are not the types of partnerships that will be dealt with in this workshop. The definition of partnership that this workshop focuses on is the way in which two or more business form a strategic alliance for a period of time. Through a strategic alliance, the businesses retain their corporate independence, but align to combine resources, capabilities and core competencies to pursue mutual interests. Usually, the businesses are not in direct competition with each other, but they may have similar products or services that can be combined in order to reach the same target audience3. In some cases, competitors come together to form a strategic alliance that magnifies their product offer to an intended audience. Strategic alliances are more commonly used for extending the reach of a company without committing to expensive internal expansion beyond the company’s core business. It may help the companies achieve economies of scale while increasing their penetration into new or existing markets. These alliances can help develop, enhance or diversify products; add capacity; and reduce costs. The Vancouver 2010 Winter Games presents an excellent opportunity for British Columbia companies to extend their reach and grow their business by partnering not just with each other, but with any of the top quality international companies that are interested in doing Games-related business. These types of relationships have the potential to continue beyond 2010, leading to new markets and new lines of business. 3. www.1000ventures.com/business_guide/strategic _alliances_main.html 4 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 5 www.2010CommerceCentre.gov.bc.ca Module One: Sustainability The Business Case for Sustainability Within the last decade, sustainability practices or corporate responsibility (CR) has emerged as a growing management approach to address global and societal changes that are affecting the overall corporate environment4. Such changes include: f Global pressures that challenge corporations to think about their impact on communities, Aboriginal peoples and the environment; f Increasing stakeholder standards and expectations of business conduct; f Evolving values, norms and expectations of consumers; and, f Changing standards of corporate responsibility and accountability. Although its scope of operations is large by comparison to a SME, VANOC provides a great example of the growing demand for proof of sustainability in the companies it chooses to do business with. VANOC has entrenched its commitment to sustainability through the institution of its Buy Smart Program. This is a formalized set of procurement and licensing procedures and activities, designed to ensure that sustainability, ethical choices and Aboriginal participation are taken into account within their procurement and licensing activities. Along with price, quality and traditional purchasing considerations, this information is factored into VANOC’s decision making, affecting a minimum of 10 per cent of bid’s overall rating. VANOC’s sustainable purchasing decisions have a ripple effect that will have a large bearing on the business environment in B.C. and continue to influence business decisions well after the 2010 Winter Games are over. Licensees of merchandise bearing the Olympic marks must also comply with VANOC’s ethical Licensee Code of Conduct that sets out requirements for safe, healthy and environmentally responsible workplaces and factories (see Appendix 4). Therefore, anyone doing business with them will have to contribute to their initiatives in meeting the requirements of Buy Smart and the Code of Conduct. As a result, demonstration of sustainability practices is strongly recommended for companies wishing to secure contracts with VANOC and the Olympic Family - many of the companies who secured early contracts with VANOC already had a well-entrenched track record in sustainability. However, while sustainability is fundamental with regard to Games-related contracts, it extends beyond 2010 and is becoming increasingly important as a business practice in North America and worldwide. 4. Conference Board of Canada. 2004. The National Corporate Social Responsibility Report. Managing Risks, Leveraging Opportunities 5. Key Trends While statistical evidence regarding the business case for employing corporate responsibility is limited at this point, particularly for small to medium sized businesses, some relevant research does exist. The following statistics and trends, drawn from several sources, indicate that: f Stakeholders, including consumers, are becoming increasingly aware of a company’s ethical practices and that this is starting to influence purchasing and investment decisions. f A growing number of companies are responding to this trend by employing sustainable practices and reporting on their results. f There is growing evidence that employing sustainable practices can contribute to the success of a company. Trend #1: Company Performance 5 Research conducted through the Institute for Business Ethics (the “Institute”) reveals that companies with business ethics, reflected in their policies and practices, are more likely to be commercially successful in the long run. The Institute’s research findings are consistent with the expectation that companies with a demonstrable ethics program benefit from the confidence that is instilled in their stakeholders. Successful programs: f Facilitate reputation building; f Enhance relations with bankers and investors; f Help firms attract and retain better employees; f Increase goodwill; f Leave the firms better prepared for external changes, turbulence and crisis; and, f Generally help the firm run better. Does Business Ethics Pay? Revisited by Kaodi Ugoji, Nicole Dando & Lance Moir, Institute for Business Ethics, 2003. 6 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Trend #2: Consumer Preferences 6 Consumers are taking a greater interest in how products and services are produced and delivered, including the operating practices of companies. As such, consumers are increasingly factoring information related to a company’s sustainability practices into their purchasing decisions. Also, companies are becoming aware of how other businesses in their supply chain operate and this, in turn, is influencing many companies’ choice of suppliers. This is having an impact on how companies operate and how they brand their products and services. In 2002, 44 per cent of the British public believed it was very important that a company show a high degree of social responsibility when they buy the company’s product. This was up from 28 per cent in 1998. 55 per cent of the general public across Europe feels that industry and commerce do not currently pay enough attention to their social and environmental responsibilities. 86 per cent of consumers have a more positive image of a company that is seen to be doing something to make the world a better place. A company’s responsibilities to society, the environment and its employees are seen by the public across 20 countries as more important than its economic contribution. Corporate responsibility offers a means by which companies can manage and influence the attitudes and perceptions of their stakeholders. Trend #3: Ethical Investing An indicator of growth in corporate responsibility is the increase in Socially Responsible Investment (“SRI”), which incorporates social, environmental and community development objectives into traditional investment decision-making processes. A survey7 conducted by the Social Investment Organization reports that assets managed in Canada according to social responsibility guidelines: f Increased from $49.9 billion in 2000 to $503.6 billion in 2006, which represents overall growth of 909 per cent and average annual growth of 152 per cent. Trend #4: Reporting Another indicator of growth in CR is the number of companies that report on their CR practices. According to KPMG’s International Survey of Corporate Responsibility Reporting 2005 (note that this is the most recent update of this study).8 f 41 per cent of Canada’s 100 largest companies issue separate CR reports, which is double the amount that were reporting in 2002; and, f Twenty-three of the companies within that 41 per cent category report in accordance with the Global Reporting Initiative Guidelines, an internationally recognized and voluntary standard of corporate sustainability reporting. A report ranking Canadian firms according to their CR performance9, indicates that CR reporting is occurring throughout a variety of economic sectors, including automotive, banking, fast food, food and drug retailing, footwear and apparel, insurance, media, mining, oil and gas, paper and forest products, retailing, technology and telecommunications. This research suggests that CR is acknowledged as important to a growing number of companies and that reporting on a company’s CR practices is a fundamental aspect of a solid CR program. By extension, it also means that these companies are also now looking for more CR from their suppliers, creating new opportunities for well-positioned companies. 7. 6. Arthur D. Little, The Business Case for Corporate Responsibility, Business in the Community, Beacon Press, December 2003, p. 2. Canadian Socially Responsible Investment Review (based on 2006 survey data), The Social Investment Organization of Canada, 2007. 8. KPMG. 2005. KPMG International Survey of Corporate Responsibility Reporting 9. Report on Business. 2005. Jantzi Research Inc. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 7 Benefits of Sustainability A 2003 survey by Canadian Business for Social Responsibility, found that “one of the most consistent benefits cited was the competitive advantage [the respondents] felt resulted from their CSR initiatives, something they expect will only grow in the future as consumer purchasing trends demonstrate the public’s increasing demand for ethical products and services10.” Let’s take a look at these benefits in more detail. Companies must now ensure that their performance outcomes and the manner in which they are achieved, reflect the values, interests and expectations of society. Conference Board of Canada The National Corporate Responsibility Report: Managing Risks, Leveraging Opportunities. June 2004. 3. New Market Opportunities In addition to differentiating its product within an existing market, new market opportunities often emerge when a company explores how it can produce and deliver products and services in a more sustainable manner. For example, a firm that becomes certified to specific environmental and social standards may find new markets as a supplier to particular retailers. In general, sustainable companies will find new opportunities to be included in supply chain relationships that would otherwise be unavailable to them. Corporate responsibility also tends to stimulate learning and innovation within organizations. Addressing the challenge of its own sustainability record often leads a company to identify valuable solutions for other businesses or consumers in the market12. 1. Brand Differentiation & Reputation Management A company’s brand and reputation is dependent on values such as trust, credibility, reliability, quality and consistency. As discussed earlier, consumers are increasingly considering a company’s CR track record when they make their purchasing decisions. This provides a golden opportunity for companies to differentiate their brand and build customer loyalty based on distinctive ethical and sustainability values11. 2. Risk Management and Maintaining Customers As the market environment becomes more attuned to social, Aboriginal and environmental issues, businesses are now expected to consider their own impact as a risk. Anticipating and effectively managing social and environmental risks in balance with existing legal, economic and other risks will go far in helping the business improve security of supply and overall market stability. What this means to a small business is that failure to engage in CR can potentially set it up for a loss of customers when they demand a higher standard— regardless of whether their market is retail or business-tobusiness. Reporting on their sustainability policies, practices and results, in addition to monitoring their stakeholders’ reports (see Trend #4), is becoming an important tool for companies to examine and evaluate their risk factors. 4. Employee Recruitment, Retention and Productivity “There is increasing evidence that the proportion of people wanting to work for a responsible organization is growing. Eighty-one per cent of young people have a strong belief in the power of responsible business practice to improve profitability over time. Corporate responsibility is increasingly a key factor in attracting and retaining a talented and diverse workforce13.” The ability to consistently attract and retain talented employees through good sustainability practices can contribute significantly to a company’s performance. A good sustainability program can not only reduce turnover, it will also reduce the cost and resources required to routinely recruit and train new employees. It also can serve to motivate staff, resulting in higher productivity within a company’s operations14. 12. Ibid., p. 6. 13. Arthur D. Little, The Business Case for Corporate Responsibility, Business in the Community, Beacon Press, December, 2003, p. 5. 14. www.businesslink.gov.uk 10. Engaging Small Business in Corporate Social Responsibility – A Canadian Small Business Perspective on CSR, Canadian Business for Social Responsibility, October 2003, p. 4. 11. John Paluszek, “Ethics and Brand Value: Strategic Differentiation”, PowerPoint Presentation, Business and Organizational Ethics Partnership Meeting. Markkula Centre for Applied Ethics, Santa Clara University, April 6-7, 2005. 8 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Challenges of Sustainability 5. Access to Capital “Traditionally, investors [and lenders] have been portrayed as having little interest in the non-financial aspects of business management. Today, the investment community [is] more likely to regard corporate responsibility as a proxy [for] the “quality of management” of a company and as evidence of the link between good corporate citizenship and good financial performance mounts, few investors can afford to ignore this aspect of business behaviour15.” This is demonstrated by the growth in socially responsible investing reported in the Canadian Socially Responsible Investment Review (see Trend #3: Ethical Investing, discussed earlier). As with any rapidly evolving trend, there will be challenges. The challenges discussed here are particularly relevant to SMEs18. 1. Implementation Costs and Resources The initial costs of implementing a corporate sustainability program, coupled with fewer in-house resources than larger companies, can present a challenge to the smaller business. Often, the costs of implementation may be upfront, while the benefits in the form of savings, employee recruitment and retention as well as enhanced revenue generation may occur over the longer term. For example, Frogfile Office Essentials paid for a lighting refit in 2008 – a capital investment that will pay for itself, but it will take a few years. However, in the first year alone, the change yielded a 50 per cent savings in electricity, the change promises that the savings will continue long after the investment is paid off. 6. Increased efficiency A company’s current investment in corporate responsibility opens opportunities to reduce present and future costs to the business16. For example, these include: f Better attraction and retention of employees, resulting in lower employee turn-over and lower recruitment costs; f Improved energy efficiency (the Carbon Trust in the UK estimates that many businesses could cut energy costs by 20 per cent by using energy efficiency measures)17; f Minimizing transportation costs, including capital, fuel and labour inputs; and f Improving utilization of raw materials and supplies, reducing waste and the cost of disposal. 2. Sourcing Supplies It can be challenging for many small businesses to source the types of inputs required to consistently support their sustainability practices. For example, when Vancouver caterer Edible Planet started its operations in 1994, it was challenged to find locally produced organic food products. However, the company’s persistence has been rewarded in recent years with recognition of a long-standing commitment. The availability of environmentally-friendly and socially responsible supplies is improving, as more businesses join the growing throng of sustainable companies. SMEs often lack the buying power of larger companies and may find their choices of supplies limited and in some cases, more expensive. However this is not always the case and this too is changing. Companies may choose to team up with other companies to pool resources or buy in larger quantities to assist their buying choices. This will be discussed in more length later in the workshop. 7. Improved Relations With Regulators In a number of jurisdictions, governments have expedited approval processes for firms that have undertaken social and environmental activities beyond those required by regulation. 15. Ibid., p. 7. 16. Ibid., p. 8. 17. www.businesslink.gov.uk 18. Research related to challenges is based largely upon the following document: Engaging Small Business in Corporate Social Responsibility – A Canadian Small Business Perspective on CSR, Canadian Business for Social Responsibility, October 2003. