Making sustainability connections

Young Managers Team 2004

World Business Council for Sustainable DevelopmentYoung Managers Team

PrefaceSustainable development is increasing inimportance amongst global stakeholders. Thissituation presents business leaders with growingsocial and environmental responsibilities andprospects. The managers of tomorrow are a criticalaudience today because they will need newleadership skills and experiences to enable them totackle these opportunities.

Through the WBCSD’s YMT, senior decision-makerswith an eye on the future are helping to build andfoster this capacity among their successors. TheYMT 2004 aimed to close the gap between thinkingand action by making connections among thesustainable development community.

Overcoming cultural and resource barriers, thisgroup has demonstrated the unique role thatyoung executives can play in making sustainabilitya reality. From assessing good practice andfacilitating meetings in Brazil, designing a learningmodule dedicated to Chinese businesses andchallenging young analysts to integrate sustainablecriteria in their decision making, these 28 managershave not only made a personal commitment, butalso a substantial contribution to society, theWBCSD and added value to their companies.

This program provides an important learningexperience and networking opportunity for theparticipants and the companies they represent. Atthe WBCSD it is our hope that these future leaderswill become ambassadors, spreading thesustainability message within their networks andcompanies, locally and internationally, andcontinue to make connections about sustainabledevelopment both now and in the future.

Ray Anderson, Chairman of the board, Interface

“There is a lot of talk about sustainabledevelopment in boardrooms,universities, conferences and even in ourhomes. The challenge is to ensure thistalk becomes reality. YMT 2004 soughtto show how this can be and is beingdone.”

Matthew Janssen, Skanska, Project Leader YMT 2004

Finding the right wordsTwenty-eight young managers from WBCSDcompanies worked together on a year-long projectthey called: from rhetoric to reality – makingsustainability connections….

Sustainability principles may be advancing inboardrooms across the world, but progress is slow.Despite a growing awareness of the impact theglobal population is having on finite resources,global warming and health pandemics, a profoundshift is needed to move towards implementingsustainable business practices.

Too often companies develop sustainable projectsin isolation; too often sustainable development isseen as the enemy of profits; too often there isignorance of the seriousness of the environmentaland social crises facing our world.

And as the business sector continues along the pathof globalization, the skills and experience requiredfor handling local operations in diverse

geographical regions and cultures is becomingincreasingly important. Striking a balance betweenglobally consistent standards and local valuesrequires understanding and sensitivity. The capacityfor communicating effectively across differentcultures, languages and ranks is a key factor forsuccess. Making connections and maintaining themis a critical skill in today’s business world.

The third year of the WBCSD’s Young ManagersTeam (YMT) worked together for one year to createand stimulate the connections required to spreadsustainable development awareness. Recognizingthe diversity of sustainability perspectives, they builtbridges between individuals and organizations,countries and regions and government, industryand civil society.

They proved that in a short time it is possible tomove from rhetoric to reality – you need to createspace for new approaches and solutions to emerge.The team recognized the importance of integratingsustainable development into day-to-day decision-making and the need to change accepted practices.

Along the way these future business leadersincreased their own understanding of sustainabilityand enhanced their leadership and professionalskills. The self-managed group split into threeworkstreams, one focusing on China, one on Braziland one on financial analysts. The aim was toharness existing forces for sustainability rather thanreplace them, connecting companies and individualsworking towards similar goals, and to share learnings.

� With China, the world's fastest growing majoreconomy with significant environmentalimpacts, the challenge was to spread the wordto a business sector unfamiliar withsustainability thinking and focused on growth.The answer this workstream found was tocreate China-specific advocacy materials fordissemination by business groups andstudents to communicate the business realityin this expanding economy.

� In Brazil, a country struggling to match theaspirations of its growing population whileprotecting its natural resources and ecosystems,the task was to encourage the use of rainforestbiodiversity to both make profits and provide

“The YMT was an extraordinary experiencefor us as individuals. The human aspect isvery rich, working with people from suchdifferent backgrounds, and learning how todo it is a hard but also very valuableexperience.”

Antoine Bois, Michelin

sustainable livelihoods. The response was tocreate connections between local actorsworking on comparable projects and shareexperiences in Brazil and beyond.

� For the financial analysts workstream, theproblem was to understand the relationshipbetween financial markets and long-term valuefrom intangibles. The team responded bysurveying young financial analysts. Theirresponses revealed disappointingly low levelsof interest and knowledge about sustainability.However, through further consultation, theYMT took the first step to engage the industryand change mindsets.

The strength of YMT 2004 is the diversity of itsmembers’ skills and backgrounds. These youngmanagers have few cultural and social constraintsand are part of the most networked generation ever.

They come from 18 countries and work in variousfields across different industries ranging from a

corporate planning researcher in a power companyin Japan to a human resource manager in acosmetics company in France, a civil engineer in themining industry in Chile to a manager of sustainablestrategy in the floor coverings industry in the UnitedStates. This makes a perfect platform forunderstanding and tackling sustainability issues andmaking connections in diverse cultures andcompanies.

