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Education for Sustainability: Relevance to Corporations NESDEC Meeting January 31, 2008 Bob Willard [email protected] www.sustainabilityadvantage.com UN Decade of Education for Sustainable Development (DESD), 2005-2014 • UN General Council Resolution Dec 2002 • UNESCO is the lead, coordinating UN Agency • Mainly up to each country / state • Government, NGO, corporate, etc. collaboration • Touches formal, non-formal, informal education • 4 major thrusts of ESD 1. 2. 3. 4. Public awareness and understanding Access to quality basic education Reorienting existing education Training programs for all sectors Math problem: Early 1960s Problem: A logger sells a truckload of lumber for $100. His cost of production is four-fifths of this price. What is his profit? Answer: $20 The Evolution of Teaching Math, Virginia Department of Education web site Math problem: Early 1970s Problem: A logger sells a truckload of lumber for $100. His cost of production is four-fifths of this price, or $80. What is his profit? Answer: $20 The Evolution of Teaching Math, Virginia Department of Education web site Math problem: Late 1970s Problem: A logger exchanges a set, "L", of lumber for a set, "M", of money. The cardinality of set "M" is 100. Each element is worth one dollar. Make 100 dots representing the elements of the set "M." The set "C", the cost of production, contains 20 fewer points than set "M.“ Represent the set "C" as a subset of set "M" and answer the following question: What is the cardinality of the set "P" of profits? Answer: 20 The Evolution of Teaching Math, Virginia Department of Education web site Math problem: 1990s Problem: A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Rewrite and underline the “$20.” Answer: $20 The Evolution of Teaching Math, Virginia Department of Education web site Math problem: 2014? Problem: By cutting down beautiful trees and desecrating the precious forest, a logger makes $20. What do you think of this way of making a living? Topic for class participation: Do a role play of how the forest birds and squirrels -and the logger’s children - feel as the logger cuts down the trees. The Evolution of Teaching Math, Virginia Department of Education web site UN Decade of Education for Sustainable Development (DESD), 2005-2014 • UN General Council Resolution Dec 2002 • UNESCO is the lead, coordinating UN Agency • Mainly up to each country / state • Government, NGO, corporate, etc. collaboration • Touches formal, non-formal, informal education • 4 major thrusts of ESD 1. 2. 3. 4. Public awareness and understanding Access to quality basic education Reorienting existing education Training programs for all sectors Sustainability 3-Legged Stool Sustainability Economic Leg Good Jobs Fair wages Security Infrastructure Fair Trade Environmental Leg 0 Pollution & Waste Renewable Energy Conservation Restoration Social Leg Working conditions Health services Education services Community & Culture Social justice Quality of Life / Genuine Wealth / Genuine Progress Corporate Sustainability 3-Legged Stool Sustainability – Sustainable Development (SD) Environmental, Social, Governance (ESG) Corporate Social Responsibility (CSR) Corporate Responsibility (CR) Triple Bottom Line (TBL) – 3Es – 3Ps Economy - Profits Growth, Jobs, Taxes Products Services Environment - Planet Eco-efficiencies Eco-effectiveness Restorative Equity - People Employees Community / Culture World Smart Business 3-Legged Stool Asset Management Financial Capital Built Capital Natural Capital Human Capital Social Capital Sustainable Enterprise Academy (SEA) Mission To assist business in the transformation to corporate sustainability by providing senior executives with the vision, education, tools and support necessary to champion sustainable development in their organizations . NA’s premier executive education program on sustainability Based at the Schulich School of Business, York University Schulich is consistently ranked among the top 3-5 business schools in the world at teaching sustainability A 3 ½ day intensive residential seminar Targeted to senior executives of multi-national corporations 30-50 participants at each session: Level is strategic, not managerial or technical SEA Seminar Outline Company Value “Iceberg” Balance Sheet Tangibles Financials Intangibles - Nonfinancials Brand Image - Reputation Stakeholder Relationships Market Capitalization Company Value “Iceberg”: 1981 Balance Sheet Tangibles Financials Intangibles - Nonfinancials Market Capitalization