Paola_Fiore_SDA_Bocconi_Presentation_22_05_2012.key

THE THREE PILLARS OF SUSTAINABILITY
AND YOUR INNOVATIVE GROWTH

Insights by Paola Fiore, 22 May 2012 - SDA Bocconi

The Bocconi ETHICA CLUB and ETICAMBIENTE®

THE THREE PILLARS OF
SUSTAINABILITY

‣ Commonly, we recognize
three Pillars of
Sustainability: Society,
Ecology and Economy.

‣ Although, there is also a
fourth pillar to consider:
Government.


SOCIETAL
SUSTAINABILITY

‣ Societal Sustainability is concerned with the
well being of current people, but also future
generations. Though common reference to
Societal Sustainability is the "seventh
generation" stewardship, which requires that
in all actions we consider the needs of the
next seven generations, not just our own
generation’s needs.

‣ It also includes the need to incorporate
sustainable practices into cultural norms in
order for the society to persist.


ECOLOGICAL
SUSTAINABILITY

‣ Ecological sustainability is concerned with
the health of the natural environment, the
conservation of natural resources, and the
preservation of ecosystem functions
performed by individual members and the
ecosystem as a whole.

‣ It requires that use of natural resources not
exceed the capacity of an ecosystem to
regenerate them, known as the ‘carrying
capacity’.


ECONOMIC
SUSTAINABILITY (1/5)

‣ Economic Sustainability uses the construct
known as the Triple Bottom Line (TBL), or
Three Ps (Proﬁt, People, Planet) as opposed
to the traditional "Bottom Line", which only
concerns itself with monetary success.

‣ The Triple Bottom Line considers economic
proﬁtability compared to environmental
harm or to societal harm.


ECONOMIC

‣ The TBL is an accounting framework that
incorporates the three dimensions of
performance: Social, Environmental and
Economic (Sustainability Reporting).

‣ The TBL differs from other traditional
reporting frameworks as it includes
ecological (or environmental) and social
measures that can be difﬁcult to assign
appropriate means of measurement.


ECONOMIC

‣ Economic Measures: Economic variables
ought to be variables that deal with the Bottom
Line and the ﬂow of money.

‣ It could look at income or expenditures, taxes,
business climate factors, employment, and
business diversity factors.


ECONOMIC
‣ Environmental Measures: Environmental
variables should represent measurements of
natural resources and reﬂect potential
inﬂuences to its viability.

‣ It could incorporate air and water quality,
energy consumption, natural resources, solid
and toxic waste and land use/land cover.

‣ Having long-range trends available for each of
the environmental variables would help us
identify the impacts a project or policy would
have on the area.


ECONOMIC

‣ Social Measures: Social variables refer to
social dimensions of a community or region
and could include measurements of
education, equity and access to social
resources, health and well-being, quality of
life and social capital.


GOVERNMENTAL
SUSTAINABILITY

‣ Governmental Sustainability primarily pushes
for legislation that furthers the other three
components of Sustainability, acting as a
steward of common resources and the public
well being for many generations, not only the
present constituents.


SUSTAINABILITY A
STRATEGIC ISSUE (1/4)
‣ Sustainability help us see relationships
between issues and more accurately
forecast what may occur in the future.

‣ Sustainability examines our world as a
whole system, revealing threats and
opportunities.

‣ It forces us to see relationships between
social, economic and environmental trends.


SUSTAINABILITY A
‣ Sustainability challenges us to make
decisions that can improve the economy, the
community and the environment.

‣ This challenge may seem far outside the
scope of business responsibility. Why should
business examine its impacts on such issues?

‣ ...In a global and connected world, what
happens elsewhere can affect us...


SUSTAINABILITY A
‣ Why Sustainability is drawing so much
attention?

1) Transformative worldwide trends;

2) Sustainability is a natural extension of other
organizational changes;

3) Natural resources are now a limiting factor;

4) Environmental issues are becoming global;


SUSTAINABILITY A
5) Health concerns are rising;

6) Social, environmental and economic factors are
creating instability;

7) Energy supply is a signiﬁcant threat;

8) These problems are uncovering new
opportunities; and,

9) Sustainability tends to produce multiple,
unintended beneﬁts.


