MBAC0036

Systems view of sustainability

There are several moving parts in sustainability. Only a

systems view can ensure that all components are factored into
the overall pursuit of sustainability. Some specific areas of
sustainability include the following:
• Environmental sustainability
• Operational sustainability
• Energy sustainability
• Health and welfare sustainability
• Safety and security sustainability
• Environmental Issues/Challeges
• Environmental issues are the harmful effects of human activities
on the environment. These include pollution, over-population,
waste disposal, climate change, global warming, greenhouse
effect, etc. Some of the current environmental issues that require
urgent attention are:
 Climate Change
• Climate change is a great concern in today’s scenario. Greenhouse
gases are the major cause of climate change. Environmental
changes have several destructive impacts such as the melting of
glaciers, change in seasons, epidemics, etc.
 Global Warming
• The increase in temperature across the globe is known as global
warming. The burning of fossil fuels, emissions from the
automobiles and chlorofluorocarbons add to the greenhouse gases
in the atmosphere. This has led to an increase in earth’s
temperature causing environmental changes.
• Ozone Layer Depletion
The ozone layer is a layer of concentrated ozone gas. It protects
us from the sun’s harmful ultraviolet rays. This very important
layer is being destroyed by CFCs (chlorofluorocarbons), which
are used in industries and everyday life (e.g. aerosol cans).
The chlorine in these compounds destroys the ozone layer. The
hole in the ozone layer leaves humans and wildlife exposed to
the harmful UV rays resulting in several skin diseases including
cancer.
• Water Pollution
The introduction of harmful substances into rivers, oceans,
lakes and ponds, which changes the physical, chemical or
biological condition of the water is called water pollution. The
polluted water lacks oxygen and therefore the organisms die.
• Water is the main source of life and therefore it is our prime
duty to prevent it from any kind of pollution.
• Deforestation is the depletion of trees and forests at
an alarming rate. The trees provide us with oxygen,
several raw materials and also maintain the
temperature of the earth. Due to the depletion of
trees for commercial purposes, there has been a
drastic change in the earth’s climate.
• Forests are an abode to a large number of wild
animals and plants. Destruction of forests has led to
the elimination of a large number of plants and
animal species affecting the biodiversity.
 Sustainability Innovation in Business
• Sustainability Development (SD) is the process for
businesses to reconsider the issues of products/production to
support the long term growth and development of the
environment.
• Sustainability development involves 3 principles in business:
 Wellbeing: to focus on the improvements in societal
wellbeing, health, safety and sustainability of resources Eg:
unleaded petrol for cars, lower cc cars,
 Alternatives: to consider the reuse of alternative sources of
energy and product inputs to create competitive advantages
Eg: Electric cars, solar powered cars Important to think of
alternatives so that when one source is lost we can always
switch to another.
• Non-profit Focus: businesses needs to change
mind-set that profit is not the only ultimate motive
of existence of businesses Eg: concern about people,
planet then automatically profits will come in.

• Sustainable development creates new opportunities

in many industries
1. Eco Tourism
2. Transportation
3. Services
4. Manufacturing
• Eg: Toyota- hybrid cars, LED – energy saving
bulbs, supermarket – no bags there
 Corporate social responsibility:
environmental impact
Corporate social responsibility (CSR) can refer to a
wide range of actions that businesses may take - from
donating to charity to ethical trading. One primary focus
of CSR is the environment.
Environmental CSR aims to reduce any damaging effects
on the environment from your business processes.
Activities may focus on:
• energy use; water use; waste management
• Recycling; emissions
• eco-friendly office and business travel policies
• Some of these are significant from both environmental and
financial points of view.
 Advantages of environmental CSR
• Green CSR can reduce business risk, improve
reputation and provide opportunities for cost
savings. Even the simplest energy efficiency
measures can generate savings and make a
difference to your business. For example:
• switching off lights and equipment when not in
use
• reducing the use of water
• reducing the amount of paper you waste
• Caring about the environment can increase
revenue too. Many customers prefer to buy from
responsible companies.
 How to reduce your environmental impact
 You can reduce your business' environmental impact
in many ways. For example, you can:
 create products that can be recycled
 optimise your product life cycle
 source responsibly (eg using recycled materials and
sustainable timber)
 reduce packaging
 buy locally to save fuel costs
 create an efficient (and fuel-efficient) distribution
network
 work with environmentally conscious suppliers and
distributors
 HP
• Packaging Initiative
– Lighter paperboard sleeve for ink cartridges
• Reduced packaging weight by 34%, reducing costs by more
than $700,000 a year
– Reusable transit packaging for inkjet cartridges
• Reduced waste by 2,400 tonnes in 2002, saving $1.5M
– Bulk packaging for desktop computers
• Reduced waste by 86%, saving $1.1M in 2002
• Expected savings of $4M in 2003

http://www.hp.com/hpinfo/globalcitizenship/gcreport/products/packaging.html
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 Nike
 Created a “Transparency 101” Program, which ensures
public awareness of Nike’s business practices
 Transparency 101 also monitors its factories in each country
to make sure its practices follow Nike’s code of conduct
 Nike is phasing out the use of PVC and other harmful
chemicals in its products through work with William
McDonough
 Created the “Reuse a Shoe”, a program that recycles shoes
 Uses organic cotton in some of their clothing
 Has certified its Oregon buildings in an effort to decrease
energy use
Source: The BSD Global website.
http://www.bsdglobal.com/viewcasestudy.asp?id=81
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 Limits to conventional growth model In Business

