Organisational Sustainability

Organisational Sustainability
Purpose 2.What do we mean
by sustainability?
1. Business is 3. A Sustainability
destroying the world Maturity Model

4. Example of “maturing”
Organisational Sustainability 5. Planning to make
it happen Networking
6. A Sustainability
& References
Maturity Rating System

Version 5

Purpose
The purpose of Organisational Sustainability is:
To describe a way organisations, both private and public sector, can :
a) Improve theirs and others sustainability, and in doing so also
b) Show how their progress can be measured in economic, community, and
environmental terms .

Main Headings:
1. “Business is destroying the world”
2. What do we mean by sustainability?
3. A Sustainability “Maturity” model
4. Example of “maturing” Organisational Sustainability
5. Planning to make it happen
6. How to assess Governments & Industries Sustainability Maturity
Copyright David Alman 2011

1. Business is destroying the world

“Business is destroying the world”: What are you doing about it?

Quote from The ecology of commerce by Paul Hawken

Basically, environmental and social costs are growing faster than the benefits
of economic growth, making us poorer not richer.*

Population
explosion

Famine & growing
regional conflict /
Unlimited terrorism /refugees Civilisation
Economic in danger
Growth Depletion of
biosphere & mineral
resources

Green house
effects

*Rephrasing of a quote by Herman Daly, Senior Economist , World Bank (1988-1994) in The Consumption Dilemma.
Report by Deloitte Touch Tohmatsu and the World Economic forum. January 2011

Actually it is more
like this (too much
for one slide!)

Slide 1 with 12 supporting
slides from
“Interconnectness of world
problems” by Fritjof Capra


But there are businesses that are
working on changing from wasteful
and destructive practices to restorative
practices, cutting costs and finding
competitive advantage.

The way to becoming a Sustainable
Organisation is difficult and involves
changes to mindsets and innovation.

The Interface Model from Mid- Course Correction by Ray Anderson

2. What do we mean by Sustainability?

2.1 Sustainability defined
2.2 Translating sustainability into organisational terms
2.3 Brief explanation of organisational sustainability terms
2.4 Internal & External Sustainability issues and costs



2.1 Sustainability Defined:

Organisational Sustainability
An Organisation’s ability to achieve its goals and increase long-term stakeholder
value by integrating economic, environmental and social opportunities into its
strategies.
Adapted from “Symposium on Sustainability – Profiles in Leadership,” NYC, Oct. 2001.

UN Based Definition
Meeting the present generation’s needs in ways that are not only economically
viable, environmentally sound and socially equitable but will also allow future
generations to do the same .
Based on an explanation in the Brundtland Report “Our Common Future” United Nations World
Commission on Environment and Development, 1987



2.2 Translating Sustainability into Organisational terms
Developing Organisational Sustainability means shifting from a single - “thin” one
dimension – to a “thick” three dimension - approach, and recognising each dimension
also affects the other in achieving sustainable value.

Thick Value
To achieve social, environmental, and
economic (SEE) sustainability by optimising
the value of resources and outcomes value
Thin Value to stakeholders (Organisational Health).
To achieve organisational sustainability
by minimising waste in the use of
resources (inputs) and optimising
the value of services/products (outputs)
(Financial Health).

“Thin” & “Thick” Value are terms coined by Umair Haque in The New Capitalist Manifesto



2.2 Translating Sustainability into Organisational terms

Sustainability Terms Internal Organisational terms

Social Well-being

Environment Economic Resources Productivity



2.3 Brief explanation of Organisational Sustainability terms: Productivity



2.3 Brief explanation of Organisational Sustainability terms: Resources.
Energy & Materials Usage. Diagram below illustrates changes in materials usage.

Figure 4 from World Economic Forum report Redesigning business value: A roadmap for sustainable consumption


2.3 Brief explanation of Organisational Sustainability terms: Well-being
1. Well- being covers: Employee Satisfaction
Cost of disengagement in 2007 in Australia is estimated as $42.1 billion
(Ref: Gallop Q12 Employee Engagement Poll 2008 Results)

2. Well-being covers: Employee Health
The World Health Organisation (WHO) and International Labour Organisation (ILO) define the
aims of occupational health as:
The promotion and maintenance of the highest degree of physical, mental, and social well-being
of workers in all occupations by prevention of departures from health, and controlling risks.

