Models Flashcards
UN SDG Wedding Cake
In 2000, they set a new set of goals called Sustainable Development Goals- 17 goals:
- 4 biosphere
- 8 society
- 4 economy
- 1 at the top about collaboration and partnerships
Includes:
- Climate change
- Hunger
- Gender equality
- Sources of energy
If you are a business person and you want to make profit you need to worry about these sustainable development goals because:
- To get profit, you need a healthy economy
- In order to have a healthy economy, you need to have a cohesive, operative society (Countries where society is fragmented have little economic activity)
- Biosphere and environment underpins society. If we destroy the environment, there would not be the ability for society to operate → fragmented society → no economy
Dunphy et al 2003 Model of sustainability
1st wave
1. Rejection (Value destroyer)
- Opposition by company
- Rejecting facts of sustainability- actively funding research to disprove observed sustainability trends
- highly instrumental perspective on employees and environment
- culture of exploitation
- opposition to government and green activists
- community claims seen as illegitimate
Cargill- despite pledges to end deforestation by 2020, company has been continuing deforestation in the Brazilian Savannah where the company has been buying lots of soy citing that the “economic stakes are higher” (David Clearly)
So it has been rated as the worst company in the world by Mighty Earth
2. Non-Responsiveness (Value limiters)
- Ignorance more than opposition
- Financial and technological factors take primacy
- Seeks business as usual- compliant workforce
- Environmental resource is seen as a free good
PPL- Electricity company with no formal GHG emission reduction plan in place
2nd wave
3. Compliance (Value conserver)
- Think about sustainability as a compliance issue- need to reduce impact on the environment to abide by the law
- Focuses on reducing risks for sanctions for failing to meet minimum legal community standards
- Little integration between HR and environmental functions
- Follows route of compliance + proactive measures to maintain good citizen image
Anglian Water services paid £100,000 twice for pollution incidents that killed fish. Now they have taken measures to prevent this from happening again.
4. Efficency (Value creator)
By being more efficient, can have a positive social/ environmental impact and make more profit
HR –> higher productivity and efficiency
Environmental management- source of avoidable cost for the organisation
- Puma- consumers are more concerned about the transparancy of the supply chain. Due to the rise of globalisation, ethical malpractice will be more likely to be accessible by people- this could damage Puma’s brand reputation as well as increasing non-compliance costs. Thus, to tackle this Puma has voluntarily taken responsiblity for its supply chain- reducing chance of non-compliance costs whilst building up brand image.*
- Desso- carpet tile company utilises circular economy by collecting and recycling products –> reducing costs*
5. Strategic proactivity (Value creator)
Use environmental principles to gain competitive advantage
Take initial product- make it productively and cheaper
Focus on innovation
Seeks stakeholder engagement to innovate safe, environmentally friendly products and processes
Advocates good citizenship to maximise profits + increase employee attraction and retention
Starbucks- millenials and generation Z are increasingly environmentally conscious. Starbucks has realised this and responded appropriate by promoting the use of reusable cups within its stores and making disposable cups more recyclable and compostable by using a BPS liner.
3rd wave
6. Sustaining corporation (sustainable business)
Transformation phase
Sustainability becomes embedded into long term organisational thinking
Reinterprets nature of corporation to an integral self-renewing element of the whole society in an ecological context
- Tala- sustainable and ethical athletic fashion brand. Mission –> 100% upcycled- 92% the way there*
- Packaging recyclable and tags = 100% plantable paper*
- Recycled cotton- saves 4817 litres of water than growing cotton*
- Q-nova - uses 90% less water and releases 80% less CO2 emissions than textured polyamide yarn*
- Seals of approval from organsiations like Global Recycled Standards and GOTS*
Malthus
Brander
Overpopulation would lead to a propulation “condemned to a perpetual oscillation between happiness and misery”
As a population grows, there will be a point where the population would be unable to feed itself –> population crash –> misery
BUT does not take into account technological advancements - he did not anticipate the full extent of the Agrarian and the Industrial Revolution which allowed us to increase yields
Having said this, Brander said that:
“Technological progress is unlikely to stay ahead of exponentially growing population at current rates for much longer”
Even when there is technology –> unable to progress enough to satisfy demand- point where we will be unable to feed ourselves
Arrow et al 2004- we are consuming too much
20th century:
- industrial output increased by 40 times
- per capita consumption higher than that 100 years ago- irresponsible with resource demands
In the last 100 years:
- energy use increased by 16 times
- carbon and sulfur dioxide emissions increased by 10 times
- annual fish harvesting increased by 35 times
Sustainability
“development that meets the need of the present w/o compromising the ability of the future generations to meet their own needs” - World Commission of Environment and Development
“the possibility that human and other forms of life on earth will flourish forever” - John Ehrnfield, Professor Emeritus, MIT
Corporate Sustainability
- focus on environmental constraints and social needs alongside need for business to generate economic profits
- multi-stakeholder view taking into account the needs of organisation’s key stakeholders
- intertemporal concern focusing on both long term and short term
” a future- focused, multi-stakeholder concept whereby businesses undertake _voluntarily initiative_s to reduce their environmental impacts and contribute to communities and wider society in which they operate, all within the context of striving to maximise their economic profitability in the long-term”
3-overlapping circles model
Sustainability lives in the intersection between economy, environment and society
Limitations
- very dangerous model of sustainability –> suggests that not hitting the target is okay
- easy to find short-term benefits economically, socially or environmentally but this is not necessarily sustainable
3-nested dependencies model
- Economy sits within society which sits within environment
- economy operates w/in limits set by society
- society flourishes w/in hard ecological limits of the world
- nested interdependencies
- e.g: SDG wedding cake model
Business impacts this nested model –> business at heart of economy –> if business does not worry about impact to society –> will not get solid, sustainable outcomes
3-legged sustainability stool
Economic leg
- good jobs
- fair wages
- security
- infrastructure
- trade
Environmetnal leg
- zero pollution and waste
- renewable energy
- conservation
- restoration
Social leg
- working conditions
- health services
- education services
- community and culture
- social justice
If any of the legs of the stool are knocked, it will fall over. Need to have all of these 3 otherwise the system will not be in balance
Natural Step Funnel
- going through resources faster than we can replenish them = Earth overshoot day in July
- pressure we are putting on resources on a planetary perspective is increasing
- declining resources against increasing demand –> ever shrinking space in which we have to operate (convergence)
Natural step- sustainability principles
4 principles for an organisation to be sustainable.
