Sustainable Leadership: Answering Why? What? Who & How?

1. Sustainable Leadership: Answering Why? What? Who & How? Steve Downing PhD, BSc

2. Context:The Leadership/ Change Challenge • Sustainability requires leadership and radical change • 70% of managers fail to become effective leaders • 70% of major organisational change initiatives fail to achieve goals

3. What are sustainability principles? • A better integration of economy, ecology and society • Living within the biophysical parameters of the earth • Living in harmony with all other life forms (biodiversity) • Living to allow future generations to do so also • Living with greater equity

4. The Triple Bottom Line Profit Social Responsibility Eco-Efficient Sustainable Enterprise Natural Capitalism Stakeholder Capitalism Nature Equity Raise the Bottom Community Development Economy Environment Social

5. A Sustainable Business? Sustainable development • “Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs” Brundtland Commission 1987 • Encompasses three general policy areas: economic development, social development and environmental protection Commercial sustainability • The ability of the business to generate continued long term profit growth Sustainable business • Addressing key business-related social, environmental and economic impacts in a way that builds stakeholder and shareholder value, thereby improving commercial sustainability

6. Are we in Denial about Sustainability? • A 90% chance humans are the main cause of global warming - 2500 scientists in the IPCC – 4th report 2007 • `People are broadly concerned but not entirely convinced` - Phil Downing Ipsos MORI June 2008 (Observer Newspaper, n.1039) • 6 out of 10 adults agreed `many scientific experts still question if humans are contributing to climate change. • More than half did not have confidence in international or British politicians to tackle climate change • Over a quarter think it is too late to stop it

7. Or just `stuck` or slow to change behaviour • 91% say Sustainable Development should be accelerated • 84% reject the idea that left to itself the market will sort it out before any major issues occur • 71% take Sustainable Development very seriously • 56% think Governments will fail to enforce a sustainable future • 55% think big business commitment to sustainability is not • 74% Agreed Sustainability needs a shift of consciousness away from individualism and materialism • 77% Agreed Quality of Life Indicators should be more important than measures of GDP Source UGovStone, Sample of 1066 Influentials, September 2008

8. Reasons to be Sustainable • We will have to (un-sustainability of the status quo) • We will want to (business case & personal benefits) • (We ought to) (environmental & social progress)

9. Climate Change CommitteeRecommendations Accepted by UK Government • 80% GHG emissions reduction (1990-2050) • Eventually to include aviation and shipping • Energy efficiency in homes and new buildings • Increase in renewable energy, nuclear & CCS • Hybrid engines, bio fuels, and electric cars • Heating efficiency, combined heat and power ground source heat pumps biomass boilers • New technology for steel and concrete October 6th 2008

10. 10 Less developed countries: Africa, Asia (excluding Japan), Latin America, The Pacific Islands and The Carribean More developed Countries: Europe, North America, Australia, New Zealand and Japan 8 6 4 2 More developed countries 2000 2050 2100 2150 1750 1950 1800 1850 1900 Year Population (in billions) Source: UN Population Division

11. Technology (fossil fuels) = Greenhouse Gas Emissions • 6 GHGs including CO2, Methane and Nitrous Oxide • 50% of emissions are man made • CO2 at highest level for 800,000 years (375 ppm CO2 equiv.) • 0.74 degrees C increase in surface temperature • 66% of the world population will face water scarcity by 2025 (UN) • UK emissions 2% up between 1997-2007 (500m tonnes pa) • Globally approx 30 bn tonnes CO2 pa from fossil fuels in 07 • Sustainability = 5 – 6 billion tonnes • It will cost 1% of GDP to reduce now, 20% of GDP later • 20% ignores the intrinsic value of lives and ecosystems

12. Environmental Burden • Climate Change • Loss of glaciers • Loss of water • Loss of forests and fertile soil • Loss of soil productivity • Loss of fish stocks • Loss of species • Extreme weather • Rising Sea Levels • Mass migration