The four elements affecting employee well-being are therefore:
Environmental factors; Physical health; Mental (psychological) health; and Social health.
Information drawn from Creating Healthy work organisations edited by Cooper & Williams

Cost of workplace stress in Australia (inc Presenteeism and Absenteeism) $14.81 billion a year
(Ref: The cost of workplace stress in Australia. August 2008. Medibank Private).
Economic cost of work related injury and illness in 2005-6 in Australia was $57.5 billion
(Ref Australian Safety and Compensation Council quoted by Safe to Work)


2.4 Internal & External Sustainability Issues

Internal Organisational Issues External Stakeholder Issues

Productivity Economic progress
(efficiency &
effectiveness)

Sustainability Resources (Energy Environmental
and materials protection, restoration,
usage/waste) & regeneration

Employee
(Wellbeing) Community well-being


2.4 Internal & External Sustainability Costs External Stakeholder Costs

Internal Organisational costs Product/service waste causing health
& environment impacts e.g. diabetes,
Productivity cancer, heart disease. Higher Taxes to
inefficiency (waste cover community costs.
time)
“Clean up” of environmental damage,
Sustainability Resources (Energy & non-renewable/finite resource over
material waste) usage (water, natural resource & fossil
fuel usage): Regulation and Penalty
charges.
Employee
(incompetence, Education costs, medical costs, family
injury inc stress) and community costs. Higher taxes to
cover welfare and unemployment
costs.


3. A Sustainability “Maturity” Model
3.1 A Sustainability “Maturity” model – 4 Levels
3.2 Level 1 Foundation
3.3 Level 2 Rebuilding
3.4 Level 3 New value chains
3.5 Level 4 Balanced systems

Adapted from the World Economic Forum Report Redesigning Business Value: A Roadmap for Sustainable Consumption

3.1 A Sustainability “Maturity” model – 4 Levels

Level 1. Foundation: Sustainability Reports available. Demonstrated
mindsets, statements, and plans

The first step is toLevel upRebuilding: Breakthrough innovative improvements.
firm 2. the foundation, as the current leading business practices of today
Organisations integrate sustainability across all operations. Viable new
operating and business models developed.

Level 3. New value chains: Zero waste and no harm performance.
Integrating sustainability across entire value chains to achieve “no harm”
and zero net waste.
Level 4. Balanced systems: Stakeholder driven sustainability. In which
innovation drives sustainable value chains and value is redefined for all
stakeholders as partners.

3.2 Sustainability “Maturity” model – Level 1 Foundation

Level 1. Foundation: Sustainability Reports available. Demonstrated
mindsets, statements, and plans to support continuous improvements in
sustainability.

The first step is to firm up the foundation, leadership mindset business practices of today
Challenges: Developing a as the current leading
Awareness at all levels
Sustainable strategy planning
Organisational (public & private sector) inertia

Enablers: Employee engagement
Stakeholder dialogue
Internal measurement & reporting of non-financial information
(e.g. Sustainable Balanced Scorecard)


3.3 Sustainability “Maturity” model – Level 2 Rebuilding

Level 2. Rebuilding: Breakthrough innovative improvements. Organisations
integrate sustainability across all operations.
Viable new operating and business models developed.

The first step is Challenges: Integrating sustainability intoleading businessorganisation today
to firm up the foundation, as the current all levels of the practices of
Trialling innovative new models
Collaborative organisational change
Value chain changes

Enablers: Internal trust
“Deep smarts” in knowledge and knowhow
Cross industry & government reporting & transparent measurement
Consumer/citizen engagement
Employees enabled & empowered


3.4 Sustainability “Maturity” model – Level 3 New Value Chains

Level 3. New value chains: Zero waste and no harm performance.
Integrating sustainability across entire value chains to achieve “no harm”
and zero net waste”.

Challenges: Sustainably integrated across value chains
Towards zero net waste & “no harm”
Major shifts to new models
Refocus value towards all stakeholders

Enablers: Industry & government collaboration
External trust through transparency
Markets/policies
Sustainability literate citizens
Co-opetition platforms


3.5 Sustainability “Maturity” model – Level 4 Balanced Systems

Level 4. Balanced systems: Stakeholder driven sustainability. In which
innovation drives sustainable value chains, and value is redefined for all
stakeholders as partners.

