Download Working Green: Sustainability in an Efficiency

10/21/2013
Working Green:
Sustainability in an
Efficiency-Focused World
Antonio Luis Galvao Costa, CSCP
Vice President Global Supply Chain,
DiverseyCare Business Partner
Sealed Air
Antonio Galvao
Vice President Global Supply Chain at Diversey, now part of Sealed Air
Author of the "Working Green" department in APICS magazine since 2008.
More than 22 years of experience encompassing planning, logistics,
sourcing, manufacturing, engineering, customer service, product portfolio
management, and marketing operations.
Degree in production engineering and MBA from the Federal University of
Rio de Janeiro in Brazil.
Brazilian (born and raised in Rio), lived in 5 different countries, married, 2
kids and a tortoise.
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My biggest logistics challenge
Agenda
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Sustainability definitions
Greenovate examples
Common Pitfalls
Drivers of change
Path for a more sustainable operation
Key takeaways
Questions and Answers
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Definitions
Sustainability is not only GREEN…
Or maybe it is…
“The problem in agreeing on the meaning of
sustainability is not fundamentally about agreeing upon
a precise definition, but about agreeing upon the values
that would underlie any such definition.”
Simon Dresner
The Principles of Sustainable Development - 2002
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Definitions
• Confusion remains
•
•
Environmental ≠ Sustainability
Profit a critical element
“Meeting the needs of the present without
compromising the ability of future generations to
meet their own needs.”
Our common future 1987 UN World
Commission on Env & Development
WCED (Brundtland report)
Triple bottom line
• Most definitions focus on protecting the triple
bottom line
– Human impact…
– Environmental impact…
– Financial impact…
People
Planet
Profit
• Sustainable development means balancing these
interests for longlong-term success.
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Integrated Bottom line
• A more operational, integrated equation
Enhanced top-line growth Brand
value, customer relationship, talent
recruiting/retention
Reduced Operational Costs
Energy, water, waste, compliance,
health, labor, liability
Growth
+
Cost Savings
=
Integrated Bottom Line
Relevance in recession: reducing waste (cost), improving results
The evolution
Economic
Environmental
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Employee engagement works as a catalyst through:
•Visible leadership
•Management support
•Communication, communication, communication
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“Reducing carbon in the life cycle of our products will often
mean reducing energy use. That results in greater efficiency
and with the rising costs of energy, lower costs, making our
business stronger and more competitive.”
Mike Duke
Walmart President and CEO
Greenovate!
Companies innovating to create a more sustainable world
• Book by Dr. H. Patel , T. McNally and R. Jonash
– Compilation of stories of how many of the world’s leading and
emerging companies are addressing sustainability issues with
profitable solutions that can spur even more innovation , growth and
development.
– Innovations that generate profit with environmental and social
benefits.
– Each story identifies the drivers, the barriers, the enablers, the impact
and what’s next.
– If new businesses are developed based on sustainable practices, the
need to continue draining finite resources will be reduced.
From Greenovate! Companies innovating to create a more sustainable
world , April 2010
AMANHA, June 2010 article with Dr. Hitendra Patel
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Greenovate!
Companies innovating to create a more sustainable world
• What if we could recycle all residues from our industrial processes,
transforming into raw materials or efficient fuels all the garbage that
goes today into the thousands of landfills across the Globe?
• What if we could improve all the agricultural and food producing
related processes, making food accessible and cultivation
sustainable? What if we reduced the generation of residues to never
seen before levels?
• What if we could fund new ways to create alternative energy,
dramatically reducing our dependence of fossil fuels that are
pollutant and expensive?
Quiz 1
In 2011, world population reached 7 billion; in what
year was it half that much?
