Lecture 4: Challenges: climate change and beyond Flashcards
what are the observed changes in the world?
the atmosphere and ocean have warmed, the amounts of snow and ice have diminished and the sea level has risen.
why the inaction?
cultural explanations: 1-climate change scepticism
the climate is not changing, its just normal cyclical variations, we dont know enough, people adapt
2-culturalshift needed; changes to our way of life
economic explanations: 1- incentives: distibution of impats 2- the tragedy of the commons (shared resources social and private incetives differ, over-use of common resources) (sheep grazing, fishing, climate change)
3-behavioral explanations: individual impact on CC, temporal scale & feedback, diffusion of responsibility
what is sustainable entrepreneurship? (Lee et al., 2022)
“the process of identifying (discovering or creating) and pursuing economic opportunities consistent with pro-social and environmental objectives.”
Is SE the green panacea?
While sustainable entrepreneurship is recognized for its potential to contribute to sustainability, it is also acknowledged that sustainable markets are complex and uncertain, which can pose challenges for entrepreneurs. Therefore, while sustainable entrepreneurship holds promise by promoting economic social and environmental sustainability its not a one-size-fits-all solution or a cure-all for sustainability challenges.
What are the challenges for sustainable entrepreneurs?
Market uncertainty and Collective action problem
What is market uncertainty for a SE?
Demand uncertainty: real or perceived unpredictability of consumer preferences
Supply uncertainty: absence/unpredictability of producers or ways to produce and supply a good or service
what is the collective action problem for a SE?
suppose each member of a group has a choice between engaging in an activity and not engaging in it. the group has a collective action problem if it is better for all if some do it than if nobody does, but better for each not to do it
What does the framework proposed by Lee et al. (2022) aim to provide?
a systematic mapping of entrepreneurial opportunities for sustainable entrepreneurship under different degrees of uncertainty: demand & supply uncertainty
Explain the first quadrant of the framework by Lee et al. (2022).
SE face low demand and supply uncertainty in this condition, incremental. the challenges are, competition from larger players with greater resources, limited growth/market share by a focus on incremental improvements to existing products or practices rather than addressing systemic or transformative impacts (no or few collective action pproblems),
Explain the second quadrant of the framework
SEs face high demand uncertainty and low supply uncertainty, demand disrupting. the challenges are constructing the product category. This can be challenging especially when the demand for sustainable products is uncertain and requires significant consumer education and behavior change efforts.
Building legitimacy and Consumer awareness —> a key challenge for sustainable entrepreneurs in Q2 is the need to build legitimacy and consumer awareness for their products or services. To create consumer awareness collective action is essential.
Explain the third quadrant of the framework.
low demand uncertainty and high supply uncertainty, radical products the challenges are
1-High risk of unproven technology: entures that rely on novel or untested solutions face uncertainty regarding technology performance, market acceptance, regulatory compliance and scalability. The lack of proven track records and established market demand can increase the risk of failure and investment losses.
2-Coordination and Interdependence (need for coordination of inter-dependent decisions, collective action problems):complex networks of stakeholders, technologies and market dynamics. The interdependence of various components, such as knowledge systems, distribution channels, and regulatory frameworks, can pose challenges in coordinating efforts
explain the fourt hquadrant of the framework.
high demand uncertainty and high supply uncertainty, market transformation
1-collective action problems are multiplied e.g. supply side coordination with unclear demandç educationg consumer without certainty of supply
What are the key challenges of sustainability in organizations?
1.Sustainability is more than just a change initiative: sustainability is a continuous process that evolves over time and requires a deep understanding of why businesses do what they do.
2-Look at the entire value chain.
3- Make sustainability a priority for the board
4- Gain buy-in from the undecideds: middle later of the workforce that may be hesitant about sustainability initiatives is crucial for successful implementation
5- make sustaianbility part of every employee’s job:organizations need to create a culture where sustainability is embedded in daily operations and decision-making processes
6-Redefine the competitive space by collaborating: industry players work together towards shared sustainability objectives.