The first step is toChallenges: Continuous value chain innovation business practices of today
firm up the foundation, as the current leading
Closed value loops, zero waste, “no harm”
Sustainable enriched communities & lifestyles

Enablers: Societal collaboration
Governance
Regulation
Eco-system replication & regeneration
Business/government consensus and partnership
True cost of resources reflected in resource value.


4. Example of “maturing” Organisational
Sustainability
4.1 Organisational Sustainability Maturity Model
4.2 Organisational Sustainability Maturity Model Level 1. Foundation
4.3 Organisational Sustainability Maturity Model Level 2. Rebuilding
4.4 Organisational Sustainability Maturity Model Level 3. New Value Chains
4.5 Organisational Sustainability Maturity Model Level 4. Balanced Systems


Sustainability
4.1 Organisational Sustainability Maturity Model: Concepts
1. Sustainability “Maturity” Levels 3. Sustainability Factors (colour Coded)
Level 1. Foundation: Sustainability Reports available Internal External
Level 2. Rebuilding: Breakthrough innovative improvements
Productivity: Shareholder
Outcome dialogue
Level 3. New value chains: Zero waste and no harm Differentiation

Level 4. Balanced systems: Stakeholder driven sustainability Productivity: Natural
Waste
2. Organisational Performance model efficiency
Environment
Economic Sustainability
Resources Resources:
e.g. waste & Supplier
emissions dialogue
Waste reduction Value adding reduction

Employee Community
well-being well-being

Environmental & Social Sustainability

Sustainability
4.1 Organisational Sustainability Maturity Model

Productivity: Productivity: Shareholder
Waste efficiency Outcome dialogue
e.g. process & Differentiation
network efficiency value e.g. customer
Natural
value
Environment

Waste reduction Value adding
Community
Resources: Resources Employee well-being
Supplier dialogue e.g. waste & well-being
emissions reduction e.g. health
(physical, mental,
and social)


Sustainability
4.2 Organisational Sustainability Maturity Model Level 1. Foundation

Waste efficiency Outcome dialogue:
e.g. process & Differentiation Customers/citizens,
network efficiency value e.g. Shareholders
Customer/ citizen
value
Resources:
Supplier dialogue Employee
Resources
on value chains well-being
e.g. waste &
emissions reduction e.g. Employee
engagement


Sustainability
4.3 Application of Sustainability Maturity Model Level 2. Rebuilding

Waste efficiency New models of dialogue: Cross
e.g. process & Differentiation industry &
network efficiency value e.g. government ;
Customer/ Citizen Consumer/citizen
value engagement
Resources:
Supplier dialogue: Resources Employee
On value chain e.g. waste & well-being
change emissions reduction e.g. Employees
enabled &
empowered; use of
“Deep smarts”


Sustainability
4.4 Application of Maturity Model Level 3. New Value Chains

Shareholder dialogue:
Productivity: Industry & government collaboration;
Productivity: Major shift in models,
Waste efficiency Consumer/ citizen engagement;
refocus value onto all co-opetition platforms
e.g. process & stakeholders
network efficiency (customers/citizens, Natural Environment
shareholders, regulators, Lower service & product impact on
suppliers, environment). finite environmental resources
Resources
Supplier dialogue:
Sustainability across value Resources Employee
chains e.g. Closed loops, well-being
Zero waste & e.g. “No harm”
Community well-being. emissions, “No harm” approach & equity
Reduced work related approach
health costs.


Sustainability
4.5 Application of Maturity Model Level 4. Balanced Systems

Shareholder dialogue:
Productivity: Sustainable lifestyles, consensus
Productivity: Major shifts in models,
Waste efficiency business/government partnership
refocus value onto all
e.g. process & stakeholders
network efficiency (customers/citizens, Natural Environment
shareholders, regulators, Eco system replication
suppliers, environment). & regeneration

Resources Resources Employee Community well-
Supplier dialogue: e.g. Closed loops, Zero well-being being.
Continuous value waste & emissions, e.g. Enrichment & Sustainable enriched
chain innovation. “No harm” approach. social justice communities
Closed loops. True cost of resources
in valuing resources