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 9 Becoming a Sustainable Business 3. Educating Consumers Although knowledge about the impacts of purchasing decisions is rapidly growing, there is still a large proportion of the population that is unaware of the impacts of its purchasing behaviour – unconvinced that they can have a positive impact by changing their behaviours. SMEs typically do not have the resources required to design and implement a communications strategy aimed at educating consumers, but there is help: industry organizations and organizations such as Canadian Business for Social Responsibility (“CBSR”) are quickly coming to the rescue with communications campaigns. Successfully integrated into your business, sustainability can create opportunities and competitive advantages. However, first and foremost, it must meet the needs of the business and be seamlessly incorporated into its overall business plan. Your investment now in sustainability will reap long-term and enduring benefits well beyond 2010 only if it is an integral part of the business, not a temporary value-added component. There are two essential aspects for businesses to consider: one, it must put internal processes in place; and two, it must ensure external credibility. 4. Internal Communication and Training Establishing an effective CR program typically requires initiatives aimed at engaging employees in the process, and educating them about the new programs objectives, strategies and reporting mechanisms. Many SMEs may have limited resources to support the internal communication and training needed to establish a CR program. For this too, there is help: there are an increasing number of publicly-supported organizations that host education programs around sustainability for low or no cost. 5. Reporting and Credentialing Many SMEs may lack sufficient resources to support a formal reporting program and/or a formal credentialing program. However, many industry associations have begun to look at branding and credentialing programs as well as the introduction of award programs that allow companies to obtain public recognition for their efforts. Companies should be cautious of reporting and credentialing programs that are superficial, as they may impact the credibility of the company’s CR efforts and as a result, the reputation of the company. “Greenwashing” has gained broad recognition as a term to describe communications and marketing efforts that give the false impression that a company has effective environmental programs in place. 10 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Internal Processes Developing and implementing the sustainability plan requires the commitment and diligence of the entire organization and builds on its existing core strengths. Approach sustainability as you would any new venture, and ensure that it is a good fit with your overall plan for future growth, and be inclusive of employees and other key stakeholders in the discussion. Partnership – encourage our employees, consultants, trades and suppliers to become more environmentally aware, and require of them a level of commitment that equals Adera’s. Provide education and resources so that all parties involved can meet this commitment. Passion – take on these challenges with the drive and determination which Adera applies to all its endeavors. If you turn to your participant’s workbook to Appendix Three you will see more sample sustainability policies. Many companies conduct a “best practice scan” to find out what the sustainability leaders are doing in their industry or community. This can be a simple and invaluable initial source of ideas for your approach. 1. Discover your company’s sustainability philosophy… You have probably already been doing some thinking about sustainability and its fit with your business model. Now try putting that into words. For example, what do you envision for your company in five years? How does sustainability fit into that vision? What are your company’s core values and beliefs and how do they relate to economic, environmental and/or social sustainability? Is there a role for Aboriginal participation in your company? Establishing a written statement around what you believe in and where you are going will guide you as you contemplate changes to the company. This will be your company’s sustainability policy. Any changes that you consider making in the future should be assessed against this policy to keep you true to the philosophy that you started out with. Publishing this statement on your website will tell your customers and suppliers what you believe in as well. Adera Development Corporation, based on Vancouver Island, provides the following Environmental Policy on its website19. Adera Development Corporation recognizes that what we do today will affect tomorrow. Adera is committed to being a leader in practical sustainable design and construction in all the communities we build in. Adera’s core values are Passion, Innovation and Partnership. We will strive to achieve the following: Innovation – use new technology and business practices to promote more efficient use of energy and water, use resource-efficient building products, improve indoor air quality, reduce waste, protect our natural resources and minimize the impact our construction projects have on the environment. 19. www.adera.com/about/envpolicy 2. Re-think your mission – make it short and sweet… You should be able to explain to anyone in 10 seconds or less how sustainability fits into how you do business. A well-crafted mission statement will help you do this. For example, Novex Courier states the following mission on its website: Our mission is to be the best provider of local delivery services. By incorporating social and environmental responsibility into all aspects of our business, we are the sustainable solution to businesses in the Lower Mainland. Take a critical look at your company’s current mission, goals and objectives to see how receptive they are in delivering on your policy. Amend or add to these elements as necessary. In developing objectives, make sure that each one is explicit, measurable and incorporated into your firm’s business plan. This will be important later, when reporting out on the progress of each. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 11 3. Build on what you are already doing… Chances are that you have already begun to incorporate sustainability practices into your organization—many companies are already “unknowingly” or informally carrying them out because it makes good business sense or they see it as the “right thing to do”, like supporting a local softball team or recycling paper. Using the definitions of economic benefit, environmental sustainability, social responsibility and Aboriginal participation listed in the workbook on pages 6 and 7, do a sustainability SWOT (strengths, weaknesses, opportunities and threats) analysis of your company. Don’t forget to look at all aspects of the company, including operations, suppliers, marketing, sales and service, as well as support activities such as procurement, infrastructure, research and development, and human resource management. Identify potential areas where you can weave in other sustainable practices to create added value or reduce costs. Match the resulting analysis against your sustainability policy to determine areas of priority. 5. Get the staff involved … Although top management needs to lead the charge, empowering your employees in achieving your corporate sustainability goals will pay off in attracting and retaining loyal staff members20. Companies like Burnaby-based office product supplier Frogfile Office Essentials put significant value on this approach. Frogfile’s Ten Ways to Empower Your Employees to Go Green 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Establish a clear and transparent environmental policy Start a “Green Team” Encourage participation in educational events and networks Show them that their actions make a difference. Reward innovation Recognize leadership Communicate employee efforts to the community and customers Lead by example Create a listserve or blog to share ideas and information Make it fun! 4. Examine your supply and distribution chains… Your strategy to become sustainable may be severely undermined if you aren’t accessing products and services from sustainable partners through your supply chain. Many certification programs and requests for proposals will ask you to prove that the subcontractors and supplies that you are using meet their standards. Therefore, it is a good idea to research suppliers for sustainable products and ensure that your distribution network is operating in sustainable ways to develop a trusted roster of suppliers and distributors for the future. A valuable tool for you to use is the Fraser Basin Council’s Sustainability Purchasing Network. This network focuses on helping businesses develop and improve their sustainability purchasing efforts. Information on this is available in Appendix Two of this workbook. Start by setting achievable goals that the staff can easily accommodate, like bringing their own coffee mugs to work, requiring that all printing be double-sided and turning off lights. As confidence, enthusiasm and expertise increase, you can become more ambitious by attacking buying policies, hardware replacement, community volunteerism, and so forth. Some companies may decide to create staff teams responsible for achieving specific goal areas. To be effective they must have top-level support, adequate budgets and ready access to all of the other employees. Ensure that internal communications systems are in place to keep employees informed of the plan’s progress and to stimulate discussion. This can be as simple as a centrallyplaced bulletin board on which milestones are tracked and achievements celebrated. Educating and informing staff members on economic, environmental, social and Aboriginal involvement trends and workable solutions will go far in encouraging enthusiasm for meeting your company’s goals. 20. vancouvergreenbusinessjournal.wordpress.com 12 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 External Credibility 6. Consider partnering with another business An effective way to quickly lever sustainability into your business plan is by creating a strategic alliance with another business or supplier. This can add capacity, knowledge, experience or a sustainable product line to your business more quickly than if you start from the bottom up. For example, Kootenay Knitting, a Cranbrook B.C. company which designs, manufactures and sells high quality knitwear sought to enhance its “made in Canada” brand by integrating West Coast Aboriginal designs into the product. It did so by establishing a partnership with Nisga’a Knit & Apparel Corporation, based in Laxgalts’ap, a small Nisga’a village in northwestern British Columbia. In addition to strengthening Kootenay Knitting’s brand, the alliance brought fresh equity into the company. Ensuring that your sustainability efforts are taken seriously is essential to your ability to use them to differentiate your business, product or service and enhance your competitive position. 1. Understand who else will be affected… To position your company as the “company of choice” among not just customers, but also investors, employees, suppliers, and the community in which you operate, you need to identify who will be directly or indirectly affected by the changes in your business, and the ways in which each will be affected. By thinking through potential issues for each group, you can plan to identify and build trust while alleviating any potential for conflict. 2. Get the message out… If you want to use sustainability to differentiate yours from other businesses, you need to ensure that your customers, suppliers and anyone else important to your company know about it. Therefore, it is essential that your sustainability message be incorporated prominently into your company’s marketing efforts and branding. In preparing your communications messaging, focus on how sustainability adds value to your existing value proposition—whether that is cost, quality, convenience, design, or selection. Here are some ideas for how you can get the message out: f Add your sustainability mission, beliefs and values to your website and report on any changes to support them f Issue information releases to your customers and other stakeholders when you take on a new practice or project – make sure you list them on the website to help establish a track record for your company’s actions f Add a sustainability element to your logo and brand messaging and include it in your marketing plan f Inform customers of their contribution to sustainability on receipts or ticket tabs f Get involved in sustainability cooperatives with likeminded businesses and suppliers 7. Measure and monitor your continuous progress and performance… For each of the business plan’s objectives, establish points in time (milestones) at which certain elements of the plan will be achieved. Set up monitoring systems that track the progress toward each of these milestones as well as systems to correct the company’s trajectory should it go off course. Recognize that sustainability is a journey, not a destination. Every year, review your progress, reconsider your strengths and weaknesses, and build next year’s sustainability plan upon your experiences. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 13 f Make presentations on your company’s sustainability philosophy and record of actions at business meetings, conferences, etc. f Ask employees, suppliers and customers to take a positive action in favour of their community or the environment. Here is a great example of sustainability marketing, taken from the Edible Planet Catering website. At Edible Planet we understand the fundamental need for creating food that energizes. We use only Ocean Wise™ fish. We use chicken and beef that is grass fed. We use fair trade organic coffee. We celebrate the bounty of the season and create our menus accordingly. We support the local and organic growers. We make an effort to become more environmentally responsible, with recycling and composting programs. We celebrate team work. Another effective example of marketing yourself as sustainable can be taken from building supply retailer RONA, “The Canadian How-To People”. As a National Partner, RONA has developed a number of programs to support VANOC’s objectives, including support for 2010 Winter Games athletes and the RONA Vancouver 2010 Fabrication Shop. The Shop is a community-based training program to prepare inner-city residents, Aboriginal peoples and others for entry-level construction jobs at 2010 Winter Games venues. RONA has produced a television commercial about the shop which is very effective in branding RONA as a socially responsible retailer – without even mentioning a single RONA product! 3. Report progress in meeting goals… Your company may choose to use an internal reporting system or one of the many publicly available frameworks to gauge progress toward achieving internal sustainability goals. The example above is taken from Novex Couriers’ website. Novex partnered with Visible Strategies, an environmental software reporting company, to use its “See It” software to visually display its goals and its progress in meeting them. A list of potential resources for reporting are listed in Appendix Three. Involve your employees in devising creative ways to report on the company’s progress to stakeholders – their growing enthusiasm and knowledge, as well as pride in the company’s accomplishments will shine through. Ensure your public relations are honest and accessible. Public relations that are “all good” will invite speculation and cynicism about your company’s progress. The best reports are “warts and all”, adding credibility to the process. 14 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 4. To certify or not to certify? Certification systems or sustainability branding programs can help you distinguish your products and services by their social and environmental performance. The premise of these programs is that consumers will prefer to buy or even pay for the goods and services that are associated with the brand. A good example is the Vancouver Aquarium’s Ocean Wise™ Program, which describes itself on its website home page: Ocean Wise is a Vancouver Aquarium conservation program created to help restaurants and their customers make environmentally friendly seafood choices. To be sure you’re making the most responsible seafood choices look for the Ocean Wise symbol on menus at participating restaurants. It’s your assurance that a seafood dish has been guaranteed ocean-friendly by the Vancouver Aquarium. So now you can enjoy a great meal – while doing your part to protect our oceans. The Ocean Wise Website also lists participating websites and distributes news releases on key events that the program sponsors or supports. Most importantly, the Aquarium’s large membership base expands the market reach of participating restaurants. It is important that you research these initiatives before investing time and resources in them, to ensure that they are backed up and accredited by a respected and wellknown authority on sustainability. There are a number of branding or certification programs that have gained consumer recognition in B.C. Some of these are listed in the workbook, under Appendix Two. Certification or quality assurance branding may also be a factor for companies who plan to export their products to jurisdictions that are increasingly conscious about sustainability, such as UK or the European continent. In this case, choose a program with international recognition, such as the International Organization for Standardization (ISO). 