Lecture2.3

Question 1

What are the three phases of corporate sustainability?

Answer 1

1. First Phase: Companies ignore sustainability, reject (oppose = disagree) responsibilities, and focus on “business as usual”.
2. Second Phase: Companies adopt sustainability for compliance, efficiency, and strategic proactivity.
3. Third Phase: Companies transform economies and societies with a holistic approach to sustainability.

Question 2

What characterizes the First Phase of corporate sustainability?

Answer 2

• Companies oppose or ignore sustainability.
• Reject responsibilities and ignore environmental impacts.
• Example: Volkswagen diesel scandal (cheating software in ~11M cars).
  Companies in this phase destroy value

Question 3

What are the key elements of the Second Phase of corporate sustainability?

Answer 3

• Compliance: Proactive measures to comply with regulations and reduce costs/sanctions(punishments)/risks.
• Efficiency: Implement systems for monitoring/document their activites
  -> good image
  Environmental management is seen as an opportunity to:
• improving efficiency, and reduce costs
• levergae monitoring systems to comply
• Strategic Proactivity: Using sustainability as a competitive advantage.

Question 4

What defines the Third Phase of corporate sustainability?

Answer 4

• Companies transform economies and societies.
• Adopt a holistic perspective that integrates ecological and societal values. -> center piece = sustainability
• Example: Patagonia (avoids toxic materials, holistic management).

Question 5

What are the shortcomings of the three-phase framework?

Answer 5

• Assumes phases are linear and sequential.
• Overlooks that companies face multiple sustainability issues.
• Suggests all companies have equal opportunities to become sustainable.

Question 6

What are the benefits of the three-phase framework?

Answer 6

• Helps assess how sustainable specific company activities are.
• Provides insights into what motivates company for sustainability.
• Generates ideas for advancing corporate sustainability.

Question 7

Example of Second Phase

Answer 7

Real-life example:
IKEA employs risk and compliance officers, employees responsible for secure
work environment and emissions
Increasing the amount of recyclable materials and reducing waste