The team has an enormous stake in the future andare building a long-term business perspective,shaping the future of their companies. As theirinfluence over decision-making increases, theirglobal networks and holistic thinking will broadenthe vision and understanding of business. Marryingthe energy of youth with the inquiring minds ofsuccessful businessmen and women, these futurebusiness leaders are ambassadors for sustainabledevelopment. The progress made by YMT 2004, inonly 20 days spread throughout the year, showsthat they really are dedicated to making adifference.

Chinese learning module for

businesses in China

China’s spectacular economic growth, averagingalmost 10 per cent a year over the past quarter-century, has catapulted it to the second largesteconomy in the world after the United States, whenmeasured by economic indicators such as itsnational oil consumption. As a consequence, theenvironmental challenges that the country faces areenormous. Issues range from energy and waterscarcity to air pollution and soil erosion. Of the 20most polluted cities in the world, 16 are in China.

The continuing growth needed to satisfy theaspirations of its 1.3 billion people and the trend ofmulti-national companies moving their productionfacilities to China pose a serious threat to theenvironment. Due to the scale of their environmentalimpact, the consequences are felt worldwide.Therefore it matters to us all, not just to China, thatstakeholders in this new economic superpowerembrace sustainable development. There will be nosustainable world without a sustainable China.

China has the legislation, the infrastructure and thequality of people to implement a more sustainablesociety. But the challenge is to translate existingstructures into across-the-board, practical reality.The team decided to work through the newlyfounded China Business Council for SustainableDevelopment (CBCSD), which brings togetherChinese companies and international firmsoperating in the country.

After research and consultation with academics andbusiness executives in China, the team concludedthat the key to a sustainable China is raisingawareness through education.

Quoting one of the major recommendations from ahigh-level (CCICED) study of the barriers andchallenges in China’s progress towards sustainability:“There is a clear need to speed up capacity buildingwithin a broad spectrum of business, management,legal system, and social institutions.”

Or as Mr. Weiming Jiang, President of NovozymesChina and Vice President of the CBCSD, noted:“What is needed to advance sustainabledevelopment in China is education - most of all insustainability practices and in general managementskills.”

By integrating existing resources, the YoungManagers developed a resource kit on sustainabledevelopment. The dedicated learning module is aflexible package of materials that can be used by:universities and business schools, academic forums,company training workshops and executiveseminars. The main messages of the learningmodule are why sustainability should matter to thebusiness world in China and what individualmanagers can do specifically in the Chinese context.

Moving ‘from rhetoric to reality’ the YMT group haspresented the module in a series of train-the-trainersessions with participants from the CBCSD, theChinese branch of the student-organization AIESEC,and the Hong Kong Business EnvironmentalCouncil (HKBEC). With these materials, the team aims to plant asustainability seed in the minds of China’s currentand future business leaders through continuous dissemination across the country. �

“With the whole world’s eyes turned toChina, we have an opportunity that isunique in the history of mankind: if webring together our best practices, buildingon experience from around the globe,and adjust them to fit the Chinesecontext, we will be able to do thingsbetter and use the world’s resources moreefficiently than anywhere else”

Yvette Go, DSM, workstream leader

Biodiversity is the life support system of the planetand nowhere is more important for biodiversitythan Brazil. But its forests are a crucial part of bothlocal and national economies, accounting for one-tenth of Brazilian exports. The challenge forbusinesses is to work in these forests in ways thatprotect their biodiversity, improve the lives of localpeoples, and make a profit.

Brazil was a natural choice for this workstreamwhich aims to build bridges between local actorsmeeting this challenge while spreading themessage that there is a real business opportunity indeveloping sustainable projects in the forest. Theteam first found examples of sustainable businessmanagement which could be scaled up or repeatedelsewhere and communicated to other companiesand key stakeholders.

On visits to Brazil, members of the team metenvironmental campaigners, businesses, andgovernment officials, and visited projects in thenortheastern state of Bahia. Companies such asMichelin and wood pulp producer Veracel arecombining sustainable plantations with ecologicalcorridors to preserve and expand the last remnantsof the Atlantic Forest, a rainforest that once coveredmost of eastern Brazil.

Having consulted with a range of people it becameclear that there were excellent examples of goodpractice, but they were little known. Oftencompanies are pursuing similar ideas in isolation.To improve this situation, on December 9th 2004 the Young Managers brought together more than50 Brazilian business forestry representatives,university researchers and government officials.

“The Young Managers Team has made aunique contribution in raising awareness offorestry issues and seeking viable solutions.By working with these young professionals,the CEBDS has been able to appreciate theirvalue and will now launch a similarprogram in Brazil.”

Fernando Almeida Executive President, BCSD Brazil (CEBDS)

YMT forges sustainability

connections between businesses

working in the Brazil forest

The conference, co-hosted by the WBCSD’s regionalpartner in Brazil, the Brazilian Business Council forSustainable Development, was an opportunity forstakeholders to network and find out what otherplayers were doing. It also helped companiesidentify key success factors, such as transparency,measurable targets and working in partnership.