5. Build an external support system… Creating a corporate support system for your company is essential in meeting your goals. Start with your industry association, Chamber of Commerce, Board of Trade or Business Improvement Association – most of them have identified the growing trend toward sustainability and are creating services for their members. They will provide you and your staff with training, networking opportunities and in some cases, opportunities for acquiring awards and sustainability branding. Environmental and social non-profit organizations recognize the sizeable impact, both positive and negative, that the business community has on the sustainability footprint. Several have begun to offer services for the business community in terms of education programs, external auditing, third-party certification programs, and so forth. A great example is the Canadian Business for Social Responsibility’s Report Assessment Tool. For this and more examples, see Appendix Three. 6. Continue to engage with others Once your firm has successfully implemented a few key steps, you may want to share how you did this with others and ask them to join you in improving social and environmental conditions. Consider putting your top ten tips on your website or asking your employees, suppliers and customers to take a positive action in favour of their community or the environment. Ask that same group for their views on your sustainability performance and incorporate their suggestions into your plans. This will not only ensure that you are meeting expectations, it will build loyalty and enhance your company’s brand amongst your key stakeholders. 15 www.2010CommerceCentre.gov.bc.ca Module Two: Partnerships Types of Partnerships between Businesses Sustainability and partnerships share a key aspect: both can be used to add capacity and capability to your business. In fact, partnering is a great way to become a sustainable business more quickly, by teaming up with a sustainable supplier or complementary business with a sustainability track record. Games-related business opportunities also tend to require large amounts of goods and services, but often for only a temporary period lasting a few short weeks or months. For many businesses, the only way to practically position themselves for these opportunities is as a player within a larger group of companies that face the same challenges. There are many more good reasons to consider partnering, which will be discussed in this module. This workshop examines partnerships that can be formed between businesses. They are also referred to as strategic alliances, broadly defined as “a relationship of two or more entities conducting business for mutual benefit21.” The nature of the partnership is limited only by the imagination of the individuals who forge it. Through a strategic alliance, the businesses retain their corporate independence, but align to combine resources, capabilities and core competencies to pursue mutual interests. Usually, the businesses are not in direct competition with each other, but they may have similar products or services that can be combined to be reach the same target audience22. In some cases, competitors come together to form a strategic alliance that magnifies their product offer to an intended audience. Successful alliances or partnerships generally enable the following: 1. 2. 3. 4. 5. 6. There are clear benefits to each of the partners The alliance results in increased sales of products and/or services There is no confusion for customers over who handles what The alliance results in increased visibility for both partners Revenue flows to both that would not otherwise occur Revenue increases and marketing costs decrease. Strategic alliances can range from a very informal agreement based on a handshake, to formal and sometimes very complex agreements based upon a written contract. There are several types that you may consider23. 1. Combining complementary skills, products or services This involves two or more partners combining skills, products or services to enhance what they deliver to the market or to bring a new product/service to the market. For example, Kootenay Knitting’s partnership with Nisga’a Knit & Apparel Corporation is advantageous for both sides. For a small northern B.C. village with issues around economic wealth and employment, this represents an opportunity for entry into the mainstream Canadian economy and training for its people, particularly its female population. For its part, Kootenay Knitting saw an opportunity to do business with a progressive Aboriginal leadership, allowing it to leverage Aboriginal involvement into the operation. The result is a product that is authentically Canadian – linking two B.C. communities and bringing economic advantages to both. 2. Combining assets to develop and deliver a product or service This involves two or more partners combining assets to develop and deliver a product or service. An example is Spirit Ridge Vineyard Resort & Spa (one of the Workshop’s case studies), where the Osoyoos Indian Band provided land and financial resources and Bellstar Hotels & Resorts provided its proven expertise in resort development and operations. 3. Distributor partnering This is an alliance between a firm and one or more distributors to gain access to new markets or strengthen a position in an existing market. For example, a company in another country may be interested in providing a specialized product or service for the 2010 Winter Games. Such companies will 21. www.investorsworlds.com/e609/partnerships.html 22. www.1000ventures.com/business_guide/strategic _alliances_main.html 23. sbir.nas.gov/SBIR/alliances.htm 16 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 typically benefit by forming a strategic alliance with a company in B.C. that has knowledge of the local economy and regulatory environment. Similarly, a B.C. company may wish to sell its product in Europe, and may form strategic alliances with European distributors to achieve this objective. 6. Supplier partnering This is an alliance between a company and its supplier(s) to improve quality and/or reduce costs. If, for example, a company requires certain supplies at a higher quality level than that which is currently being provided by its supplier, the company may pursue a strategic alliance with its supplier to provide the supplies at a higher quality level. In turn, the company would agree to continue doing business with the supplier, if the supplier is able to meet the company’s needs. Similarly, a company may require the supplies at a lower cost than the supplier is currently offering. The company may not be able to continue its operations if it does not reduce costs. If the supplier is able to meet the needs of the company, the company may, in turn, provide some guarantee of an ongoing business relationship, or strategic alliance, with the supplier and/or they may agree to purchase a certain volume of supplies on a regular schedule. 4. Franchising and/or licensing agreement This is an alliance to provide longer-term business assistance or access to a new product, technology or logo. An example is a Vancouver 2010 Official Licensing Program, whereby companies that meet certain VANOC requirements and enter into a strategic alliance with VANOC, are able to use 2010 Winter Games logos on their product, subject to certain application restrictions. The resulting legal contract for this type of arrangement specifies the agreement’s terms, including the schedule of royalties to be paid to VANOC. 5. Pooled purchasing This is an alliance between firms for purchasing similar or identical products by combining separate purchasing volumes to increase their leverage on suppliers. For example, many suppliers provide discounts for purchase orders that meet or exceed a certain volume. Two (or more) smaller companies that require the same types of supplies can achieve discounting by combining their order to reach a certain volume. This type of strategic alliance tends to be fairly informal. 7. Research and development (“R&D”) partnership and/or consortia These are alliances between a firm and an organization, such as a government agency or university, to conduct R & D related to the firm’s specific product, service and markets. An example may be a small company that does not have in-house R & D expertise, but requires research with regards to a new market opportunity and the competitive environment for its product in a new market to assist with business development decisions and strategy. This company can form a strategic alliance with a government agency that is also interested in this market and/or a university to conduct the required market/competitive research collaboratively. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 17 Structuring Partnerships Strategic alliance partnerships can be formalized in several ways. Some common forms are listed below - starting with the least formal and ending with the most formal 24. Why Partner? Potential Advantages There are many potential advantages or benefits that can result from strategic alliances that are worth examining25. 1. Non-equity strategic alliance In this type of partnership, each business or entity collaborates, but does not invest any equity in the alliance project. This type of structure is suitable for any of the above-noted types of partnerships, with the exception of the last type (combining assets), which often requires investment of equity by one partner or both partners. A non-equity strategic alliance may be governed by an informal or formal agreement, depending on its complexity and the legal implication of the partnership. A good example would be a subcontracting arrangement where one company provides a service to another company for a specified period of time on a straight feefor-service basis. 1. Increased capacity and capabilities In addition to increasing your business’ capacity to meet larger product or service orders, partners bring complementary knowledge, technology and/or expertise that your firm may need in order to capitalize on new business opportunities, respond to short-term opportunities, or to respond to longer-term opportunities that require a larger production and/or sales force. Partnering is particularly useful if time is of the essence and you need to ramp up your service or product offer quickly, in order to match a unique need or lever in sustainability or Aboriginal content. For example, as we approach February 2010, a number of organizations (including VANOC) will be soliciting bids from B.C. businesses with increasing intensity. These include the growing list of Vancouver 2010 Official Licensees, the venue cities (Vancouver, Whistler, Richmond and West Vancouver), the National Olympic and Paralympic Committees, sponsors, broadcasters, and a variety of government-related agencies. Although providing goods or services to such a large event may be beyond the capacity of a single small business, larger national or international businesses may be looking for partnering relationships with local B.C. businesses to fill product niches, round out their service offer, provide on-the-ground services or help them meet B.C. regulatory requirements. Licensees will be interested in partnerships that assist them in meeting VANOC’s sustainability requirements. 25. Sources include: infosky.wordpress.com and www.corporate-partnering.com 2. Equity strategic alliance Here, one or both businesses or entities invest equity in initiatives related specifically to the strategic alliance. (Equity is also invested in some joint venture agreements, discussed below.) These types of alliances are used when there is a need to invest capital to attain the goals of the strategic alliance. An example could be two companies who would like to jointly bid on a contract to supply a specific item required by VANOC to host the 2010 Winter Games, requiring a financial investment by each of the partners to produce the required product volumes. 3. Joint Venture In this type of partnership, two or more businesses or entities join together under a contractual agreement to conduct a specific business enterprise with both parties sharing profits and losses. The venture is typically for one specific project only, rather than for a continuing business relationship, although some joint ventures extend over many years. Typically, either a separate corporation or a formal business partnership is established to manage the joint venture alliance, for legal and/or tax purposes. Joint venture partnerships can involve any type of product or service. For example, in a joint venture alliance between a company that creates educational software and a company that provides an overseas educational service, the alliance could be to adapt the educational software for a new foreign market. 24. www.smallbusinessnotes.com/operating/leadership/strategicalliances.html 18 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 (One of the most popular places they will be looking is the 2010 Business Network, which will be discussed in detail a little later.) Previous Games have also shown us that many of these new relationships will continue to bear fruit for many years after 2010. If your company is outside of the Vancouver/Whistler area, partnering with a local company based in that area may bring your reach closer to the customer. If you are located close to the 2010 Winter Games venues, partnering with a company outside of the region may add a larger geographic dimension to your bid (often important in public procurement), as well as the expertise and capabilities you need. For more information on business opportunities in the Games environment, visit www.2010CommerceCentre.gov. bc.ca, especially the document “Striving for Excellence: Your Guide to Business Opportunities for the 2010 Winter Games” on the 2010 Commerce Centre website. 2010, B.C. companies may find that this is the asset that they are bringing to the table in a potential partnership with international companies. An example of this is United Kingdom-based companies looking for B.C. partners in 2010—and then looking to replicate the partnership in London 2012. 4. Shared financial risk Sharing the rewards also means sharing the investment requirement and sharing the risk when the partnership is between two or more businesses. Should the project not succeed, the loss is limited to your company’s share in the investment. 5. Reduced production costs Companies can use joint purchasing agreements, whereby two or more firms are able to purchase larger volumes of supplies at a lower cost to ramp up their purchasing power. 2. Increased access to existing or new markets and/or product distribution Partnering with an established successful business will open you up to opportunities for cross-marketing or complementary marketing with each other’s existing markets. A great example of that is the alliance between C Restaurant and the Vancouver Aquarium in the Ocean Wise Program. The partnership gave the restaurant an opportunity to promote itself to the Aquarium’s membership. In addition, the partnership itself may increase access to new markets and market intelligence. The competitive advantages that you have developed with it may allow you to tap into more opportunities than just the initial one that provided the incentive partner. 6. Reduced marketing costs and/or increased marketing resources Marketing is expensive. By combining forces, companies can decide to market their products and services collaboratively, reducing overall marketing expenses and increasing their overall marketing budget – for example, through a joint marketing agreement. On a grand basis, the Olympic Games often feature an advertising partnership between Worldwide Olympic Partner VISA and the host jurisdiction’s tourism destination marketing organization. However, variants of this model are repeated on many scales. 7. Improved access to capital By combining each firm’s individual strengths, the alliance has increased the ability of both firms to compete more effectively—which also makes it a better financial investment. When backed by a solid business plan, a strong partnership improves the credibility of both partners with lenders and investors. 3. Increased ability to address regulatory and/or cultural needs in new markets Working with a partner who has experience working in a different operating environment (knowledge of regulations, political connections, distribution channels, language capabilities, cultural sensitivities etc.) will increase your company’s capacities in this area. During Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 19 What to Watch out for− Potential Risks of Partnerships As we have discussed, there are some great advantages to partnering. However, a partnering arrangement also carries potential risks for your business. Generally speaking, these risks can be mitigated through proper due diligence – lots of research and the gathering of intelligence before entering into an alliance. Written contracts are also recommended as a way of thinking through potential problems before they pose a threat, and creating agreement and clarity about how potential issues will be handled. Let us take a closer look at some of the risks of strategic alliances and partnerships26. 