5.1 Develop a Sustainability Life Cycle Assessment
5.2 Develop a Sustainability Balanced Scorecard


5.1 Develop an Organisational Sustainability Life Cycle Assessment

Impact of organisation Impact in organisation Impact of organisation
Sustainability Supplier on-cost waste Process waste/value User value End Use waste
Factors
Economic • % new improvements • User complaints
• % inefficiency (non value • User satisfaction
adding time)

Environmental • % of contaminants in • Overall energy consumption • Hazards from • % recycled waste
supplies • Water usage/% recycled service/products • % toxicity of
• % of hazardous chemicals • Solid waste/% recycled • Service/product life waste
supplied • Emissions cycle length •% compostable
• % Energy used in supplies • Hazards from materials used
• Sustainability of supplies
• Environmental damage
from supplies

Social •Safety hazards (flow on) • Network value contribution • Community costs of
costs to suppliers • Competency level assessments health impacts
employees from • Employee participation levels • Community literacy
products/services provided • Staff absence costs on
• Transport costs • Conflict/complaint costs social/environmental
• Injury/stress costs issues.


5.2 Develop a Sustainability Balanced Scorecard – Generic Private/Public Sector Example
Financial effectiveness
Return on Capital/ Budget cost benefit
Economic
Customer/ Citizen
• Complaints.
•Service/product satisfaction

Process productivity
• % new improvements
• % inefficiency (non value adding activities)

Environmental Suppliers Process waste/value User hazards & waste
• % of contaminants in supplies • Overall energy consumption • Hazards from service/products
• % of hazardous chemicals supplied • Water usage/% recycled • Service/product life cycle
• % Energy used in supplies • Solid waste/% recycled • % recycled waste
• Sustainability of supplies • Emissions • % toxicity of waste
• Environmental damage from supplies • Hazards from materials used

Social • Safety hazard (flow on) costs to • Network value contribution • Community costs of health impacts
suppliers employees from • Competency level assessments • Community literacy on
products/services provided • Employee participation levels social/environmental issues.
• Transport costs • Staff absence costs
• Conflict/complaint costs
• Injury/stress costs

6. How to assess Governments & Industries
Sustainability Maturity
6.1 Rating Government & industry Sustainability Maturity Performance.
The following Sustainable Maturity Performance Rating System examples how government
and industry are interconnected and can be assessed on their Sustainability “Maturity”.

A rating system (1 to 4) is exampled as an easy way of gauging both industry and government
agencies performance toward achieving full sustainability (Rating 4) to benefit stakeholders.

Stakeholders interested in making this kind of assessment on government(s) and industries
could include:
 Individuals;
 Employees and unions;
 Community & community groups;
 Industries and shareholders;
 Government (local, state, & federal);
 Media (news, talk shows);
 Social media.


Sustainability Maturity Performance Rating System*

Rating 1. Foundation: Sustainability Reports available. Demonstrated mindsets, statements, and plans (including legislation)
that support continuous improvement in organisations performing as Sustainable Organisations;

Rating 2. Rebuilding: Breakthrough innovative improvements. Organisations (including public sector agencies) demonstrate the
application of the 3 sustainability factors across all operations, and viable new ways that show “breakthrough” innovation in
improving sustainability;

Rating 3. New value: Zero waste and no harm performance. Organisations (including public sector agencies) demonstrate the
integration of the 3 sustainability factors by the achievement of “no harm” and “zero waste” practices.

Rating 4. Balanced systems: Stakeholder driven sustainability. Organisations (including public sector agencies) demonstrate
innovation is driving ongoing sustainability improvements in their systems (and those they influence/affect), and the value of what
is done is defined by stakeholders as partners.

*Adapted from the World Economic Forum Report Redesigning Business Value: A Roadmap for Sustainable Consumption.

Sustainability maturity rating is based on the three integrated sustainability factors:
Economic (productivity) e.g. Industry/public sector efficiency (minimal non valued activity – waste) and effectiveness in meeting
stakeholder needs and values.
Social (well-being) e.g. employee and community satisfaction and health & development (physical, mental, and social).
Environmental (resources) e.g. energy/material waste, restoration, and regeneration.


