AmCham Belgium Green Survey
How green are we?
September 29th, 2010
AMCHAM BELGIUM
Why eco-sustainability matters?
AMCHAM BELGIUM
As billions of people improve their living standards, resources will inevitably become limited
Today Future, 20xx
7 bn.100
(indexed)
• Developing countries strive to increase standard of living
• Fierce competition for resources leads to sharp price increase
• Current business models are becoming constrained
The only way to survive this environment is to focus on “smarter” resource usage
One planet Five planets
20%
Resources
80%
20%
# People
80%
Developing countries
Developed countries 7 bn. + X 500
10%
Resources
98%
2%
# People
90%
AMCHAM BELGIUM
Sustainability is of strategic importance
Economic Development
Environ-mental
Protection
Social Wellbeing
Regulation and activism
Resource scarcity
Consumption patterns
The sustainability challenge… … is amplified by three main forces
AMCHAM BELGIUM
Eco-sustainability represents formidable challenges and opportunities for companies
Reven
ue
Co
sts
Risk Opportunity
New Products
Carbon Tax
“Revenue Threat” “Growth Platform”
“Cost Peril” “Efficiency Booster”
Packaging weight
reduction
Declining relevance
of current product portfolio
AMCHAM BELGIUM
To address those challenges and opportunities, companies need to take a product lifecycle approach
New end-to-end lifecycle approach to sustainability
Traditional inward-looking approach to sustainability
CO2Share of emission
Supply Production DistributionUsage and disposal
60-70%
80-90%
80-90%
AMCHAM BELGIUM
To assess eco-sustainability of its members, AmChamBelgium has, with A.T. Kearney, conducted a green survey
Support functions(sales, marketing, administration)
Corporate strategy & business model
R&DPurcha-sing
1
2
3
25 companies participated in the survey
Product use
Distri-bution
Disposal
Services
Production
To what extent is eco-sustainability a key element of
company strategy and embedded in the organization?
How does the company manage eco-sustainability in its day to day
operations?
To what extent are eco-
sustainability principles applied
in support functions?
AMCHAM BELGIUM
Eco-sustainability in Corporate Strategy & Business Model
AMCHAM BELGIUM
Sustainability is clearly recognized as a positive force for future performance
Impact of eco-sustainability on profitability % of respondents
10%
20%
10%
Positive
None
Negative
Next 3 yearsLast 3 years
90%
70%
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
A similar trend in terms of
revenue growth
Eco-sustainability seen as a key enabler
to outperform industry peers
AMCHAM BELGIUM
Primary eco-sustainability objectives are brand and reputation improvement as well as regulation compliance
Product differentation
71%
Risk management
83%
Increased efficiency
88%
Cost reduction
92%
Employee motivation
92%
Compliance
92%
Brand/reputation
96%
Objectives in your eco-sustainability strategyFrequency in %
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Sustainability is clearly perceived as a key risk factor to be managed
Competitor, substitutes
Geopolitics
Economics, globalization,
tariffs
Regulatory change
Consumer and demographic
Technology & innovation
Environment and climate
change
84%
72%
64%
60%
60%
52%
48%
Perceived and managed long term risksFrequency in %
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
84% of survey participants emphasize eco-sustainability in their strategy but much less translate it into targets
% of respondents Frequency in %
16%
Keyelement
Not akey element
84%
19%
29%
62%
Water usage Paper Consumption
CO2 emissions or energy usage
Importance of eco-sustainability in the company global strategy
Defined targets in key sustainability areas
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
(1) Management by ObjectivesSource: AmCham Belgium – A.T. Kearney Green Survey 2010
% of respondents Frequency in %
Most senior person accountable for
sustainability strategy
Eco-sustainability rewarding method
Responsibility and accountability for sustainability is not yet firmly embedded in the organization
Level of staff with sustainability goals
included in their MBO1)
Frequency in %
Board ofDirectors
or onelevel below
Two levelsdown
the boardor below
100%
70%
30%
Manager 33%
Senior Manager/Associate
Director24%
Director 29%
Vice President 24%
24%Member of the
executivecommittee
Other 10%
Reco-gnition
rewards52%
Monetaryrewards
24%
At leastone type
of reward67%
AMCHAM BELGIUM
Leaders in eco-sustainability have defined a clear strategy and structurally embedded it in their organization
Eco-sustainability performance for Leaders and Followers% of total score
(1) Top 25% performersSource: AmCham Belgium – A.T. Kearney Green Survey 2010
83%
62%
84%
27%31%
65%
+56%
+31%
InvestmentsOrganization and KPI’sStrategy
Leaders
Followers
AMCHAM BELGIUM
Eco-sustainability along the Value Chain
AMCHAM BELGIUM
Companies tend to focus their sustainability efforts within their boundaries
Companies with eco-sustainability policies translated into concrete actions % of respondents