3. Leakage of proprietary technology and/or intellectual property In the event of a failed or terminated alliance, one or both firms may continue to utilize the technology and/ or intellectual property of the other firm. The preparation and execution of a written contract is a must for mitigating this risk, and the use of proprietary technology during and after the partnership needs to be clearly spelled out before you start. 4. Inadvertent disclosure of non-alliance information to alliance partners Adding on to the theme above, in a partnership relationship that may be too casual, it is possible that proprietary information could be inadvertently disclosed between the two companies. This also can be managed in advance through the terms of the contract as well as by establishing communication protocols and systems between the two companies. 1. Loss of individuality A firm can lose its corporate identity through inadvertent, gradual dependence on alliance partners--to the extent that that one or both firms are no longer autonomous and/or cannot function effectively without the other partner. This situation can be mitigated through a clear recognition from the outset that independence is possible, and mutual agreement to be aware of any signs that one or both companies is starting to rely too heavily on the relationship. 5. Possibility of the alliance partner becoming a future competitor It is possible for an alliance partner to use new technology and knowledge gleaned from the relationship to build up its own capacity in this area, potentially becoming a competitor in the future. In a strategic alliance, it should be understood that each of the alliance businesses operates independently, with clear guidelines and protocols governing any aspects that are shared. These guidelines should be recorded in a written agreement, along with mediation and conflict resolution strategies prior to entering into the partnership. 2. Erosion of brand and image A company’s competitive advantage is based on its reputation for following through on its brand promises. If your partner fails to live up to your standards, or one of your partners suffers a loss of reputation while in the partnership, it could negatively impact your company as well. Although no one has a crystal ball to foresee the future, to a great extent this possibility can be reduced by initial due diligence prior to establishing the alliance. 6. Investment of time and management resources to establish and manage the partnerships Depending on its nature, a successful strategic alliance may require a considerable amount of time and resources. An unsuccessful one could invoke indirect costs when the potential of working with other partners is blocked. This should be approached as any investment would be – with an eye on the return on that investment. 26. Sources include: sbir.nasa.gov/SBIR/alliances.htm and www.corporate-partnering.com 20 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Mitigating Risk by Choosing the Right Partner and the Right Agreement Two of the best defenses against a bad partnership are to choose your partner well and to ensure that you have a solid partnership agreement from the onset. Learn as much about the prospective partner’s organization as possible 28: f Personal visits to a prospective partner’s corporate headquarters and plant sites are effective ways to assess: corporate culture, capabilities, adequacy of resources. f Seek a strategic alliance partner with goals that are consistent and compatible with one’s own firm. 9 The goals of each firm must not conflict in any way. 9 It is critical that strategic alliance partners act in expected ways. 1. What to Look for in a Partner One of the best risk management strategies with regard to strategic alliances is taking the time and due diligence to select the right partner. The following list of actions27 is exhaustive - each due diligence step may not be required for all strategic alliances. Typically, the more complex the relationship, the greater degree of partner due diligence required. It is important to assess a prospective partner’s: f Compatibility with the firm in terms of strategic goals. f Top management strength and philosophy, including an assessment of a prospective partner’s board of directors (if applicable). f Financial and physical resource capacity and capabilities. Include a credit check and financial analysis of the prospective partner firm. f Past quality and delivery of performance; look for gaps in a prospective partner’s capabilities and professionalism. f Prospective partner’s likely trustworthiness: In its relationships with its suppliers and customers. In its history (or hopefully lack of history) of litigation. Its history of other strategic alliances Any current or past labor relations problems the partner may have experienced or is experiencing. 9 Inconsistencies, in public records or otherwise, between the prospective partner’s words and deeds. f Ability to protect intellectual property. f Ownership of patents and intellectual property rights that is crucial to the strategic alliance venture. 9 9 9 9 2. What to Look for in an Agreement The formality of agreements used to establish strategic alliances varies, usually depending on the complexity of the arrangement. Agreements may take the form of: f An oral agreement, as in a handshake f A written agreement, as in 9 A sub-contract 9 A licensing agreement 9 A memorandum of agreement A written contract is generally advised and overseen by an attorney. 27. Strategic Alliance Partnering – Some Guidelines, NASA, sbir.nasa.gov/SBIR/alliances.htm. 28. Strategic Alliance Partnering – Some Guidelines, NASA, sbir.nasa.gov/SBIR/alliances.htm. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 21 Where to Find Potential Partners There are many ways and means by which you may identify potential partners. For example, y y y y y y Word of mouth – by consulting your own network of contacts Chambers of Commerce and Board of Trade functions Industry association workshops, conferences and other events Business Clubs and associations Functions or workshops sponsored by your municipality 2010 Business Network that only match your specific criteria—including primary products and services, company size, age and markets. It also allows you to find companies that practice corporate responsibility initiatives, including environmental, social and Aboriginal participation. Being a member of the 2010 Business Network can provide the following to your business: 1. Exposure to an international audience The 2010 Business Network will receive regular inquiries from businesses all over the world interested in purchasing billions of dollars of goods and services, both through bid and direct source. Being a member of the Network puts your business in front of that beneficial group. 2010 Business Network For companies looking to take advantage of partnership opportunities being presented in the Games environment, the 2010 Business Network is an invaluable tool. Another initiative of the BC Olympic and Paralympic Winter Games Secretariat, its an online database that allows B.C. and international companies to profile themselves to Games-related buyers—including VANOC, Official Olympic Sponsors, National Olympic Committees, international broadcast and media organizations, dozens of related sporting events, and scores of other Gamesrelated organizations. The Network will be a key vendor source for these buyers as they seek to find specific suppliers of all manner of goods and services needed to fulfill their pre/during/post-Olympic Games programs. From a partnership perspective, the 2010 Business Network will also allow companies to find suitable partners to facilitate subcontracting, partnering and networking opportunities. As noted earlier, partnerships formed around 2010 business opportunities will lead to many long-term relationships with other B.C., Canadian and international businesses—leading to new markets and new opportunities in the future. Membership to the 2010 Business Network is free. It requires only a simple online registration and completion of a company profile at www.2010CommerceCentre.gov. bc.ca. Businesses can then access other profiles by using the Network’s search engine—and can find partners 2. Partnering and network opportunities International and local companies are on the lookout for businesses that complement their products/services and want to join forces on bidding or subcontracting opportunities. Network members can search for potential business partners. At the same time they can also be found by others looking to make a bid or find a partner. 3. Sustainability Information and References The registration process is also a reference source for integrating sustainability into your business. In particular, you can find information on: y y y y y Aboriginal participation & employment agencies Certified sustainable management programs Sustainable supplier sources Environmental operating programs and standards Social programs and employment agencies 22 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 4. Exclusive invitations The 2010 Commerce Centre and its partners will host valuable “Meet The Buyer” events, in addition to a variety of workshops, information sessions, matchmaking sessions and other related programs leading up to 2010. Being a 2010 Business Network member ensures you will always be up-to-date on business opportunities. 5. Control of your image A membership is more than just a company listing − it is a comprehensive profile, giving 2010 partners an understanding of what your company is, what it provides, where it’s going, and what its unique competitive strengths are. Editorial control of your profile stays with your company. In addition, the 2010 Commerce Centre offers a number of services at its website tailored specifically for small business, including: y y y y Newsletter E-mail notification of business opportunities relevant to your business Winning bidders of Games-related contracts Calendar of Events, including additional workshops related to business opportunities from the Games 23 www.2010CommerceCentre.gov.bc.ca Wrapping it up… And Taking it Home to Your Business Here is a list of “top ten” actions that were created for this workshop to help you get started right away. 1. Join the 2010 Business Network It is free and a great resource. Not only do you get to view potential partners, they can see your attributes as well. Its emphasis on sustainability will also give you another tool to communicate your corporate responsibility initiatives, and find the right partners to help you achieve the same. www.2010CommerceCentre.gov.bc.ca 6. Subscribe to the Sustainability Purchasing Network This will assist your company in learning about building a sustainability-based supply chain or becoming an essential part of someone else’s supply chain. buysmartbc.com 7. Share this workshop material with your employees and business partners Make your own list of the workshop highlights that have the most meaning for you and your business. Pass it on to who you want to know, and tell them to sign up for the next workshop found in the Events Calendar at www.2010CommerceCentre.gov.bc.ca. 2. Join your industry association In addition to great networking, educational opportunities and contacts, your association will often be your guide to industry-specific sustainability issues, regulatory changes or procurement requirements you need to know about. If you are already a member of your provincial association, consider national and international associations. To start, you can find a list of most of the B.C. associations at Small Business BC: www.smallbusinessbc. ca/pdf/2008associationsall.pdf 8. Host a brainstorming session with your staff Look at what you are already doing and generate some ideas about how you can use sustainability or partnerships to add value to your brand or product. Here is a thought starter for your session: What are five sustainable actions that our company can do in the next month to increase our competitiveness? 3. Surf for ideas The Internet abounds with information on innovative approaches to sustainability and partnering to hone your company’s competitive edge. Start by “googling” these keywords and see where it leads: sustainability business case; corporate responsibility. 9. Appoint an internal Champion Corporate responsibility starts with your staff taking the initiative and ownership for the little things that make up your corporate culture. Make sure you have appointed a Champion (or a Team), and have given them authority to initiate change. 4. Check out the award winners Check out companies in your industry or complementary industries that have won awards or acclaim. They may be perfect candidates for partnership. For starters, check out the business award winners at Ethics In Action, www.ethicsinaction.com 10. Pull your team together and get to work! Get them excited about a new vision and mission and start setting some achievable sustainability goals for today, tomorrow and the future. Remember, it is not just because it is “the right thing to do.” It is because it is good business. 5. Read VANOC’s latest sustainability report and share it with your staff This will provide your company with important insights into how this major event planner and potential source of procurement opportunity approaches sustainability. You can find it at vancouver2010.com 24 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 25 www.2010CommerceCentre.gov.bc.ca Appendix 1: Case Studies Case Study #1: C Restaurant and the Vancouver Aquarium’s Ocean Wise Program Over a decade ago, C Restaurant in Vancouver had a problem: one of its most popular type of seafood, the Chilean Sea Bass, was on its way to becoming an endangered species. That was when restaurant owner Harry Kambolis and Chef Rob Clarke began to look for a fish that had similar characteristics and quality – but was more sustainable. When they discovered the B.C.indigenous Sable Fish, they also learned an important fact: that if seafood was handled with care and respect throughout the harvesting process, what finally appeared on the customer’s plate would be of higher quality. “The end result,” says Kambolis, “is that when people are taking care of the product, it’s better for the consumer.” After this, they began to research seafood to understand the problems with harvesting and distribution of fish from the oceans. With about 68 per cent of seafood being consumed in restaurants, it was evident that restaurants could be at the forefront of leading change in encouraging sustainable seafood practices and consumption. Some time later, B.C.’s Vancouver Aquarium was considering a new program, to be called Ocean Wise. Based on the successful Sustainable Seafood Initiative pioneered by the South Carolina Aquarium, the goal of the Ocean Wise program is to make recommendations to restaurants and other food service outlets on seafood varieties that have been well-harvested, are resilient if over-fished and are backed by a strong fishery management plan based on current scientific studies. In 2005, the Aquarium approached C to help it launch Ocean Wise. In its first year, only 16 restaurants were involved. Since then, nearly 300 restaurants have come on board – moving away from over-fished species and fishing methods that harm the sea environment. At first, seafood distributors and supply companies were reluctant to get involved, believing that it would place more pressure on an already slim bottom line. Now, the program gets calls daily from supply companies, importers, exporters, wholesalers and fishers interested in getting involved. More than ten local suppliers are currently involved with the program. For C Restaurant, this approach has been good for the bottom line. “People have said it’s easy for a high-end restaurant which can charge $30 to $35 for a dish. The reality is - that’s not true, says Clark. “We’ve cut out a lot of middlemen and when we do pay higher prices, it’s for the highest quality, freshest product. Comparing local spot prawns to imported tiger prawns is comparing apples and oranges.” He recommends that any restaurant with about 25 percent seafood on the menu can make the same choices. “We have to stop thinking of food as just a commodity,” says Kambolis. “It’s what we eat. Ten years ago we were the only seafood restaurant talking about sustainability, believing that sustainability and quality go together. That says that we care to the customers who want to feel good about where and what they eat.” Working together has paid off, both in marketing the restaurant and in publicizing the Aquarium’s Ocean Wise Program. Each has cross-promoted the other, giving C access to the Aquarium’s sustainability-sympathetic membership and allowing the Ocean Wise Program to send its sustainability message to the restaurant’s clientele. C Restaurant was included in the new edition of 1000 Places to See Before you Die and has won numerous awards from the Vancouver Magazine Restaurant Awards. Clark was awarded the Critics Choice Award for the Chef of the Year in 2006. C Restaurant preaches what it practices. Along with the Raincity Grill, it has collaborated with Growing Chefs! Chefs for Children’s Urban Agriculture to help inspire the love of growing and eating sustainable food in young people and teach them how to grow their own