Sustainability Performance indicators * that could be reported to, and rated by, stakeholders include the following:
Economic (productivity) Community
 Financial value generated  Proportion of locally based suppliers used
Customer satisfaction on life cycle product/service information &  Proportion of senior management living in local community
labelling  Development & impact of infrastructure investments & services
 % of products & services subject to life cycle assessment provided for local benefit (commercial, in kind, pro bono).
 Environmental impacts of products/services  % of operations implemented with local engagement, impact
 % of products & packaging reclaimable. assessments, and development programs.
 Renewable energy based products/services  Operations with potential or actual negative impacts on local
 Health & safety impacts of products & services communities.
 Transport impacts of products, goods, materials, & services Environmental (resources)
Social (well-being)  Materials: % of recycled material used
Health & Safety  Energy: Energy saved due to conservation & efficiencies
 Injury rates, lost days, absenteeism  Water: % & total volume recycled & re-used
 Training, counselling, preventative/risk control programs.  Emissions, effluents, & waste:
 Number of incidents of discrimination & corrective action  Greenhouse emissions by weight
Training  Ozone depleting substances by weight
 Hours per employee by gender & category  NO, SO, and other significant emissions by type & weight
 Programs for skills management & life long learning  Total waste water discharged by quality & desalination
 % employees receiving regular performance & career  Total weight of waste & hazardous waste.
development by gender & employee category  Total number and volume of spills
Remuneration  Habitats affected by water discharge & run off
 Rates of basic salary & remuneration by gender & employee  Biodiversity:
category  Impact of activities, products, services on areas of high
diversity value.
* Based on the Global Reporting Initiative (GRI). Reporting Frameworks. G 3.1 Guidelines  Habitats protected or restored


6.1 Rating Government & industry Sustainability Maturity Performance - Example.
Sustainability Maturity Performance Rating
Queensland State Industry operating within Legislative & Regulatory System
Government Requirements – example industries
Rating 1. Foundation: Sustainability Reports
Legislation supporting
Civil construction Mining available . Demonstrated mindsets, statements,
Organisational and plans (including legislation) that support
inc housing & Rating: 0
Sustainability continuous improvement in organisations
infrastructure performing as Sustainable Organisations;
Rating: 0 Forestry
Rating: 0
Rating: 0 Rating 2. Rebuilding: Breakthrough innovative
improvements. Organisations (including public
Health services & sector agencies) demonstrate the application of the
Queensland Fisheries
support 3 sustainability factors across all operations, and
Government Rating: 0 viable new ways that show “breakthrough”
Rating: 0
Agencies innovation in improving sustainability;
Rating: 0 Agriculture
Energy providers Rating 3. New value: Zero waste and no harm

Rating: 0 Rating: 0 performance. Organisations (including public
sector agencies) demonstrate the integration of the
3 sustainability factors by the achievement of “no
Queensland Water & effluent Hospitality & harm” and “zero waste” practices.
Local management tourism Rating 4. Balanced systems: Stakeholder driven
Governments Rating: 0 Rating: 0 sustainability. Organisations (including public
Rating: 0 sector agencies) demonstrate innovation is driving
ongoing sustainability improvements in their
Waste Management Manufacturing systems (and those they influence/affect), and the
Rating: 0 Rating: 0 value of what is done is defined by stakeholders as
Queensland Local partners.
Government
Transport Financial Services Rating System based on three integrated
By laws & Regulations sustainability factors:
Rating: 0 Rating: 0 Rating: 0 • Economic (productivity) .
• Social (well-being)
• Environmental (Resources)

Social Network Acknowledgements
This PowerPoint has largely grown out of a LinkedIn group discussion on Gene
Bellinger’s Systems Thinking World where Helene Finidori set up the following Thread:
UN call for revolutionary thinking and action to ensure an economic model for survival... How to make this
happen?
Warning for global suicide and time running out, Ban ki-moon called last Friday at Davos for revolutionary
thinking and action to ensure an economic model for survival. What is needed to take a global interconnected
perspective on the issues and threats our planet is facing and start action? How can this gain traction and
produce the desired effect?

“To make it happen we have to be prepared to make major changes – in our lifestyles, our economic models,
our social organization, and our political life. We have to connect the dots between climate change and what I
might call here, WEF – water, energy and food… Together, let us tear down the walls,” he declared. “The walls
between the development agenda and the climate agenda. Between business, government and civil society.
Between global security and global sustainability. It is good business – good politics – and good for society.”

