Here, Bob Willard, author of The New Sustainability Advantage, discusses the reputational risks of ignoring sustainability. He suggests that we’ve come upon a perfect storm of risks - including pollution, poverty, social justice, climate change and food & water insecurity. He also asserts that stakeholder expectations are rising and that companies are improving their performance in response. “The time is right to figure out how to measure what matters and get on with it,” he says.

1. Enabling the Renaissance: The Perfect
Storm in True Cost Accounting
Bob Willard
Author
The New Sustainability Advantage

2. bobwillard@sympatico.ca www.sustainabilityadvantage.com
ENABLING THE RENAISSANCE:
THE PERFECT STORM IN TRUE COST ACCOUNTING

3. Intangibles
/ Reputation
/ Goodwill
Tangibles
/ Financials
THE ICEBERG OF COMPANY VALUE

4. 2010
20%
Tangibles
/ Financials
80%
Intangibles
/Reputation
/Goodwill
!"#$%&'(&')$&*#+#,)$-.$/012#$
82%
18%
1995
68%
32%
1985
70%
30%
1975

5. Tangibles
/ Financials
Intangibles
/Reputation
/Goodwill
Pollution
& Health
Climate Change & Energy Crisis
Poverty &
Social Injustice
Overharvesting &
Species Extinction
Food &
Water Crises
Regulators
Governments
Communities
Employees
(NGOs) (Scientists)
Customers
Competitors
Markets
Investors
THE PERFECT STORM OF RISKS
Customers
Employees

6. CAPITALISM 2.0
Capitalism 1.0 Capitalism 2.0
Purpose of the
Firm
Maximize shareholder
value; ROI; Growth
Creating shared stakeholder
value, including the Environment
Legitimate capitals Financial Financial, Natural, Human, Social
Bottom lines Profit -first Profit, People, Planet
Environmental and
social impacts
Externalized Internalized
Accountability
boundaries
The Firm The Firm’s value chain, over its
products’ life cycles
Transparency As little as possible Naked
Business model Take-Make-Waste; Linear Borrow-Use-Return; Circular
Source of financial
capital
Stock market; Big
financial institutions;
Absentee owners
Stock market; Smaller financial
institutions; Customers;
Employees; Local communities
Market focus Global Local

7. bobwillard@sympatico.ca www.sustainabilityadvantage.com
ENABLING THE RENAISSANCE:
THE PERFECT STORM IN TRUE COST ACCOUNTING