Sustainable Development

Lee A. DeHihns III

Alston & Bird, LLP

White Paper 2009

1
 LEARNING OBJECTIVES

 Provide a historical perspective

about sustainability
 Present case studies of key
corporations
 Discuss resources and future
trends
2
 Historical Perspective
RIO/BRAZIL
STOCKHOLM World Business
U.N. CONFERENCE
CONFERENCE Council for
ON ENVIRONMENT
Declaration on
& DEVELOPMENT Sustainable
the Human
Environment
Development
(WBCSD)

1972 … 1987 1992 1997 1999 2002 … TOMORROW

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 World Business Council for
Sustainable Development
(WBCSD)
 The WBCSD is a council of 200 leading global
corporations with a market capitalization of $7
Trillion+

 The group’s President Bjorn Stigson said at their

annual meeting in Johannesburg in Nov 2008:
“The companies in our membership are innovative and
well-managed partly because of their commitment to
sustainable development. They are also the front
runners in understanding the business benefits derived
from innovative energy and environmental
approaches.”
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 World Business Council Sustainable
Development (WBCSD)
 It provides a platform for companies to explore
sustainable development, share knowledge,
experiences and best practices, and to advocate
business positions on these issues in a variety of
forums, working with governments, non-
governmental and intergovernmental
organizations.

 Members are drawn from more than 35

countries and 20 major industrial sectors. The
Council also benefits from a global network of
about 55 national and regional business
councils and regional partners

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 Historical Perspective
RIO/BRAZIL
STOCKHOLM
U.N. CONFERENCE JOHANNESBURG
CONFERENCE
ON ENVIRONMENT Declaration on
Declaration on
& DEVELOPMENT Sustainable
the Human
Development
Environment

1972 … 1987 1992 1997 1999 2002 … TOMORROW

Kyoto Dow Jones

Protocol Sustainability
Future
Indexes Trends

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Dow Jones Sustainability Indexes
 Launched in 1999, the Dow Jones Sustainability
Indexes are the first global indexes tracking the
financial performance of the leading sustainability-
driven companies worldwide in terms of corporate
sustainability. Based on the cooperation of Dow
Jones Indexes, STOXX Limited and SAM, they
provide asset managers with reliable and objective
benchmarks to manage sustainability portfolios.

 All indexes of the DJSI family are assessed

according to the same Corporate Sustainability
Assessment and respective criteria.

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 DJSI GLOBAL SUPERSECTOR LEADERS
2008/2009

 Automobiles & Parts  BMW -Germany

 Banks  Australia & NZ Banking Group
 Basic Resources  Xstrata Plc -UK
 Chemicals  BASF SE - Germany
 Construction & Materials  Holcim -Switzerland
 Financial Services  Itausa-Investimentos - Brazil
 Food & Beverage  Unilever - Netherlands
 Health Care  Novartis AG - Switzerland
 Industrial Goods & Services  TNT N.V. - Netherlands
 Insurance  Swiss Re - Switzerland
 Media  Pearson Plc. - UK
 Oil & Gas  ENI - Italy
 Personal & Household Goods  Adidas AG - Germany
 Real Estate  Land Securities Group PLC - UK
 Retail  Kingfisher Plc - UK
 Technology  Intel Corp. - USA
 Telecommunications  BT Group Plc -UK
 Travel & Leisure  Air France-KLM - France
 Utilities  Grupo Iberdrola -Spain
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 LEARNING OBJECTIVES

 Provide a historical perspective

about sustainability
 Present case studies of key
corporations
 Discuss resources, strategic
implications and future trends
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 A Case Study
BASF
 BASF is the leading chemical company in the most
important sustainability index - the Dow Jones
Sustainability Index (DJSI World).

 BASF shares were included in the DJSI World for the

eighth year in succession in 2008. The companies
included in the DJSI-World are selected out of all
2,500 members of the Dow Jones Global Index on the
basis of sustainability criteria … only the top 10 % in
each industry group are selected.