In over 1250 posts (at time of writing) the discussion has ranged widely, been
informative, and supplied many references. This Power Point covers only one
perspective on a small part (Organisational Sustainability) of that much larger
discussion, now being reset into Blogs at: http://www.systemswiki.org/blog/?p=285


Social Network Acknowledgements
In this respect I would like to express an especial thank you to the following for their
many contributions and references as they relate to the subject area of this Power
Point (while recognising that their views are not necessarily those expressed here).

Helene Finidori

T.A. Balasubramanian

Stephen Scott Wright


References
Models of Sustainability
The ecology of commerce. Paul Hawken. Harper Business.
Interconnectedness of world problems. Fritjof Capra. http://bit.ly/j7qPm9
The new capitalist manifesto. Umair Haque. Harvard Business Review Press.
Capitalism at the crossroads. Stuart Hart. Wharton School publishing.
Redesigning business value. Deloitte Touch Tohmatsu & World Economic Forum. http://bit.ly/k35zyx
Developing Organisational Sustainability
Four steps to see sustainability as a strategic asset. Anton Breman. http://bit.ly/mdSXGV
Creating Sustainable Value. Hart & Milstein. http://e4sw.org/papers/Hart_Milstein.pdf
Mid-course correction toward a sustainable enterprise: The Interface model. Ray Anderson. The Peregrinzilla Press.
Productivity
The Productivity Model. Philip McGee. http://bit.ly/lMhcmj
Defining and measuring productivity in the public sector: Managerial perceptions. Linna, Pekkola, Ukko, & Melkas. http://bit.ly/iWWoMF
Organisational Productivity. David Alman. http://slidesha.re/kZuPp7
Well-being
Creating healthy work organizations. Ed. Cooper & Williams. Wiley & Sons
The Gallop Q12 – Employee Engagement- Poll 2008 Results. http://bit.ly/kOBxME
The cost of workplace stress in Australia. August 2008. Medibank Private. http://bit.ly/kVRIPi
The cost of work related injury and illness for Australian employers, workers and the community 2005-6. Safe to Work http://bit.ly/iGExb7
Workplace conflict and how business can harness it to thrive. CPP Global Human Capital Report. July 2008 http://bit.ly/lWJXST
Sustainability Measures
What is sustainable development? Kates, Parris, Leiserowitz. http://hvrd.me/jquAKT
Translating ESG into Sustainable Business Value. UNEP Finance Initiative & World Business Council for Sustainable Development. http://bit.ly/lu67WO
Global Reporting Initiative (GRI). Reporting Frameworks. G 3.1 Guidelines. http://bit.ly/mrtHfQ
Sustainability Life Cycle Assessment
The consumption dilemma. Deloitte Touche Tohmatsu & World Economic Forum. http://bit.ly/ij396T
Life cycle-based sustainability indicators for assessment of the US food system. Heller & Keoleian. http://css.snre.umich.edu/css_doc/CSS00-04.pdf
The Balanced Scorecard
The Strategy-Focused Organization. Kaplan & Norton. Harvard University Press.
Sustainable Organisation Performance. Graham Hubbard. http://bit.ly/kMwnoS
The Sustainability Balanced Scorecard. Figge, Hahn, Schaltegger, & Wagner. http://bit.ly/msctCA
Sustainability Benchmarking
Lists of the most sustainable companies. Bob Willard. bit.ly/isZ0Ku
Leadership and corporate responsibility metrics for sustainable corporate performance. Szekely & Knirsch. http://bit.ly/mrdjBs
Sustainability Futures Thinking
Systems Theory: Balancing efficiency with resilience. John Fullerton http://bit.ly/iMpkol
The New Economics Foundation http://www.neweconomics.org/
Scenarios for 2040. The Challenge Network. http://bit.ly/jqIupu


Travelling Companions

http://bit.ly/kFOwpJ http://bit.ly/lB7lEm http://bit.ly/kYJRiS

Want to explore or talk more?

Please feel comfortable in contacting David Alman at Proventive Solutions

A range of contact options are shown on my Contact Page at
proventivesolutions.com.au


Organisational Sustainability

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