food, even in the city. In the program, chefs are paired with elementary school classrooms to help them learn about sustainable food from production to preparation, in many cases, involving them in preparing foods grown in their own classrooms. “If C, a seafood restaurant, can do it,” says Clark, “restaurants with 25 per cent seafood can at least begin to make the right choices. That’s the beautiful thing about Ocean Wise, 26 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 you just move forward.” Case Study #2: Edible Planet Catering Company When they started Edible Planet in 1994, Marilyn Kopansky and Lisanne Collett were already personally committed to environmental and social responsibility. Their challenge was for their catering business to reflect these deeply felt values while meeting the demand of the company’s principal customer, the film industry. At that point in time, the industry’s priority was focused on sourcing good quality food to feed as many as 1000 people a day in remote film locations. Undaunted, Marilyn and Lisanne stuck to their values, convinced that using seasonal and locally grown produce as well as meats and poultry raised without hormones or antibiotics would produce delicious food products of exceptional freshness and quality – meeting and exceeding the film industry’s demands. It faced growing competition from other companies who did not face the same issues of restricted supply and increased cost. In the early years, Edible Planet had to progress one careful step at a time, building a community of trusted growers and other suppliers. A key strategy was to foster alliances with like-minded businesses and suppliers. Its association with groups such as Farm Folk, City Folk (FFCF) helped to build relationships with growers and organic suppliers who buy direct from local farmers. These efforts paid off in mutual promotion and reciprocity in services. Edible Planet is listed in FFCF’s brochure and website “Get Local”. Another strategy was to get active in well-publicized initiatives that underline the company’s commitment to sustainability, such as Green Table and Ocean Wise – both of which emphasize the company’s efforts to protect the integrity of the food source. Slowly and surely, their commitment to using sustainably sourced foods to differentiate their product paid off over time: by 2002, Edible Planet had grown from two to twenty employees, a café and production kitchen and 4 trucks. Edible Planet’s “value-based” approach also paid off in attracting and retaining a long-term creative staff team, composed of individuals who share the company’s values. For example, some of its chefs have been with the organization since the company’s inception in 1994. According to Kopansky, “The food is fantastic, it tastes great and the people who make it enjoy themselves.” This further differentiates the company as it allows it to combine the creative talents of the team with the best available products, resulting in a reputation for an innovative approach to food and service offerings. The team is no doubt also proud to be part of the company’s contributions to improving the quality of life for Vancouver Downtown East Side residents. Kopansky is a founder of the annual film industry-sponsored dinner at Oppenheimer Park in Vancouver’s Downtown East Side and is involved in the Potluck Café. The Café grew out of a “youth at risk” employment initiative in 2000 and is currently operated out of the Portland Hotel a housing project in the Downtown East Side. In addition to a robust catering service, the Café provides nutritious meals and training employment opportunities to area residents. Now, as a recognized leader in the field the company is poised to reap the benefits of serving markets for whom sustainability has become a priority. Stirred by work such as Al Gore’s “An Inconvenient Truth” and Leonardo Dicaprio’s “The 11th Hour”, both of which used film as the medium for their messages, the film industry’s interest in environmental issues increased substantially in a relatively short period of time. While other companies ramp up their practices to accommodate the change in demand, Edible Planet is ready with a solid reputation of more than a decade for sustainable practices. It is among a handful of food service/catering companies listed on BC Film Commission’s “Reel Green” pages. The company’s reputation was a deciding factor when it was awarded the catering contract for the latest X-files movie, X-Files 2: I Want to Believe. In 2008, the company anticipates an approaching period of rapidly escalating demand for its services as British Columbia prepares to host the Vancouver 2010 Olympic and Paralympic Winter Games. With the anticipated flood of business, media and sport groups who will flock to B.C. in the weeks and months prior to the Olympic Games, Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 27 always immediately visible, but they’re there.” together with VANOC’s commitment to sustainability and social responsibility, Edible Planet is acutely aware that its reputation for delivering high quality, sustainably-grown and local food products to large gatherings will make it an appealing and sought-after service provider. To prepare itself to meet the demand, the company is presently re-thinking and re-organizing. Part of its strategic plan is to move away from fixed premises to a more mobile approach – one that places emphasis on moving its food service closer to the consumer. Already a recognized business leader and innovator, Kopansky has begun to think about the future beyond 2010, and refers to a “new green” emerging, in which humans are beginning to take better care of their minds and bodies in order for them to better extend that caretaking function to the planet. Edible Planet will continue to adapt its future strategy to address this evolving value. As Kopansky says, “It’s all about attitude. You need to be open to growth and to examine your business to see where the opportunities for growth may be. They may not Case Study #3: Frogfile Office Essentials For Gil Yaron, President of Frogfile, it was obvious that office supply consumption has an enormous impact on the environment. As a lawyer and environmentalist, he knew that this was an industry that has been slow to change. However, he also knew that there was a latent demand out there and not a lot of supply. “Consumers were having to search and source green products from many different suppliers, which was both time consuming and uneconomical,” says Yaron 29. In this highly competitive and cost-sensitive industry – with little to differentiate the products it offers - Yaron recognized a golden opportunity to offer a more appealing product while meeting his own values as an environmentalist. So, in April of 2006, he started Canada’s first one-stop green office supply company to help businesses improve their operations—both environmentally and financially – and making the case that going “green” doesn’t come at a premium. The benefits have been substantial: in the last year alone, Frogfile’s business has grown 400 per cent due to increasing demand for green products. Frogfile’s early track record in sustainability and innovative business model attracted a valuable business partnership which has resulted in its unique brand of 100 per cent post-consumer recycled copy paper. Hemlock Printers, a $40 million business with huge buying power from the mill that produces Harbor 100 paper, contacted Yaron in 2006 (just two months after starting the business) expressing an interest in working with Frogfile to bring the paper to market. Although Hemlock was not interested in selling the paper itself, it was interested in working with someone who could. Hemlock then negotiated pricing with the mill on Frogfile’s behalf, worked with it to create a custom branded wrap for the paper (featuring both Frogfile and Hemlock), purchased the first two truckloads of paper and warehoused them long before Frogfile had the capacity to do it on its own. As a result, Frogfile was able to market the paper at a very competitive price. 29. Tech Vibes (uniting the tech community) website, accessed June 8, 2008 28 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Frogfile’s largest coup has been beating out four competitors to secure a two-year renewable copy paper contract with BC Hydro, which estimates using approximately 24 million sheets of paper annually. Now thanks to their contract with Frogfile (and Frogfile’s partnership with Hemlock Printers), they are using 100 per cent recycled, processed chlorine-free paper — which, according to www.papercalculator.org is equivalent to saving about 2,880 trees and 5 garbage trucks full of solid waste. A valuable byproduct of Frogfile’s efforts is high staff moral and retention rates. It places high value on encouraging good environmental and social practices throughout the organization, and rewards external staff practices, such as taking transit to work. Staff members get an extra measure of satisfaction through the company’s involvement in community work and in managing innovative in-house projects, like its roof garden and worm composting. The model has brought media attention. Among others, Frogfile was featured in The Vancouver Sun and in the online Vancouver Green Business Journal in June 2008. Schools that have benefited from Frogfile’s Green Giving program and an increasing base of loyal customers are now a source of testimonials, which adds to the considerable media profile. “It’s a great learning experience, running a business,” says Yaron, who oversees a staff of six. “And the mission inspires me. I’m proud to be part of something that is creating change — it’s a springboard for a lot of conversations. It’s very cool30.” Case Study #4: Homescape Building and Design Homescape Building and Design’s owners Vicki and Eric Gerrits place high importance on learning and professional development as a way of building their company’s reputation for quality and professionalism. As a result, learning is integrated into all aspects of the business– whether that is discovering the latest trends, staying on the cutting edge of sustainable building materials and practices, or contributing to training a new generation of builders. “A respected, qualified company will always receive more job opportunities,” says Vicki. “As a builder it is very important to gain the confidence of the consumer.” That is a big reason why Homescape takes an active part in education programs offered by the Canadian Homebuilders Association (CHBA). The business, located in Summerland, British Columbia, shares three key challenges with others in the industry – that is, how to meet the increasing consumer demand for sustainable buildings, differentiate its business in a highly competitive industry and attract good trades people. Along with many of its peers, Homescape can work through the CHBA to continuously raise the bar in meeting those challenges. This is also a big reason why, in 2007, Homescape was a partner with Okanagan College (south campus) in the Home for Learning Program – allowing the Gerrits to play a leading role in creating an enduring supply of new builders to the industry. The Home for Learning Program is part of the College’s Trades and Apprenticeship Faculty’s Residential Construction Program. Students participate in a 30-week program which includes the construction of a singlefamily home while earning credit towards their carpentry apprenticeship. Once built, the home is sold, and proceeds are used to support the training of future trades students through scholarships, bursaries and the purchase of new equipment. The bursaries are presented in the names of the builder and the developer who support the project. The program has four corners to its partnership arrangement: the local high school supplies an on-going 30. Sympatico MSN.ca Small Business “Frogfile Office Essentials”, March 2008 Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 29 supply of students; Okanagan College delivers the training and oversees the students on site; the developer supplies the land at a discount; and the builder manages the project, provides on-the-job expertise, keeps everyone on schedule and carries the home through to finish after the students have finished their part of the job. There are benefits to the arrangement for all who are involved. For the college, the Home for Learning Program is an effective way of delivering its first level carpentry program. For the students, who are a mix of high school, young adults and mature students, the program gives them hands-on experience, working with one of the Okanagan’s foremost “Built Green” builders as they work towards trade certification and the ability to draw higher wages. The developer benefits from the higher profile afforded to the development by a flood of attention from the media as a green building is constructed on site. “We do a lot of advertising, events in the home, etc.”, says Nancy Darling, the college’s program administrator. “In addition, we wrap it all up in a large, multi-page supplement in the newspaper. It is great publicity for the developer to have this kind of focus in the midst of the development, where he’s trying to sell other properties.” The program attracts a host of sponsorships from suppliers and sub-trades as well, all of which is managed by Homescape on the job site. The City of Summerland adds its support by providing the necessary permitting free of charge. For Homescape, one of the benefits is the access to a supply of new, tested employees, some of whom end up as apprentices with the company, adding new life to an industry that faces consistent turn-over as mature workers retire or as younger workers leave to start their own businesses or to find work in a more urban environment. However, the greatest benefit is that the company has a hand in molding the next generation of builders. “It’s important to practice what you preach,” says Vicki Gerrits. “We always encourage people to have their homes be “Built Green” and R2000 rated. Not only do they look great, but they’re energy efficient. We think they make better homes. We [also] promote the need for more trades people – this program is a concrete way of addressing the critical shortage by training people and putting more dollars into training programs.” What the students learn is drawn from Homescape’s deep well of experience and knowledge, as well as its diligence in staying abreast of the latest trends. They learn how to work with new, sustainability-based materials and techniques that will make them more appealing as workers in the future. The students’ on-site learning experience is overseen by a college instructor and comprises about half of the total course time. Its commitment to professionalism and the quality of its work has won Homescape the applause of its peers, winning “Georgie Awards” presented by the Canadian Home Builders Association every year since 1996. In 2007, Homescape took home the prize for the “Small Volume Single Family Home Builder of the Year” as well as the “Built Green BC Builder of the Year”. The awards have resulted in heightened credibility of the company, a quality attractive to prospective customers as well as employees. 