Slide1: BUSINESS & THE ENVIRONMENT: Managing Risks, Maximising Opportunities David Holmes Senior Project Officer, Business Partnerships Sustainability Programs Division


Slide2: Business A business analogy… Environment Estimated value of ecosystem services: $33 trillion Global GNP: $18 trillion Costanza et al 1997 Products & services Capital / assets Capital / assets Products & services Resources Labour


Slide3: Depletion of Resources Resource availability: 1.9 ha/person World Footprint: 2.3 ha/person Australia: 7.6 ha/person World Population: 2.5 6.1 billion (19502000) Affluence and consumer demand Danger of ecological collapse So, what’s the problem? Disappearing forests and fisheries, desertification Loss of biodiversity, mass extinction Global warming and climate change Result? Liquidation of ecological assets


Global costs of extreme weather events (inflation adjusted): Global costs of extreme weather events (inflation adjusted) “Climate change is a major business risk and we need to act now” Australian Business Roundtable on Climate Change, 2006


What is sustainability?: What is sustainability? > 100 definitions of sustainable development “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.” quality of life, now and in the future Business perspective Right to ‘profit and grow’ (can’t be sustainable if broke) but within a ‘community licence to operate’ employees, community, environment [WCED, 1987]


What is a sustainable company? : What is a sustainable company? Sustaining Corporation Champions sustainability Efficiency Poor enviro practice seen as cost. Cleaner Production, resource efficiency Compliance Minimum environmental standards to meet legal requirements and reduce risk…”employ people, pay taxes, obey law”. Non-responsive –Enviro. not seen as relevant in business decisions Rejection – Resources (employees, comm. infrastructure, enviro) there to be exploited Source: Dunphy, Griffiths, Benn Strategic Proactivity Competitive advantage, Enviro best practice, green design, continuous improvement Company positioned to maintain viability and sector leadership Company reactive, short-term focussed, exposed to multiple risks


Why pursue sustainability?: Why pursue sustainability? Because there are real business advantages! Reduced risk, compliance costs and free up time Direct savings through efficient resource use (raw materials, energy and water) and reduced levels of waste and other emissions ‘Supplier of choice’ through innovative ‘green’ products and building a reputation as a good corporate citizen Increase in reputational value Improved employee satisfaction, retention, productivity Improved access to investment (ethical funds, lower insurance costs)


Business advantages…Direct savings via resource efficiency and waste reduction: Business advantages… Direct savings via resource efficiency and waste reduction DEC Industry Partnership Program… 340 companies, 3 years 33,200 MWh electricity and 4600 GJ gas 34,000 tonnes of CO2 (7000 cars off the road) 9,200 tonnes of raw materials saved 8,900 tonne diverted from landfill 300 Mega litres of water (300 Olympic pools) Recurrent savings more than $10 million p.a.


Cost Savings fromCleaner Production: Cost Savings from Cleaner Production Industry Partnership Program


Savings through Supply chain: Savings through Supply chain Sicpa was losing 5% ink from packaging – negotiated new packaging and making savings Conplant identified longer life product for fleet -significant savings in waste and servicing Hawker de havilland repackaged parts supplies substituted waste plastic for reuseable cardboard –reduced landfill and freight fees Siemans Dematic and pallet supplier developed steel reuseable pallet for sheet steel and cardboard stillages reducing shrinkwrap JohnsonDiversey’s used reprocessed 200 litre drums saving $600,000 each year THALES Underwater Systems energy savings through equipment supplier


Business advantages…Increase company value and image through better reputation: Business advantages… Increase company value and image through better reputation Reputation accounts for 60-70% company value (WBCSD) Best environmental practice boosts reputation as well managed, valuable business partner Market capitalisation 29% 71%


Working collaboratively with your Supply Chain: Working collaboratively with your Supply Chain Deepen and broaden relationships beyond price, quality and timing Build capacity to understand environmental performance of your products and services through the supply chain Develop and integrate sustainability criteria into specs, contracts, guidelines and tender processes Raise awareness with suppliers


Cleaner Production as a Catalyst – What’s next?: Cleaner Production as a Catalyst – What’s next? Based on: Must ‘add-value’ for companies Your environmental priorities and agenda No additional work – ‘accelerate’ and complete existing commitments eg Water Plans, NPC


The value of clusters: The value of clusters Share ideas, new developments and best practice Solutions to common problems Peer support and friendly competition


Partnership Program in Action: Partnership Program in Action Diagnostic Work in 2-3 ‘module areas’ Current groups Newcastle, Food Manufacturers, Commercial Property, Poultry Common areas of work: environmental planning, resource efficiency, staff training, supply chain Clusters meet 4 times a year (12-18 months) Costs – up to $2500 per company


DEC proposal for business : DEC proposal for business Partnership program with DEC Target: business interested in sustainability work Establish groups for reporting, training, workshops and seminars Co-ordinator assigned to each group Group meets quarterly Open to business of all sizes Nominal participation cost and management commitment required


An invitation from DEC: An invitation from DEC Contact: David Holmes – 8837 6030 or david.holmes@environment.nsw.gov.au For more info on sustainable business, see: http://www.environment.nsw.gov.au/education/sustainbusinessresources.htm


A parting thought: A parting thought In their 2006 report, with respect to greenhouse gas reductions, The Australian Business Roundtable on Climate Change said: “The longer we delay acting, the more expensive it becomes for business and for the wider Australian economy.”