Problems:
-There is no universal method of measuring, so
there are no social, environmental and ethical
equivalents of revenue, expenses, equity,
assets, and liabilities.
-There is not yet any way to accurately or
completely describe consumer, community or
environmental benefits using a number.
• One problem with the triple bottom line is that the three
separate accounts cannot easily be added up.

Thus The modeling was sponsored by the “Club of Rome,”

an eminent group of leaders (“scientists, educators,
economists, humanists, industrialists, … civil servants”).
The model is intended to evaluate the pattern of behavior of
five key variables –
• population,

• industrial output, pollution,

• food, non-renewable resources.
 Purpose
• To explore how exponential growth interacts
with finite resources.

• The size of resources is not known, only the

general behaviour can be explored.

• It is predicted that the limits to growth would

be reached by 2070.
State of the world
 Findings

No matter what is done with the input data.

No matter how generously the resources are used and

technology is improved.

There is only 1 outcome:

“Industrialization can only go so far - sooner or

later , it overshoots the earths capacity.”
• Understanding Efficiency
• The term efficiency can be defined as the ability to
achieve an end goal with little to no waste, effort, or
energy. Being efficient means you can achieve your
results by putting the resources you have in the best
way possible. Put simply, something is efficient if
nothing is wasted and all processes are optimized.
• Eco-efficiency is based on the concept of creating more
goods and services while using fewer resources and
creating less waste and pollution (Glavič et al., 2012).
Eco-efficiency is a sustainability measure combining
environmental and economic performances.
However, a commonly agreed definition does not exist
yet (Huppes and Ishikawa, 2005).
• The most common eco-efficiency is defined as
(Koskela and Vehmas, 2012):
 A ratio between environmental impact and
economic performance
 A ratio between economic performance and
environmental impact
• Eco-efficiency is achieved through three
objectives:
 Increasing product or service values
 Optimizing the usages of resources
 Reducing environmental impacts (Government of
Canada, 2013)
 What is Sustainable Innovation?

• Sustainable innovation involves making intentional

changes to a company’s products, services, or processes
to generate long-term social and environmental benefits
while creating economic profits for the firm. Richard
Adams, ……
• Here’s how sustainable innovation works with products,
services, and processes.
• Developing novel products and services.
• Changing operational processes.
• Sustainable innovations require systems thinking
• Sustainable innovations must be embedded into firm’s
culture.
 Here are few technological innovations will shape the sustainability agenda in coming year

Public electric transport. It’s not only

individual vehicle owners who have better
access to electric vehicles (EVs) than ever
before—there are 160 electric and hybrid
vehicle models available today—but
municipalities are taking notice as well. In
China, 300,000 electric buses hum down city
streets every day.
• 2. Electric trucks. Especially in the light- and
medium-duty segments, could surpass the car
EV sales mix in some markets by 2030.
• 3. Cheap energy storage. The new age of
electric vehicles has rapidly expanded the
market for lithium and cobalt batteries—and
drastically reduced their price. Lithium ion
batteries now cost $200 per kilowatt-hour
compared to $1,000 per kilowatt-hour just nine
years ago.
4.Plastic recycling. 260 million tons of plastic waste
is generated across the globe every year, but only 16
percent gets recycled. The plastics industry has the
opportunity to move away from a “take, make, and
dispose” business model and adopt a circular model,
which aims to eliminate waste across sectors while
creating economic, societal, and environmental
benefits. One promising circular process is
pyrolysis, which uses heat and the absence of
oxygen to reconvert plastic waste back into liquid
feedstock. The benefits are economic as much as
environmental, with a recycling-based profit pool
estimated at $55 billion by the next decade.
 5. LED light efficiency. Energy-efficient LED
lighting is quickly replacing traditional
incandescent bulbs in American homes and is
expected to achieve 84 percent market share by
2030. In 2030 alone, LED lights will reduce
energy consumption by 40 percent, which adds up
to $26 billion in savings adjusted to today’s energy
prices.
6. Carbon capture and storage. Instead of just
focusing on completely decarbonizing the major
industrial commodities behind plastics and cement,
we can also consider safely capturing the carbon
emitted when these commodities are produced.
Basic corporate environmental
strategies.
 Motives for environmental strategy
• Public concern
• most often used: response to public concern
• external political force
• “green image”
• Regulatory forces
• regulators important stakeholder group
• pollution control and waste management
• pollution prevention and resource reduction
Motives for environmental strategy
• Expected competitive advantage
• cost savings and improved efficiency
• preserving resources
• enhance reputation
• product quality improvement,
• comply with legislation
• attract quality employees
• satisfy consumer needs
• meeting stakeholders expectation
– attract capital investments
– capitalize on new opportunities
 Corporate environmental strategies
• Sustainability strategies are choices available to
managers to align environmental and social
investments with the generic strategy of a firm
(Orsato, 2009).