37%
63%
45%
60% 57%
Supply Production DistributionUsage and disposal
R&D
Support functions
Within 4-walls
Outside 4-walls
Not applicable (mainly R&D driven)
The next challenge is to further engage suppliers
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Leading companies have a stronger eco-sustainability focus across the entire value chain
54%
44%
83%
52%
83%
50%
29%
44%
33%
52%
+19%
+39%+31%
Support FunctionsDistributionProduction/ServicesSupplyR&D
Followers
Leaders(1)
(1) Top 25% performersSource: AmCham Belgium – A.T. Kearney Green Survey 2010
Eco-sustainability performance in core adding-value activities % of total score
AMCHAM BELGIUM
60% of companies recognize that eco- sustainability performance starts at the design stage
60% of companies
take concrete actions in
R&D
Supply
Production
Usage and disposal
Distribution
• New manufacturing line reducing energy usage by 30%
• Detergent enabling washing machine to operate at 15°C
Examples from participants
• More compact detergent enabling to decrease transport volume by 40-57%
• Minimize use of volatile organic compounds (VOC) in products
Design (R&D)
UsageManufac-turing
High
Low
Environmental impact influenced
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Companies tend to focus more eco-sustainability improvement on process improvement
14%
14%
14%
25%
29%
43%Raw material
reduction57%
Use of eco-friendly raw material
71%
Energy efficiency 75%
Use of green energy 86%
Waste reduction 86%
Water reduction 86%
Formal policy No Formal policy
Raw material changes are seen as more difficult to implement
Efforts in production towards eco-sustainability% of respondents
Process related
Product related
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Companies have started to implement sustainable procurement …
56%
38%
36%
23%Awards andrecognition
69%46%
Staff training 71%36%
Sustainabilityevaluation criteria
77%38%
Writtenguidelines
100%44%
Currently do it
Plan to do it within 12 months
33%
30%
Policy & clear guidelines
Policy but no guidelines
No policy
37%
% of total spending value% of respondents
Scope of sustainable procurementProcurement actions related
to eco-sustainability
… however, guidelines cover less than 40% of their spending
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
% of respondents % of respondents
Excluding suppliers based on insufficient performance in
sustainability
Recognize or reward suppliers with good eco-sustainability practices
Pressure on suppliers regarding their sustainability performance is expected to increase significantly
23%
8%
<10% of the time
>10% of the time
Never
Within 5 years
57%
43%
Today
31%
54%
15%
5 yrs ago
69%
50%
33%
Today Within 12 months
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Traceability in the supplier chain is a key pre-requisite to ensure eco-sustainable supply
29%
69%
92%36%
23%
8%
Third- to End-tier suppliers
Second-tier suppliers
8%
First-tier suppliers
36%
No visibility
Partial visibility
Full visibility
Companies visibility in their suppliers’ eco-sustainability practices% of respondents
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
As a result, environmental certification of supplier is expected to increase
38%
15%
Within 12 monthsToday
62%
54%
Within 12 monthsToday
% of responses
Require environmental certification from suppliers
Collaborative process to improve supplier eco-performance
% of responses
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Common practices
In the support functions, potential to reduce environmental footprint is still under-exploited
• Companies make efforts to save energy in buildings:̶ Insulation efforts̶ Energy efficient IT systems̶ Water saving devices
• Very few companies have energy efficient / passive buildings
• Many companies try to limit business and home-to-work travel
• Most companies take actions to reduce paper consumption
• 12% of companies do not sort waste
• Very few companies have incentives in place to involve all employees
• 57% of companies don’t use green energy
• 77% of companies use recycled paper
Opportunities Overall
Green Infra-
structure
Influence behavior
Consume green
Medium
Medium
Poor
Source: AmCham Belgium – A.T. Kearney Green Survey 2010
AMCHAM BELGIUM
Lessons from the green survey
Look at sustainability as an opportunity
and with a long term perspective
Make sustainability part of your strategy,
ensure leadership commitment
Embed sustainability in the organization and culture through
targets, KPI, and people involvement
Make sustainability a key component of
your product design
Take a product lifecycle approach across the entire
value chain
1 2 3
4 5
AMCHAM BELGIUM
For more information, please contact :
Benoît Nachtergaele
Principal
A.T. Kearney
Tour & Taxis
Entrepôt Royal – Koninklijk Pakhuis
Av. du Port 86C b411 Havenlaan
B-1000 Brussels
Belgium
Tel : +32 2 504 4851
Johan Kestens
Partner
A.T. Kearney
Tour & Taxis
Entrepôt Royal – Koninklijk Pakhuis
Av. du Port 86C b411 Havenlaan
B-1000 Brussels
Belgium
Tel : +32 2 504 4803