Triple Bottom Line slides from Jan 2010

SEATTLE

SUSTAINABLE

a catalyst and resource - locally and globally

Triple Bottom Line ReportingPort of Everett - January 2010

Roadmap for the Day

Introduction

What, who, where and why?

History

The Path to CR and an exercise

Frameworks

TBL report exercise

Tips and takeaways

Lunch

Best Practices

TBL revisited based on AI

What is working at the Port?

Mapping and metrics

What could be going on- Dream

What should be going on? - Feasible

What are the next steps?

Recap, lessons learned, final words

Introduction:

Commissioner Michael Hoffman

IntroductionsName Tents Please!

Laura Musikanski, JD,MBA, CEM, CELR

Executive Director of Sustainable Seattle

What, who, where and why?

What is TBL accounting?

Who is issuing TBL reports?

Where do they show up?

Why are entities accounting for the TBL?

What is TBL reporting? Triple Bottom Line reporting is accounting for environmental, social and economic performance.

Internal External

Triple Bottom Line Reporting is Voluntary

Financial Reporting is required by law

Environmental reporting - Required under some environmental regulations

Defining Triple Bottom Line Reporting


Most commonly accepted definition of sustainability:

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

United Nation’s Brundtland Commission

SecuritySecurity

OceansOceans

Urban Urban GrowthGrowth

IndustryIndustry EnergyEnergy

Species & Species & EcosystemsEcosystems

Population & Population & Human Human

ResourcesResources

Food Food ScarcityScarcity

EconomyEconomy

Sustainable Sustainable DevelopmentDevelopment

Areas of focus in Our Common Future, 1987


Sustainability is practiced by managing environmental, social and economic impacts.

SocialSocial

EconomicEconomic

EnvironmentalEnvironmental

SYNERGY

Community

Natural and Built Environment

Individuals

Establishing a common language

Equity

Economy

Ecology

PeoplePeople

ProfitProfit

PlanetPlanetSYNERGY

Establishing a common language

Three Legged Stool

EconomyEconomy

Jobs, Jobs, Prosperity, Prosperity, Wealth Wealth creationcreation

EnvironmentEnvironment

Natural Natural Resources Resources BiodiversityBiodiversity

SocietySociety

Social Social EquityEquity

Sense of Sense of communitycommunity

Healthy Healthy EcosystemsEcosystems

Thriving Thriving Local Local Economy Economy

SUSTAINABLE SUSTAINABLE

DEVELOPMENDEVELOPMENTT

Establishing a common language - Graphics

Establishing a common language- graphics


EconomyEconomy

SocietySociety

SocialSocial

Economic Economic


And the issue of establishing a common language….

How do we do this?

An EcosystemAn Ecosystem

Triple Bottom Line Reporting

Accountability

You can’t manage what you don’t measure

You don’t care about what you don’t measure

Terms

Triple Bottom LineTriple Bottom Line

Corporate Responsibility

CitizenshipReportsCorporate

SocialResponsibility

EMS

AccountabilityEnvironmental,

Social and Economic

Stewardship CommunityReports

Terms Accountability

Stewardship

Agenda 21

Stakeholders Community

Engagement

Green jobs Conservation,

Restoration and Adaptation

The Natural Step Cradle to Cradle Life Cycle Analysis Full Cost Accounting Industrial Ecology Natural Capitalism Community

Capitalism

Bottom of the PyramidBottom of the Pyramid Clean ProductionClean Production

Design for EnvironmentDesign for Environment BiomimicryBiomimicry Green DesignGreen Design

Eco-efficiencyEco-efficiency Zero WasteZero Waste Smart growthSmart growth

Ecological Foot PrintEcological Foot Print

Carbon FootprintCarbon Footprint Renewable resourcesRenewable resources Sustainable TechnologySustainable Technology Take Back Take Back Closed loopClosed loop Systems ThinkingSystems Thinking Restorative BusinessRestorative Business



Where do they show up?

Why are entities accounting for the TBL?

