Sustainability

Hans Jôhr. Nestlè. Corporate Head of Agriculture.Foto:  Toini Lindroos

Creating Shared Value at Nestlé

Hans Joehr, Nestlé’s corporate head of agriculture, is responsible for providing technical and strategic leadership for Nestlé’s worldwide agricultural material supply chain. One of the ways Nestlé accomplishes its goals is by providing agricultural “extension services” for the hundreds of thousands of rural farmers who are its suppliers. It’s all part of the company’s Creating Shared Value (CSV) approach to business, a process that seeks to create value for shareholders while also ensuring the company creates value for the communities in which they operate.

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The Insurance Industry’s Renewed Commitment to Sustainability

Insurers are just beginning to wake up to their role in environmental sustainability, argues Olivier Jaeggi, founder and managing partner at ECOFACT. The most important recent development: the launch of the Principles for Sustainable Insurance in 2012. Ban Ki-moon, Secretary-General of the United Nations, wrote that the Principles provide “a framework for the global insurance industry to address environmental, social and governance risks and opportunities.”

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Sustainability? Don’t Go It Alone

At the Sustainable Brands seventh annual community in June, a key theme was succinctly framed by Sally Uren, acting chief executive, Forum for the Future: “pioneering companies are hitting the limits of what they can do alone.” To address sustainability-related issues, a growing number of companies are becoming more collaborative. Not merely with suppliers, but with competitors as well. The complexity of business problems connected with sustainability is demanding collective action.

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Insuring a Better Future: Sustainability at Swiss Re

As climate change progresses, the risk of financial and personal losses related to extreme weather events such as hurricanes, tornadoes, floods, heat waves, and droughts grows greater. Insurers and reinsurers must take these risks seriously, and for some companies, that means advocating strategies to help business and society mitigate the effects — and reduce the causes — of climate change. MIT Sloan Management Review’s Nina Kruschwitz spoke with David Bresch, Head of Sustainability at Swiss Re, about his company’s efforts to address the complex problem of climate change risk.

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Mitigation or Adaptation? Lessons from Abolition in the Battle Over Climate Policy

Although both mitigation and adaptation are needed to address climate change risks, says MIT professor John Sterman, adapting to climate change may be taking resources that could be better spent on mitigation and prevention. We have the ingenuity to successfully tackle this complex issue, and can look at the lessons learned from the abolition of slavery to help guide us.

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Sustainable Finance: 7 Steps in Managing Reputational Risk

Financial institutions’ funding decisions makes them gatekeepers for sustainable development. But how do they develop the policies and procedures that will guide how they make decisions and satisfy stakeholders? According to Olivier Jaeggi of ECOFACT, effective decision-making for sustainability can be summed up in a set of seven best practices.

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New Energy Policies for the World’s Sixth Largest Bank

Crédit Agricole, the sixth largest bank in the world, puts its money where its principles are in its recently released social and environmental policies. In keeping with its stated policy of supporting projects that are “sustainably vitalizing,” the bank’s policies prohibit funding energy projects that rely heavily on unsustainable fuels.

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A View from the Peak: Balancing Our Carbon Budget

Earlier this year, the financial services company HSBC came out with a report in which their analysts calculated that taking climate change seriously could cut share prices of major oil companies by up to 60%. That report, Peak Planet: The next upswing for the climate agenda, held some sobering news for business. Now that it has been made freely available on the company’s website, executives concerned with managing risks may want to read it.

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Sustainability Goals — Thinking About What Works and What Doesn’t

New research shows which sustainability practices have a statistically significant impact on the overall success of the sustainable value-chain — suppliers, distributors, and partners — initiatives measured, their cost savings, and their revenue impact. The leading practices that showed particular effectiveness were clustered around three areas: engagement, goals and standards, and outside expertise. Managers should focus on the practices that are proven to work, and stop wasting their efforts on reinventing the wheel.

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The Net Positive Strategy: Where Environmental Stewardship Meets Business Innovation

Nick Folland of Kingfisher, one of Europe’s largest home-improvement retailers, discusses the company’s aspirations to create a net positive impact on the environment. Kingfisher was the first business of its size to receive full certification from the Forest Stewardship Council (FSC). Folland, the group corporate affairs director of Net Positive, is leading the company’s groundbreaking collaborative effort to reduce consumption and introduce “closed-loop” products.

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How Caesars Entertainment Is Betting on Sustainability

Caesars Entertainment uses a scorecard to guide managers in its sustainability efforts. Developing the right scorecard took time, but it gave corporate managers an opening for sustainability discussions. Numbers also showed that the more information hotel and casino guests had about the things the company was doing to reduce energy consumption, recycle waste and rebuild the local community, the better they felt about the company — and the more inclined they were to visit again.

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Managing Risks, Creating Opportunities from Ecosystem Change

Most businesses depend on ecosystem services somewhere in their supply chain. Most don’t fully recognize the risk that environmental degradation poses to business. However, the Corporate Ecosystem Services Review 2.0 tool offers a 5-step process that helps managers develop strategies to deal with the risks — and opportunities — that develop from ecosystem changes.

Andy C Wales

A New Mix: More Sustainable Beer from Better Water Practices

It’s only natural that a beer company would be concerned about water. It takes five liters of water, on average, to manufacture one liter of beer. When SABMiller mapped its water footprint and found that it took 45 liters of water to produce one liter of its beer in the Czech Republic, and 155 liters in South Africa, the company changed its water practices to make its beer more sustainable. An interview with SABMiller’s senior vice president of sustainable development explains how they did it.

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Image courtesy of Official U.S. Navy Imagery/Flickr.
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Designing for Resilience

Designing for resilience can ensure that critical systems continue to operate despite increasing threats. The focus of any organization concerned with resilience should be on whatever assures the continuity of business operations and the systems in which they’re embedded. By defining a critical system — its components, boundaries, and functions — managers can begin to use “what-if” scenarios to determine which components, or combination of components, are most vulnerable.

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How Next-Gen Car Sharing Will Transform Transportation

In communities where residents can join networks to share cars, people save money, emissions go down, parking spaces free up, and companies doing the coordinating make money. In this conversation with former Zipcar CEO Robin Chase she talks about her new venture, Buzzcar, another car-sharing business. The company calls this peer-to-peer car rental, and has taglines that include “Borrow the car next door” and “fewer cars, more options & the money stays in the ‘hood.’”

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Video: Sustainability: The New Business Model Opportunities

Since 2010, MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG) have been charting how organizations are responding to sustainability as a source of competitive advantage. This year we found that nearly 50 percent of companies have changed their business model because of sustainability opportunities. In this presentation, David Kiron, executive editor at MIT SMR, and Eugene Goh, a principal with BCG, cover highlights of the report and discuss specific company examples.

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The Innovation Bottom Line

This is the fourth annual research report jointly produced by MIT SMR and BCG on the connection between sustainability and business. This year’s report focuses on who is profiting from their sustainability practices and why. Overall, respondents reporting profit from sustainability went up by 23% to 37 percent of the total. As we explore in detail, business-model innovation is the crux of sustainability profits for a majority of companies.

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