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Sustainability Partners Int’l © Triple Bottom Line
Triple Bottom Line:The Best Strategic Investment
Your Company Can Make
By Gary A. Langenwalter, CFPIM
October 18, 2012
2Sustainability Partners Int’l © Triple Bottom Line
Topics
• Assumptions
• “Show me the money”
• Long-term trends
• Some TBL stars
• Getting started
3Sustainability Partners Int’l © Triple Bottom Line
Questioning Assumptions
• EOQ -> MRP
• MRP/ERP -> Lean
• “Quality costs money” -> TQM
• Lean -> ?
4Sustainability Partners Int’l © Triple Bottom Line
Business Model Assumptions
• Resources will remain cheap and readily available.
• Waste is a necessary byproduct
• “Environmental” costs money
• Our business decisions won’t affect our children and their children.
• There is an “away” where we can safely put toxics.
• Stakeholders will remain cooperative
• People live to work
• Money is a primary motivator
5Sustainability Partners Int’l © Triple Bottom Line
Triple Bottom Line
+ Passion
Peo
ple
Profits
Plan
et
SUSTAINABILITY
An activity is
sustainable if it can be
continued indefinitely.
6Sustainability Partners Int’l © Triple Bottom Line
Objective: A Living Business™
• Is organic by design; will thrive long term• Works in harmony with nature
– Produces more energy than it uses– Uses more waste than it produces– Emits zero toxins
• Transforms communities in which it operates– Employees thrive and contribute– Communities prosper
• Creates exceptional financial returns– Double the typical returns for your industry– Minimizes risk for investors
2
7Sustainability Partners Int’l © Triple Bottom Line
Cumulative Shareholder Return
-50
0
50
100
150
200
250
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
% R
OI
LAMP
S&P 500
Shareholder Returns: S&P 500
Bragdon, 2009 http://www.scribd.com/doc/19788777/Fundamentals-of-Relational-Equity
8Sustainability Partners Int’l © Triple Bottom Line
Shareholder Returns:60 TBL Companies (LAMP)
Jand 56 others
9Sustainability Partners Int’l © Triple Bottom Line
Shareholder Returns:60 TBL Companies
Cumulative Shareholder Return
-50
0
50
100
150
200
250
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
% R
OI
LAMP
S&P 500
Bragdon, 2009 http://www.scribd.com/doc/19788777/Fundamentals-of-Relational-Equity
10Sustainability Partners Int’l © Triple Bottom Line
“Serve With Love”
– Healthy, thriving communities
– Transforming business to lead from mission
– Develop Responsible Community Leaders
– Share your learning
Burgerville’s Mission
Fresh Local SustainableFresh Local Sustainable
11Sustainability Partners Int’l © Triple Bottom Line
Shareholder Returns:Engaged Employees vs. All Companies
Edmans, MIT Sloan School, March 2007
Blue Line: Fortune Best 100 Companies to Work For, during year(s) listed
Magenta Line: All Traded Securities – Center for Research in Securities Prices
0
20
40
60
80
100
120
140
1998 1999 2000 2001 2002 2003 2004 2005
Cu
mu
lati
ve %
RO
I G
ain
12Sustainability Partners Int’l © Triple Bottom Line
Servant Leadership
• A servant leader – Person of character
– Puts people first
– Skilled communicator
– Compassionate collaborator
– Has foresight
– Systems thinker
– Leads with moral authority
Sipe and Frick, Seven Pillars of Servant Leadership, 2009
)
3
13Sustainability Partners Int’l © Triple Bottom Line
Servant Led Companies• The Toro Company• Southwest Airlines• Starbucks• AFLAC• Men’s Wearhouse• Synovus Financial• Herman Miller• ServiceMasters• Marriott International• FedEx• Medtronic
14Sustainability Partners Int’l © Triple Bottom Line
Better Than Great!
Sipe and Frick, Seven Pillars of Servant Leadership, 2009, p. 2
Servant-Led ROI
0
5
10
15
20
25
30
S&P 500 Good to Great Servant-Led
ROI %
15Sustainability Partners Int’l © Triple Bottom Line
Why TBL Works
• Social contract and expectations
– Conventional company
– Lean company
– TBL company
Sustainability Partners Int’l © Triple Bottom Line
1. Reduced recruiting costs
2. Reduced attrition costs
3. Increased employee productivity
4. Reduced expenses in operations
5. Reduced expenses at commercial sites
(energy, water, consumables)
6. Increased revenue / market share
7. Reduced risk, easier financing
8. Increased community support
7 8 Benefit Areas from Embracing TBL
Usual
focus
17Sustainability Partners Int’l © Triple Bottom Line
Current Business Model
An activity is sustainable if it
can be continued indefinitely.
Take
Make
Waste
94%6%
18Sustainability Partners Int’l © Triple Bottom Line
Business Model Assumptions
• Resources will remain cheap and readily available.
• Waste is a necessary byproduct
• “Environmental” costs money
• Our business decisions won’t affect our children and their children.
• There is an “away” where we can safely put toxics.
