Chapter 2 Flashcards
What is sustainability?
Sustainability: development that meets the needs of the present without compromising the ability
of future generations to meet their own needs. (Brundtland Commission 1987)
It can be a collective social goal that aims to have humans safely co-exist on earth.
What are the 3 pillars of sustainability?
Social, Environmental, Economic
In addition to Environmental resources, we also need social and economic resources, in fact these are
just as important, (social is the people and how sustainability directly relates to them), (economics
creates a stable economy, it also talks about practices that work towards long term economic growth
without affecting the other pillars).
How long has the concept of sustainability been around? (key points)
Ancient cultures, traditional societies;, indigenous peoples =; restriction of the use of natural
resources by human groups = “productive harmony”;
Sylvicultura oeconomica (1713) - Hans Carl von Carlowitz (1645–1714) used this term in the
sense of a long-term responsible use of a natural resource;
The Theory of Moral Sentiments (1759) - Adam Smith (1723 – 1790); wealthy individuals pursue
their own interests, employing others to labor for them and they are lead by an invisible hand
1892 - John Muir - “the Father of National Parks” - focused on protecting Yosemite National
Park; co founded Sierra club (The Sierra Club is an American environmental organization with
chapters in all 50 U.S. states, Washington D.C., and Puerto Rico.)
Theodore Roosevelt (1858-1919) - became well-known for his passion for nature and
conservation; influenced by john Muir
1949 - the U.N. held the very first conservation conference;
1955 – the US Congress enacted the Air Pollution Act;
1970 - the US National Environmental Policy Act (NEPA) was established;
April 22, 1970 – the first Earth Day =; the birth of the modern environmental movement;
1983 - the United Nations =; the new World Commission on Environment and Development;
1987 - the U.N. published Our Common Future =; goal to encourage countries to work together
on sustainable development.
Why this became important for the whole world? Environmental Degradation
Environmental degradation =&; a problem of the rich nations and a side effect of industrial wealth;
Environmental degradation =; a survival issue for developing nations =; link between ecological and economic decline;
New era =; economic growth that is socially and environmentally sustainable;
This marked the importance of all 3 pillars
The most dangerous challenges faced by the global community?
Global Warming
Climate Change
The hunger crisis and water scarcity
Things such as Covid 19 as well as the Ukraine War
Global Waste and Air Pollution Crises
Worst Countries for Air-Pollution Deaths Annually?
China - 1,400,000
India - 700,000
Pakistan - 180,000
Top Worst Cities For Air Pollution?
Onitsha Nigeria
Peshawar Pakistan
Zabol Iran
3 pillars explained further
Environmental - Initiatives that reduce the carbon footprint of the business throughout the value chain
Social - Initiatives promoting the wellbeing, health and safety of communities, customers, and employees.
Economic - Initiatives that ensure businesses can thrive while making these long-term positive impacts
What is the general objective of the 3 pillars?
The central objective is to reshape capitalism for an environmentally endangered age
A sustainable business strategy is a business that can incorporate all 3 of these into an organization
polices, practices, and process to create long term benefits for the organization its employees while
being mindful of conserving and protecting resources.
Business sustainability? Ford
Origins of green business - pioneering start-ups in organic food and wind and solar energy
before World War 1;
Henry Ford (surprisingly) as a pioneer in the sustainable business; experimented with plant
based fuels
1993 - the evolution of “green brands” =; businesses started using their environmental focus as a selling point.
The Triple Bottom Line: What Is It and How Does It Work?
The TBL =; “captures the essence of sustainability by measuring the impact of an organization’s
activities on the world … including both its profitability and shareholder values and its
social/human and environmental capital.”
This idea is a performance indicator for how companies/people can make money but also be
beneficial to the planet
TBL Theory says that companies should focus as much attention on their social and
environmental that they do on their financial
Also says if a company only focus on financial then it is not possible to capture the whole idea
and impossible to account for the full cost of doing business
The 3 P’s?
Profit: traditional measure of corporate profit - the profit and loss (P&L) account;
People: measures how socially responsible a firm has been.
Planet: measures how environmentally responsible a firm has been.
Pros of TBL?
Bonus note: ESG - Environmental, Social and Governance
Aims to have positive impact on the world
May boost employee retention as workers may appreciate favorable working conditions
May result in greater external funds from investors seeking ESG investments
May result in greater sales from customer seeking to support ESG companies
May result in long-term efficiencies that reduce costs in the long-run
Cons of TBL?
May be more difficult to assess non-financial inputs or outputs
Lack of comparability across impact groups (companies may need to pick 1 bottom line over the other)
May result in competing strategies, making it difficult to easily pivot from one plan to another
Will likely increase the cost of operations due to needing to find alternative products or processes
How to Make Your Business More Sustainable?
The share value opportunity:
Do Well - Make money
AND
Do Good - Solve social and environmental problems