30 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Case Study #5: Kootenay Knitting Kootenay Knitting is a small business that began as a basement operation in the heartland of British Columbia that designs, manufactures and sells high quality knitwear. By targeting Games-related opportunities and strategic partnerships, both for the Salt Lake City and Torino Winter Games, Kootenay Knitting had been able to increase investment and improve its product - doubling capacity and increasing its sales. In 2006, Kootenay Knitting was selected as an Vancouver 2010 Official Licensee for the 2010 Winter Games, which brought with it a new challenge: to meet the Vancouver Organizing Committee’s (VANOC) commitment to unprecedented Aboriginal participation in the Olympic Games. Inspired by VANOC’s approach, the company also recognized an opportunity to add significant value to its product offer. The company had long recognized its strength in emphasizing a high-quality Canadian-designed and Canadian-manufactured product in meeting an increasing consumer demand for 100 per cent Canadian made products. Including Aboriginal content and design could only prove to further improve the company’s brand. However, the question was: how could the company quickly ramp up to attract meaningful aboriginal participation in the business, in time to be effective as a Vancouver 2010 Official Licensee? The answer came in 2007, when Kootenay Knitting established a partnership with the Nisga’a Knit & Apparel Corporation to integrate aboriginal designs into its product lines, further enhancing its Canadian-made “True North” branding. The designs are based on the art and culture of Laxgalts’ap, a small Nisga’a village in north western British Columbia – and, the driving force behind the creation of the Nisga’a Knit & Apparel Corporation. In 2007, the Corporation cemented the relationship by buying shares in Kootenay Knitting. The fit between the two companies is advantageous for both sides. For a small northern B.C. village with issues around economic wealth and employment, this represents an opportunity for entry into the mainstream Canadian economy and training for its people, particularly its female population. For its part, Kootenay Knitting saw an opportunity to do business with a progressive aboriginal leadership, allowing it to leverage aboriginal involvement into the operation. The Nisga’a investment also allows it to upgrade its knitting capabilities. The result is a product that is authentically Canadian – linking two B.C. communities and bringing economic advantages to both. This is also bringing a changing identity for Kootenay Knitting Corp, to more clearly reflect the partnership of Aboriginal and non-Aboriginal backgrounds throughout its governance, products and operations. The Canadian marketplace is poised to be very receptive to this unique product offering. B.C.’s Olympic Games commitment to Aboriginal involvement reflects the growing awareness and pride in Canada’s aboriginal cultures exhibited by the Canadian business community, and a willing context in which the product can be marketed. The company has been able to use this differentiation to increase its market reach and sales. It has also substantively extended its capacity by developing relationships with other companies in central Canada and is considering developing other relationships off-shore. “This identity is good for our business and will open up opportunities not only in the Olympic world, but generally as well”, says Allan Rella, the company’s CEO. The challenge is to communicate the product to this potentially receptive market while meeting the on-going demands of a vibrant business. The company has plans to substantially upgrade its website as a part of a new marketing campaign to get the word out. In addition, the company has taken out membership in the Canadian Aboriginal Business Council along with many other likeminded Canadian corporations and representatives from all levels of government. Further to that, the company uses relationship-based selling techniques, through person-to-person meetings, emails and telephone calls to reach potential outlets. The company’s new identity brought it to the attention of Cross Country Canada (CCC), which is the Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 31 Sport Governing Body for Canada’s cross country ski community. This relationship will open the door for the company to appeal to other ski clubs, CCC’s retail division, other retailers, etc. With the resulting increase in capacity, Kootenay Knitting is poised to be at the head of the pack in presenting itself as an Aboriginal and non-Aboriginal partnership, generating increased economic return for both it and its northern partner. “As a small company, we had to do some soul searching about how we could increase our aboriginal involvement in a way that made sense from a business point of view” said Rella. “What happened is that through some personal communication, we found a natural fit. Now we have completely changed our corporate culture.” Case Study #6: Novex Delivery Solutions As a B.C. owned and operated company, and with over 100 delivery vehicles making more than 2000 deliveries per day, Novex Delivery Solutions has become one of the largest same-day couriers in the Lower Mainland for over 25 years. It is also known as one of the greenest, thanks to some unique marketing efforts. Novex practices what it preaches - environmental sustainability is fully integrated into the company’s business plan. Its management systems are ISO 14001 certified, which provides credibility to the company’s efforts and has considerably strengthened their management processes. Novex’ sustainability program has paid off in cost savings. For example, the company estimates that it has reduced its electricity use by 14 per cent and natural gas by 60 per cent. In 2002, the company estimates that it saved $1400 in energy costs alone. It also has a strong commitment to social sustainability, with numerous community commitments and good internal policies to support staff development. However, the challenge for many companies who operate like Novex is to get the word out, and to prove unequivocally that it means what it says. Enter Visible Strategies, a Vancouver based company which has developed a software called “See-It” (SocialEnvironmental-Economic Integration Toolkit). This is a user-friendly software that allows Novex to proactively communicate all social environmental and economical data directly to employees, clients, suppliers and other interested parties. As an early adopter, Novex partnered with Visible Strategies to assist it in testing its software in return for a price reduction and the use of new features. A visit to Novex’ website provides proof of the benefit of its partnership with Visible Strategies. There, the “See-It” software assists the company in clearly articulating its goals and its progress in meeting them. For example, it illustrates that by staying on track with its goal of offsetting the greenhouse emissions from its 115 vehicles and increasing the number of ultra-low emission vehicles from 10 per cent to 30 per cent by 2012, it will save 88 tons of C02 emissions each year. Comparatively, as Novex 32 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 is an enterprise based on vehicle travel with vehicles that travel more than 25,000 kilometres per day, it would normally produce 4.5 lbs of carbon dioxide per delivery. It also helps publicize its carbon neutral “Clean Fleet” program. The See-It software allows Novex’ CEO Robert Safrata to become very visible in the business community – promoting Novex as a potential supplier with a strong sustainability commitment. Safrata has made numerous presentations highlighting its initiatives, successes and challenges, and provides evidence that sustainable practices are possible in a financially viable manner. The fact that the company has become well-known for its sustainability efforts makes it a preferred supplier to other companies wishing to prove that their service or product is rooted in sustainability. Novex is a member of the Fraser Basin Council’s Sustainability Purchasing Network, which assists its purchasing policy and promotes it as a corporately responsible supplier. In addition to increasing customer awareness of its sustainability efforts, Novex has won acclaim from the media and the environmental community. Novex is the winner of the Globe Foundation’s 2008 ecoFREIGHT Transportation Award, beating out fellow finalists APPS Transport Group, Purolator Courier and Azure Dynamics Corp. This award, created in partnership with the Globe and Mail is awarded annually to a private shipper, carrier or other transportation service provider which has created a cost-effective program that has demonstrated results in reducing its emissions, improved water use efficiency or minimized waste. In addition, it has been named as a finalist in the Ethics in Action Award (by the society of the same name) for the last four years, and has won the 2004 Canadian Network for Environmental Education and Communication (EECOM) award for Excellence in Environmental Education and the Richmond Business Ethics Award for its involvement and leadership in the community. Case Study #7: Spirit Ridge Vineyard Resort & Spa Bellstar Hotels & Resorts has a vision; to become the leading resort developer and operator in Western Canada. In considering the company’s future, Ed Romanoski, Bellstar’s CEO, knew that the quality of a great resort hinged on the number and range of exceptional experiences that it can offer to the consumer. He also realized that Aboriginal tourism has a growing market of high-yield international tourists, evidenced by the success of other destinations such as New Zealand and Hawaii. The challenge he faced was in how to integrate authentic aboriginal content into Bellstar’s product offering and create a high quality tourism product that would differentiate a Bellstar property from its competitors. The answer lay in the active involvement of First Nations in developing a resort. In 2003, Romanoski saw a great opportunity in the beautiful south Okanagan Valley of British Columbia. The Osoyoos Indian Band (OIB) had already created a world class vineyard, winery, golf course and cultural centre on a portion of the Osoyoos Indian Reservation. Adding a first class accommodation property to the mix would not only create a destination resort that would rival any in the world, it would also be renowned for authentic Aboriginal and cultural tourism experiences. This quality would elevate it to direct competition with an exclusive number of resorts in the world with such a claim. In 2003, Romanoski approached the OIB with an idea. The Band leaders listened with interest because they also had a vision – to create future revenue for Band members through participation in economic development. Romanoski’s idea presented an opportunity to add an important jewel to its already award-winning tourism destination, composed primarily of the NK’MIP Cellars, NK’MIP Desert Cultural Centre, Sonora Dunes Golf Course and NK’MIP Campground & RV Park, with the potential of creating a robust and enduring revenue stream for the Band. The result is a joint venture partnership between the OIB and Bellstar that produced Spirit Ridge Vineyard & Spa, the only 4.5 star resort in the Okanagan Valley. The resort Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 33 offers a spectacular vantage point for overlooking the mountains, the vineyards and the lake. Over 30 wineries are within a two-hour drive. NK’MIP Cellars – the first in North America to be aboriginal owned and operated – produces fine wines and hosts wine tasting tours. The Desert Culture Centre is the recent recipient of the 2008 Governor General’s Award for architecture and tells the story of the Okanagan First Nations as well as the local plant and animal species. Both are within walking distance of Spirit Ridge. Ed Romanoski, CEO of Bellstar states, “Our mission is to deliver exceptional resort experiences. How many other resorts offer the range of experiences that this one does?” Both sides had a lot to offer to the partnership. In addition to owning the land, the Band brought cash to the table, becoming a financial investor in the property and allowing for Band leaders to be involved in its on-going governance. As the principal developer, Bellstar brought already-proven expertise and a record of success in resort operations and management, and the potential for on the job career development for Band members. Chris Scott, Economic Development Officer of the OIB says of the partnership: “It’s a lot of work – complicated and sometimes difficult like any marriage would be, but worth it if the participation is meaningful. It was creative, participatory, retro-active and forward looking at the same time.” The spirit of partnership has been a significant feature of the NK’MIP business model and is reflected throughout the destination resort. Spirit Ridge has created a further partnership with local entrepreneur Melissa Redfern to create Sonora Desert Spa - a desert and indigenouslyinspired resort spa that is a first for Canada and has also partnered with the proprietors of Passatempo to create the vineyard-inspired restaurant. NK’Mip Cellars is the result of a joint venture partnership between the Osoyoos Band and VINCOR Canada. NK’Mip Desert Cultural Centre partnered with Fortis BC and a number of other organizations to bring the inspirational centre to fruition. The success of Spirit Ridge has borne out the collective vision of the partners. Phase One, which includes strata- titled residential, a wine-country inspired restaurant called Passatempo, and the Sonora Desert Spa sold out quickly. Phase Two has followed suit, and will be completed in 2009. The progressive business model has brought acclaim and with it a high profile both nationally and internationally. NK’MIP resort has been recently named as one of Aboriginal Tourism Canada’s “Significant 29” – aboriginal tourism experiences that have been chosen as being significant by industry peers and tourism experts across Canada. “One of the biggest benefits is boasting rights. This is a First Nation resort, truly owned by First Nations,” says Scott. “There’s a big difference between being a landlord and being a landlord and an owner in the business. It’s creating a revenue stream for future generations and pride in the First Nations culture.” 34 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Case Study #8: Small Potatoes Urban Delivery (SPUD) As an MBA with an undergraduate degree in Environmental Biology, David Van Seters was convinced that a business case could be made for including sustainable practices in a company’s business model. His earliest attempts to apply his convictions in the workplace were in his role as a business consultant. When he was hired to do a study of the economic viability of sustainable food systems, he became convinced that alternative systems of food distribution could not only be more sustainable, they could also be more efficient. Ultimately, he discovered that there was an opportunity to create a profitable business. In 1998, Van Seters started Small Potatoes Urban Delivery (SPUD). The simple concept of SPUD is that it uses a mobile distribution system to deliver food directly from the producer to the consumer’s home. In doing this, SPUD is able to promote itself as bringing locally grown and organic products to the customer, drastically reducing transportation time and distance while providing a high quality product. A key benefit of SPUD’s system is the lack of dependency on bricks and mortar. With a single warehouse the company is able to serve a large city in excess of a million people. Its policy of “just in time” purchasing encourages the consumer to place the order 24 hours in advance, allowing the company to purchase only what it needs and ensure that 80% of its products enter and leave the warehouse in a 24-hour period. Not only does this effectively reducing the amount of waste; it also allows SPUD to provide the customer with a fresh product. SPUD’s record of success underlines Van Seter’s earlier conviction that a business approach to sustainability could work. When the company started in 1998 in Vancouver, it was with one truck and 4 employees. The company has grown rapidly, at about 20 per cent per year up to 2007, doubling its gross receipts in the year 2007 to 2008. In 2003, the company expanded to Vancouver Island. In 2005, it expanded again to Calgary and Seattle, and in 2007, to Portland, LA and San Francisco, acquiring a business in Seattle. Despite its mobile status, SPUD’s method of operating reduces the food system’s transportation footprint, rather than increasing it. The key to this is in SPUD’s ‘zoned’ delivery system and the fact that the service reduces the number of trips that the consumer needs to make to the local grocery store. One hundred per cent of SPUD’s waste product that is unfit for human consumption is composted and, in some of its markets, the compost is returned to the farm - prized by organic farmers as it is certified 100 per cent organic. Any leftover or unsellable food that is fit for consumption is donated to a food bank. SPUD’s other activities contribute to the growing education of the consumer – for example, each time an order is received, the customer is informed of the number of kilometres saved in ordering product through SPUD. The consumer is also informed that SPUD makes direct or in-kind donations to food banks, equivalent to 1 per cent of its sales each year. In 2007, SPUD was invited to participate in a pilot program for the Climate Smart Workgroup, a series of workshops on calculating, reducing and offsetting an organization’s greenhouse gas emissions presented by Ecotrust Canada and the Pembina Institute. This provided SPUD with the practical means by which it could improve its environmental footprint – further enhancing its green reputation in the eyes of the consumer. Through this program, the company learned how to properly calculate and reduce the company’s greenhouse gas emissions, and gained 3rd party credibility on its assertions of sustainability. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 35 As a result, the company has calculated that its Carbon Neutral Program has reduced its emissions by 3 per cent, despite the company’s expansion in the past few years. It has committed to buying high quality carbon offsets for its actual emissions in 2008, which it aims to reduce by 10 per cent. With the credibility of Pembina backing it up, SPUD can inform its customer base that grocery home delivery results in a fuel savings of 40 per cent compared with grocery shopping. One SPUD delivery van with 100 orders eliminates the need for 200 private car trips to a grocery store. SPUD’s progress clearly demonstrates that there is a growing market for sustainably grown and delivered food products. Van Seter recommends, however, that companies considering this course of action should not see it as an add-on to the company’s business plan. “To improve profitability,” says Van Seter, “sustainability must be integrated into the business’ core processes. Otherwise, it would be akin to building an energy-efficient porch on a house, where the rest of the house is un-insulated. The more integrated it is, the more profitable it can be.” 36 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 37 www.2010CommerceCentre.gov.bc.ca Appendix 2: Links and Resources For an on-line resource listing many of the following, visit 2010commercecentre.com/BusinessNetwork/registration/ additionalInfoPopup.html#aboriginal_participation f Metro Vancouver, Smart Steps Program, Business Guide to Eco-Efficiency www.metrovancouver.org/about/publications/Publications/ TenStrategies.pdf (Note: the SS includes guides specific to 11 different industry sectors) f World Business Council for Sustainable Development, Guidelines for Identifying Business Risks and Opportunities Arising from Ecosystem Change www.wri.org/publication/corporate-ecosystem-servicesreview f International Standards Organization (ISO) www.ems-hsms.com www.iso.org/iso/en/iso9000-14000/understand/inbrief.html The ISO 14000 family addresses “environmental management”. This means what the organization does to minimize harmful effects on the environment caused by its activities, and to achieve continual improvement of its environmental performance. ISO 14001 is among the most widely known of environmental certification systems. In practical terms, an organization that receives an ISO 14001 certificate has demonstrated that it has a system in place to consider and manage those aspects of its operations that could potentially affect the environment. In absolute numbers, 1,055 ISO 14001 certificates have been issued in B.C.