Amanco-Developing the Sustainability Scorecard

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REV: JANUARY 29, 2008

ROBERT S. KAPLAN RICARDO REISEN DE PINHO

Amanco: Developing the Sustainability Scorecard

A modern company must have a much broader and more sophisticated relationship with society, and must respond to issues that didn’t exist previously… Our strategy is the best for the sustainable creation of value. — Stephan Schmidheiny, Grupo Nueva and Amanco’s founder1 On January 9, 2006, CEO Roberto Salas arrived at the new Amanco headquarters in São Paulo after a long and strenuous tour through the company’s key units in Latin America. Salas had conducted intense and productive discussions about how to strengthen and standardize Amanco’s Sustainability Scorecard system (SSC), for use in executing Amanco’s new strategy. Amanco was Latin America’s biggest producer and marketer of plastic pipes and fittings for transporting fluid. It had dominant positions in Colombia and Ecuador, and was a major competitor in Brazil and Mexico. Amanco had become a top brand while establishing a reputation as a leading company in corporate social responsibility. Julio Moura, Amanco’s chairman, explained, “Customers want products that improve the society in which they exist and that protect the environment.”2 Salas reflected on the company’s recent financial performance (summarized in Exhibit 1): Amanco has lived by its triple bottom line values and become one of the Latin American’s most admired socially responsible companies. It has received several awards for being a “best” place to work. Concurrently, our revenues went from $520 million in 2001 to $688 million in 2005, with EBITDA jumping from $52 million to $84 million. For 2006, we expect revenues of $770 million and an EBITDA of $102 million.

Living on a Thirsty Planet3

Water was critical for long-term economic development, human health, social welfare and environmental sustainability. Although three-quarters of the planet’s surface was covered by water and it was by far the most abundant natural...