ENVIRONMENTAL SUSTAINABILITY AND VALUE CREATION

Basic concept of Sustainability

• Sustainability means meeting our own needs without

compromising the ability of future generations to meet their
own needs.
Sustainable business

• Sustainability is ability to maintain or support a process over time.

• Sustainability is often broken into three core concepts: economic,
environmental, and social.
• Many businesses and governments have committed to sustainable goals,
such as reducing their environmental footprints and conserving
resources.
• Some investors are actively embracing sustainability investments, known
as "green investments."
• Skeptics have accused some companies of "greenwashing," the practice
of misleading the public to make a business seem more environmentally
friendly than it is.
Sustainable Business Firms
Apple model
Tata Sustainable Model
Starbuck’s Sustainability Model
APPROACHES :triple bottom line …1
Toyota’s Sustainable Model
Esg….2
SDG…3
What Is Corporate Sustainability?

• Corporate sustainability has become a buzzword in companies big and small. Walmart Stores,
Inc. (WMT), McDonald’s Corporation (MCD), and many other corporate giants have named
sustainability as a key priority moving forward. Now other corporations are under pressure to
commit to finding sustainable ways to deliver their goods and services.
• Corporate sustainability is a growing concern among investors seeking economic profit and
social good.
• There are three pillars of sustainable investing: environmental, socially responsible, and
governance.
• Companies can improve their environmental sustainability by reducing their carbon footprint
or wasteful practices.
• The social responsibility pillar consists of practices that benefit the company's employees,
consumers, and the wider community.
• The economic, or governance, pillar refers to maintaining honest and transparent accounting
practices and regulatory compliance.
The 3 Pillars of Corporate Sustainability

• The Environmental Pillar : reducing their carbon footprints,

packaging waste, water usage, or other damage to the environment
• The Social Pillar : approval of its employees, stakeholders, and the
community it operates in
• The Economic Pillar: compliance, proper governance, and
risk management
Is it new …?
• "KAIZEN™ means improvement. Moreover, it means continuing
improvement in personal life, home life, social life, and working life.
When applied to the workplace KAIZEN™ means continuing
improvement involving everyone – managers and workers alike.“
• Masaaki Imai, Founder of Kaizen Institute
5 Principles
• Know your Customer
• Let it Flow
• Go to Gemba
• Empower People
• Be Transparent.
Big Hairy Audacious Goal (BHAG)

• BHAG (Big Hairy Audacious Goal) is a compelling, long-term goal

that is intriguing enough to inspire employees of an organization to
take action.
• BHAG comes from the 1994 book "Built to Last: Successful Habits of
Visionary Companies" by Jim Collins and Jerry Porras.
• BHAGs are meant to pull people out of a slump and energize them to
implement a big picture-type plan that could take a longer time
frame, like a decade, to complete.
• BHAGs are broadly defined as falling under four main categories:
role model, common enemy, targeting, or internal transformation.
Built to Last
• Put yourself in the shoes of Boeing’s management team in 1952. Your engineers have the
idea to build a large jet aircraft for the commercial market. Your company has virtually no
presence in the commercial market and your earlier commercial attempts have been
failures. You’ve been building aircraft primarily for the military (B-17 Flying Fortress, B-
29 Superfortress, B-52 jet bomber) and four-fifths of your business comes from one
customer—the Air Force. Furthermore, your sales force reports that commercial airlines in
both the United States and Europe have expressed little interest in the idea of a commercial
jet from Boeing. The airlines have an anti-Boeing bias—a “they build great bombers,
period” attitude. No other aircraft company has proved that there is a commercial market
for jet aircraft. Rival Douglas Aircraft believes that propeller-driven planes will continue to
dominate the commercial market. Your company still has memories of the painful layoffs
from fifty-one thousand employees down to seventy-five hundred after the end of World
War II. And, for the clincher, you estimate that it will cost about three times your average
annual after-tax profit for the past five years—roughly a quarter of your entire corporate net
worth—to develop a prototype for the jet.
• What should you do? If you’re Boeing’s management?
• You defy the odds and commit to the audacious goal of establishing
yourself as a major player in the commercial aircraft industry. You
build the jet. You call it the 707. And you bring the commercial world
into the jet age.
SDGs
Policy initiatives at the international and national level

Current flagship policies and programs of Government of India such as

• Swachh Bharat Mission (SBM)- Sanitation and Drinking water
• Beti Bachao Beti Padhao (BBBP)-Girl education
• Pradhan Mantri Awas Yojana (PMAY)-Affordable housing for urban
poor
• Pradhan Mantri Jan-Dhan Yojana (PMJDY)-Financial inclusion program
• Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) - continuous
electricity supply to rural India.
• Pradhan Mantri Ujjwala Yojana (PMUY) - 50 million LPG connections to
women of Below Poverty Line families
Concepts and approaches for accessing the
sustainability of Business
• WHAT IS SUSTAINABILITY IN BUSINESS?
Sustainability in business refers to the effect companies have on the
environment or society. A sustainable business strategy aims to
positively impact one or both of those areas, thereby helping address
some of the world’s most pressing problems.
Some of the global issues that sustainable
business strategies help to address include:
• Climate change
• Income inequality
• Depletion of natural resources
• Human rights issues
• Fair working conditions
• Pollution
• Racial injustice
• Gender inequality
you can't use business to do good in the world if you're not doing well financially.
Doing well and doing good are intertwined, and successful business strategies include both.