Who is issuing TBL reports? KPMG

International Survey of Corporate Responsibility Reporting 2005

- 52% of Global Fortune 500

- Economics is the primary driver

International Survey of Corporate Responsibility Reporting 2008

- 80% of Global Fortune 250

- 74 of 100 top revenue producing companies in 22 countries

- Ethics & Economics are the drivers

Corporate Register: 24031 reports from 5931 entities

2006: 2378 reports recorded



Global Reporting Initiative 1,101 reports recorded for 2009

KLD Research & Analytics Independent investment research firm75% of S&P 100 companies have section of web sites

dedicated to social and environmental performance in 2006- 34% increase from 2005

- 46 issued CSR reports (one document)

Siran - Sustainable Investment Research Analyst Network Analyst network - 150 North American social investment

research analysts - 30 investment firms, research providers, and affiliated investor groups.

A little under 50% of S&P 100 companies in 2006One Third use GRI


A few ports issuing TBL reports:

Portland, OR

Oakland, CA

Los Angeles

Pittsburgh

Houston

San Francisco

Massachusetts

Associated British Ports Holdings

Most Airports in EU, Many in Canada

Most ports in Australia (Queensland includes TBL in annual financial report)

Growth in reporting:

27 to 2,500 from 1992 - 2007

Subject areas: Subject areas:

Environmental: from 78% to Environmental: from 78% to 15%15%

Sustainability and CSR - 70% Sustainability and CSR - 70% in ‘07in ‘07

Source: CRRA CRReportingAwards07, Global Winners & Reporting trends March 2008


How is performance reported?Document: Hard copy, PDF

-Stand alone single document

- Integrated into financial annual report

-Stand alone multiple documents

On-line

Pamphlets

Internally – management structure

Within (Financial) Annual Report

Other Communications (media, ads, etc)

Why Issue a TBL report?

SocialSocial

EconomicEconomic


Reduce Costs & Increase RevenuesReduce Costs & Increase RevenuesEmerging markets Emerging markets

Manage risksManage risks

Resource LimitationsResource LimitationsRegulations & Laws Regulations & Laws

Attract & retain quality talent Attract & retain quality talent License to operateLicense to operate

ReputationReputation

HIGHEST POTENTIAL

EthicsEthicsQuality of Quality of

LifeLife

Long term valueLong term valueAlignment with OrganizationAlignment with Organization

First to MarketFirst to MarketGoodwillGoodwillBrandingBranding

Departmental and Agency DirectivesDepartmental and Agency Directives

Stakeholder ExpectationsStakeholder Expectations

Shareholder ResolutionsShareholder ResolutionsRegulations and RequirementsRegulations and Requirements

Laws, Regulations & Lawsuits Greenhouse gas emission Laws and Regulations

• Federal Level: HR 2454

• Regulating Authority : EPA under Clean Air Act

• State Level: HB 2815

• Regulating Authority: Department of Ecology – Proposed Ch. 173-441WAC- Reporting of Emissions of Greenhouse Gases

• Quasi-governmental body: Climate Registry

Lawsuits

• Petition for Writ of Mandate at 2, People v. County of San Bernardino, No. 07 Civ. 329 (Cal. Super. Ct., County of San Bernardino Apr. 13, 2007) – CA counties must consider GHG emissions in comprehensive plans

And other lawsuits speaking to other TBL performance areas and the local global connect…Kasky, Doe, Wiwa

Directives

Executive Order 13423: Strengthening Federal Environmental, Energy, and Transportation Management

Conduct environmental, transportation, and energy-related activities environmentally and economically sound, integrated, continuously improving, efficient, and sustainable manner.

3% GHG emissions reduction 2015, Baseline 2003.

Environmentally preferable products

Waste prevention & recycling programs

High Performance and Sustainable Buildings

Fleets: reduce, hybrids

EPEAT

Risks and Liabilities

Executive Order 13423 continued:

EMS Systems

Collection, analysis, and reporting of performance

Environmental management training

Review and audit

Leadership awards

Extends to contractors for contractor operation of government-owned facilities or vehicles

Use of Renewable energies: solar, wind , biomas. solar, wind , biomas. Landfill gas, Ocean (including tidal, wave, current and Landfill gas, Ocean (including tidal, wave, current and thermal), Geothermal, Municipal solid waste, Certain thermal), Geothermal, Municipal solid waste, Certain hydroelectric generationhydroelectric generation

