Sustainable Businessin
Sustainable Development
Sustainable Development
How do you solve an oxymoron?
A Global Development Dilemma: Two Vicious Circles
Poverty Affluence
Environmental degradation
Environmental degradation
Resource imports,
pollution exports
How does poverty cause environmental damage?
Agriculture: need to survive causes overuse of land (grazing, intensive agriculture, fertilizer, fuel wood, logging) leading to deforestation, topsoil erosion, water contamination
Worsened by: population pressures; lack of control over local resources and poor governance; Inability to invest in environment
Industry: inefficient, dirty industry locates where wages and influence over environment are low, causing pollution of air, land, and water
Cost-based competition Labour intensive Low capacity to invest in environment
How does affluence cause environmental damage?
High productivity levels cause greater throughput of materials and energy per person
Higher income levels enable greater consumption of energy and materials
Greater throughput of energy and materials means more land used for agriculture (more pesticides, fertilizers, erosion), more wood and mineral resources used, more energy extracted and used, etc.
Urbanization has disconnected producers and consumers relieving them of the influence of environmental degradation on their lives.
Connections Trade in resources, pollution and waste Exploitation of global commons for resources and
waste disposal Impact of local actions on global health
Two Paths to Sustainable Development
Poverty Affluence
Environmental degradation
Environmental degradation
Resource imports,
pollution exports
Welfare Improvement:Basic needs (food, shelter, edu.)Productive employmentControl over resourcesPopulation controlEnergy
Environmental Remediation:Production
ConsumptionFulfilling employment/leisure
Responsibility and participation
Energy
Livelihood Lifestyle
Cooperation on Global Governance
From Ad Hoc Responses to the Environmental Crisis…
Social Demands Disasters, Cumulative Poisoning, Habitat
Destruction etc. Scientists, Environmentalists, and Community
ProtestersPolitical Responses Government Regulations, Penalties, and
Administration International Conferences and Agreements
…to an (Ambiguous) Consensus on Sustainable Development
"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. ” (WCED)
The short definition was qualified by its originators in the following manner: “It (sustainable development)
contains within it two key concepts:
the concepts of needs, in particular the essential needs off the world's poor, to which overriding priority should be given; and
the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs.” (WECD, 1987, 43)
History of Sustainable Development
Stockholm 1972: UN Conference on the Human Environment
Report of the World Commission on the Environment and Development: “Our Common Future” 1987.
Rio 1992: UN Conference on Environment and Development: Agenda 21
Johannesburg 2002: 2nd World Summit on Sustainable Development
Far-Reaching Ethical, Political and Economic Implications
Raised the environmental issue to a high level;
Recognizing the issue of intra-generation and inter-generation equity;
While, still allowing for growth and development;
And bound all countries to a global effort.
National Strategies revive growth, but change the quality of growth; meet essential needs for jobs, food, energy, water, and
sanitation; ensure a sustainable level of population; conserve and enhance the resource base; reorient technology and manage risk; merge environment and economics in decision making;
Global Strategies enhance the flow of capital to developing countries; link trade, environment, and development by improving
the terms of trade; increase the diffusion of environmentally sound
technologies and their funding to developing countries.
Controversy and Acceptance
Weak vs. Strong sustainability Human-centered (anthropocentric) vs.
Nature-centered (ecocentric) perspective Laissez-faire vs. Distributive Justice Social vs. Scientific Definition Private vs. public vs. common property
views
Who does sustainable development? The UN and its agencies
Dozens of environmental conventions and programs(UNDP)
National, state, local governments, communities 110 national, over 6000 local Agenda 21s
Non-governmental organizations Thousands involved
Companies Corporate social responsibility/sustainability programs;
ethical investing Consumers
Green consumer movements, fair trade
HK’s Sustainable Development
Sustainable development in Hong Kong balances social, economic and environmental needs, both for present and future generations, simultaneously achieving a vibrant economy, social progress and better environmental quality, locally, nationally and internationally, through the efforts of the community and the Government.