THE BENEFITS OF
‣ Here are some of the beneﬁts we should
expect when we embrace Sustainability:

1) Reduce energy, waste and costs;

2) Differentiate ourself and our organization;

3) Sidestep future laws and regulations;

4) Create innovative new products or processes;

5) Open new markets;


THE BENEFITS OF

6) Attract and retain the best employees;

7) Improve our company’s image with
stakeholders and the public;

8) Reduce legal risk and insurance costs;

9) Provide a higher quality of life and work.


THE THREATS OF
‣ Here are some of the threats we should expect
if we don’t embrace Sustainability:

1) Liability for pollutants;

2) Supply problems with raw materials and
energy;

3) Attacks on our company’s image;


THE THREATS OF
4) Legal risks;

5) Bad-mouthing of our product;

6) Being closed out of certain markets.

‣ There are risks in pursuing Sustainability, more
easily manageable than those of non pursuing it:

‣ 1) Greenwashing, 2) Cannibalizing our own
business (make obsolete core product/service),
3) Raising unrealistic expectations.


A CASE STUDY OF
ENVIRONMENTAL SUSTAINABILITY

ENVIRONMENTAL SUSTAINABILITY IN THE RAILWAY
TECHNOLOGY: THE BOMBARDIER MODEL
➡ Bombardier is among the top world’s manufacturers of planes and trains.
It is evolving mobility worldwide to make easier and more sustainable for
people to connect with one another.

➡ Bombardier is present in more than 60 countries, with 76 production and
engineering sites; 70,000 employees, headquarter in Montréal, Canada.

➡ Its shares are traded on the Toronto Stock Exchange (BBD); it is listed on
the Dow Jones Sustainability World and North America Indexes.


A CASE STUDY OF


➡ Bombardier created its new Corporate Strategy in 2009, called “Our Way
Forward”; the strategy set ﬁve strategic, business priorities:

➡ 1) Enhance Execution Discipline; 2) Improve Global Talent Management; 3)
Active Risk Management; 4) More Local Roots; and 5) Greater CSR.


A CASE STUDY OF


➡ Bombardier’s approach to Corporate Governance aims to:

I. Promoting ethical behaviour (Code of Ethics and Business Conduct);

II. Strengthening its governance (Board of Directors elected every year);

III. Improving Risk Management (Finance and Risk Management Committee;
Director of Ethics and Compliance);


A CASE STUDY OF


IV. Moving forward CSR Governance [Strategic approach to CSR is an integral
part of the Corporate Strategy “Our Way Forward”; new CSR governance
structure including a more effective CSR Committee with broader expertise;
initiatives to improve CSR performance in four key areas such as 1)
Community Investment, 2) Stakeholder Engagement, 3) Employee
Volunteering, 4) CSR Reporting & Communication; speciﬁc allocated
resources to implement CSR approved initiatives].


A CASE STUDY OF


➡ Bombardier created its own Product Responsibility Strategy:

I. Making mass transit even more sustainable (launching the ECO4 suite of
customizable solutions in September 2008; ECO4 technologies built on the
pillars of energy, efﬁciency, ecology and economy; reducing overall energy
consumption by up to 50%, minimize CO2 emissions, improve total train
performance and decrease operating costs);


A CASE STUDY OF


II. Designing with the Environment in mind [HSE Policy incorporated in guiding
principle of designing products with minimal environmental impact; Product
Responsibility Strategy included three cornerstones for advancing
sustainable mobility:1) Design for Environment (DfE) Program, 2) Life Cycle
Assessments (LCAs), and 3) Environmental Product Declarations (EPDs)...;


A CASE STUDY OF


II. ...; LCAs also guided in minimizing products’ environmental lifecycle impacts
and form the basis of EPDs; EPDs summarized a product’s environmental
impact, set a baseline for further product-related environmental improvements
and enhanced environmental reporting];


A CASE STUDY OF

III. Tackling aviation emissions (effectively address business aviation’s climate
change impact in a global industry-wide solution);

IV. Fuelling Environmentally Focused Innovations (developing greener
technologies, aircraft, operations and aviation infrastructures);

V. Expanding Carbon Offset Program (Carbon Offset Program that allow
operators to offset aircraft emissions by funding projects worldwide to reduce
an equal amount of CO2 emissions).


