1 2007

“Enhancing U.S. Competitiveness Through Sustainable

Manufacturing: A Public-Private Dialogue”

Providing Value Through Sustainable Manufacturing Practices

Steve Hellem

Executive DirectorGlobal Environmental Management Initiative (GEMI)

September 27, 2007

2 2007

Overview of Discussion

• GEMI’s Journey Toward Corporate Citizenship/Sustainability, it’s not a destination.

• How do these activities meet the value proposition of a company?

• Where are we going, in a VUCA world?

3 2007

What is GEMI?

• 40 Member Companies:– Representing more than 22 Business Sectors– Annual Sales: more than $915 billion USD– Global Headcount: more than 2.5 million– Number of Manufacturing Facilities Worldwide:

more than 3,034

• Non-profit 501(c)(3) Organization

• Not an Advocacy Organization

4 2007

Current GEMI Members

5 2007

Vision & Mission of GEMI

Vision:

“To be globally recognized as a leader in providing strategies for businesses to provide corporate citizenship.”

Mission:

“Business helping business improve performance, shareholder value, and corporate citizenship.”

6 2007

A View of Global Citizenship

“Global citizenship means putting partnerships and community engagement at the center of our work. For Abbott, this involves listening to needs and developing solutions together.”

Miles D. WhiteChairman and CEOAbbott

7 2007

TQEM and EnvironmentalManagement Systems

•Quality in the 80’s impacted Environment in the 90’s

•Environment was perceived as a cost adder

•The Environmental Department was responsible for environment

•Then Environment started to become a Major business issue

•GEMI developed work tools directed at environment/business integration

•Environment became a value adder

•1996 - ISO 14001, Environmental Management Systems published

8 2007

Developing Value Driven and Integrated Tools

9 2007

2007 GEMI Tools

10 2007

GEMI Case Examples of Meeting the Value Proposition

• Through Water Sustainability activities:– Dow, Coca-Cola, Georgia-Pacific

• Through Supply Chain activities:– Motorola, Duke Energy, Anheuser-Busch,

Johnson Controls

• Through Transparency activities:– FedEx Express

• Through Metrics activities:– DuPont, Procter & Gamble, Pfizer Inc

11 2007

Meeting Value Propositions Through Water Sustainability

The Dow Chemical Company – Improving Process Water Quality and Cutting Costs at a Bulgarian Power Station

• Dow retrofitted a 22-year old power station with Dow’s UPCORE system, which resulted in:– 60% reduction of regenerate consumption– 70% reduction of the amount of wastewater – 50% reduction of maintenance needs – 40% reduction in water costs

12 2007

Meeting the Value PropositionThrough Water Sustainability (cont’d)

The Coca-Cola Company – Using Source Protection Planning to Identify Source Vulnerabilities

• 25 plants located in areas of water scarcity received increased technical and financial support

• Developed a self-assessment tool • A Coca-Cola bottling plant in Brazil invested more

than $2 million in a partnership to protect the Jundai River watershed and improved water use efficiency.

13 2007

Georgia-Pacific Corporation – Using Performance Goals to Focus Organizational Attention to Water Sustainability

• Set 5 water pollution prevention goals• Addressed those goals and set, with input from

employees, new performance measures to track continuous improvement of corporate-wide and individual business unit performance.

Meeting the Value PropositionThrough Water Sustainability (cont’d)

14 2007

Meeting the Value PropositionIn the Supply Chain

Motorola – Motorola’s Inbound Discrepancy Reporting System:

• 58% reduction in pallet-related injuries avoiding $400,000 in Workmen’s Compensation

• $400,000 in reduced transportation expenses• $100,000 in reduced handling and storage of

pallets• 16% improvement in recycling rate of non-

hazardous wastes

15 2007

Meeting the Value PropositionIn the Supply Chain (cont’d)

Duke Energy – Reel-Less Cable Packaging:• Saved $500,000 by eliminating wood reels• Reduced cable waste of $140,000 per year,

tripping charges at landfill were reduced by $11,000

• Reduced demand for 135 acres of forest each year, wood waste is reduced by 660 tons per year and protective wrap around cable is recycled and re-used

16 2007

Anheuser-Busch Inc. – Supply Chain Re-Engineering:• 90% of low volume items are now within 200 miles of

their destination• Costs of purchasing, operations and transportation

are minimized without loss of customer service• Interplant shipments have been reduced by 78% and

transportation service is 99% on-time or early

Meeting the Value PropositionIn the Supply Chain (cont’d)

17 2007

Johnson Controls Inc. – Suppliers Partnership for the Environment (SP):

• Founding member of the organization• Partnerships with NIST MEP’s• Energy Work Group that saved one small auto

suppliers $250,000 in one year thanks to the sharing of Chrysler’s energy program

• Creating foundation to address chemical in product issues for the auto industry and its supply chain led by GM

Meeting the Value PropositionIn the Supply Chain (cont’d)

18 2007

Meeting the Value PropositionIn Transparency

FedEx Express – Reciprocal Transparency:• Teamed up with Environmental Defense to address

environmental, economic and social objectives in developing with Eaton Corporation a hybrid-electric PowerTrain that improves fuel efficiency in the new vehicle by 50% with a corresponding reduction in CO2 emissions of 33%.

19 2007

Meeting the Value PropositionThrough Metrics

DuPont – Managing Energy:• Set a target to keep energy use flat at the 1990

baseline– Achieved this objective– Reduced total energy use by about 6%, while

increasing production by 41% and thereby avoiding over $3 billion in energy costs

– Set a target of achieving 10% of its energy use from renewable sources by 2010

– Set a goal of nearly doubling its revenues from non-depletable resources to at least $8 billion by 2015.

20 2007

Meeting the Value Proposition Through Metrics (cont’d)

The Procter & Gamble Company (P&G) – Exploring New Value-Creation Metrics:

• P&G’s vision of sustainable development incorporates:

• Reducing costs and impacts• Creative value and business growth through sales,

new markets, new consumers and new businesses• P&G’s water purifiers (PUR) present significant

opportunities to improve and even save lives in developing countries.

21 2007

Meeting Value Propositions Through Metrics (cont’d)

Pfizer Inc – Evaluating Company Wide Goals: • Established company-wide environment, health and

safety (EHS) goals on climate change and energy that include:– Reducing CO2 emissions by 35% per million

dollars of sales by 2007 from the baseline of 2000

– Meeting 35% of its global electricity needs by 2010 through clean energy sources, including co-generation, solar and wind power

22 2007

Where are we going,in a VUCA World?

A VUCA is a place where everyday you wake up in a:

• Volatile• Uncertain• Complex• Ambiguous world

Term has been coined by the Institute for the Future (IFTF), Palo Alto, CA.

23 2007

Where is Sustainability Going in VUCA World?

• There is a need for longer term, global sustainability planning

• Strategic planning will help turn foresight into insight

• There are key driving forces • There are impact areas• As key driving forces cross impact areas

they become challenges, opportunities or dilemmas

24 2007

Closing Comments

• Sustainability is a journey that each organization will take based on their own vision and mission.

• There must be a value proposition in that journey, or it will not succeed.

• We live in a VUCA world but we can operate in that world successfully, if we are committed to environmental, economic and socially responsible actions that are based on a grounded value system.

25 2007

How to Contact GEMI

Web site: www.gemi.org

email: info@gemi.org

1155 Fifteenth Street, NW, Suite 500

Washington, DC 20005

USA

Phone: 202-296-7449

Fax: 202-296-7442

All GEMI Tools are available for free on the GEMI Website it’s part of “Business Helping Business.”