Sustainable Development -PPT

Sustainable Development

Lee A. DeHihns III Alston & Bird, LLP White Paper 2009 1

LEARNING OBJECTIVES  Provide

a historical perspective about sustainability  Present case studies of key corporations  Discuss resources and future trends 2

Historical Perspective STOCKHOLM CONFERENCE Declaration on the Human Environment

1972

…

1987

RIO/BRAZIL U.N. CONFERENCE ON ENVIRONMENT & DEVELOPMENT

1992

1997

World Business Council for Sustainable Development (WBCSD)

1999

2002

…

TOMORROW

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World Business Council for Sustainable Development (WBCSD) 

The WBCSD is a council of 200 leading global corporations with a market capitalization of $7 Trillion+

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The group’s President Bjorn Stigson said at their annual meeting in Johannesburg in Nov 2008:

“The companies in our membership are innovative and well-managed partly because of their commitment to sustainable development. They are also the front runners in understanding the business benefits derived from innovative energy and environmental approaches.” 4

World Business Council Sustainable Development (WBCSD) 

It provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, nongovernmental and intergovernmental organizations.

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Members are drawn from more than 35 countries and 20 major industrial sectors. The Council also benefits from a global network of about 55 national and regional business councils and regional partners

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Historical Perspective STOCKHOLM CONFERENCE Declaration on the Human Environment

1972

…

1987

RIO/BRAZIL U.N. CONFERENCE ON ENVIRONMENT & DEVELOPMENT

1992

1997

Kyoto Protocol

JOHANNESBURG Declaration on Sustainable Development

1999

2002

Dow Jones Sustainability Indexes

…

TOMORROW

Future Trends 6

Dow Jones Sustainability Indexes 

Launched in 1999, the Dow Jones Sustainability Indexes are the first global indexes tracking the financial performance of the leading sustainabilitydriven companies worldwide in terms of corporate sustainability. Based on the cooperation of Dow Jones Indexes, STOXX Limited and SAM, they provide asset managers with reliable and objective benchmarks to manage sustainability portfolios.

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All indexes of the DJSI family are assessed according to the same Corporate Sustainability Assessment and respective criteria.

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DJSI GLOBAL SUPERSECTOR LEADERS 2008/2009                   

Automobiles & Parts Banks Basic Resources Chemicals Construction & Materials Financial Services Food & Beverage Health Care Industrial Goods & Services Insurance Media Oil & Gas Personal & Household Goods Real Estate Retail Technology Telecommunications Travel & Leisure Utilities

                  

BMW -Germany Australia & NZ Banking Group Xstrata Plc -UK BASF SE - Germany Holcim -Switzerland Itausa-Investimentos - Brazil Unilever - Netherlands Novartis AG - Switzerland TNT N.V. - Netherlands Swiss Re - Switzerland Pearson Plc. - UK ENI - Italy Adidas AG - Germany Land Securities Group PLC - UK Kingfisher Plc - UK Intel Corp. - USA BT Group Plc -UK Air France-KLM - France Grupo Iberdrola -Spain 8

LEARNING OBJECTIVES  Provide

a historical perspective about sustainability  Present case studies of key corporations  Discuss resources, strategic implications and future trends 9

A Case Study

BASF 

BASF is the leading chemical company in the most important sustainability index - the Dow Jones Sustainability Index (DJSI World).

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BASF shares were included in the DJSI World for the eighth year in succession in 2008. The companies included in the DJSI-World are selected out of all 2,500 members of the Dow Jones Global Index on the basis of sustainability criteria … only the top 10 % in each industry group are selected.

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BASF was recognized for its climate strategy, its environmental and social reporting and for developing innovative and eco-efficient products. 10

A Case Study

Newmont Mining Jan 2009 “Even at showcase mines, such as Newmont Mining Corporation's Batu Hijau operation in eastern Indonesia, where $600 million has been spent to mitigate the environmental impact, there is no avoiding the brutal calculus of gold mining. Extracting a single ounce of gold there—the amount in a typical wedding ring—requires the removal of more than 250 tons of rock and ore.” 11

A Case Study IBM  

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Sam Palmisano, IBM Chairman and CEO, told the Council on Foreign Relations in November 2008: “We are all now connected – environmentally, technically and socially. But we are also learning that being connected is not sufficient. Yes, the world continues to get flatter and yes, it continues to get smaller and more interconnected. But something is happening that holds even greater potential. In a word, our planet is becoming smarter.” He concluded his speech by saying: “The world now beckoning us is one of enormous promise. And I believe it is one we can build – if we open our minds and let ourselves think about all that a smarter planet could be.”

