DRAFT_Walpole Sustainability.pdf

1、CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of McKinsey&Company is strictly prohibited21 December 2019Walpole Sustainability AspirationsDiscussion MaterialsMcKinsey&Company2Agenda Summary of Walpole sustainability principles Deep-dive on the sustainability strate

2、gyMcKinsey&Company3Walpole strategy is based on the broader definition of“sustainability”,in line with UN Sustainable Development Goals2000s2010s1990sTodayCorporate Social Responsibility(CSR)Corporate Social Responsibility(CSR)With CSR came the rise of“corporate citizenship”CSR was mostly seen as sm

3、all scale,specific activities,often outside the core of the business.CSR efforts were a way to give back to society,often driven by marketing purposes or by individual initiativeTriple bottom lineTriple bottom line A movement for companies to measure themselves on three dimensions:profit,people and

4、planet In addition to reporting financial results,companies should measure&report their social&environmental impact Environmental Social Governance(ESG)Environment,Social,Governance(ESG)Evolved out of the financial industry and is pretty broad in scope,including such issues as executive pay and dive

5、rsityUsed predominantly by investors,often as a screening criteriaOften seen by corporations as a compliance issue Sustainability SustainabilityTypically associated with environmental sustainability,but has taken on a broader meaning after the release of UN SDGs.It has become a strategic issue for c

6、ompanies across sectors with significant risks&opportunitiesPurposePurposeA recent movement emphasizing a companys fundamental reason for being Millennials care about meaning at work challenging companies to rethink their raison detreSource:McKinsey Sustainability&Resource Productivity Practice;Team

7、 analysisMcKinsey&Company4UN SDGs approach to sustainability covers both the planet and peopleIn 2015,the UN General Assembly defined the SDGs as a blueprint to achieve a better and more“sustainable”future for all by 2030The 17 Sustainable Development Goals(SDGs)aim to achieve peace and prosperity f

8、or people and the planet,now and into the futureSource:UNMcKinsey&Company5British luxury sector is impacted by sustainability across multiple dimensionsWhy do we need a sustainability strategy?Consumers demand sustainable products31%of Gen Z and 26%of Millennials are willing to pay more for sustaina

9、ble productsIndustry actions&reputational pressure86%of the S&P500 firms publish reports sustainability data“Climate emergency”was named the 2019 Word of the Year Investors/shareholders demand sustainable investments1/3 of global assets are managed through sustainable strategies1400 asset managers h

10、ave signed the UN Principles for Responsible Investment80%of Walpole members stated that relative importance of sustainability has significantly increased over the last 5yrs1Employees prefer sustainable companies70%employees are more likely to work for a company with a green footprintGovernments are

11、 implementing bold regulationsUK govt.is aiming to:Become net zero carbon emissions by 2050Phase-out coal by 2025 Ban single-use plastics from April 20201.Walpole-McKinsey Sustainability in Luxury SurveyQuality assurance/standards incorporate sustainability elementsObtaining/renewing Royal Warrants

12、require compliance with sustainability standardsCase for changeSource:Walpole-McKinsey Sustainability in Luxury Survey;Press search;McKinsey Sustainability&Resource Productivity PracticeMcKinsey&Company6Minimum commitments60%of Walpole members have identified sustainability as a top 3 corporate prio

13、rity Rank the following organizational priority initiatives in the order of descending priority%of respondentsSource:2020 Walpole-McKinsey Luxury Survey;Team analysis8861615958534941Regulatory complianceGeographic expansionAttraction&retention of talentDigital transformation&analyticsSustainabilityP

14、rofitabilityDiversity&inclusionProduct innovation90%of Walpole members found sustainability to be a top 5 corporate priority60%of identified sustainability as a top 3 priorityMcKinsey&Company7Most members see sustainability as an extension of their social responsibility while others are driven by co

15、nsumer expectationsMinimum commitments1916151313775321We have seen a notable change in consumer behaviour towards sustainable productsIt is a requirement for maintaining Royal WarrantsThere is increased pressure from media on becoming sustainableWe are aiming to be ahead of competitors/lead the cate

16、gory on sustainabilityOur competitors are far ahead of us when it comes to sustainabilityWe expect there to be increased consumer demand for sustainability in our categoryWe believe it will help us attract the best talentThere is increased focus from investors and shareholdersThere is current/potential government regulationsOur leadership has put it on their personal agendaWe see it as part of our social responsibilityWhat are the key drivers of sustainability in your company?(select up to 5 mos