14. An environmental budget deficit • In 1961 world population of 3 billion was using half the resources the global ecosystem could provide sustainably. • In 1985 5 billion were using all of Earth’s sustainable production. • In 2001 6 billion were using 20% more than we could sustain – ie overexploiting fisheries, pasture, forests and polluting oceans and atmosphere. • Between now and 2050 population grows by 90 mill. Per year Tim Flannery: 2005 `The weather makers`

15. What ?

16. What? • Increasing Awareness and Understanding • Of sustainability and the business case • Using multi-stakeholder dialogue • Building Commitment and Action • Encouraging Innovation and Entrepreneurship • Role models, Rewards and Culture

17. Elements of the Business Case for Sustainable Development • Stakeholder expectations • Risk management • Reputation/ brand/ loyalty building • Cost / energy savings • Demand for sustainable/ ethical products, investments • Innovation of new products and business models • Recruitment and retention of high quality employees • Greater influence on government and media • Share price performance in long term • Triple bottom line reporting and governance • Avoiding future taxes/ costs from internalisation of externalities Ray BC

18. Re Interpreting Corporate Responsibilities • Wealth Creation • Shareholders and Stakeholders • Legal, decent and honest • Strategy (SWOT) • Entrepreneurship • Leadership • All of the above = Sustainability • Sustainability practices increase gross margins, ROS, ROA increase case flow and shareholder return (PWC May 08) • The sustainability yearbook 2008

19. Building Shareholder Value Over Time Building tomorrow’s opportunity Eco Products and Services Eco Advocacy and Leadership Nurturing internal capabilities Engaging external constituencies Stakeholder Engagement Eco Efficiency Managing today’s business Source: Developed from Hart (2005)

20. Building Shareholder Value Over-Time Tomorrow Strategy: Clean technology Develop the sustainable competencies of the future Corporate payoff: Innovation & repositioning Strategy: Sustainability vision Create a shared road map for meeting unmet needs Corporate payoff: Growth & trajectory • Drivers • Disruption • Clean tech • Footprint Drivers Pollution• Poverty• Inequity• Sustainable Value Internal External Strategy: Pollution prevention Minimise waste and emissions from operations Corporate payoff: Cost & risk reduction Strategy: Product stewardship Integrate stakeholder views into business processes Corporate payoff: Reputation & legitimacy Drivers Civil society• Transparency• Connectivity• • Drivers • Pollution • Consumption • Waste Today Source: Hart (2005)

21. Six steps on the CSR Journey • Freeloaders and Stealthy Saboteurs • Bunker Wombats • Reactive Minimalists • Industrious Stewards • Proactive Strategists • Transformative Futurists Source Dexter Dunphy, 2008, EABIS Conference

22. The Journey Towards Sustainable Development 1st Wave Organisation 2nd Wave Organisation The 3rd Wave Competitive Advantage Opposition Ignorance Risk Cost Transformation Rejection Non Responsiveness Compliance Efficiency Strategic Proactivity The Sustaining Corporation Elite seeks profit max. & treat all resources as means to that end. H & S lip service. Opposition to government and green activists Community claims seen as illegitimate More ignorant than oppositional. Seek business as usual, compliant workforce. Ignores any negative environmental impacts Focus on reducing risk of sanctions for failing to meet minimum standards. Reactive to community and legal requirements. Compliance plus proactive measures to maintain good citizen image. Human and environmental policies to reduce costs and increase efficiency Seek to be employer of choice. Stakeholder engagement to innovate safe environmental friendly products and processes. Good citizenship to maximise profits. Reinterpreted the nature of the corporation to an integral self renewing element of the whole of society in its ecological context – and tries to renew this. Restorative Source: Dunphy et al 2003

23. Who? & How? Compassion

24. `Corporations dilute their soul for some reason, and we need leaders who can get it back` Robin Blass, VP of Global Learning, Unilever (EABIS conference 12/9/08)

25. GE- Ecoimagination • Jeff Immelt led commitment: • Eco Imagination products annual revenue $25billion by 2010 • R&D in cleaner technology to double 2005-2010 to $1.5 billion • Reduce water use by 20% by 2012 • Reduce GHG emissions by 1-30-30 by 2012 against 2004 levels • Inform the public • GE Ecoimagination