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A Case Study Wal-Mart 

At the China Sustainability Summit in Beijing in Oct. 2008, Wal-Mart CEO Leo Scott said: 

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“Sustainability in our operations and supply chain selling and making products in an efficient, socially responsible way - will be essential to meeting the expectations in the future.” “For us, sustainability is about building a better business. It is about making a positive difference in people’s lives and their communities. And it is about staying out in front of the changes that will take place in world not just next month or next year, but for decades to come.”

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KPMG Sustainability Report 

In October 2008, KPMG released in first sustainability report since 2005 and concluded that: 

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Twice as many companies publicly released sustainability data on their environmental, social and governance information in 2008 compared with 2005. Ethics outweighed economics for the first time as the primary reason for such disclosures.

The report looked at information from the top 100 U.S. companies by revenue:  

74% released corporate responsibility information. Of the Global Fortune 250, 80% released corporate responsibility information. 14

LEARNING OBJECTIVES  Provide

a historical perspective about sustainability  Present case studies of key corporations  Discuss resources and future trends 15

Resources

Cut Emissions, Cut Costs Reduce your company's global warming impacts and improve your business by building climate action into your strategy.

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Resources 

Businesses/Forums: 

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Environmental Defense Fund’s Innovation Exchange, LOHAS, SOL Sustainability Consortium, CERES, Businesses for Social Responsibility, Consulting Firms, Stakeholders (Investors, Vendor/Partners, etc.)

Universities: 

Emory University (Office of Sustainability Initiatives), University of Michigan (Erb Institute for Global Sustainable Enterprise), Arizona State (Global Institute of Sustainability), KSU (Director of Sustainability)

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Future Trends  Leadership

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APPENDIX

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1972 Stockholm Conference – Declaration on the Human Environment 

Principle 1: Man is both creature and molder of his

environment, which gives him physical sustenance and affords him the opportunity for intellectual, moral, social and spiritual growth. In the long and tortuous evolution of the human race on this planet a stage has been reached when, through the rapid acceleration of science and technology, man has acquired the power to transform his environment in countless ways and on an unprecedented scale. 

Principle 3: Man has constantly to sum up experience

and go on discovering, inventing, creating and advancing. In our time man's capability to transform his surroundings, if used wisely, can bring to all peoples the benefits of development and the opportunity to enhance the quality of life. Wrongly or heedlessly applied, the same power can do incalculable harm to human beings and the human environment. 20

1972 Stockholm Conference – Declaration on the Human Environment 

Principle 6: A point has been reached in history when we must shape

our actions throughout the world with a more prudent care for their environmental consequences. Through ignorance or indifference we can do massive and irreversible harm to the earthly environment on which our life and well-being depend. Conversely, through fuller knowledge and wiser action, we can achieve for ourselves and our prosperity a better life in an environment more in keeping with human needs and hopes. To defend and improve the human environment for present and future generations has become an imperative goal for mankind-a goal to be pursued together with, and in harmony with, the established and fundamental goals of peace and of world-wide economic and social development. 

Principle 11: The environmental policies of all States should enhance

and not adversely affect the present or future development potential of developing countries, nor should they hamper the attainment of better living conditions for all, and appropriate steps should be taken by States and international organizations with a view to reaching agreement on meeting the possible national and international economic consequences resulting from the application of environmental measures. 21

Report of the World Commission on Environment and Development: “Our Common Future” (Brundtland 1987) 

1. Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:  the concept of ‘needs’, in particular the essential needs of the world’s poor, to which overriding priority should be given; and  the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.

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4. The satisfaction of human needs and aspirations is the major objective of development. The essential needs of vast numbers of people in developing countries for food, clothing, shelter, jobs are not being met, and beyond their basic needs these people have legitimate aspirations for an improved quality of life. A world in which poverty and inequity are endemic will always be prone to ecological and other crises. Sustainable development requires meeting the basic needs of all and extending to all the opportunity to satisfy their aspirations for a better life. 22

1992 UNITED NATIONS CONFERENCE ON ENVIRONMENT AND DEVELOPMENT (“Rio Conference”) Charged by the UN General Assembly to “elaborate strategies . . . to promote sustainable and environmentally sound development in all countries.” 