WWF Discussion Paper, CSR an overviewCall for legally binding global rules

Integrate sustainable development into core business strategy-Reactive to Passive to Proactive

-Risk Assessment and Branding to Change of Business Model

-Good to Services

-Win-win to strategic investments

-Marketing to Responsible Marketing

Long-term value

Brundtland Commission Report Survival of the human and

other speciesEnvironmental degradation

- Global warming

- Ozone layer

- Desertification

Poverty & InequalityPopulation growthDevelopment:

- Improving our lot in the environment in which we live

- Industrialization

New Norms of Behavior: campaigns, education and public participation

Quality of Life

1983


History

The Past to Corporate Responsibility

Simon Zadek

Sustainability Integration CurveP

erce

nt o

rgan

izat

ions

Sustainability Integration

Short Exercise:

6 performance areas (rows)circle one box in each row that you see as most true for the Port of Everett

TBL Frameworks:Global Reporting Initiative – top down

B-Sustainable.org- bottom up

Others


Global Reporting Initiative


Labor PracticesLabor Practices& Human Rights& Human Rights

CommunicationCommunicationPublic RelationsPublic Relations

SocialSocial

Service/GoodService/Good

ResponsibilityResponsibility

Economic & Economic & FinancialFinancial

Basic Basic SustainabilitySustainability

FrameworkFramework

Global Reporting Initiative

Triple Bottom Line Subject Areas

SocialSocial

EconomicEconomic


Financial PerformanceFinancial PerformanceProduct ResponsibilityProduct ResponsibilityConsumer IssuesConsumer IssuesCommunity Development Community Development CommunicationCommunication

MaterialsMaterialsWaste and RecycleWaste and RecycleBiodiversityBiodiversity

GovernanceGovernanceFair Operating ProceduresFair Operating ProceduresLabor PracticesLabor PracticesHuman RelationsHuman Relations

Integration

EnergyEnergyEmissionsEmissionsWaterWater

GRI

GRI

GRI

GRI

GRI

GRI

GRI

Sector Supplements

Public Agency

Air Ports

Transportation

Financial Services

Logistics and Transportation

Mining and Metals

Tour Operators

Telecommunications

Automotive

Apparel Apparel Food ProcessorsFood Processors NGOsNGOs Construction and Construction and

Real EstateReal Estate

Electric UtilitiesElectric Utilities EventsEvents Oil & GasOil & Gas

-Growing list-Growing list

Principles

GRI Principles

ContentMateriality

Stakeholder Inclusiveness

Sustainability Context

Completeness

QualityBalanceComparabilityAccuracyTimelinessClarityReliability


B-Sustainable:

A bottom-up approach through stakeholder

engagement

B-Sustainable.org – a web-based tool of sustainability areas, goals, indicators, data and actions.

Developed through participatory action research or grass-roots activism = community relevance.

Open Source code-base.

4 Environments: Natural Built/economicSocial Personal

23 goals: 4 in Natural environment7 in Built Environment6 in Social Environment6 in Personal Environment

189 Indicators: Upstream (causative or leading)StatusDownstream (effect or lagging)

PERSONAL ENVIRONMENT

SOCIAL ENVIRONMENT

BUILT ENVIRONMENT

NATURALENVIRONMENT

Method for identifying goals and indicators:

1.Steering Committee to ensure diverse interests and cultures represented2.Stakeholder meetings to identify goals & indicators

1. Focus Groups2. Key stakeholder meetings3. Public meetings

3.Technical Review committee to ensure robust and appropriate selection4.Data partners to report on indicators5.Iterative process to measure progress and ensure stakeholder relevance.

