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Scaling up product and process innovation around climate change in SMEs. Dr. Aileen Ionescu-Somers, Director, Center for Corporate Sustainability Management, IMD. Population. 50000. China. US. 40000. Japan. 30000. Germany. $USbn. UK. 20000. France. 10000. Italy. 0. India. 2025. - PowerPoint PPT Presentation
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© 2010 IMD International. Not to be used or reproduced without permission.
Scaling up product and process innovation around climate change in SMEs
Dr. Aileen Ionescu-Somers, Director, Center for Corporate Sustainability Management, IMD
2© IMD 2010
Population
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Dreaming With BRICs: The Path to 2050 (Goldman Sachs)
0
10000
20000
30000
40000
50000
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
$USbn
China
US
Japan
Germany
UK
France
Italy
India
EU-4
World GDP growth
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The Living Planet Index
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Human Ecological Footprint
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Ecological credit and debt 1961
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Ecological credit and debt 2005
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Development constraints: We need, but don’t have, 2.3 planets
Move to single planet consumption scenario and meet human needs within ecological limits of the planet
Increase agricultural output to feed increasing number of people, without increasing land or water used
Halt deforestation and increasing yields from planted forests
Significant moves towards halving carbon emissions worldwide (relative to 2005)
Shift to low-carbon energy systems
Shift to improved demand side energy efficiency
Increased access to low-carbon mobility
Develop radically more eco-efficient solutions, lifestyles and behaviour everywhere
Bring the Base of the Pyramid into the economic equation
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Business will see a radically new landscape emerge as a result of these shifts, resulting in:
Opportunistic business strategy: Discussions around resource constraints will move to economic ones related to sharing of opportunity and costs
Seeking solutions to local and global challenges: Move to growth and progress based on balancing renewable resources and recycling non-renewable resources.
Change in framework conditions: Shifts in regulation, consumer preferences, pricing of inputs and measurement of profit and loss
Partnerships and coalitions: Need for multi-stakeholder collaboration, systemic thinking and co-innovation
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To Value Creation
Sustainability
Transparency
Doing more good
Changes to the core business
NGOs as partners
Cost of doing business
Supply/value chain focusHelping companies figure out what to do
From Risk ManagementCorporate Social
ResponsibilityPublic Relations
Doing less harm
Changes around the edges
NGOs as threats
Philanthropy
Internal corporate focus
Telling companies what they can’t do
Business response is changing
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‘State’ of developmental sustainability, environmental protection and corporate social responsibility on the corporate agenda
“Step changes” in the last three years:
RISK OPPORTUNITY
DENIAL RECOGNITION
SIDELINES MAINSTREAM
SELLING THE GETTING THINGS
BUSINESS CASE DONE
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Businesses/NGOs aiming for “Smart Zone”
“Smart Zone”
Req
uire
men
ts
Time
Threat toShareholder
Value
Public acceptance curve
Law / compliance curve
Maximise Shareholder
Value
Non-profitable area
Illegal area
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WWF: Business as agents of change
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Current Roundtables/Dialogues/Certification
Schemes supported by WWF
Aquaculture
Dialogues
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Climate Change challenges for companies
A new
real
ity?
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Global CO2 concentrations are not natural
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On track to + 6°C
17
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Projected impacts of climate change
1°C 2°C 5°C4°C3°C
Sea level rise threatens major cities
Falling crop yields in many areas, particularly developing regions
FoodFood
WaterWater
EcosystemsEcosystems
Risk of Abrupt and Risk of Abrupt and Major Irreversible Major Irreversible ChangesChanges
Global temperature change (relative to pre-industrial)0°C
Falling yields in many developed regions
Rising number of species face extinction
Increasing risk of dangerous feedbacks and abrupt, large-scale shifts in the climate system
Significant decreases in water availability in many areas, including Mediterranean and Southern Africa
Small mountain glaciers disappear – water supplies threatened in several areas
Extensive Damage to Coral Reefs
Extreme Extreme Weather Weather EventsEvents
Rising intensity of storms, forest fires, droughts, flooding and heat waves
Possible rising yields in some high latitude regions
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Record Heat
Record Ice Melt
Record Coral Bleaching
Record Hurricane season
Record Droughts
To stay below 2 degrees C warming over pre-industrial levels:
Global GHG emissions (+3% per annum 2005) will have to peak
and decline in next 10 to 15 years
Global GHG emissions have to be reduced by at least 80% below
1990 levels by 2050 -
By 2050, this translates into ~100% GHG reductions for
industrialised countries including the EU
By 2050, this translates into ~60%GHG reductions for
developing countries compared to today
WWF position on context and urgency
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What’s the solution? – a level playing field - an enabling environment?
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10
EFFECTIVENESS OF LOBBYING
How would you rate the effectiveness of lobbying of the following organisations?