-the fourth highest number in the country. 672 of these certificates were in the Fraser Basin (64% of the B.C. certificates). When the number of certificates is divided by the number of enterprises operating in the province in 2003, B.C. slips to sixth place in the country (6.7 certificates for every 1,000 enterprises), well behind Ontario (22.6) and Quebec (23.5).31 f Green Seal www.greenseal.org Founded in 1989, Green Seal provides science-based environmental certification standards that are credible, transparent, and essential in an increasingly educated and competitive marketplace. Its industry knowledge and standards help manufacturers, purchasers, and end users alike make responsible choices that positively impact business behavior and improve quality of life. 31. Fraser Basin Council Website www.shim.bc.ca/atlases/fbc/ss3/Business.html Guides to Implementing Sustainability in the Corporate Environment f The Natural Step Canada www.naturalstep.ca/about.html The Natural Step Framework has been developed to help organizations incorporating sustainability into their business strategies. Its A-B-C-D Analytical Approach includes four elements, which are repeated as the organization progresses along various pathways towards sustainability. f Industry Canada www.ic.gc.ca/epic/site/csr-rse.nsf/en/rs00131e.html The Industry Canada website provides a step by step approach to CSR, plus numerous tools and links General Sustainability (Contact your industry organization to learn about sectorspecific programs) f Conference Board of Canada, Corporate Responsibility Assessment Tool (CR AT) www.conferenceboard.ca/GCSR/CR_AT/ The CR AT is a Web-based tool that companies can use to manage, measure, and improve their CSR performance. Environmental Sustainability (Contact your industry organization to learn about sectorspecific programs) f Metro Vancouver, Smart Steps Program, Business Case Total Cost Assessment www.metrovancouver.org/smartsteps/businesscase/Pages/ default.aspx Helps business owners identify changes to operational practices that can lead to reduced costs and increased profitability while also increasing resource efficiency 38 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Social Responsibility f International Standards Organization (ISO) isotc.iso.org/livelink/livelink/fetch/2000... ISO 26000 provides an International Standard providing guidelines for social responsibility (SR). This guidance standard will be published in 2010 as ISO 26000 and be voluntary to use. It will not include requirements and will thus not be a certification standard. f Building Opportunities for Business (BOB) www.buildingopportunities.org Funded by the City of Vancouver, the Province of British Columbia, the Government of Canada, a portion of Bell Canada’s Olympic sponsorship, and other contributions from the private sector, the Building Opportunities with Business Inner-City Society (BOB) works with residents, community groups, government agencies and businesses to create economic opportunities that strengthen the social wellbeing, health and security of vulnerable populations f Access/WORKS www.accessworks.ca/ A consortium of disability organizations created accessWORKS as a mechanism to mobilize the capacity of the disability community and capture the opportunities presented by the 2010 Winter Olympic Games. f Workable Solutions www.workablesolutionsbc.ca WorkAble Solutions is an initiative to connect B.C. employers to persons with disabilities by providing employment resources and support f THEO BC www.Theobc.org THEO BC non-profit organization Serve the mental health and disabled communities and people in need of employment-related assistance or training. f Neil Squire Foundation www.neilsquire.ca Neil Squire Foundation used technology, knowledge and passion to empower Canadians with physical disabilities f MOSAIC www.mosaicbc.com MOSAIC’s mandate is to support and to empower immigrant and refugee communities, helping them to address critical issues in their neighborhoods and workplace Aboriginal Participation f Aboriginal Community Careers Employment Services Society (ACCESS) www.buildingfuturestoday.com ACCESS offers customized employment and training services designed specifically to provide members of the Lower Mainland urban Aboriginal community with the education and skills to compete equally and effectively in today’s job market. f First Nations Employment Society www.fnes.ca First Nations Employment Society (FNES) represents ten First Nations as well as on/off reserve people residing in the Vancouver Sunshine Coast areas and assists in training and employment opportunities in the region f Metis Nation of BC www.mpcbc.bc.ca Métis Nation British Columbia develops and enhances opportunities for the Métis communities by implementing culturally relevant social and economic programs and services. Sustainable Purchasing − What to Do and Where to Go f Sustainable Purchasing Network (Fraser Basin Council) www.buysmartbc.com The Sustainability Purchasing Network creates social, economic, and environmental value by educating, connecting, and inspiring organizations to develop and improve their sustainability purchasing efforts. The Network serves the needs of organizations through sustainability purchasing training, resources, and projects. Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 39 f Metro Vancouver, Smart Steps Program, Sustainable Supply Chain Logistics Guide www.gvrd.bc.ca/Smartsteps/tools.htm This Guide is about sustainable supply chain logistics (SCL) - that is, the planning, storage, transportation, and reverse logistics processes involved in getting goods and services to the right place, at the right time, and in the right condition, while minimizing the impacts on our natural and social environments. f Metro Vancouver, Smart Steps Program, Sustainable Purchasing Guide www.gvrd.bc.ca/Smartsteps/tools.htm Many businesses are interested in purchasing products and services with characteristics that make them environmentally and socially beneficial. Yet, it is often difficult to know whether one product or service is better than another, and whether you are making good decisions about what to buy. This Sustainable Purchasing Guide can help you incorporate social and environmental considerations into your company’s purchasing decisions. f Metro Vancouver, Smart Steps Program, BuildSmart Product Directory www.gvrd.bc.ca/Smartsteps/tools.htm BuildSmart is Metro Vancouver’s source for design and construction information about sustainable buildings. The BuildSmart website can update you on the latest industry news and events in our region. There is also a green product directory with over 400 environmentally responsible building materials and products, along with a wealth of helpful technical guides, case studies and directories of salvage and recycling contractors. f 2010 Commerce Centre Business Network www.2010commercecentre.com/ This is a valuable source of information, research, tools and resources, and opportunities for businesses, including the provision of a one-stop access to 2010 procurement opportunities. f North American Green Purchasing Initiative www.cec.org/programs_projects/trade_environ_eco... The North American Green Purchasing Initiative (NAGPI) Steering Committee is made up of major groups and agencies working with green purchasing in North America. In addition to advocacy, NAGPI provides programs and activities to support green purchasing. f Social Purchasing Portal www.sppvancouver.org The Social Purchasing Portal supports supplier businesses and social enterprises (located within Vancouver’s inner city or with links to it) who promote good employment standards and contribute to economic and community development. Sustainability Resources/Funding f Social Purpose Business (Enterprising Non-Profits Program): www.enterprisingnonprofits.ca ENP is a funding program that provides matching grants to non-profit organizations in B.C. who are interested in starting or expanding a business. Partnerships – Where to Find Partners f 2010 Commerce Centre Business Network www.2010commercecentre.com/ Membership in the 2010 Business Network will showcase and promote your business to 2010-related buyers looking for suppliers of goods and services. The 2010 Business Network will also be used by both domestic and international companies looking to joint venture with or sub-contract to businesses, including those with sustainability and aboriginal features or qualifications. Industry Associations Many industry associations provide networking opportunities between businesses. Contact your industry’s association for information. f Chambers of Commerce Either your municipal chamber or the BC Chamber of Commerce are good places to network. 40 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 41 www.2010CommerceCentre.gov.bc.ca Appendix 3: Sample Sustainability Policies Adera Development Corporation Environmental Policy32 Adera Development Corporation recognizes that what we do today will affect tomorrow. Adera is committed to being a leader in practical sustainable design and construction in all the communities we build in. Adera’s core values are Passion, Innovation and Partnership. We will strive to achieve the following: Innovation – use new technology and business practices to promote more efficient use of energy and water, use resource-efficient building products, improve indoor air quality, reduce waste, protect our natural resources and minimize the impact our construction projects have on the environment. Partnership – encourage our employees, consultants, trades and suppliers to become more environmentally aware, and require of them a level of commitment that equals Adera’s. Provide education and resources so that all parties involved can meet this commitment. Passion – take on these challenges with the drive and determination which Adera applies to all its endeavors. Mountain Equipment Coop33 Sustainability Policy Everything MEC does has an impact – on the planet, on communities, on individuals, and on the local and global economy. As a member-directed outdoor retail cooperative, we can provide a vibrant and healthy future for our members, our business, and generations to come. Our Sustainability Policy provides MEC with the direction and the framework to help create a just world and a healthy planet. What We Believe We believe a sustainable world reflects these three interdependent principles: y The planet has a limited carrying capacity and we are all dependent on a healthy, functioning biosphere. Individuals can best meet their needs in caring and vibrant communities. A just economy is dependent on an equitable society and a healthy planet. The 3 nested spheres of sustainability – interdependent and interconnected. We believe that MEC has a responsibility to make the world a more sustainable place. We’ve defined our role as: y Encouraging and supporting our members to enjoy self-propelled wilderness recreation, lead healthy, active lives and be stewards of the natural environment. y Promoting wilderness conservation and responsible use of the outdoors. y Improving the social and environmental impacts of our products, services and business operations. y Providing leadership in the community and working with others to pursue collective social and environmental goals. y Empowering our members to be active participants in our co-op and other co-operative endeavors. y y y y 32. Adera Development Corp website, www.adera.com/about/envpolicy, July 2008 33. MEC Website: www.mec.ca 42 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 Placer Dome Sustainability Charter34 At Placer Dome we accept our corporate responsibility to practice environmental protection and promote social and economic progress without compromising community well being or security. Our goal is to contribute to a better future for our host communities and countries. We are committed to building partnerships with our host communities and other stakeholders. These partnerships are based on mutual trust and are consistent with our core values and community interests: only together can we achieve sustainability. Our Values and Beliefs: y Sustainability is good business practice, reduces risk and underpins our relationship with stakeholders. y Implementing sustainability requires leadership and a balance between environmental, social and economic needs. We strive to improve the quality of life of our employees and their families. y We require the support of host communities and governments, gained through meaningful dialogue. y Society’s need for the metals we produce must be balanced with the earth’s capacity to absorb the effects of our activities. y Our activities must be conducted in a way that respects cultures, customs and social values. y We are committed to act with precaution, commensurate with the risk, and in an appropriate and lawful manner. y We must pursue new technology to reduce the impact of mining’s activities. Our Policy and Principles: It is our policy to: y y Implement and maintain ethical business practices and effective systems of corporate governance. Integrate sustainable development considerations and practice into the corporate decision-making process. Uphold fundamental human rights and respect cultures, customs and values in our dealings with host communities and other stakeholders. Implement risk management strategies based on valid data and sound science. Seek continual improvement of our health, safety and environmental performance. Contribute to the conservation of biodiversity and use integrated and consultative approaches to land management. Facilitate and encourage responsible product design and usage, and the recycling and disposal of our waste. Contribute to the equitable distribution of economic benefits and the social and institutional development of host communities. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders. y y y y y y y 34. Placer Dome, Sustainability Report: Canadian Operations, page 1 , 2005 Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 43 VANOC’s Sustainability Performance Objectives Accountability To behave ethically, set measurable performance targets and communicate openly about our progress and challenges To consult with external groups affected by our activities Environmental Stewardship and Impact Reduction To conserve natural environments and manage, mitigate and offset negative impacts Social Inclusion and Responsibility To convene accessible 2010 Winter Olympic Games that have a positive impact on socially and economically disadvantaged groups that otherwise would not benefit To care for our workforce, protect human rights, and ensure health and safety Aboriginal Participation and Collaboration To work with our partners to achieve our goal of unprecedented Aboriginal participation in the planning and hosting of the 2010 Winter Olympic Games, and in the creation of 2010 Winter Games legacies. Economic Benefits To demonstrate that sustainable innovation and practice makes good business sense Sport for Sustainable Living To use sport, and growing athlete and public interest in living more sustainably, to inspire action on local and global sustainability challenges 44 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 45 www.2010CommerceCentre.gov.bc.ca Appendix 4: VANOC Supplier Code of Conduct for Social and Environmental Compliance Respecting local laws, workers, and the environment. The Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC) is committed to managing the social, environmental and economic impacts of the 2010 Winter Games through procurement. Our Supplier Code of Conduct (the Code) defines the minimum standards of social and environmental conduct for suppliers. The goal of the Code is to ensure safe and healthy workplaces for the people who supply products and services to VANOC. VANOC suppliers and their subcontractors are required to comply with VANOC’s Code. The Code specifies minimum standards only. Labour practices are based upon the core conventions of the International Labour Conventions (ILO), the United Nations’ Universal Declaration of Human Rights and the United Nations conventions on the rights of the child and the elimination of all forms of discrimination against women. Environmental standards are based on local and international laws and regulations. 