Linear economy
Reuse economy/ Semicircular economy
Circular Economy
Linear economy- old model
- How can we take raw materials, turn it into products, sell it (use) and then throw it away (non-recyclable waste)?
- Then we can then take more raw materials and start cycle again etc
Reuse economy/ semicircular economy- where we are at currently
- Raw materials → products
- Products → used
- Small proportion of used products go back to be reused/ remanufactured.
- BUT recycling is only a small proportion- products go through the loop once or twice before becoming non-recyclable waste
- E.g. Can only use paper ⅚ times - becoming too low grade after that
Circular economy- everything that is used is then recycled
- But this gets more and more difficult
- Principle is how do we close the loop to minimising waste going outside
3 Main Principles for foundations of circular economy- Ellen Mc Arthur Foundation
1. Design out waste and pollution
- Change mindsets to view waste as a design flaw and make use of alternative materials and technologies to prevent waste and pollution being created
2. Keeping products and materials in use
- Prevent wastage of resources
- Want to change from “using things up” to using things by making products that can be reused, repaired and reproduced
- Aims to prevent landfill by reusing old packaging and food products
3. Regenerate natural systems
- Aims to provide benefits to environment rather than protecting against damage
- Build natural capital and providing nutrients to the ecosystem- closing the nutrient loop
- Promoting a move away from linear agricultural methods in which nutrients are removed from the soil
5 stage sustainability journey
- Pre-compliance - ignoring regulation and doing anything
- Compliance- abide by regulation but not going beyond what regulation says
- Beyond compliance- starting to see benefits = efficiency/ publicity benefits
- Integrated strategy- how do we integrate sustainability into mainline business strategy. Recongises potential for enhanced business value
- Purpose/Passion- rise in organisations that are driven by purpose (wave 3), Value driven CEO
Complex interconnect challenge
Freeman- stakeholder theory
Theory argues that company’s stakeholders include just about anyone affected by the company and its workings
Contrary to Friedman, all of these stakeholders are important for business to thrive
Can include primary (ones closest to the firm) and secondary stakeholders
Broad stakeholder theory vs Narrow stakeholder theory vs Stockholder theory
shift towards broader view
managers have to figure out how the interests of the different stakeholders can be aligned in the same direction
stakeholder theory- if you want to look after profits, then looking after stakeholders is a logical thing to do
Archie Caroll’s classical model of CSR
Carroll’s definition of CSR reflected concerns like:
- seriously considering the impact of a company’s actions on others
- obligation of managers to protect and improve the welfare of society
- meeting economic and legal responsibilities and extending beyond these obligations
- Evident that social responsibility has both a social and business component
ECONOMIC Responsibilities
- important to perform in a manner consistent with maximising earnings per share
- important to be commited to being as profitable as possible
- important to maintain a high level of operating efficiency
- important that a successful firm be defined as one that is consistently profitable
LEGAL Responsibilities
- important to perform in a manner consistent with the expectations of the government and law
- important to comply with legislation
- important to be a law-abiding corporate citizen
- impotant that a successful firm be defined as one that fulfils legal obligations
- important that goods and services meet minimum legal standards
ETHICAL responsibilities
- important to perform in a manner consistent with expectations of social and ethical norms
- important to recognise and respect new or evolving moral norms adopted by society
- important to prevent ethical norms from being compromised to reach corporate goals
- important that good corporate citizenship is defined as what is expected morally or ethically
- important to recognise that corporate integrity and ethical behaviour go beyond mere compliance with laws and regulations
PHILANTHROPIC responsibilities
- important to perform in a manner consistent with philanthropic and charitable expectations of society
- important to assist the fine and performing arts
- important that managers and employees participate in voluntary and charitable activities w/in local communities
- important to provide assistance to educational institutions
- important to assist voluntarily those projects that enhance a community’s QoL
