1. What Does “Sustainability” Have To Do With Your Economic Development Strategy? John Cleveland Innovation Network for Communities

4. The Multiple Dimensions of “Sustainability”

6. A Simple Definition of Environmental Sustainability “ Sustainable development is living on nature’s income rather than its capital.” Bjorn Stigson, President, World Business Council for Sustainable Development “ At the heart of the current crisis in economic theory and practice is the fact that we are consuming the earth’s resources beyond its sustainable capacities of renewal, thus running down that capacity over time; that is, we are consuming natural capital while calling it income.” (Herman Daly, Beyond Growth )

7. Other Definitions of Sustainability “ ...meeting the needs of the present without compromising the ability of future generations to meet their needs.” -Bruntland Commission “ Leave the world better than you found it, take no more than you need, try not to harm life or the environment, make amends if you do.” Paul Hawken, Co-author, Natural Capitalism

8. Four Dimensions (“Layers”) of Communities

9. Broad Community Sustainability Goals By Layer Layer Systems Sustainability Goals NATURAL Flora, fauna, water sheds, air, minerals and other natural resources. Protecting, preserving and restoring the adaptive capacity of bio-regional systems. BUILT Water supply, waste systems, transportation grid, information highways, building codes, zoning systems. Designing built environments that reduce consumption of natural resources. ECONOMIC Firms, markets, economies, currency, labor markets, technology. Supporting ways for people to create wealth without harming natural systems or human beings. SOCIAL Governance, media, neighborhood organizations, informal associations, politics, government, education, social services, art, religion, health care, etc. Creating opportunities and capacity for citizens to participate in the shaping of their future; and creating educational, health, human services, spiritual, artistic and other systems to support human growth and renewal.

10. Sustainability and Business Enterprises

13. An Integrated Approach to Capital Formation Financial Natural Social Core Process: Customer value creation. Embodied in: Money, physical assets, “good will.” Core Process: Building trust and reciprocity. Embodied in: Social relationships and social institutions. Core Process: Learning and personal development. Embodied in: Physical, mental, emotional, spiritual capabilities; and intellectual property. Core Process: Water, mineral, energy and biotic cycles. Embodied in: Natural system resilience and productivity; raw material inputs. Human The Focus of “Sustainable Commerce” is Here

15. A Focus on the Natural Capital Aspect of Businesses (aka “Sustainable Commerce”)

18. Firm Environmental Performance The environmental performance of firms can be looked at from at least three different useful dimensions: Environmental impacts The facet of the natural ecology that is being affected (what ISO 14000 refers to as “environmental impacts”) Environmental aspects The dimension of the company’s operations that can have an impact on the environment (what ISO 14000 refers to as “environmental aspects”) Improvement goals The generic strategies that can be deployed to reduce environmental aspects and impacts.

19. Environmental Impacts This dimension of environmental performance refers to the aspect of natural capital that company activities are most likely to affect. The four main categories are linked to the four primary natural cycles that sustain us. Cycle Description Energy Energy cycles represent the pathways through which energy is captured, stored, and used. There are three different energy “pathways” – energy “income” which is reflected in direct solar absorption, biomass storage, wind, and hydro power; energy “savings” which is our store of fossil fuels; and energy “inheritance” which is our store of nuclear and geothermal energy. Mineral These are the cycles of minerals from underground to above ground and back to the earth. In natural systems, this occurs through plants and the soil, which makes minerals available for use by living species. Mining and other human cycles accelerate and disrupt these cycles. Water Waste moves through a continuous cycle of evaporation, precipitation, percolation and infiltration. Disruptions to the natural water cycles affect its quality, quantity and timing. Animal and plant populations Plant and animal ecologies depend on energy, mineral and water cycles. When we disturb these cycles, we affect both individual species and entire eco-systems.