1. Business Integrity a) Laws and Regulations Suppliers will comply with applicable national laws and regulations, minimum industry standards, ILO and UN Conventions, and any other relevant statutory requirements. Where provisions of the law and the Supplier Code of Conduct address the same issue, the higher standard will apply. b) Transhipment Suppliers shall comply with Canadian laws related to importation of products and, in particular shall establish and maintain documentation to support country-of origin production verification, to prevent illegal transhipping of products. 2. Labour Standards c) Freedom of Association and Right to Collective Bargaining Suppliers will recognize and respect that workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively. Where the right of freedom of association and collective bargaining is restricted under law, the supplier will not hinder the development of parallel means for independent, free association and bargaining. d) Freely Chosen Employment Employment must be on a voluntary basis, respecting the rights of employees to decide to work or not. Suppliers will not use forced, illegal, or prison labour, including indentured labour or any other form of compulsory labour. Suppliers will not require workers to lodge deposits or their identity papers as a condition of employment, or financially penalize workers for resigning. e) Child Labour Avoidance Suppliers will not employ any person that is under the age of 15, under the age interfering with compulsory schooling, or under the minimum age established by law, whichever is greater. Suppliers acknowledge that VANOC Supplier Code of Conduct for Social and Environmental Compliance according to the UN Convention on the Rights of the Child, a person is a child until age of 18. Suppliers will ensure young workers in the age group 15-17 are employed according to the protective restrictions prescribed by local laws. f) Humane Treatment and Disciplinary Practices Employees shall be treated with respect. Corporal punishment and other forms of coercion, abuse or harassment, whether psychological, sexual or physical, is prohibited. 46 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 g) Non-Discrimination Employees will be considered for positions on the basis of their qualifications and abilities. Discrimination in hiring or any aspect of work (other than bona fide occupational requirements allowed by law) based on race, colour, national origin, religion, disability, gender, sexual orientation, union affiliation, marital status or political opinion, is prohibited. h) Hours of Work Suppliers will ensure working hours are in compliance with local law and regulations and that total working hours do not exceed 60 hours per week (48 regular hours and 12 overtime hours) on a regular scheduled basis, except under exceptional unforeseen circumstances. Workers will be provided with at least one day off during every seven-day period. Suppliers will ensure that overtime is voluntary and when overtime is needed, workers are compensated either according to law, or where the law is silent, at a rate at least equal to their regular hourly compensation rate. i) Wages and Benefits Suppliers recognize that wages are essential to meeting an employee’s needs. Employees shall be paid the higher of the minimum wage required by the laws of the countries where goods are made or the prevailing local industry wage and shall be entitled to all legally mandated benefits. Workers must be paid directly and provided with clear, written accounting of hours worked, deductions and regular and overtime wages. Deductions from wages not provided for by the laws of the countries where goods are made, shall not be permitted without the express permission of the employee. 3. Health, Safety & Environment j) Management of Health and Safety Workers will be provided with a safe and healthy work environment. Conditions in all work and residential facilities shall be safe, clean, and consistent with all applicable laws and regulations regarding health and safety. The supplier shall provide written health and safety guidelines for employees in terms of equipment, training, management, and work practices in the working language of employees. k) Minimizing Environmental Impact Suppliers will ensure that all waste materials, as byproducts of operations, are disposed of properly and in an environmentally responsible manner, and according to the applicable local and international laws and regulations. 4. Employee Communication And Engagement l) Code Posting This Code of Conduct shall be communicated to all employees and posted in the working language of the employees in an area accessible to all employees. Implementation Roles and Responsibilities for VANOC’s Supplier Code Of Conduct VANOC expects all its suppliers and their subcontractors to respect its SCC and to actively do their utmost to achieve VANOC’s standards. VANOC believes in cooperation and VANOC is willing to work with its suppliers to improve performance where necessary. VANOC reserves the right to ask for proof of compliance with applicable labour, health, safety, and environmental laws, and may inspect working conditions, at any time (or request independent verification of compliance). Suppliers must maintain current records to substantiate their compliance with the Code and VANOC may ask that they are independently verified at the supplier’s expense. VANOC may discontinue business with Suppliers who are not responsive to requests to address concerns around workplace practices. 47 www.2010CommerceCentre.gov.bc.ca Appendix 5: VANOC’s Buy Smart Program Questionnaire Supplier Sustainability and Aboriginal Participation Performance Questionnaire – Recommended Update Version - #5 December 2007 VANOC Buy Smart Sustainability and Aboriginal Procurement Program VANOC is strongly committed to leveraging the purchasing decisions of the 2010 Olympic and Paralympic Winter Games to advance sustainability innovation and transformation, including unprecedented Aboriginal participation. Procurement is a critical tool by which VANOC will achieve its sustainability commitments. The goals of VANOC’s Buy Smart Procurement Program include: 1. 2. 3. 4. 5. 6. 7. Increased social, ethical and environmental performance within business operations Growth of Aboriginal and minority-owned businesses and the sustainable enterprise sector Increased jobs for target groups defined as Aboriginal people, Inner-City residents and persons with a disability) Higher performance venues and operations to support an “excellent 2010 Winter Games” Support the local and provincial economy Increased sustainability purchasing leading to innovation, trade and investment in the sustainability sector Creation of a best practice model for sustainable purchasing. Wherever possible, VANOC will use the purchasing process to procure from suppliers with sustainability and Aboriginal participation performance strongly aligned with these Buy Smart goals. To this end, we ask that you consider the following questions and identify how your organization can bring a sustainability ‘value add’ to a supplier relationship with VANOC. Please answer all of the following questions. Check those elements that objectively describe your organization’s sustainability programming and performance. Only check those which apply, and ensure that information to substantiate your organization’s sustainability and Aboriginal participation performance can be provided upon request if it is not already publicly available. 48 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 1. Management, Verification & Business Integrity 1.1. Does your organization have a management system that measures and mitigates negative socio-economic and environmental impacts of your operations and supports achieving positive sustainability results? | a) Registered and ISO 14001 certified environmental management system | b) Unregistered sustainability or environmental management system | c) Registered and ISO 18001 certified health and safety program | d) Sustainability training, education and awareness program for employees | e) No system or approach 1.2. How does your organization publicly report on its sustainability performance? | a) Sustainability, social, environmental or accountability report (within past 2 yrs) | b) Independent verification of sustainability/environmental report (within past 2 yrs) | c) No report Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 49 2. Environmental Performance & Practices | a) Documented Zero Waste Policy | b) Implemented eco-efficiency measures to reduce material use in products and processes | c) Operate take-back programs for products and packaging / product stewardship programs | d) Organizational recycling program with greater than 50% recycling rate | e) None 2.1. How does your organization reduce waste and promote recycling? 2.2. How does your organization reduce energy use and greenhouse gas emissions? | a) Documented carbon neutral commitment and carbon off-set program | b) Operate employee trip reduction programs and/or fleet management programs | c) Purchase renewable energy and/or alternative fuels | d) Implemented energy efficiency retrofits and initiatives | e) None 2.3. How does your organization promote water conservation? | a) Implemented eco-efficiency measures to reduce water use | b) Installation of low-flow and flow control fixtures or waterless technologies | c) Promotion of efficient water use habits to employees | d) None 2.4. How does your organization significantly reduce or prevent pollution or eliminate the use of toxins? | a) Documented Pollution Prevention Policy | b) Implemented a Zero Toxins program | c) Apply Life-Cycle Analysis to reduce pollution with our processes and products | d) Exclusively purchase non-toxic and eco-certified cleaning products and / or solvents | e) None 50 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 3. Contribution to a Sustainability Marketplace 3.1. Which purchasing tools or strategies does your organization have in place to support positive social, environmental and ethical impacts? | a) Documented Sustainable, Environmental, Aboriginal, Ethical or Social Purchasing Policy | b) Implemented a program to purchase sustainable products and services | c) Participate in collaborative efforts around sustainability purchasing (e.g. member of Sustainability Purchasing Network) | d) Informal preference for sustainable products and services | e) None 3.2. Do you manufacture, resell or import products? | Yes | No (If no, please skip to question 3.4) If yes, does your organization have a documented Code of Conduct which sets internationally-recognized minimum labour standards you expect your suppliers to meet when manufacturing your products? | Yes | No (If no, please skip to question 3.4) 3.3. If yes, how does your organization audit supplier compliance with your Code of Conduct? | Conduct regular independent audits of supplier compliance with our Code of Conduct | Company staff regularly monitor supplier compliance with our Code of Conduct | Supplier compliance with our Code of Conduct is not audited 3.4. Does your organization sell environmentally preferred or benign products and services? | a) We sell exclusively (80% or more by sales) environmentally certified goods and services (please specify certifying body) | b) Approximately 50% of the goods and services we sell have eco-label certifications (please specify certifying body) | c) We offer customers a green product line that is not independently certified by a third party | d) We do not carry these types of products or services Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 51 4. Aboriginal Participation (First Nation, Inuit, Métis) | a) Majority Aboriginal ownership (51% or greater) | b) No, but we are in a joint venture or strategic partnership with an Aboriginal-owned business or sub-contract to one or more Aboriginal-owned businesses | c) No, we are not Aboriginal-owned or affiliated with Aboriginal businesses IF (a) is indicated, GO TO SECTION 5 (Question 5.1) Skip question 4.2. IF (b) is indicated, please provide the name(s) of the Aboriginal business(es), the general nature of the relationship (e.g. subcontract, joint-venture) and attach an authentication letter from the applicable Aboriginal group(s). 4.1. Is your organization Aboriginal-owned (First Nation, Inuit, Métis)? 4.2. If you answered (b) or (c) above, how does your organization support Aboriginal employment and progressive Aboriginal relations? | a) Purchase goods and services from Aboriginal-owned businesses | b) Implement Aboriginal employment programs and employ Aboriginal people | c) Offer capacity development programs for Aboriginal youth and adults (e.g. internships, scholarships, training, etc.) | d) Employees receive Aboriginal cultural awareness training | e) Operate active Aboriginal community relations programs | f ) None of the above 52 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 5. Social Inclusion and Accessibility 5.1. VANOC seeks to create economic opportunities for target groups. Identify how your organization supports economic opportunity for persons with a disability, Inner-City residents and social enterprises.. | a) Registered with Building Opportunities with Business and actively participate in their recruitment and/or procurement activities | b) Proactively hire from Vancouver’s three Inner-City communities (Downtown Eastside, Mount Pleasant and Downtown South) | c) Joint venture with, or subcontract to, businesses that intentionally hire from the Inner City | d) Located in one of Vancouver’s three Inner-City communities | e) 51% or more of the business is owned by a person with a disability | f ) Registered with AccessWorks | g) Intentionally hire persons with a disability | h) Joint venture with, or subcontract to, businesses that are 51% or more owned by a person with a disability | l) Listed with the Enterprising Non-Profits Marketplace as a social enterprise | m) Joint venture with, or subcontract to, a social enterprise | o ) None IF (c), (h) or (m) is indicated, please provide the name(s) of the organization, the general nature of the relationship (e.g. subcontract, joint-venture) and attach a letter of authentication from the applicable benefiting group(s). 5.2. In addition to economic opportunities for target groups, VANOC also seeks to encourage other means for supporting accessibility and social inclusion. Please indicate if your organization has adopted any of the following measures. | a) Charitable contributions that directly benefit target groups | b) Employees actively volunteer to support target groups | c) Provide products and services designed specifically for use by persons with a disability | d) Maintain barrier-free workplace and facilities | e) Employees receive diversity/cultural awareness training | f ) None Using Sustainability and Partnerships to Give Your Business a Competitive Edge www.2010CommerceCentre.gov.bc.ca 53 6. 6.1. Sport and Sustainable Living How does your organization promote sport and healthy and sustainable living? | a) Sponsor sports and recreational clubs for target groups (See Section 5 for definition of target groups) | b) Sponsorship of individual athletes | c) All employees receive a living wage that is sufficient to meet the basic needs of workers and their families | d) Formal ‘Health and Wellness’ / ‘Active Living programs’ are offered to all employees | e) Work-Life Balance programs are offered to all employees | f ) Caring Company Designation with Imagine Canada | g) Operate public and/or consumer awareness and action programs on sustainability | h) None 6.2. Does your organization contribute to environmental, social or Aboriginal legacy initiatives such as significant grant programs for target groups, special environmental funds or reclamation projects, or programming for youth at risk? | a) Environmental contribution programs | b) Social contribution programs for target groups | c) Aboriginal contribution programs | d) No IF a, b, or c are indicated, please describe programs: 54 www.2010CommerceCentre.gov.bc.ca Winning Strategies for 2010 7. Value Add: Leadership Practices and Sustainability Commitment Potential vendors are encouraged to distinguish themselves in the marketplace by identifying where their corporate practices may be able to provide sustainability ‘value-add’ to VANOC by answering the two questions below. 7.1. In 500 words or less please elaborate further on best practices, such as leading programs or policies, that have been identified in the questions above and that exemplify your organization’s commitment to sustainability and / or Aboriginal participation. Alternatively, please describe any best practices in your organization which were not identified in the previous questions but you feel advance VANOC’s sustainability and Aboriginal participation goals. 7.2. In 500 words or less please elaborate on any commitments that your organization would be willing to make towards actively participating in sustainability and/or Aboriginal participation programs that would significantly support VANOC’s sustainability objectives. VANOC’s key priorities would include commitments from suppliers in the areas of: | Employment opportunities for Aboriginal people or Inner-City residents | Procurement opportunities for Aboriginal or Inner-City businesses | Carbon neutral commitments and carbon off-set programs | Zero waste commitment and recycling programs | Public, organization and/or consumer awareness and action programs on sustainability | Adoption of a Supplier Code of Conduct and implementation of ethical sourcing programs