Why
sustainability
is every
company’s
business
http://www.fastcompany.com/1803277/top-corporate-sustainability-trends-watch-2012
The Great Acceleration - Anthropocene
Global Temperature Variation 1880-2017
Shell’s sustainability journey...
The story of Ogoni people
Shell’s sustainability journey
The Brent Spar
Social Sustainability
Social Sustainability is about people both
within and outside organisations
For a business to understand the importance
of Social Sustainability it needs to understand
Social Risks
Rana Plaza Collapse
Labour Rights
Why should are Human
businesses be Rights
concerned
about social
sustainability?
Human rights
include: Complicity
& sphere of
influence
Emergent sustainability challenges…
Social Environmental
Ecosystem services
Value
USD 44
trillion
Global
GNP
USD 80
trillion
Population Growth
2016
7.4 billion
Gini Inequality Index - 2007
Gini coefficient is a number between 0 and 1 (or 0 to 100).
0 = country where the income is equally distributed.
1 = one person owns everything but the rest owns nothing. In reality, all
scores are between 0.25 and 0.6
Human Development Index 2015
0.850–0.899 0.600–0.649 0.350–0.399
0.800–0.849 0.550–0.599 0.300–0.349
0.750–0.799 0.500–0.549 0.250–0.300
0.700–0.749 0.450–0.499 0.200–0.250
0.650–0.699 0.400–0.449 0.150-0.200
Data unavailable
Sustainability
A definition:
Sustainable development seeks to meet the needs and
aspirations of the present without compromising the ability to
meet those of the future
- Brandtland report, World commission on environment and development (WCED) 1987
What is sustainable business?
Is it “continuously profitable business”, a “business as a
going concern”?
World Business Council for Sustainable Development WBCSD
talks about three components of sustainability – profit,
environment and people or economic, environment and
social.
Sustainability
Sustainable development is a concept: its possible to make
a profit, protect the environment and care about people.
Instead of measuring one bottom line – our profits – it calls
for triple-bottom-line approach
What does sustainability mean to business?
• Long-term commitment to change the way business is conducted
• Balancing needs to current people with those of the future
generations
• Recognition that businesses are part of PPP
• Awareness and management of our resource use and its impact on
these systems
• Acknowledgement of multiple forms of capital
Sustainability
Forces for business sustainability
• Regulations imposed by government and industry organisations
• Political lobbying by interest groups
• Attention from media
• Demands from customers
• Competition from other businesses
• Requirements from other stakeholders – supply chain, investors, insurers
Why is sustainability good for business?
• Cost reduction
• Increased revenues
• Better risk profile
• Enhanced brand reputation
• Innovation
Core principles
1. Defining sustainability:
- a sustainable state
- Notions of capital – financial, human, intellectual, natural, social
2. Growth & consumption:
- Economic growth is seen as a good necessary to keep pace with
population growth and poverty removal
- Critiques of GDP and GNP: need for ‘defensive expenditures’ to
control pollution; residual damage to environment; depletion of
natural capital
- Does economic growth increase wellbeing?
- Over consumption and accelerated waste generation
- Demand for resources up from 70% of Earth’s ability to absorb and
regenerate to 120% over the last four decades
- Theories of sufficiency
Core principles
3. Social justice: linking a firm’s purposes and actions to a more
humane and equitable global society
- 1990s saw the emergence of social dimension of sustainability
- initial focus on timber & mining industries
- extended to labour rights, and broader human rights
- between rich consumers and poor workers; urban rich and rural poor
- UN Millennium Development goals
- Developing countries face serious environmental challenges
- Other issues: income & poverty; health; food & agriculture; water use;
population density
- the North and the South issues
Core principles
4. Ethical frameworks:
- Sustainable business is ethical business
- Clear business case for ethical business
- Avoiding damage to people, entities or environments that others depend on
- Stakeholder theory
- Utilitarian ethics: moral worth of actions is their consequences, not in the
nature of actions – has criticisms: only aggregate considered, ignores social
justice
- Kantian ethics: derives moral worth from the action itself, not from its
consequences – criticisms: little emphasis on outcomes, all persons are
expected to act rationally and morally
- Rights theory: natural rights such as human dignity, John Rawls theory of
distributive justice & justice as fairness
- Virtue ethics: personal character and motivations
- Ethics of care
- Common morality: most people understand moral & ethical norms of their
community
Sustainable business practices
Accounting & Finance:
- Triple bottom line (TBL) concepts:
Inventory approach – report variations in natural capital – GHG,
oil, energy, waste
Environmental sustainability cost approach – gaps and remedial
costs in maintaining the biosphere
Resource flow input/output approach – measure natural
resources flowing in and out
- Environmental Management Accounting: TBL, CSR, EMS, BS
- Include sustainability factors in valuation
Sustainable markets and marketing:
- ecologically oriented, viable, ethical, relationship-based
- Social marketing: to improve welfare of individuals and society
Sustainable business practices
Sustainable production:
- Compliance with legal and regulatory environment: Acts, codes
- Environmental Management Systems
- Life cycle assessments
Sustainable organisation:
- Corporate governance
- Global Reporting Initiative (GRI) – stakeholder empowered
- Management & performance evaluation system – ISO 14001 & SA 8000
- Transparency enhancement
Developing the sustainable change:
- Incremental change: non-responsiveness to compliance to sustainable
efficiency to strategic proactivity to sustaining corporation
- Transformational change: reinventing the organisation
Sustainability Approach
• Model of the economy as a subset of the
biosphere
So what is a (environmentally)sustainable
enterprise ?
• Its rate of use of renewable resources should not
exceed their rate of regeneration.
• Its rate of use of non renewable resources should not
exceed the rate at which sustainable renewable
substitutes are developed.
• Its rate of pollution emission should not exceed the
assimilative capacity of the environment.
Daly, H. E. (1991). Steady-state economics (2nd ed.). Washington, D.C.: Island Press.
© UniSA
The journey towards sustainability
Sustaining corporation
Strategic pro-activity
Efficiency
Compliance
Non responsiveness
Rejection
What can businesses do?
2
What can businesses do?
3
Reduction and
Prevention
Reuse
Repair
Re-cycle and compost
Recovery or Reclamation for e.g. energy from wastes
Landfill and Disposal
Waste management
• End of Pipe: trapping , storing, discarding,
pollution, e.g. smokestacks, scrubbers...
• Start of pipe – changing the design such that
pollution is reduced, e.g. catalytic convertors
• Product stewardship – life cycle analysis aiming at
cradle to cradle
BMW’s design for dis-assembly
(Rohner mills)
© UniSA A sustainable society and a fulfilling life
What can businesses do?
4
LCA as cradle to cradle
Life Cycle Analysis (LCA)
Design for Environment (DfE)
What can businesses do?
5 Partnerships
United Nations Programmes
United
Nations
Environment
Programme
(http://www.unep.
org/)
What can businesses do?
6 Certification programmes
CERES
Coalition for
environmentally
responsible
economies
WBCSD
Equator World business
Principles council for
sustainable
development
Sustainable Development Goals - UNDP
Universal call to action to end poverty, protect the planet
and ensure all people enjoy peace and prosperity