 BASF was recognized for its climate strategy, its

environmental and social reporting and for
developing innovative and eco-efficient products.
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 A Case Study
Newmont Mining
Jan 2009
“Even at showcase mines, such as
Newmont Mining Corporation's Batu
Hijau operation in eastern
Indonesia, where $600 million has
been spent to mitigate the
environmental impact, there is no
avoiding the brutal calculus of gold
mining. Extracting a single ounce of
gold there—the amount in a typical
wedding ring—requires the removal
of more than 250 tons of rock and
ore.”

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 A Case Study
IBM
 Sam Palmisano, IBM Chairman and CEO, told the
Council on Foreign Relations in November 2008:
 “We are all now connected – environmentally, technically and
socially. But we are also learning that being connected is not
sufficient. Yes, the world continues to get flatter and yes, it
continues to get smaller and more interconnected. But
something is happening that holds even greater potential. In a
word, our planet is becoming smarter.”
 He concluded his speech by saying: “The world now beckoning
us is one of enormous promise. And I believe it is one we can
build – if we open our minds and let ourselves think about all
that a smarter planet could be.”

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 A Case Study
Wal-Mart
 At the China Sustainability Summit in Beijing in
Oct. 2008, Wal-Mart CEO Leo Scott said:
 “Sustainability in our operations and supply chain -
selling and making products in an efficient, socially
responsible way - will be essential to meeting the
expectations in the future.”
 “For us, sustainability is about building a better business.
It is about making a positive difference in people’s lives
and their communities. And it is about staying out in
front of the changes that will take place in world not just
next month or next year, but for decades to come.”

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 KPMG Sustainability Report
 In October 2008, KPMG released in first
sustainability report since 2005 and concluded
that:
 Twice as many companies publicly released sustainability
data on their environmental, social and governance
information in 2008 compared with 2005.
 Ethics outweighed economics for the first time as the
primary reason for such disclosures.

 The report looked at information from the top 100

U.S. companies by revenue:
 74% released corporate responsibility information.
 Of the Global Fortune 250, 80% released corporate
responsibility information.

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 LEARNING OBJECTIVES

 Provide a historical perspective

about sustainability
 Present case studies of key
corporations
 Discuss resources and future
trends

15
 Resources

Cut Emissions, Cut Costs

Reduce your company's global warming impacts and improve your business by building climate action into your strategy.

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 Resources

 Businesses/Forums:
 Environmental Defense Fund’s Innovation Exchange,
LOHAS, SOL Sustainability Consortium, CERES,
Businesses for Social Responsibility, Consulting Firms,
Stakeholders (Investors, Vendor/Partners, etc.)

 Universities:
 Emory University (Office of Sustainability Initiatives),
University of Michigan (Erb Institute for Global
Sustainable Enterprise), Arizona State (Global Institute
of Sustainability), KSU (Director of Sustainability)

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Future Trends  Leadership

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APPENDIX

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 1972 Stockholm Conference –
Declaration on the Human Environment
 Principle 1: Man is both creature and molder of his
environment, which gives him physical sustenance and
affords him the opportunity for intellectual, moral, social and
spiritual growth. In the long and tortuous evolution of the
human race on this planet a stage has been reached when,
through the rapid acceleration of science and technology, man
has acquired the power to transform his environment in
countless ways and on an unprecedented scale.
 Principle 3: Man has constantly to sum up experience
and go on discovering, inventing, creating and advancing. In
our time man's capability to transform his surroundings, if
used wisely, can bring to all peoples the benefits of
development and the opportunity to enhance the quality of
life. Wrongly or heedlessly applied, the same power can do
incalculable harm to human beings and the human
environment.
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 1972 Stockholm Conference –
Declaration on the Human Environment
 Principle 6: A point has been reached in history when we must shape
our actions throughout the world with a more prudent care for their
environmental consequences. Through ignorance or indifference we can do
massive and irreversible harm to the earthly environment on which our life
and well-being depend. Conversely, through fuller knowledge and wiser
action, we can achieve for ourselves and our prosperity a better life in an
environment more in keeping with human needs and hopes. To defend and
improve the human environment for present and future generations has
become an imperative goal for mankind-a goal to be pursued together with,
and in harmony with, the established and fundamental goals of peace and of
world-wide economic and social development.
 Principle 11: The environmental policies of all States should enhance
and not adversely affect the present or future development potential of
developing countries, nor should they hamper the attainment of better living
conditions for all, and appropriate steps should be taken by States and
international organizations with a view to reaching agreement on meeting the
possible national and international economic consequences resulting from the
application of environmental measures.