Stopping the vicious cycle of deforestation anddegradation in Brazil requires strong action fromgovernment and local communities alike. For thebusiness world, the YMT conference provedthat sustainable development works mosteffectively when local people areinvolved. Because centralizeddecision-making often fails to takeinto account specific conditions,such as the level of technologyavailable, the slogan “thinkglobally, act locally” wasnever more apt.

But the most important need identified by the YoungManagers is for communication. Sustainabilitylessons — positive or negative — need to be sharedwith governments, businesses, NGOs andcommunities. �

“Biodiversity and livelihoods areeveryone’s business; companiescannot function if ecosystems aredestroyed or out of balance.”

Carlos Mendes CIMPOR workstream leader

Executives in the financial services sectorincreasingly speak of the importance ofenvironmental, social and governance (ESG) issuesto the value of securities. Financial analysis can be asignificant enabler or inhibitor of change incorporate practice and young analysts are a keyindicator of and potential catalyst for change withinfinancial institutions. However, the disconnectbetween high-level promises and realperformance means it is difficult for young financialanalysts to translate rhetoric into reality.

The YMT 2004 analysts workstream decided to gostraight to the heart of the matter by exploring therole of financial analysts in making change happen.Financial analysts wield enormous power in themarkets, influencing investors with their buy andsell recommendations. A scoping exercisecarried out by the YMT and their partners fromUNEP FI (United Nations Environment ProgrammeFinance Initiative) found that young financialanalysts are highly skeptical of ESG issues:

� They do not feel adequately informed aboutwhich ESG issues are important;

� They do not perceive big client demand forsuch research;

� They do not know how to effectively quantifyESG issues in their research.

The hour-long interviews, conducted with 18young analysts at investment banks and researchinstitutions in Hong Kong, the United States andWestern Europe, explored their knowledge of ESGissues and any barriers to their inclusion invaluations. While the results of such a small surveyare anecdotal in nature, they provided theinspiration to organize a one-day workshop toexplore barriers and identify change levers.

High-profile financial experts from industry,academia and NGOs (i.e. Citigroup AssetManagement, Swiss Re, the Aspen Institute,

“Young financial analysts are a criticalbarometer for real change in corporatethinking around environmental and socialissues. This partnership has been successfulin revealing the status quo and in laying

the foundations for future action.”

Paul Clements-Hunt, Head of Unit, United NationsEnvironment Programme Finance Initiative

Language the market understands

Harvard University) offered input on how to dealwith ESG issues in the finance sector. Despitereaching out to more than one thousand youngfinancial analysts to generate interest and solicitparticipation, event turnout was low.

The lack of participation from the target audience,the findings from the interviews and the discussionoutcomes of the event provide compellingevidence that sustainability advocates have failed toeffectively engage with the mainstream financesector. The group determined that one of the mainbarriers is the choice of language used to engagewith the financial community.

Additionally, young analysts, are over-burdenedwith information and subject to constraintscontaining conditions shaped by managementdecisions, that prevent them from responding toESG issues.

The YMT’s conclusions are therefore aimed at seniormanagement: Enabling tomorrow’s managers tofulfill their responsibilities as change agents willrequire urgent and resolute action by today’sdecision-makers.�

“We felt that the investment culture doesn’talways encourage the young analysts’perspective. This is an occasion to leveragethe synergies between the professionals inour team and the younger generation withinthe financial community”

Chris Hunter Johnson & Johnson, workstream leader

The World Business Council for

Sustainable Development (WBCSD)

WBCSD is a coalition of 175 internationalcompanies united by a shared commitment tosustainable development via the three pillars ofeconomic growth, ecological balance and socialprogress. The WBCSD’s members are drawn frommore than 35 countries and 20 major industrialsectors. It also benefits from a global network of

45 national and regional business councils andpartner organizations located in 50 countries,involving some 1,000 business leaders globally. The WBCSD’s activities reflect its belief that thepursuit of sustainable development is good forbusiness and business is good for sustainabledevelopment.

For more information about the YoungManagers Team, contact Katherine Madden, madden@wbcsd.org +41 22 839 3113

Ordering publications: WBCSD, c/o SMI(distribution services) limited

Tel: 44 1438 748 111Fax: 44 1438 738 844Email: wbcsd@earthprint.comWeb: www.earthprint.comPublications are available on the WBCSD website:www.wbcsd.org

The (YMT) is a professional developmentopportunity building on the diverse membership ofthe WBCSD and its sustainability focus. Tomorrow’sleaders will need new skills and competencies tocope with increasing social and environmentalchallenges across the changing competitivelandscape. A sustainability perspective will becritical for managing relationships, creating changeand planning for the future. The program aims toengage and create a network of young business

leaders who can enhance their leadership andprofessional skills while gaining understanding onhow to apply sustainability principles.

The briefing is released in the names of the YMT2004. Although the briefing builds on theexperience of the WBCSD membership, the viewsexpressed do not necessarily reflect those of everymember company.

The young managers team