26. Be the Change unfrozen

27. Sustainability Must-Read Books • James Lovelock- (06) The revenge of Gaia • Jonathon Porritt (06) Capitalism as if the world mattered • Stuart Hart (05) Capitalism at the crossroads • Tim Flannery (05) The weather makers • Nattrass and Altomare(02) Dancing with the tiger • Winsemius and Guntran (02) A thousand shades of green • McDonnough and Braungart (02) Cradle to cradle • John Elkington (01) The chrysalis economy • Hawken, Lovins and Lovins (99) Natural capitalism • Dunphy,Griffiths and Benn (03) Organizational change for corporate sustainability • Elizabeth Kolbert, Field Notes from a Catastrophe (06) • (Bjorn Lomburg (98) The sceptical environmentalist)

28. Winning Websites • www.direct.gov.uk/ActonCO2 • www.WWF.org.uk • www.RSA.org/Carbon • www.sustit-net • www.IPCC.ch • www.lohas.com • www.planetark.com • www.tiptheplanet.com • www.greenbiz.com • www.sustainabilityatwork.org.uk • www.ethicalcorp.com • www.worldwatch.org

29. Good guides to personal growthand leadership • Peter Senge et al (05) Presence, exploring profound change • Robert Greenleaf (77) Servant Leadership • Joseph Jaworski (96) Synchronicity: the inner path of leadership • Lama Surya Das (97) Awakening the Buddha within • Charlotte Joko Beck (89) Everyday Zen • Dalia Lama (02) How to practise the way to a meaningful life • Sharon Janis (00) Spirituality for dummies • Mike George (03) The 7 AHAs of highly enlightened souls • Erich Fromm (76) To have or to be • Ken Wilber (01) A theory of everything • Eckhart Tolle (99) The power of now, & A new Earth (05) • Toni Packer (02) The wonder of presence

30. What can we do ?Det Store KlimaårSå er Det Store Klimaår gået i luften. Det Store Klimaårer et tilbud til danske virksomheder, der ønsker at sætte fokus på klimaet op til det store klimatopmøde i København i slutningen af 2009. Udgangspunktet for Det Store Klimaårer at give deltagerne en række redskaber til, hvordan man på en enkel og nem måde kan engagere virksomheden - og ikke mindst medarbejderne - i klimadebatten.Du kan se påwww.burningpanda.dk/detstoreklimaår, hvilke virksomheder der har tilmeldt sig, og hvad de gør for klimaet.Foghs grønne takterI sin tale på Venstres landsmøde i søndags sagde Statsminister Anders Fogh Rasmussen, at Regeringen har taget fejl i sin klimapolitik, og at Danmark nu skal være fri for fossile brændstoffer (kul, olie og gas). Det er Burning Panda og WWF Verdensnaturfonden naturligvis glade for, men problemet ved Foghs udmelding er, at han endnu ikke har præsenteret en konkret handlingsplan, der bakker udtalelserne op.Ved at lave et klimastatement påwww.burningpanda.dk viser du politikerne, at du bakker op om, at de skal sætte handling bag ordene. Klimatopmøde i Poznan1. december starter klimatopmødet COP14 i Poznan, Polen. Klimatopmødet skal være med til at bane vejen for en global aftale til COP15 næste år i København. Under topmødet vil Earth Hour, som Sluk lyset Danmark 2009 er en del af, blive præsenteret for pressen. Over 60 lande har nu meldt sig til Earth Hour og målet er, at 1 milliard mennesker skal slukke lyset i en time den 28. marts 2009, som en symbolsk handling i forhold til klimaet. Du kan vise dit engagement i klimasagen og tilmelde dig Sluk lyset Danmark 2009 herFrameld nyhedsbrevWWF VerdensnaturfondenRyesgade 3F2200 København NTlf: +45 35 36 36 35Fax: +45 35 24 78 68E-mail: burningpanda@wwf.dk