Arthur D. Little, The Business Case for Corporate Citizenship , 2002 83% 17% Company Value “Iceberg”: 1998 Tangibles Financials Intangibles Nonfinancials Arthur D. Little, The Business Case for Corporate Citizenship , 2002 29% 71% Sea of Demanding Stakeholders Financials Economists NGOs Employees Global Markets Media The Public Nonfinancials Customers Competitors Banks Governments Investors Insurers Scientists Sea of Demanding Stakeholders Two-Part Business Case Financials NGOs Employees Global Markets Media The Public Economists Nonfinancials Customers Competitors Banks Governments Investors Insurers Scientists Mega-Issue Storm Clouds Pollution & Health Climate Crisis Water Crisis Other … Pandemics Energy Crisis Erosion of Trust NGOs Employees Economists Global Markets Media The Public Investors Customers Competitors Banks Governments Insurers Scientists The Debate is Over … Awakened Public - Consumers The “Goracle factor” + Hurricane Katrina ($125B, 1,833 deaths) + Weird weather globally + Rising gas prices + IPCC reports + … 70-80% of consumers say are switching to “green” companies 20% actually did in 2006; LOHAS sector: $200B in 2007; $420B by 2010; $845B by 2015 Warnings from Economists Stern Review Report (Oct 2006) Former World Bank chief economist, Nicholas Stern Quantified warnings in the 1997 Economists’ Statement on Climate Change 1. Cost of climate change mitigation: 1% of annual global GDP by 2050 if we act now; 5-20% if we act later 2. Benefits of $2.5T if we act now; global depression if we do nothing 3. Must stabilize GHGs: Use carbon taxes and / or a cap-and-trade system; deploy low-carbon technologies; remove barriers to energy efficiency Risk of Becoming a “Risky Investment” Carbon Disclosure Project 2003 Institutional Investors 35 2007 315 Value of Assets Held $4.5T $41T Companies Surveyed FT500 2,400 Q. Revenue, regulatory, or physical risks to value from climate change? A. Carbon-intensive manufacturers could lose 40% of their market value; Banks could lose 29% of value Two-Part Business Case Financials NGOs Employees Global Markets Media The Public Economists Nonfinancials Customers Competitors Banks Governments Investors Insurers Scientists One More Goal … or an Enabling Strategy? Profit Share price Growth Revenue Customer care Expense savings Competition Market share Leadership Governance Innovation Speed to market New markets Talent wars Productivity Motivation Brand image Managing risks Compliance Supply security Typical Large Company Benefits Revenue Profit Workforce Avg. Employee Salary Avg. Manager Salary $44,000,000,000 $3,000,000,000 120,000 $60,000 $70,000 Potential profit increase: +38% + Energized employees + Improved corporate image + Competitive advantage + Positioned for the future Lead It Like Any Culture Change 1. Walk the talk as senior leaders Integrate into vision - mission – strategies Business strategy vs. philanthropy Avoid “green-washing” hype 2. Educate the whole company Solicit employee ideas - help 3. Align with measurement & reward systems 7 Benefit Areas 1. Reduced recruiting costs 2. Reduced attrition costs 3. Increased employee productivity 4. Reduced expenses in manufacturing 5. Reduced expenses at commercial sites 6. Increased revenue - market share 7. Lower insurance & borrowing costs … yielding a profit increase of +38% Potential Improvements 1. Reduced recruiting costs -1% 2. Reduced attrition costs -2% 3. Increased employee productivity 4. Reduced expenses in manufacturing +10% -5% 5. Reduced expenses at commercial sites -20% 6. Increased revenue - market share +5% 7. Lower insurance & borrowing costs -5% … yielding a profit increase of +38% Two-Part Business Case Financials NGOs Employees Global Markets Media The Public Economists Nonfinancials Customers Competitors Banks Governments Investors Insurers Scientists In Summary … Sustainability is smart business New market forces - risks are in play Public expectations are rising Talk business language Show relevance to existing priorities You are not alone; find partners Opportunity for leadership CEO Financials Besieged by important stakeholders 9 AM – 5 PM Economists NGOs Employees The Public Media Nonfinancials Customers Competitors Banks Governments Global Markets Investors Insurers Scientists Sustainability “Pincer Strategy” 9 AM – 5 PM “CEO” 24/7 “Daddy” Besieged by important stakeholders Besieged by family / kids Education for Sustainability: Relevance to Corporations NESDEC Meeting January 31, 2008 Bob Willard [email protected] www.sustainabilityadvantage.com