• Stakeholders will remain cooperative
• People live to work
• Money is a primary motivator
)
4
19Sustainability Partners Int’l © Triple Bottom Line
Quick Look at the Future
• Resource Use = P x A• P (Population)• A (Affluence [GDP per person])
Time
Resources
Available Resources
Resource Use
20Sustainability Partners Int’l © Triple Bottom Line
Resource Prices
Resource Prices
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
1990 1995 2000 2005 2008 2009 2010 2012
Coal
Copper
Corn
Iron
Oil
Wheat
21Sustainability Partners Int’l © Triple Bottom Line
Crude Oil
Source: Campbell
22Sustainability Partners Int’l © Triple Bottom Line
Energy UsageEnergy Usage per Capita, 2005
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
CA
N
US
A
NO
R
FIN
AU
S
SW
E
RU
S
FR
A
NZ
L
DE
U
JP
N
AU
T
GB
R
IRL
DN
K
CH
E
ITA
UK
R
HU
N
PO
L
CH
N
IND
Kg
Oil
/Cap
ita
http://earthtrends.wri.org/text/energy-resources/variable-351.html
23Sustainability Partners Int’l © Triple Bottom Line
Water
Lake Wendouree, Ballarat, Victoria, Australia March 2007
24Sustainability Partners Int’l © Triple Bottom Line
Ogallala Aquifer
Illustration courtesy of the High Plains Underground Water Conservation District No. 1, Lubbock, TX. www.hpwd.com
5
25Sustainability Partners Int’l © Triple Bottom Line
Toxins• Cancer: 43% of Americans!
– 50% of American men – 33% of American women
Bill Saporito, Time, September 15, 2008
• Children:– Carry an average of 23 carcinogens, hormone disrupters, and
neurotoxins, including PCB’s and DDTMittelstaedt, Martin, “Toxic cocktail found in children,” Toronto Globe and Mail, June 2, 2006
• Breast Milk– Flame retardants, dioxin, lead, arsenic,J– DDT, PCB’s (both banned for more than 30 years!)
Williams, Florence, “Toxic Breast Milk?” New York Times, January 9, 2005
26Sustainability Partners Int’l © Triple Bottom Line
TBL Strategies
Circular
Economy
Design
End of Life
Customer
Use
Marketing
Operations
Sourcing
27Sustainability Partners Int’l © Triple Bottom Line
Rejuvenation
• Redesigned brass antiquing process
– Investment: $8,100
– Payback:
• Water: from 31,000 gal/yr to 0
• Operating cost: from $21,655 to $7,500/yr
• Rejected foam packaging
– $200,000 savings
28Sustainability Partners Int’l © Triple Bottom Line
Davey Water Products
• 30% of shop employees volunteered for TBL Sustainability
• Excellent results in 3 months
29Sustainability Partners Int’l © Triple Bottom Line
Davey Water Products:31m Rubbish Bin
30Sustainability Partners Int’l © Triple Bottom Line
Davey Water Products: The Solution
)
6
31Sustainability Partners Int’l © Triple Bottom Line
Burgerville
“Choose fresh, local, sustainable. Choose Burgerville”
• For-profit, “Serve with love”
• Local sourcing; sustainable suppliers
• Subsidized healthcare
• People development
• 100% wind power
• Recycling /Composting
32Sustainability Partners Int’l © Triple Bottom Line
Shaklee
• TBL oriented since 1956
– $4 billion paid to independent businesses
– Golden Rule – based business
• Scientifically-based products “in harmony with nature and good health”
– 1st Climate Neutral in US
– 1st Earth Day cleaners
– Award-winning building
33Sustainability Partners Int’l © Triple Bottom Line
Wal-Mart
• Started as defensive strategy; now their move-forward strategy
– Truck fleet: saved $26 million/yr in fuel
– Earned $28 million by selling plastic from stores (used to throw it away)
– Opening experimental eco-stores
– Signed with Environmental Defense Fund “Greening the Supply Chain”
• Requiring their mfrs to use suppliers with best environmental and social practices
34Sustainability Partners Int’l © Triple Bottom Line
Gerding Edlen
• Brewery Blocks – LEED – Invested $70 million
Now worth $250 million
– Highest average rents
• OHSU CHH – LEED Platinum– Cost 4% less to build!
– Uses 61% less energy
– Uses 56% less water
35Sustainability Partners Int’l © Triple Bottom Line
Doubletree
• 1st Green Seal hotel in West
• Higher guest ratings
• More bookings
• Lower cost
• Helped Marriott getcertified, too!
– More business for all
36Sustainability Partners Int’l © Triple Bottom Line
Oatfield Estates / Fanno Creek
• New model for retirement home:
– Residents are active and empowered
– Environmental commitment
• Fanno Creek: LEED Platinum
)
7
37Sustainability Partners Int’l © Triple Bottom Line
InterChurch Center
• 5 Faith-based organizations in 1 building
– Already focused on social issues
– Improved environmental decisions• Green cleaning products
• Recycled copy paper
38Sustainability Partners Int’l © Triple Bottom Line
Education
• Internal:
– Improve environmental impact on campus
• External:
– Integrate TBL into curriculum
39Sustainability Partners Int’l © Triple Bottom Line
Local Government
• Environmental– Reduce car & truck traffic
– Increase recycling
• Social– Redesign for neighborhoods
• Economic– Attract clean businesses
– Reward sustainable TBL businesses
40Sustainability Partners Int’l © Triple Bottom Line
State Government (Prisons)
• Reduced energy use
• Reduced water use
• Socialization
• Helping others
41Sustainability Partners Int’l © Triple Bottom Line
Leave Your Checkbook at Home!
• Rely on your people’s creativity
• Make TBL investments meet your hurdle rate
42Sustainability Partners Int’l © Triple Bottom Line
Seven Steps to Success
1. Oppt’y Assessment;
Go/No Go
5. Metrics
2. Values Alignment
4.
Triple Bottom
Line Strategy
3. Initial Education
6. Action Plan
7. Team Launch
)
8
43Sustainability Partners Int’l © Triple Bottom Line
Thanks for Starting Now!
For the well-being of our:
Companies
Community
Children
Together we can make a difference
44Sustainability Partners Int’l © Triple Bottom Line
For More Information:
Sustainability Partners Int’l
Gary Langenwalter(971) 221-8155