a)
b)
c)
d)
e)
1858
1908
1948
1968
1988
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The Sins of Greenwashing
Terrachoice
• Authors of “Six sins of green-washing – 2007”, “Seven sins of greenwashing – 2009” and “Sins of green-washing: Home and Family
edition – 2010”
• Green-wash – verb: the act of misleading consumers regarding the
environmental practices of a company or the environmental benefits
of a product or service
• Seven sins: hidden trade-off, no proof, vagueness, irrelevance, lesser
of two evils, fibbing, worshipping false labels
• From 2009 to 2010, the number of “greener” products has gone up
by 73%
• Proportion of sin-free products increasing from less than 1% in 2007
to approximately 2% in 2009 and almost 4.5% in 2010
http://sinsofgreenwashing.org
Investment community is focusing on the
potential growth and performance…
•Companies in the 2012 CDLI and CPLI
provide approximately double the average total
return of the Global 500 between Jan 2005
and May 2011(2)
•A third of the world’s invested capital calls for
67.4
Total return %
(US$) from
Jan 2006 to
July 2012
corporate environmental data through Carbon
disclosure project (1) (722 investors with $87 trillion
in assets , from 655 and $78 trillion in 2011)
•Heightened investor engagement ; Carbon action
has seen more than five fold increase in investor
signatories since 2011 (190 investors/18
trillion). Natural capital concept.
31.1
Global 500
CDLI
15.9
Total return %
(US$) from
Jan 2010 to
July 2012
6.4
Global 500
CPLI
•Growing awareness of water as a critical
business issue (530 investors/$57 trillion) and
forest risk commodities (184 investors/$13
trillion).
(1) CDP Press report Feb 2013
(2) Carbon Disclosure Project 2012 – Global 500 report
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…but also paying attention to how the
risks will be managed(1)
•Physical
• Dependency on resources, physical events and poor infrastructure and
quality – Climate change like other business risks
•Regulatory
•Market based regulations i.e.: carbon taxes, tariffs, trading and permits and
stringent requirements
•Reputation
•No green-wash. Brand value
•Litigation
•Due to increased legislation. Financial impact. Sustainability reporting and
financial reporting combined.
(1) KPMG – Climate changes your business
Global Risks 2013, Eighth Edition – World Economic Forum, Risk response network
Top Five Global Risks in Terms of Impact and
Likelihood, 2007-2013
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2011 Economic Losses Related to
Selected Natural Catastrophes
Global Risks 2013, Eighth Edition – World Economic Forum, Risk response network
Adapted from sigma natural catastrophe data base of Swiss Reinsurance Company
Quiz 2
How much of the Earth’s water is undrinkable salt
water?
a)
b)
c)
d)
97%
67%
87%
77%
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Water
Business Strategy for 21st Century
“American Industry has used the raw materials employed in its
manufactured products with little regard for future supply. Forests
have been felled in haste, mines stripped of their contents, the
earth sucked dry of its treasures to provide necessities and
luxuries for a lusty, growing nation. With supplies failing in one
section, industry has abandoned its shafts and trekked on to a
new source of supply. It was not until industry found itself
embarrassed by actual shortages of raw materials that
businessmen began to recognize the need for scientific research.”
H.F. Johnson Jr. , 1936
“A sustainable enterprise is dependent on a sustainable
environment. Management decisions that fail to reflect this put a
company at grave, future risk.”
Sam Johnson, 1975
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What legacy will we leave?
“The Earth belongs in usufruct to the living… No generation can contract debts greater
than may be paid during the course of its own existence.” – Thomas Jefferson, 1789
“Society...is a partnership in all science; a partnership in all art; a partnership in every
virtue, and in all perfection. As the ends of such a partnership cannot be obtained in
many generations, it becomes a partnership not only between those who are living,
but between those who are living, those who are dead, and those who are to be born.“
– Edmund Burke, 1790
“I fear citizens might become unmindful of what they have received from their
ancestors or what is due to their posterity and therefore in the risk of leaving to those
who come after them a ruin instead of an habitation” – Edmund Burke, 1790
"We have too long treated the natural world as an adversary rather than as a lifesustaining gift from the Almighty. If man has the genius to build, which he has,
he must also have the ability and the responsibility to preserve.” - Gerald Ford, 1975
Quiz 3
Compared to the average person in India, the
average American consumes how much more
energy?
a)
b)
c)
d)
3x as much
7x as much
14x as much
21x as much
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Unbridled consumption presents consequences for
our children…
Current Demand = 1.50 x what Earth can sustain
Population x Consumption > Planet
Source: WWF Living Planet Report
If the entire world consumed like
Americans…
4 Planet Earths
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Global trends by 2050
•70% of people will live in urban areas
•Population stress : 3Billion in 1955, 9 Billion in 2050
•Average income will increase 2.8x
•Consumption could double, but food could triple
•Emerging markets will dominate trade
•And then there is carbon and climate change…
Climate change
•Atmospheric CO2 concentration has
risen strongly since about 1850
•Rise entirely caused by humans and
primarily due to burning of fossil fuels,
with smaller contribution due to
deforestation
•Since 1900, global climate warmed by
~0.8oC
•Temperatures in the past 10 years
have been the highest since
measurements records started in the
19th century and for many centuries
before that.