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Principle 1: Human beings are at the center of concerns for sustainable development. They are entitled to a healthy and productive life in harmony with nature. Principle 3: The right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations. Principle 4: In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it. 23

1992 UNITED NATIONS CONFERENCE ON ENVIRONMENT AND DEVELOPMENT (Rio) 

Principle 1: Human beings are at the center of concerns for sustainable development. They are entitled to a healthy and productive life in harmony with nature.

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Principle 3: The right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations.

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Principle 4: In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it.

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“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” 25

2002 Johannesburg Declaration on Sustainable Development 

Principle 18: We welcome the focus of the Johannesburg Summit on the indivisibility of human dignity and are resolved, through decisions on targets, timetables and partnerships, to speedily increase access to such basic requirements as clean water, sanitation, adequate shelter, energy, health care, food security and the protection of biodiversity.

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Principle 19: We reaffirm our pledge to place particular focus on, and give priority attention to, the fight against the worldwide conditions that pose severe threats to the sustainable development of our people, which include: chronic hunger; malnutrition; foreign occupation; armed conflict; illicit drug problems; organized crime; corruption; natural disasters; illicit arms trafficking; trafficking in persons; terrorism; intolerance and incitement to racial, ethnic, religious and other hatreds; xenophobia; and endemic, communicable and chronic diseases, in particular HIV/AIDS, malaria and tuberculosis.

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Principle 20: We are committed to ensuring that women’s empowerment, emancipation and gender equality are integrated in all the activities encompassed within Agenda 21, the Millennium development goals and the Plan of Implementation of the Summit.

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BASF 

"A business cannot be successful in the long term if it does not act responsibly toward the environment and society. That is why sustainability is an integral part of our strategy." Jürgen Hambrecht, Chairman of the Board of Executive Directors

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Acting responsibly in our Supply Chain: 

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How carefully do carriers handle BASF's products? Under what conditions do BASF's technical partner companies work? How safe are our suppliers' products and processes? What counts for us is acting responsibly throughout the entire supply chain because we want to build stable and sustainable relationships with our business partners. This is why we choose carriers, service providers and suppliers not just on the basis of price, but also include their performance in the fields of environmental and social responsibility when making our decisions.

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Newmont Mining 

Beginning with geologic exploration, our success is tied to our ability to develop, operate and close mines in a manner that provides long-term value. Long-term value has evolved into a broad set of concepts that are now referred to as "sustainable development" or "sustainability."

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Sustainability can be summarized in four key principles: 

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First, benefits of economic activity must be considered in relation to their respective social and environmental consequences; Second, in using resources, we must consider the needs and expectations of future generations; Third, government, business and other segments of civil society must act together to balance these needs; Fourth, the corporate governance contributes to sustainable economic development by enhancing the performance of the company and increasing its access to land and capital.

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Newmont Mining 

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Protect and respect human rights, community engagement and consultation, contribute to communities' development aspirations, and mitigate the impacts of our mining activities. Our ability to engage, understand and manage the needs and interests of communities during the development and operating stages is the key challenge around communities. Protect human health and the environment, and work in cooperation with host communities and governments to create sustainable, long-term economic and social opportunities. Eliminate or reduce to a level as low as reasonably possible any risk that could result in personal injury, illness, property damage, process or loss to the environment by developing and implementing the most effective health, safety and loss prevention management system possible Attract, develop and retain the company's most valuable asset, our employees.

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Newmont Mining Jan. 2009 NG 

National Geographic Magazine “Even at showcase mines, such as Newmont Mining Corporation's Batu Hijau operation in eastern Indonesia, where $600 million has been spent to mitigate the environmental impact, there is no avoiding the brutal calculus of gold mining. Extracting a single ounce of gold there—the amount in a typical wedding ring—requires the removal of more than 250 tons of rock and ore.”

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Newmont Mining NG 

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“Pushed by rising gold prices and the depletion of deposits in the U.S., South Africa, and Australia, the world's largest mining companies are pursuing gold to the ends of the Earth. Few companies have gone global more aggressively than Newmont, a Denver-based mining giant that now runs open-pit gold mines on five continents, from the lowlands of Ghana to the mountaintops of Peru. Lured by the benefits of operating in the developing world—lower costs, higher yields, fewer regulations—Newmont has generated tens of thousands of jobs in poor regions. But it has also come under attack for everything from ecological destruction to the forced relocation of villagers. At Batu Hijau, where Newmont, the single largest share-holder, is wholly responsible for the mine's operation, the company has responded by ramping up community development and environmental programs—and dismissing its critics. "Why is it that activists thousands of miles away are yelling, but nobody around the mine complains?" asks Malik Salim, Batu Hijau's senior external relations manager. "Gold is what drives everybody crazy.”