Sustainable Development: as a balance
Environment
EconomySociety
Sustainable Development as Integration
Industrial
Ecology
Technology
PoliticsSociety
Environment EnvironmentIndustrial
Ecology
Industrial
Ecology
Economy
Business
Environmental Management
Accepted Principles
public trust doctrine precautionary principle inter-generational equity intra-generational equity subsidiarity principle polluter pays principle (PPP) user pays principle (UPP)
The public trust doctrine means that governments must act to prevent environmental damage whenever a threat exists, whether it is covered by a specific law or not.
The precautionary principle holds that where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.
The principle of inter-generational equity is at the heart of the definition of sustainable development. It requires that the needs of the present are met without compromising the ability of future generations to meet their own needs.
The principle of intra-generational equity requires that people within the present generation have the right to benefit equally from the exploitation of resources and that they have an equal right to a clean and healthy environment.
The subsidiarity principle requires that decisions should be made by the communities affected or on their behalf, by the authorities closest to them.
The user pays principle (UPP) applies the PPP more broadly so that the cost of a resource to a user includes all the environmental costs associated with its extraction, transformation and use (including the costs of alternative or future uses foregone).
The polluter pays principle (PPP) suggests that the polluter should internalize all the environmental costs of their activities so that these are fully reflected in the costs of the goods and services they provide.
Polluter-pays is key to a clean environment, says Liao
She hopes people will accept the approach as the backbone for environmental protection.
Dr Liao said the construction-waste charging scheme was a "golden test" of the principle and she would do everything necessary to lobby support for it. She said the scheme was fair because it held waste-producers, not the transporter, liable for failing to pay.
Dr Liao also called for an expanded producer responsibility programme, such as packaging laws for electrical manufacturers - it is currently free to dump a television set in a landfill - with costs passed on to consumers in the form of higher product costs.
What does sustainable development mean to business?
Continued regulatory pressure and a shifting of the ‘business environment’
Governance Growth Economic role Technology Local interaction Consumption
Sustainable Business
How has business reacted to environmental demands?
Denial and Cover-up Environmental Management Strategy
Denial and Cover-up
Costs Priorities Liability Exposure Ignorance
Environmental Management
‘End-of-pipe’ technologies ‘Reaping low-hanging fruit’ Establishment of Environment, health and safety departments (EHS)
Environmental Management Systems
Strategy
Pollution Prevention Product Stewardship Clean Technologies Sustainability Vision
International Chamber of Commerce (ICC) Business Charter for Sustainable Development
1. Corporate Priority 2. Integrated
Management 3. Process of
Improvement 4. Employee Education 5. Prior Assessment 6. Products or services 7. Customer Advice 8. Facilities and
Operations 9. Research
10. Precautionary Approach 11. Contractors and
Suppliers 12. Emergency
Preparedness 13. Transfer of Technology 14. Contributing to the
Common Effect 15. Openness to Concerns 16. Compliance and
Reporting
Four Perspectives on Environmental Ethics and
Strategy The Triple Bottom Line Beyond Greening Ending the Stalemate between
Environmental Performance and Competitiveness
Natural Capitalism
Corporate Governance and Sustainability:New Voices
Government Trading Partners Community Employees Investors Insurers Media Pressure Groups Customers
What’s so special about Society’s environmental expectations of Business???
Taxes Health and workers’ compensation Unemployment insurance Product liability Pensions
Values Created through a Sustainable Business Strategy
How can you make money from: Improved product quality? Healthy working environment and staff commitment? Improved community relations? Positive pressure group relations? Improved media coverage? Green Products and byproducts? Cheaper finance? Lower insurance and legal costs? Assured present and future compliance? Improved materials and energy efficiency? Reduced cleanup and decommissioning costs? Reduced supplier and customer costs?