[MUSIC] Hi, my name is Philip Peck and I'm going to talk about the process that organizations need to go through in order for them to work more sustainably. Before any business or formal organization can create value and work effectively with sustainability initiatives, they must have certain 'capacities'. That is, a certain 'quality' embodied in the suite of resources that the organization has. This includes the people in an organization, and the inherit qualities of their skills, knowledge, and experience. It also includes the linkages and networks that they have beyond their place of work, their interconnections with other organizations and their relationships with neighbors, government, customers and other stakeholders. These all add to a company's sustainability capacity. However the ability to work with sustainability issues is not an 'instinct', an organization has. Hopefully one day it will be, but for now it's a skill set that has to be learned and then continually refined. If you think of the organization as a concert pianist, some things, such as walking or running may be instinctive, but other things, like playing a piano, we have to learn from scratch - then practice - again and again, each time pushing our limits. In the same way, a company cannot just "decide" to be excellent when seeking to work with environmental, social, and economic issues. It cannot just automatically "use sustainability to create business value", gain competitive advantage. First, an organization has to build capacity. While it's a continuum, I'm going to present three general phases of capacity building in industry. The 1st phase is one of commitment, compliance, and awakening. It comprises mainly internal processes. Often it begins with occupational health and safety work that then picks up environment. First the company learns to care better for its workers, then it expands scope and starts to work to understand and reduce its negative impacts on the environment. This is where the company learns the basics, things like environmental reporting, transparency, how to engage in real dialog with stakeholders. Here they start to become more attuned to trends in areas such as public and policy maker expectations, particularly those related to environmental issues. For most companies, this involves actions such as making their first environmental commitments, formalizing resource efficiency work, adopting an environmental management system, or commissioning 3rd party warranted performance. For some, particularly those with true global spread, this may start with achieving compliance with laws and regulations everywhere they operate. The 2nd phase can be said to be one of operational, process and product excellence. Here companies get better and better at working with environmental and working issues. While much of the focus remains internal, organizations are now starting to look beyond the boundary fence. Companies are now chasing wasted materials and energy much harder. They expand their scope to supply chains and look for environmental or business practice improvements upstream. In areas such as energy, carbon, chemicals. Importantly, many also examine their business ethics. Companies also look downstream towards their customers or users. They ask questions such as, how do our products and services perform? What can we improve about the way our products are used? Or, what happens to them at their end of life? Organizations are now investing more and more in training and development, making the new and special skills learned by few into the way we do things here. This brings us to the 3rd phase. One that we can see as building the business case for sustainability. This phase is much more outward and future looking. It's also harder to describe. Here we must focus more on the opportunities offered to businesses by sustainability challenges, not just dealing with threats. While a number of the leading companies around the world are entering this phase, many companies have not yet reached this level. Creating value in sustainable ways requires effort to develop products and services that are good for society, the economy, and the environment. It must involve reduction of our impacts on the planet and support social development. Companies are now considering social issues, human rights and development challenges more deeply, and pursuing the development of products with sustainable material cycles or targeting sectors central to sustainability efforts. They are explicitly discussing the importance of a low carbon and resource constrained future, and of external and internal transparency for their business. Some specific examples we can expect to see in this phase include, integrated sustainability reporting, codes of conduct for suppliers, portfolios of sustainability related products and services, and partnering with NGOs or academia for sustainability work. We see the creation of value while pursuing sustainability as one of the greatest challenges faced by organizations today. But we are just getting started, and there is exciting work ahead. [MUSIC]