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Newmont Mining NG 

At Batu Hijau, Newmont uses a finely tuned flotation technology that is nontoxic, unlike the potentially toxic cyanide "heap leaching" the company uses in some of its other mines. Even so, no technology can make the massive waste generated by mining magically disappear. It takes less than 16 hours to accumulate more tons of waste here than all of the tons of gold mined in human history. The waste comes in two forms: discarded rock, which is piled into flat-topped mountains spread across what used to be pristine rain forest, and tailings, the effluent from chemical processing that Newmont pipes to the bottom of the sea. 32

DuPont’s Sustainability Goals 

In DuPont’s 2008 Sustainability Progress Report, Chairman and CEO Chad Holliday stated: 

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“We are taking a holistic approach to sustainability that fully integrated into our business models.” “We continue to strive for zero safety and environmental incidents. And we are maintaining our focus on decreasing raw material and energy inputs and reducing emissions at our sites.” 33

Canon ~ Kyosei 

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“Canon’s corporate philosophy is kyosei. Kyosei aspires to a society in which all people, regardless of race, religion, or culture, harmoniously live and work together for the common good into the future. Kyosei, in other words, is an attempt to bring about a society characterized by sustainable prosperity. Canon aims to become a truly excellent global corporation worthy of admiration and respect around the world. We consider the fulfillment of our social responsibilities to be a natural obligation as we respond to various challenges and work to fulfill the expectations of our stakeholders, beginning with our customers, our shareholders and investors, our employees, and the local communities in which we operate.” Canon Sustainability Report 2008

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The Conference Board 

Set up a Research group on Corporate Governance and Sustainability – Doing Well by Doing Right. 

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“It used to be that a company’s financial issues differed from its social issues. But in today’s business climate, an organization’s financial matters are its social matters.” Companies are being forced to address climate change, environmental protection and human rights by large investors, public pension funds and many other shareholders. “By integrating sustainability and citizenship initiatives into your overall strategy, you not only benefit society, but also your bottom line.” 35

The Conference Board 

On Jan 29-30, 2009, at its “2009 Leadership Conference on Global Corporate Citizenship”, some participants included:  

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Global VP for Corporate Responsibility for Molson Coors Bayer’s Chief Administrative for Corporate Social Responsibility Kimberly-Clark’s VP for Global EH&S 3M’s Senior VP for Environmental Affairs.

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Price Waterhouse Coopers Sustainability Survey Report 

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In 2002, PWC concluded that” Sustainability speaks directly to those societal and financial values in terms of the need to protect the future.” Using Brundtland’s report, PWC stated further that we must “Think of it more simply as doing your part to build a world – economically, environmentally and socially – that you want to live in, and that you want your children and grandchildren to inherit.” 37

Environmental Defense Fund’s Innovation Exchange 

www.edf.org

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RESOURCE: The Innovation Exchange provides a nocost, comprehensive set of recommendations, case studies, publications and tolls for companies to improve their environmental performance.

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Lisa Manley, The Coca-Cola Company’s Director of Environmental Communications said: “Access to proven environmental strategies is more vital to business success than ever before. Collaborative innovation between companies will play a major role in helping us meet our sustainability goals.” 38

The Erb Institute for Global Sustainable Enterprise – University of Michigan 

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The multinational corporation is the most powerful societal agent of change on the planet, and can do much to address our pressing environmental issues and to lift people out of poverty. But corporations also cause many of the changes that threaten the sustainability of our planet. The job of the Erb Institute is to help bring the power of business to bear on our most pressing sustainability challenges. Research at the Erb Institute seeks to reveal how business strategy, operating within a context of policies and social norms, can produce desirable environmental and social outcomes. 39

Emory University Office of Sustainability Initiatives 

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Sustainability is defined as meeting the needs of the present generation without compromising the needs of future generations. As part of a commitment to positive transformation in the world, Emory has identified sustainability as one of the University’s top priorities. Areas of focus:       

Building green Integrating sustainability into the curriculum Promoting commute options Protecting green space Conserving water Recycling waste Providing local and sustainably-grown food 40

Atlanta Regional Commission (ARC) Green Communities Program 

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In Jan 2009, ARC launched its Green Communities Certification Program that will enable communities that voluntary complete an application covering 60 specific measures in 10 categories will become certified. ARC Chair Sam Olens said: “Communities around the region are already implementing ways to use fewer resources and be more sustainable.” 41