Course : Business Sustainability
Effective Period: September 2023
Introduction to
Sustainable Business
Session 1-2
Thank you
Acknowledgement
These slides have been adapted from:
Nada R. Sanders (2019). Foundations of
Sustainable Business: Theory, Function,
and Strategy. Second Edition. WILEY.
ISBN: 978-1-119-57755-3
Learning Outcomes
• LO 1: Identify the reasons, perspectives,
and governance for sustainability
practice in business
Introduction
• Sustainability can be about much more than our
response to a crisis: It is an opportunity; it is a set of
behaviours integrated into an organization’s culture.
• Sustainability is about much more than our relationship
with the environment : it’s about our relationship with
ourselves, our communities and our institutions
- Dov Seidman, LRN (2007)
What Do We Mean By
“Sustainability”?
Sustainability Is a Loaded
Word
• Sustainable economic development meets the
needs of current generations without compromising the
ability of future generations to meet their own needs.
– Principle of Balance: Economic activity should
promote social welfare and protect the natural
resource based
– Principle of Stewardship: Economic activity
should take into account impacts on future
generations and steward the natural resource base
so it is productive for future uses.
• Sustainable Business - The private sector trend
managing business success in terms of social,
economic, and environmental performance.
Running Out of Space
• Natural Capital - The available stock of natural
resources upon which human life and economic
activities depend.
• Global Living Planet - Index Scientific analysis of the
health of the planet assesses the vitality of life systems
given the burdens imposed by human activity.
• Negative Externality - A cost generated by business
activity, which is shifted from the business onto natural
resources, populations, or third parties without consent
or compensation.
• Internalize - When the party that creates a risk
ultimately bears that risk instead of externalizing it.
Causes and Consensus
Around Sustainable
Business
What Do Externalities Have to
Do with It?
• The practice of shifting the cost of business away from
the operator and on to natural resources or
populations is described in economic terms as
externalizing the costs of business. A simpler term for
such a practice is bad.
• Sustainable businesses own up to these externalized
costs, creating the appropriate incentives to eliminate
waste and overconsumption and to protect employees
and surrounding communities from exposure to risks
created by the company’s activities.
• Some sectors of industry cause harm to the
environment and public health at levels in excess of
their own profits. This means that more value is
destroyed than created by economic activity in these
sectors. This value destruction comes in the form of
lost natural capital, defined earlier.
The Triple-Bottom-Line
Approach to measuring sustainable business performance
that includes:
– Traditional financial bottom line measured in terms
of profits and losses;
– An account for social responsibility measured in
terms of the organization’s effect on people; and
– An account for environmental stewardship
measured by pollution and resource depletion.
Baseline Shift Toward
Sustainability
The following business prescriptions are supported by
leaders in the private sector:
• Addressing global social and environmental challenges
is essential for future business success.
• Leadership is urgently required from businesses to
achieve sustainable and equitable economic growth.
• There is a clear economic case for doing business more
sustainably.
• Businesses should reduce their focus on short-term
performance and focus on long-term competitiveness.
• Businesses should use their power to act quickly and
decisively to drive change where government
policymakers cannot.
Baseline Shift Toward
Sustainability (2)
The following business prescriptions are supported by
leaders in the private sector:
• Drive change by working with customers, consumers,
and suppliers.
• Proactively engage with governments to define
solutions for sustainable growth.
• Adopt stretching sustainability targets (for example to
reduce water, energy, and material use) in order to
drive innovation.
The Forms and Stages of
Sustainable Business
Sustainability Marginalized
• Sustainability was not always the popular kid on the
playground. The main problems with sustainable
business over the last few decades boil down to a few
issues:
1. it was peripheral to the core business activities;
2. it proceeded incrementally in fits and starts; and
3. it was uneconomical according to existing
incentive structures.
• Not too long ago, sustainability was popular among a
relatively small group of academics, scientists, NGO
officials, nonprofit public interest organizations, and
community activists. Although it has grown
tremendously in relevance and popularity among large
companies, there are still a few hurdles to clear before
sustainability has its day in the sun.
Leadership: Ray Anderson,
Revolutionary Carpet Salesman
• Founder of one of the world’s largest carpet
manufacturers had an epiphany, felt wrong about the
pollution his company generated.
• Launched “Mission Zero.” Between 1994 and 2009,
the company reduced material waste, pollutant
emissions, and energy consumption:
– 24% reduction in greenhouse gas emissions,
– 60% reduction in fossil fuel consumption,
– 82% reduction in waste being sent to landfills,
– 80% reduction in the amount of water used,
– $450 million in avoided costs
The Business Case for
Sustainability
There Is Actually Just One
Bottom Line
• Sustainability is not a departure from the traditional
business imperative to promote profit—it is rather a
refinement.
• The benefits of sustainability may include flourishing
ecosystems, improved public health, and increased
consumer satisfaction, but the underlying driver is
profit for the company involved.
• If profit did not accompany sustainability, it would
flounder as a movement, yet it has only grown.
• Companies are taking sustainability seriously not just
to save the planet but simply because it is a good
investment.
Project Assignment
Assignment
• Develop a team consist of maximum 5 people.
• Choose a company or business for case study in this
project
• Create a sustainability framework for the
company/business.
• Present and submit the final report at the end of course
(Week 13).
Assignment Report Contents
1. Introduction
• Introduction of the Company/Business and the
Sustainability Background
• Perspectives in Sustainable Business
• Leadership, Change Management, and Corporate
Governance
2. Accountability
• Legal Frameworks for Sustainability
• Metrics, Tools, and Reporting
• Sustainability Reporting: Economic Aspect
• Sustainability Reporting: Environmental Aspect
• Sustainability Reporting: Social Aspect
• Risk Management for Sustainability
Assignment Report Contents
3. Implementation
• Implementation in Marketing
• Implementation in Supply Chain Management
• Implementation in Operations Management
4. Conclusion
*Note:
• Write using the topics explained in each session
• The questions of project assignment will be provided in
the end of each session to be discussed
Discussion
General Questions
1. When did you first learn about sustainability? What
was your impression?
2. Do you agree with the idea that businesses have
social responsibilities?
3. Have you ever worked for a company that promotes
sustainability?
Questions for Project
Assignment
1. What are the externalities typically associated with the
business operations?
2. What would be the primary drivers of sustainability
innovation? What would be the benefits to the
company?
3. Describe the sustainability commitment of the
company.
4. What environmental changes have implications for the
industry? What kinds of sustainable innovations could
be motivated by these changes?
Reference
Nada R. Sanders (2019). Foundations
of Sustainable Business: Theory,
Function, and Strategy. Second
Edition. WILEY.
ISBN: 978-1-119-57755-3