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Report of the World Commission on Environment
and Development: “Our Common Future”
(Brundtland 1987)
 1. Sustainable development is development that meets the needs
of the present without compromising the ability of future
generations to meet their own needs. It contains within it two
key concepts:
 the concept of ‘needs’, in particular the essential needs of
the world’s poor, to which overriding priority should be
given; and
 the idea of limitations imposed by the state of technology
and social organization on the environment’s ability to meet
present and future needs.

 4. The satisfaction of human needs and aspirations is the major

objective of development. The essential needs of vast numbers of
people in developing countries for food, clothing, shelter, jobs -
are not being met, and beyond their basic needs these people
have legitimate aspirations for an improved quality of life. A
world in which poverty and inequity are endemic will always be
prone to ecological and other crises. Sustainable development
requires meeting the basic needs of all and extending to all the
opportunity to satisfy their aspirations for a better life.

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1992 UNITED NATIONS CONFERENCE ON
ENVIRONMENT AND DEVELOPMENT
(“Rio Conference”)
Charged by the UN General Assembly to
“elaborate strategies . . . to promote
sustainable and environmentally sound
development in all countries.”
 Principle 1: Human beings are at the center of concerns for
sustainable development. They are entitled to a healthy and
productive life in harmony with nature.
 Principle 3: The right to development must be fulfilled so as to
equitably meet developmental and environmental needs of present
and future generations.
 Principle 4: In order to achieve sustainable development,
environmental protection shall constitute an integral part of the
development process and cannot be considered in isolation from it.

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1992 UNITED NATIONS CONFERENCE ON
ENVIRONMENT AND DEVELOPMENT
(Rio)
 Principle 1: Human beings are at the center of concerns for
sustainable development. They are entitled to a healthy and
productive life in harmony with nature.

 Principle 3: The right to development must be fulfilled so as to

equitably meet developmental and environmental needs of
present and future generations.

 Principle 4: In order to achieve sustainable development,

environmental protection shall constitute an integral part of the
development process and cannot be considered in isolation from
it.

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

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 2002 Johannesburg Declaration
on Sustainable Development
 Principle 18: We welcome the focus of the Johannesburg Summit on the
indivisibility of human dignity and are resolved, through decisions on targets,
timetables and partnerships, to speedily increase access to such basic
requirements as clean water, sanitation, adequate shelter, energy, health
care, food security and the protection of biodiversity.

 Principle 19: We reaffirm our pledge to place particular focus on, and give
priority attention to, the fight against the worldwide conditions that pose
severe threats to the sustainable development of our people, which include:
chronic hunger; malnutrition; foreign occupation; armed conflict; illicit drug
problems; organized crime; corruption; natural disasters; illicit arms
trafficking; trafficking in persons; terrorism; intolerance and incitement to
racial, ethnic, religious and other hatreds; xenophobia; and endemic,
communicable and chronic diseases, in particular HIV/AIDS, malaria and
tuberculosis.

 Principle 20: We are committed to ensuring that women’s empowerment,

emancipation and gender equality are integrated in all the activities
encompassed within Agenda 21, the Millennium development goals and the
Plan of Implementation of the Summit.