1. Climate Change – State of the Science
Prof. Stefan Rahmstorf – Potsdam Institute for
Climate Impact Research http://www.pikpotsdam.de/~stefan
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Climate change
•Further increase in CO2 concentration
must lead to further rise in Global
mean temperature. In different
scenarios for 2100 this increase range
could be from 2oC to 7oC above pre
industrial values.
•Last major Global warming was at the
end of the last great Ice age (15,000
years ago). Warming of 5oC over a time
span of 5,000 years
•We could get a similar magnitude,
over a fraction of this time and starting
from a higher point
1. Climate Change – State of the Science
Prof. Stefan Rahmstorf – Potsdam Institute for
Climate Impact Research http://www.pikpotsdam.de/~stefan
Impacts and risks
•Sea level rise and loss of ice sheets – 20th century sea level increased 15-20
cm (0.5 to 0.65). Future rise by 2100 could exceed 1m (3.3ft).
•Loss of ecosystems and species – Climate change and on-going global ocean
acidification
•Extreme events – droughts, forest fires, stronger hurricanes
•Water and food supplies – Poorer and warmer countries can expect
reduction in yields due to water shortages and weather extremes . Resource
scarcity might drive riots and resource wars
1. Climate Change – State of the Science
Prof. Stefan Rahmstorf – Potsdam Institute for
Climate Impact Research http://www.pikpotsdam.de/~stefan
Can we afford the risk?
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Possible Impact of Global Warming on
Different Sectors
Global Risks 2013, Eighth Edition – World Economic Forum, Risk response network
Adapted from Shaping Climate-Resilience Development: A Framework for decision-making. 2009 Economics of Climate Adaptation Working Group.
How can we initiate the path to a more
sustainable and profitable operation?
•Measurement
•Direct
•Indirect
•Technology
Where are resources and energy being used, where are they being
wasted and generating unnecessary emissions?
Carbon Footprint – Total amount of GHG (mainly CO2) emitted over the
entire lifecycle of a product or service
CO2 = WASTE
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What steps can corporations take to achieve
energy efficiencies and costs savings?
1. Energy efficiency through technology improvements
2. Energy efficiency through management or behavioral
changes
3. Increased use of low-carbon energy
Adapted from “The 3% Solution – 2013” – Carbon Disclosure Project and WWF
Collaboration – TAO WAO PAO
How can we initiate the path to a more sustainable and
profitable operation from a Supply Chain stand point?
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Greenovate!
Companies innovating to create a more sustainable world
• What if we could recycle all residues from our industrial processes,
transforming into raw
materials orand
efficient
fuels all the garbage that
Patagonia
Terracycle
goes today into the thousands of landfills across the Globe?
• What if we could improve all the agricultural and food producing
related processes, making food accessible and cultivation sustainable?
What if we reduced
generation
of residues
to never seen before
IKEA the
Farmer
schools,
RainForest
levels?
Alliance
• What if we could fund new ways to create alternative energy ,
dramatically reducing our dependence of fossil fuels that are pollutant
and expensive?Energy innovations, Nanosolar
Sustainability
•Not a competing priority
•Should be embedded in the strategy
•Not as an add-on Strategic imperative short/long term plans
•It is not about doing the right thing only…
It is doing the SMART thing
Sustainability enhances competitiveness and resilience of
the supply chain
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Key takeaways
•Waste is not good and should be eliminated
•Supply Chains have a direct impact on the equation
•Be part of the solution not the problem
•It is not a threat but an opportunity
•Sustainability needs to be at the core of the business
•Extending the reach is essential – TAO WAO PAO
•Sustainability is a major trend in business and continues to
evolve
It simply makes good business sense!
“Preach the gospel at all times; use
words if necessary.”
St . Francis of Assisi (1181-1226) ???
“Preach the gospel – use actions and
words always.”
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Survey
www.tinyurl.com/kmd5lrs
Questions?
Antonio Galvao
[email protected]
Tel: +31(6)30-900-047
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