23. Summary of Environmental Performance Strategies Product Design Operations Facilities Transportation Etc. ENV. IMPACT GOALS Environmental Aspect (Co. Systems) Environmental Impact Improvement Goals Energy Impact Mineral Cycle Impact Water Cycle Impact Plant & Animal Population Impact Reduce Use Intensity Increase Renewable Resources Increase Degree of Reuse Extend Service & Function Reduce Health and Pollution Risk Restore ecosystems

25. Sustainability and Business Innovation

27. Sustainability As An Innovation Opportunity “ We believe that the integration of sustainability thinking into a business’s innovation processes – not as a negative or limiting factor in the creative process, but as an opportunity – is in its best business interests. Companies whose products and services receive quick acceptance from society and also create solutions to environmental or societal problems will benefit. In the long run, such companies will be the ones that succeed.” (World Business Council for Sustainable Development, Innovation, Technology, Sustainability & Society , 2004)

31. The Auto Market Example “ The ultimate goal of producing cars and trucks that emit nothing more harmful than water vapor and use up no finite resource is not only achievable, but will in fact occur because society demands it, consumers say they want it, and competition is advancing to the point that no auto manufacturer can afford to be left behind.” Ashok Goyal, Director of Product Development, Ford Motor Company (Industry Week, “Green Machines”, Feb. 2005)

33. Sustainable Economic Development Strategies

37. Typical Smart Growth Principles 2. Increase density in urban and village centers. In order to accommodate growth and protect open spaces, we need higher levels of density in our development centers. This density also contributes to the social and economic vitality of these areas. 6. Increase housing choices. A diversity of housing types and prices improves community diversity and access, and allows more families to live in proximity to where they work. 1. Protect open spaces. Open spaces (“green infrastructure”) provide multiple benefits to communities, including protection of ecosystems and habitat; recreational opportunities; aesthetic value; viability of land-based industries; and watershed protection. 8. Direct development to existing communities. Efficient use of our infrastructure requires that we maximize the value of what we have already invested in to reduce redundancy and duplication. 3. Encourage compact, walkable neighborhoods. Compact, walkable neighborhoods contribute to our sense of community and reduce our need for automobiles. 10. Support cross-jurisdictional and cross-agency planning that effectively involves stakeholders. Many issues cross existing political jurisdictions and can benefit from collaborative planning across communities and across agencies. Ultimately, successful planning requires that all community stakeholders have input into the process. 7. Preserve critical cultural and historical assets. People like to live in place that have a strong “sense of place.” This requires preserving those assets that make a place special and reflect its history. 5. Develop vibrant urban centers and downtowns. Urban centers and downtowns make living in more dense areas an attractive option. And they attract the creative and entrepreneurial talent that fuels our business growth of the future. 9. Provide a variety of transportation choices. Safe and reliable public transportation, sidewalks and bike paths increase mobility while reducing dependence on the automobile, reducing cost to consumers, pollution, energy consumption, congestion and infrastructure costs. 4. Mix land uses. Increasing density and encouraging compact neighborhoods is supported by close proximity of residential, commercial and retail uses..

38. Strategies to Support Sustainable Commerce Strategy Description Invest Invest, either directly or indirectly (i.e. through equity or debt funds) in the growth of existing companies or the creation of new ones that demonstrate superior environmental performance (e.g. “green gazelles”). Subsidize Underwrite some cost of doing business (e.g. tax abatements; tax credits; equipment purchase; land and utilities; etc.) that help companies improve environmental performance. Regulate Change regulatory incentives and penalties to encourage environmental performance. Create New Inputs Through R&D and other investments, create new products, materials, or intellectual property that can improve firm environmental performance (e.g. university research institutes for alternative materials).

39. Strategies to Support Sustainable Commerce (cont’d) Strategy Description Create Demand Be a customer for products or services that exhibit improved environmental performance (e.g. buy green buildings; purchase green power); aggregate demand among many customers to make the sale more feasible. Advise and Consult Provide consulting services to companies (such as MMTC’s “lean and green” services; or the Green Supplier Network assessments) Inform Provide market research; tool kits; and other information materials. Create indicators of environmental performance for firms and sectors. Educate Develop curricula (credentialed and non-credentialed) and educational programs to provide the knowledge and skills that companies need to improve environmental performance. Network Create relationships between players that would not happen in the normal course of their business.

41. The INC Mission is to develop and spread scalable innovations that transform the performance of community systems. www.in4c.net Pete Plastrik 231-448-3169 [email_address] John Cleveland 616-240-9751 [email_address]