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 BASF
 "A business cannot be successful in the long term if it does
not act responsibly toward the environment and society.
That is why sustainability is an integral part of our strategy."
Jürgen Hambrecht, Chairman of the Board of Executive Directors

 Acting responsibly in our Supply Chain:

 How carefully do carriers handle BASF's products? Under what
conditions do BASF's technical partner companies work? How
safe are our suppliers' products and processes?
 What counts for us is acting responsibly throughout the entire
supply chain because we want to build stable and sustainable
relationships with our business partners. This is why we choose
carriers, service providers and suppliers not just on the basis of
price, but also include their performance in the fields of
environmental and social responsibility when making our
decisions.

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 Newmont Mining
 Beginning with geologic exploration, our success is tied to
our ability to develop, operate and close mines in a manner
that provides long-term value. Long-term value has evolved
into a broad set of concepts that are now referred to as
"sustainable development" or "sustainability."

 Sustainability can be summarized in four key principles:

 First, benefits of economic activity must be considered in
relation to their respective social and environmental
consequences;
 Second, in using resources, we must consider the needs and
expectations of future generations;
 Third, government, business and other segments of civil society
must act together to balance these needs;
 Fourth, the corporate governance contributes to sustainable
economic development by enhancing the performance of the
company and increasing its access to land and capital.

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 Newmont Mining
 Protect and respect human rights, community engagement
and consultation, contribute to communities' development
aspirations, and mitigate the impacts of our mining
activities. Our ability to engage, understand and manage the
needs and interests of communities during the development
and operating stages is the key challenge around
communities.
 Protect human health and the environment, and work in
cooperation with host communities and governments to
create sustainable, long-term economic and social
opportunities.
 Eliminate or reduce to a level as low as reasonably possible
any risk that could result in personal injury, illness, property
damage, process or loss to the environment by developing
and implementing the most effective health, safety and loss
prevention management system possible
 Attract, develop and retain the company's most valuable
asset, our employees.

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 Newmont Mining Jan. 2009
NG
 National Geographic Magazine “Even at showcase
mines, such as Newmont Mining Corporation's
Batu Hijau operation in eastern Indonesia, where
$600 million has been spent to mitigate the
environmental impact, there is no avoiding the
brutal calculus of gold mining. Extracting a single
ounce of gold there—the amount in a typical
wedding ring—requires the removal of more than
250 tons of rock and ore.”

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 Newmont Mining NG
 “Pushed by rising gold prices and the depletion of deposits in the U.S.,
South Africa, and Australia, the world's largest mining companies are
pursuing gold to the ends of the Earth. Few companies have gone
global more aggressively than Newmont, a Denver-based mining giant
that now runs open-pit gold mines on five continents, from the
lowlands of Ghana to the mountaintops of Peru. Lured by the benefits
of operating in the developing world—lower costs, higher yields, fewer
regulations—Newmont has generated tens of thousands of jobs in poor
regions. But it has also come under attack for everything from
ecological destruction to the forced relocation of villagers.
 At Batu Hijau, where Newmont, the single largest share-holder, is
wholly responsible for the mine's operation, the company has
responded by ramping up community development and environmental
programs—and dismissing its critics. "Why is it that activists
thousands of miles away are yelling, but nobody around the mine
complains?" asks Malik Salim, Batu Hijau's senior external relations
manager. "Gold is what drives everybody crazy.”

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 Newmont Mining NG
 At Batu Hijau, Newmont uses a finely tuned
flotation technology that is nontoxic, unlike the
potentially toxic cyanide "heap leaching" the
company uses in some of its other mines. Even
so, no technology can make the massive waste
generated by mining magically disappear. It
takes less than 16 hours to accumulate more
tons of waste here than all of the tons of gold
mined in human history. The waste comes in
two forms: discarded rock, which is piled into
flat-topped mountains spread across what used
to be pristine rain forest, and tailings, the
effluent from chemical processing that
Newmont pipes to the bottom of the sea.
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DuPont’s Sustainability Goals

 In DuPont’s 2008 Sustainability Progress

Report, Chairman and CEO Chad Holliday
stated:
 “We are taking a holistic approach to
sustainability that fully integrated into our
business models.”
 “We continue to strive for zero safety and
environmental incidents. And we are
maintaining our focus on decreasing raw
material and energy inputs and reducing
emissions at our sites.”