• Corporate environmental strategies are choices

available to managers to align environmental and
social investments with the generic strategy of a firm.
_ defines corporate priorities and resources
– managerial perceptions of environmental risks and market
opportunities determine the level of integration of
environmental issues
Corporate environmental strategies

Unsustainable business models

Renato J. Orsato: When does it pay to be green? Palgrave Macmillan, 2009

Corporate environmental strategies
Non-rival
strategies

Competitive
strategies

Unsustainable business models

Renato J. Orsato: When does it pay to be green? Palgrave Macmillan, 2009

• See other file for
CORPORATE ENVIRONMENT STRATEGIES
 Engaging Stakeholders
• Whether led by a sustainability executive or traditional
management, the pursuit of long-term business sustainability
enables:

– Employees: Create incentives to lower costs, initiate process

improvements, and stimulate innovation.
– Customers: Establish expectations that are defining products
and service attributes.
– Suppliers: Align supply chain expectations to drive
sustainable material requirements and efficiencies.
– Local Community: Defined framework for initiatives
carried out at the local level through partnership with
community groups, local businesses, and governing bodies.
– Investors: By comprehensive and accurate reporting;
– Others?
Sustainable product
development.
• Sustainable Product Development (SPD)
enables product development teams to
consider alternative materials, processes,
sourcing, marketing, and other aspects of a
product which can result in decreased
environmental impacts throughout the
product’s LIFE CYCLE.
 life-cycle assessment
• A life-cycle assessment (LCA) is a technique to assess
environmental impacts associated with all the stages of a
product's life from cradle-to-grave (i.e., from raw
material extraction through materials processing,
manufacture, distribution, use, repair and maintenance,
and disposal or recycling).
• LCAs can help avoid a narrow outlook on
environmental concerns by:
– Compiling an inventory of relevant energy and material
inputs and environmental releases;
– Evaluating the potential impacts associated with identified
inputs and releases;
– Interpreting the results to help make a more informed
decision.
• Thus, the key features of the proposed SPDS approach
can be summarized as follows.•As a life cycle
approach developed based on the existing frameworks
and approaches, the SPDS is more advanced than the
existing LCM and PSS (product service system)
applications.
• It considers all stages of the product life cycle, from
product design, manufacture, distribution, retail, use,
maintenance, and repair, to EoL.
• The TBL of sustainability is addressed in both
products and services.
• The interaction between product development and
service phases enhances the sustainability
performance.
• What is sustainable marketing?
• Sustainable marketing is the promotion of environmental
and socially responsible products, practices, and brand
values. If you’ve ever spent a little bit more on something
because you know it was locally sourced or 100%
recyclable, you’ve experienced sustainable marketing.
• "Our mission is to make all LEGO® bricks
sustainably by 2030. Why? Because being sustainable is
good for the planet! We want to make bricks out of things
that we can grow again or are recycled. This is not easy as
we want sustainable LEGO bricks to have the same high
quality that you are used to, but what we know is this: big
ideas may start small, but they will help us build a greener
planet one brick at a time."
Framework for Sustainable Marketing
 Sustainable Marketing Strategies
1. Make Sustainable Marketing
Strategies Part of Everything You Do
Green marketing starts with embodying
everything about the idea. You need to
make it a part of your brand by simply
practicing what you preach. This means
that everything from how your business is
operated, how you source parts and
components, the packaging materials you
use, and how you address a problem is
centered on being green.
• 2. Start with the Product or Service
• While your sustainable marketing strategies can focus
on the bigger issue, you still need to make sure that
your product or service can win over consumers. This
means that you need to really make sure that
the quality is on par with competitors, the price is
comparable, and it’s just as easy to use. Once you’ve
got that down, you can appeal to consumers that
really want to make a difference.
• 3. Tell a Story About Your Brand
• One of the most effective sustainable marketing strategies
you can implement is telling a story. Many green brands
are using their websites to tell elaborate stories, publishing
interesting videos on YouTube, becoming active on social
media, and sponsoring related events to get their brand
story heard. By approaching it from a story angle, your
brand will be more relatable and easy to understand.
• 4. Build and Leverage a Community
• An essential part of executing sustainable marketing
strategies is to build and leverage a community. You want
to associate yourself with local events, initiatives, and
communities to build a following.
• 5. Focus on Educating Consumers
• It’s not enough to let consumers know that
you’re offering a green alternative. You need
to let them know everything about the
category you’re in. For example, if you’re
selling a harmless biodegradable cleaning
product, let consumers know how traditional
products are damaging our environment.
ALL The Best