Other Frameworks for Triple Bottom Line Reports

SRI Indices – DJSI, FTSE 4 Good

ISO 26000 (2010 issue)

Principles for Global Corporate Responsibility:Bench Marks for Measuring Business Performance

Agenda 21 – ICLEI

Seven Generations – Traditional ways

Strategic frameworks: The Natural Step (TNS)

Natural Capitalism

Environmental Management Systems (EMS)

- ISO 14001, Cradle to Cradle & LCA

Bottom of Pyramid

TBL Exercise:

Groups of 3Review ReportsDiscuss in group – 3

pointsClass discussion

Tips for a writing a TBL report

Identify Scope: GRI

Time & Baseline

Data availability

Importance- stakeholders, drivers

Determine Indicators: GRI, competitors, cross-industry

Integrated triple bottom line

Interconnected :

- Internal & Across Time (Long Term) &

- Out in Environment, Society & Economy

Tips for writing a TBL report

Gather Data Internal and External

Set path for future accountability & management controls

Tell the story Quantitative and Qualitative

Visuals

Material & Reliable: Use communication channels tailored to your intended audience

Criteria

Tips for an effective TBL report

Address stakeholder interest, provide feedback loop and respond to stakeholder feedback

Look backwards- Identify challenges and root causes

Look forwards- State goal and means to measure performance, demonstrate programs for continual improvement & understanding of sustainability as a journey

Use Indicators that are relevant, comparable, and accessible to the entity, in the industry and cross industries

Include an Indicators Index, use third-party assurance & solicit and publicly respond to recommendations

Use and ;ink to online updates, supplements and references

Take-awaysPrioritize

Stakeholder interest: What is important to them?

Control and Influence: What can you really do?

Leverage Points: What are you already doing?

Quantify

Numbers – comparable and understandable

Standardize

GRI & industry practices

Verify

Message

Tell story in language & medium for audience

LunchWhen we come back:

Best Practices

TBL revisited based on AI What is working at the Port?

Mapping and metrics




Recap, lessons learned, final words

Best Practices: Green TeamsGreen teams are composed

of anyone in the entity who gather on a periodic basis to identify and undertake initiatives

• Green teams usually start on a voluntary basis- once a week lunches.

• Green teams usually develop into task forces or coalitions.

• They often have success with low hanging fruit and then are allocated resources – time & budget.

• Often a position emerges to take on ownership of initiatives.

• Sustainability Initiative coordinator,

• Environmental Stewardship manager

• Director of Sustainability

• Value: identify champions, initiate TBL at grass roots,employee satisfaction, public recognition

Best Practices: Establishing a Common Language

Establish a definition Adapting accepted terminology to entity

Often rooted in Brundtland Commission definition for sustainability

Establish principles Often these are an extension of existing entity principles

and reflect others within the industry

Determine indicators for measuring & managing environmental, social & economic performance areas Often starting by communicating externally what is already

being measured internally and expanding from there.

Common methods: Surveys

Sustainability training and information sessions

Consutant and/or position to keep momentum

Best Practices: Visionary Leadership

Katsuaki Watanabe, CEO of Toyota

"For us to become the genuine number one - in quality - we have to realize the dream vehicle, which makes the air cleaner, never injures people, makes people healthier and can run on a single tank of fuel between London and Istanbul."

Best Practices: Integration of Systems of Accountability

Best Practices: Top Management Compensation tied to TBL performance

Exelon CEO’s compensation tied to his ability to leverage the energy company’s position on GHG emission

Attracts investors

Best Practices: Stakeholder engagement and non-profit partnerships

Perdue formed partnerships with small nonprofit to undertake pro-active projects to address regulations and regulator concerns.

Projects were funded by agencies and Perdue.

Tips Key stakeholder identification

Build and keep trust open and transparent process and shared decision making

Keeping momentum going: one person allocated the responsibility

TBL revisited based on AI What is working at the Port?

Mapping and metrics




Appreciative Inquiry Developed by David Copperfield

A means to engage stakeholders, often employees

Builds on the positive

Discover

What is working at the Port?

Discover

Map it and Identify Metrics

Dream

What could be? What should be? – no limits

Design

What can be?– What is feasible?

SMART goals: specific, measurable, actionable, realistic and time-bound.

Design/Deliver


How will we measure success?

Recap exercise

Groups of 3

Discuss the day

Identify 3 points to share

Appoint a spokesperson

Back into group

TBL success factors

Leadership Buy –in

Resource Allocation

Accountability

TBL: A Shift in Accounting

TBL reporting is as much about change management as about the triple bottom line and sustainability.

Change takes time…and patience. “I have not failed. I've just found 10,000

ways that won't work” Thomas Edison

THANK YOU

Education

Triple Bottom Line slides from Jan 2010