Questioning Assumptions Business Model AssumptionsQuestioning Assumptions • EOQ -> MRP ......

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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


Questioning Assumptions

• EOQ -> MRP

• MRP/ERP -> Lean

• “Quality costs money” -> TQM

• Lean -> ?


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


Triple Bottom Line

+ Passion

Peo

ple

Profits

Plan

et

SUSTAINABILITY

An activity is

sustainable if it can be

continued indefinitely.


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

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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


Shareholder Returns:60 TBL Companies (LAMP)

Jand 56 others


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


“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


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


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

)

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Servant Led Companies• The Toro Company• Southwest Airlines• Starbucks• AFLAC• Men’s Wearhouse• Synovus Financial• Herman Miller• ServiceMasters• Marriott International• FedEx• Medtronic


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 %


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


Current Business Model

An activity is sustainable if it

can be continued indefinitely.

Take

Make

Waste

94%6%


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

)

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Quick Look at the Future

• Resource Use = P x A• P (Population)• A (Affluence [GDP per person])

Time

Resources

Available Resources

Resource Use


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


Crude Oil

Source: Campbell


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


Water

Lake Wendouree, Ballarat, Victoria, Australia March 2007


Ogallala Aquifer

Illustration courtesy of the High Plains Underground Water Conservation District No. 1, Lubbock, TX. www.hpwd.com

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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


TBL Strategies

Circular

Economy

Design

End of Life

Customer

Use

Marketing

Operations

Sourcing


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


Davey Water Products

• 30% of shop employees volunteered for TBL Sustainability

• Excellent results in 3 months


Davey Water Products:31m Rubbish Bin


Davey Water Products: The Solution

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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


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


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


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


Doubletree

• 1st Green Seal hotel in West

• Higher guest ratings

• More bookings

• Lower cost

• Helped Marriott getcertified, too!

– More business for all


Oatfield Estates / Fanno Creek

• New model for retirement home:

– Residents are active and empowered

– Environmental commitment

• Fanno Creek: LEED Platinum

)

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InterChurch Center

• 5 Faith-based organizations in 1 building

– Already focused on social issues

– Improved environmental decisions• Green cleaning products

• Recycled copy paper


Education

• Internal:

– Improve environmental impact on campus

• External:

– Integrate TBL into curriculum


Local Government

• Environmental– Reduce car & truck traffic

– Increase recycling

• Social– Redesign for neighborhoods

• Economic– Attract clean businesses

– Reward sustainable TBL businesses


State Government (Prisons)

• Reduced energy use

• Reduced water use

• Socialization

• Helping others


Leave Your Checkbook at Home!

• Rely on your people’s creativity

• Make TBL investments meet your hurdle rate


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

)

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Thanks for Starting Now!

For the well-being of our:

Companies

Community

Children

Together we can make a difference


For More Information:

Sustainability Partners Int’l

Gary Langenwalter(971) 221-8155

[email protected]

Questioning Assumptions Business Model AssumptionsQuestioning Assumptions • EOQ -> MRP ......

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