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 Canon ~ Kyosei
 “Canon’s corporate philosophy is kyosei. Kyosei aspires to a
society in which all people, regardless of race, religion, or
culture, harmoniously live and work together for the common
good into the future. Kyosei, in other words, is an attempt to
bring about a society characterized by sustainable prosperity.
Canon aims to become a truly excellent global corporation
worthy of admiration and respect around the world. We
consider the fulfillment of our social responsibilities to be a
natural obligation as we respond to various challenges and work
to fulfill the expectations of our stakeholders, beginning with
our customers, our shareholders and investors, our employees,
and the local communities in which we operate.”
 Canon Sustainability Report 2008

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 The Conference Board
 Set up a Research group on Corporate Governance
and Sustainability – Doing Well by Doing Right.
 “It used to be that a company’s financial issues differed
from its social issues. But in today’s business climate, an
organization’s financial matters are its social matters.”
 Companies are being forced to address climate change,
environmental protection and human rights by large
investors, public pension funds and many other
shareholders.
 “By integrating sustainability and citizenship initiatives
into your overall strategy, you not only benefit society, but
also your bottom line.”

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 The Conference Board
 On Jan 29-30, 2009, at its “2009 Leadership
Conference on Global Corporate Citizenship”,
some participants included:
 Global VP for Corporate Responsibility for Molson Coors
 Bayer’s Chief Administrative for Corporate Social
Responsibility
 Kimberly-Clark’s VP for Global EH&S
 3M’s Senior VP for Environmental Affairs.

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 Price Waterhouse Coopers
Sustainability Survey Report
 In 2002, PWC concluded that” Sustainability
speaks directly to those societal and financial
values in terms of the need to protect the
future.”
 Using Brundtland’s report, PWC stated
further that we must “Think of it more
simply as doing your part to build a world –
economically, environmentally and socially –
that you want to live in, and that you want
your children and grandchildren to inherit.”

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 Environmental Defense Fund’s
Innovation Exchange
 www.edf.org

 RESOURCE: The Innovation Exchange provides a no-

cost, comprehensive set of recommendations, case
studies, publications and tolls for companies to improve
their environmental performance.

 Lisa Manley, The Coca-Cola Company’s Director of

Environmental Communications said: “Access to proven
environmental strategies is more vital to business
success than ever before. Collaborative innovation
between companies will play a major role in helping us
meet our sustainability goals.”
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 The Erb Institute for Global
Sustainable Enterprise –
University of Michigan
 The multinational corporation is the most powerful
societal agent of change on the planet, and can do
much to address our pressing environmental issues
and to lift people out of poverty. But corporations
also cause many of the changes that threaten the
sustainability of our planet. The job of the Erb
Institute is to help bring the power of business to
bear on our most pressing sustainability challenges.
 Research at the Erb Institute seeks to reveal how
business strategy, operating within a context of
policies and social norms, can produce desirable
environmental and social outcomes.
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 Emory University
Office of Sustainability Initiatives
 Sustainability is defined as meeting the needs of the
present generation without compromising the needs
of future generations. As part of a commitment to
positive transformation in the world, Emory has
identified sustainability as one of the University’s
top priorities.
 Areas of focus:
 Building green
 Integrating sustainability into the curriculum
 Promoting commute options
 Protecting green space
 Conserving water
 Recycling waste
 Providing local and sustainably-grown food

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Atlanta Regional Commission (ARC)
Green Communities Program

 In Jan 2009, ARC launched its Green

Communities Certification Program that will
enable communities that voluntary complete
an application covering 60 specific measures
in 10 categories will become certified.
 ARC Chair Sam Olens said: “Communities
around the region are already implementing
ways to use fewer resources and be more
sustainable.”

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