Rebecca Henderson
• Many of today’s firms have adopted the triple bottom line, which
suggests that organizations should focus on more than just profits, or
the “bottom-line,” and also measure their environmental and social
impact. These focuses can be referred to as “the three Ps,”: people,
planet, and profit. Quite often, this sustainable approach to business
ultimately boosts business performance.
WHY IS SUSTAINABILITY IMPORTANT?

• Sustainability initiatives can contribute to an organization's overall

success.
• It may seem counterintuitive that spending more money on sustainable
business practices can boost a company’s profitability, but studies show
that the most sustainable companies are also the most profitable.
• Environmental, social, and governance (ESG) metrics are often used to
determine how ethical and sustainable an organization is.
• According to McKinsey, companies with high ESG ratings consistently
outperform the market in both the medium and long term. While
sustainability strategies might be an investment in the short term, they
can lead to long-term benefits.
BENEFITS OF SUSTAINABILITY IN
BUSINESS
1 You’ll Protect Your Brand and Mitigate Risks
2 Being Purpose-Driven Is a Competitive Advantage
3 There's a Growing Market for Sustainable Goods
4 Cooperative Action Can Drive Change
ESG MATRIX
• An ESG matrix is a table documenting sustainable activities that help
companies measure their environmental, social, and governance
performance.

• It provides transparency, clearly outlines risks (materialities), and

defines the opportunities and goals that the company aims to achieve
How are ESG metrics calculated?

• The metrics are calculated by scoring companies on a scale of 1-100.

• The higher the number, the better they rate in that category.
• These metrics are compared to other companies in the same industry
and geographical areas of operation.
ESG reporting frameworks

• There are two primary reporting frameworks, one is referred to as GRI

and the other is ISO.
• The Global Reporting Initiative has 3 interwoven Standards that apply
universally to every entity, company, or organization who are creating
on its sustainability practices.
• Reporting publicly on a range of economic, environmental and social
impacts.
GRI Sustainability Reporting Guidelines

• The fourth generation of the GRI Guidelines, G4, was launched in

May 2013 and has been revised and enhanced to reflect important
current and future trends in sustainability reporting.
GRI ( Global Reporting Initiative)

The Global Reporting Initiative (GRI) is a widely recognized

framework for sustainability reporting that helps organizations report on
their economic, environmental, and social impacts. The GRI Standards
increase an organization's transparency, enhance stakeholder
engagements, and help mitigate an organization's risks.
The GRI reports
1. Sustainability Reports: A report on an organization’s economic,
environmental, and social performance.
2. Integrated Reports: A report that combines financial and sustainability
information
3. Climate Change Reports: A report on an organization’s greenhouse
gas emissions
4. Water Security Reports: A report on an organization’s water use and
management
5. Biodiversity Reports: A report on an organization’s impact on
biodiversity
• Proxy data: data used to study a situation, phenomenon or condition for which no
direct information - such as instrumental measurements is available. For example – Tree
rings
• Materiality : means analyzing which issues are the most important of being
addressed by businesses.
• Category weights : calculated based on an objective and data-driven approach to
determine the relative importance of each theme to each individual industry group.
• The ESG pillar score : it is a relative sum of the category weights, which vary per
industry for the environmental and social categories. For governance, the weights remain
the same across all industries.
International Organization for Standardization (ISO)

• ISO is the world’s largest developer of voluntary International

Standards.
• International Standards provide state-of-the art specifications for
products, services and good practice, helping to make industry more
efficient and effective.
• Developed through global consensus, they help to break down
barriers to international trade.
ISO

• ISO standards contribute to all three dimensions of sustainable

development — economic, environmental and societal
• ISO comprises a network of national standards bodies representing
over 160 countries from all regions of the world, and covering
developed, developing and transitional economies.
• These national standards bodies make up the ISO membership and
each represents ISO in its own country.
ISO 26000:2010
Guidance on social responsibility ISO 26000 provides guidance on how
businesses and organizations can operate in a socially responsible way.
It helps clarify what social responsibility is, helps businesses and
organizations translate principles into effective actions and shares best
practices from around the world relating to social responsibility.
Applicable to all types of organization, including big business, small-
and medium-sized enterprises, public administrations, governmental
and non-govermental organizations.