A CASE STUDY OF


➡ Bombardier fine-tuned its own Sustainability Operations:

I. Managing energy and carbon more effectively (launched a global energy and
carbon assessment of operations + inventory of energy sources and GHG
emissions at 85 sites; identified facilities with the greatest opportunities for
energy-efficiency improvements and GHG emission reductions; developed a
more comprehensive Energy and Carbon Management Strategy - ECMS to
help reach new targets);


A CASE STUDY OF


II. Drawing Down Carbon Footprint (signed the Copenhagen Communiqué as a
lead-up to the UN Climate change Conference for a global deal on Climate
Change; reduced operations’ carbon footprint through energy-efﬁciency
programs, process modiﬁcations and renewable energy sources);


A CASE STUDY OF


III. Energy Efficiency and Process Modifications (developed initiatives to meet
company’s global reduction objectives and targets; modifications to processes
enabled achieve sizeable reductions in GHG emissions and energy
consumption);

IV. Renewable Energy Sources (used significant renewable hydro-electricity in
major manufacturing sites in Québeq, Canada; more comprehensive
understanding of sites’ green energy use worldwide);


A CASE STUDY OF


V. Improving HSE Data [enhanced accuracy and integrity of HSE data; used a
leading HSE Information Management System to provide greater data quality,
integrity and traceability for Sustainability Reporting purposes; added three new
environmental indicators to monitor HSE performance such as 1) waste
valorization index, 2) use of volatile organic compounds - VOCs, and 3) number
of environmental incidents].


A CASE STUDY OF


➡ Bombardier integrated Sustainability into its own Supply Chain:

I. Encouraging High Ethical Standards (Supplier Code of Conduct; Supplier
Evaluation and Approval Process; Compliance programs and external audits
within the framework of the Association of the European Rail Industry - UNIFE
to harmonize efforts in this area);


A CASE STUDY OF


II. Engaging Suppliers in Sustainable Design (involved suppliers in DfE and LCA
processes to inﬂuence supplier decisions and reduce company’s product’s
environmental lifecycle footprint; encouraged suppliers to select materials and
processes that enhance company’s products’ end-of-life recyclability; joint
research and development activities with suppliers yield technologies to
further improve company’s products’ environmental performance);


A CASE STUDY OF


III. Improving Supply Chain Performance (implemented programs to
systematically measure and manage supplier performance; improved
productivity and quality, removed non-value activities, integrated processes and
implemented lean techniques; programs included a rigorous selection process
to verify compliance about supplier quality and qualiﬁcations);


A CASE STUDY OF


IV. Communicating with Suppliers (Supplier Communication Plan to foster long-
term strategic alliances with key suppliers and improved supply chain
performance; supplier advisory and technical boards to facilitate collaboration
on market strategies, technology roadmaps and business continuity; supplier
forums to engage suppliers in discussions on key market issues, ensuring a
common understanding of challenges and strategies; launched the Bombardier
Suppliers Advisory Board in 2007).


A CASE STUDY OF


➡ Bombardier promoted the Global Compact’s 10 Principles:

I. Encouraging High Ethical Standards (Human Rights, Labour Standards,
Environment, Anti-Corruption);


A CASE STUDY OF

THE BOMBARDIER MODEL: CONCLUSIONS
Bombardier created its own model for economic sustainability and
consumption of products, pursuing the objectives of:

1) Energy savings;

2) Improved efﬁciency;

3) Achieving a reasonable economic value; and

4) Protecting the environment.


USEFUL LINK ON
SUSTAINABILITY
‣ 2012 Global 100 Most Sustainable Companies:
The Full List . The Global 100: World Leaders in
Clean Capitalism: http://www.global100.org/

‣ The Global 100 is the most extensive data-
driven corporate sustainability assessment in
existence, and inclusion is limited to a select
group of the top 100 large-cap companies in
the world.

‣ Launched in 2005, the annual Global 100 is
announced each year during the World
Economic Forum in Davos.


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