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But companies can also be more ambitious
A further shift to natural gas
Nuclear power Renewables Bio-products Carbon capture and storage
Mass transportation
Road transport Buildings Low energy appliances
Doing things differently
Energy conservation and efficiency
Emission reduction
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http://cleaneconomy.panda.org/csvideo/index.html
WWF Climate Savers
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2009: CSM case studies on climate change product and process innovation by WWF Climate Savers
Johnson & JohnsonTetra PakNovo NordiskXanterra Parks & ResortsFairmount HotelsElopakNokia Siemens NetworksSonyHewlett PackardSagawa Transportation
Consult them at: www.letthecleaneconomybegin.org
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The universe of climate change partnerships
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WWF Climate Savers: Potential strategic options
New markets
Existing markets
Existing products New products
CS (US/Europe)
sectors
Emerging markets Supply Chain
Zero C02
Markets
Products
Bottom left-hand quadrant (outlined) = current area of influence
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Thank you: Any questions?
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Brief descriptions of some Climate Savers cases
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CSM’s case series on WWF Climate Savers Innovations
IMD-2-0146: WHAT DOES IT TAKE TO GET PROJECTS OFF THE GROUND? JOHNSON & JOHNSON’S CAPITAL RELIEF FUNDING FOR CO2 REDUCTION PROJECTS
Johnson & Johnson’s capital relief funding for CO2 reduction projects have attracted the interest of managers in many companies in different industries, eager to learn how the corporation have eliminated budgeting barriers and allowed 61 climate friendly energy projects to take off in less than 4 years.
IMD-2-0147: BREAKING DOWN ALIGNMENT BARRIERS: TETRA PAK PULLS TOGETHER ALLIES TO REACH CLIMATE GOALS
Tetra Pak efforts to align market companies, manufacturing sites and suppliers with its climate goals required significant organizational change. By empowering shop floor teams to initiate and explore new approaches to energy efficiency along the supply chain, the company created a structure that allows organic innovation to take place.
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CSM’s case series on WWF Climate Savers Innovations
IMD-2-0148: DEVELOPING AN INNOVATIVE BUSINESS MODEL:NOVO NORDISK AND DONG ENERGY DRIVING THE MARKET FOR RENEWABLE ENERGY IN DENMARK
Novo Nordisk’s search for cost-effective solutions to reduce CO2 emissions drove the development of a new business model which expanded the commercial basis of renewable energy in Denmark.
IMD-2-0149: REMOVING BARRIERS TO INNOVATION: XANTERRA PARKS AND RESORTS GAINING SCALE IN ON-SITE SOLAR POWER GENERATION
Xanterra Parks & Resorts’ focused strategy of bringing on-site renewable energy generation to the next level required not only significant dedicated resources, but also singular efforts to break down skeptical mindsets and risk-related barriers to innovation. By active learning from an almost terminated project, the company was able to build one of the largest privately-owned solar photovoltaic systems in the US.
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CSM’s case series on WWF’s Climate Savers innovations
IMD-2-0150: FAIRMONT HOTELS & RESORTS STRETCHING THE TARGETS FOR CLIMATE ACTION AT LANDMARK HOTELS
The Fairmont Hotels & Resorts case focuses on actions taken by Fairmont during the full restoration of The Savoy in London and the building of the new Fairmont Pittsburgh in the United States. It shows the feasibility of stretching targets for lowering CO2 emissions from hotel operations.
IMD-2-0151: REACHING A TURNING POINT WITH NO TURNING BACK: HOW ELOPAK ROLLS OUT CO2 REDUCTION INITIATIVES
Elopak committed to reduce its CO2 emissions by 15% within a tight time frame of 3 years. This ambitious target pushed the company to adopt an innovative roll out approach, including active participation of Elopak’s CEO in efforts to build internal buy in, incorporation of a carbon strategy as part of the marketing mix and integration of climate targets into normal management cycle and reporting systems.
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CSM’s case series on WWF Climate Savers Innovations
IMD-2-0152: DEVELOPING IT SOLUTIONS FOR REDUCING TRAVEL-RELATED CO2 EMISSIONS: THE HEWLETT-PACKARD’S HALO
HP’s search for IT solutions to reduce travel-related CO2 emissions has driven the development of innovative telepresence collaboration solutions. By developing solutions that create a lifelike virtual meeting experience the company is contributing to the removal of technological and mindset barriers to the substitution of business travelling by virtual collaboration.
IMD-2-0153: LAFARGE’S C-C-TOOL: SUPPORTING CO2 MITIGATION DECISION MAKING THROUGH IMPROVEMENT MONITORING, ANALYSIS AND SIMULATION
By improving internal CO2 data management and putting in place a user-friendly tool for monitoring, analysis and simulation of mitigation alternatives, Lafarge facilitated decision-making processes and strengthened the autonomy of operational managers in implementing CO2 reduction projects.
And others……..
IMD-2-0154 – Sony
IMD-2-0155 –Nokia Siemens Networks