What is Sustainability and Its Pillars
Sustainability has become the need of the hour as it helps in meeting the needs of the present without compromising the future. The module intends to explain the meaning of sustainability, its history, and current forces for business sustainability. It is determined that there are three pillars of sustainability- social, economic and environmental. Social sustainability ensures that the people are provided with a safe environment. Economic sustainability ensures that the financial, employment and consumption issues are addressed. Environmental sustainability ensures that there is waste management, optimum energy usage and pollution reduction ideas. The main reasons why sustainability must be applied in real-life is that it helps in creating long-term value by taking in consideration every dimension of the above stated pillars. For example, every individual can address the climate change issue which is the most dreading issue in the recent times. The four key principles of corporate governance are transparency, accountability, responsibility and fairness. Not only individually, the corporate companies can inculcate sustainability in their business practices. It is because there shall be increased trust between management and employees. There shall be better life work balance, equity of opportunity and increased respect among the employees. For a real-life example, Starbucks may be reviewed. Starbucks supports farmers and communities by responsibly growing coffee beans. It may be noted that such initiative by Starbucks has helped them lower cost of production, reduction in pest disease, increasing the yield of coffee and benefit to the communities (Starbucks.ca 2018).
Reference
Starbucks.ca, 2018. Supporting Farmers and Communities. [online] Starbucks Coffee Company. Available at: <https://www.starbucks.ca/responsibility/sourcing/farmer-support> [Accessed 4 May 2018].
The customers, investors, employees, government, suppliers and other various stakeholders have differences in the type of relationship they have with the firm. A firm needs proper engagement with their stakeholders. They have different perceptions that impact the objectives. The importance of a stakeholder can be adjudged on the basis of three attributes namely power, legitimacy and urgency. The business paradigm should be updated as per the requirement of sustainability. Dow Jones Sustainability indices are a group of indices that evaluate these sustainability performances of number of companies. It also possesses industry based indexed. For the application, the firm should try to make sure that it has more of the supportive (positive) stakeholders than the Obstructive (negative) ones. The basic awareness and understanding shall be possessed by the firm on sustainability. Another example for the stakeholder is government in which it plays a vital role as the regulations laid by them affects the firm directly. Therefore, the firm needs to make sure they are in harmony with the government rules and regulations. The basic awareness and understanding shall be possessed by the firm on sustainability. The government need to keep a benchmark for their performances. Their focus should be on sustainability and have the basic idea about what and how to achieve such objectives related to sustainability. The framework includes wide range groups, organisations and government bodies. They need to have social awareness, support the NGOs and ultimately the government support is also needed by the firm for achieving objectives (Harik et al. 2015).
Corporate Governance and Sustainability
Reference
Harik, R., El Hachem, W., Medini, K. and Bernard, A., 2015. Towards a holistic sustainability index for measuring sustainability of manufacturing companies. International Journal of Production Research, 53(13), pp.4117-4139.
An ethical business has these basic characteristics such as honesty, confidentiality, trust, good value, integrity, strong leadership. Ethical business practice helps in realising the obligations and responsibilities to the stakeholders and supports the ethical goals of the firm. The ethical objectives should be discussed among the employees. The firm should make sure that they educate the employees on a regular basis so as to keep the ethical goals in mind. Good governance means to conduct the public affairs and effectively manage the public resources. The principles include recognition and will to accept the responsibilities, leading the organisation, being transparent, working with integrity and efficiency and many other principles. The firm needs to maintain a set of ethical principles and frame rules and policies that support these principles. The policies should be monitored if they are being followed effectively by scheduling a weekly meeting discussing the achievements and failures. Penalties should be imposed for non-compliance of such policies and standards. Corporate social responsibilities are the organisation’s responsibility towards the social and environmental duties. The organisation can make adequate contribution to the sustainability goals by acknowledging and working on their environmental, social and ethical responsibilities. The key elements of Corporate Social Responsibilities are the creating a CSR management system and framing strategies, internal assessments, documenting the visions and values, embedding CSR into the plans and budgets, educating the stakeholders and specially the employees about the CSR by proper communication and establish accountability and responsibility (Zaharia and Zaharia 2015).
Reference
Zaharia, C. and Zaharia, I., 2015. Corporate governance and business ethical values. Linguistic and Philosophical Investigations, 14, p.103.
Sustainable development helps in maintaining a balance and harmony between social, economic and environmental well-being. The linear throughput model states that the resources from the natural environment are the sole provider of life-support services. The human life capital may increase human well-being beyond the natural capital. The linear throughput model begins as input of natural resources end up in depreciation. According to the net psychic income model, the psychic benefits are generated from economic activity less the psychic costs endured. It is analysed that there is a need for making steady state economy viable by minimizing waste. The concepts of sustainability can be applied in real world by improving the stock of physical goods. The cost of negative impacts on the society such as unemployment may be reduced. It is further determined that there are three policy goals that are required to be met by an organization for sustainable development- sustainable scale, distributional equity and allocating resources efficiently. In the real world, it might not be easy to attain sustainable development goals. However, the organizations may differentiate themselves from the competitors and strengthen their supply chains. The consumers demand may be anticipated so that the stock of physical goods may be improved as required. Sustainability shall be applicable in real life when better understanding is developed in the companies. Business helps in generating employment and is a source of finance. The organizations across the globe shall consider sustainability concepts at a strategic level and maintain good terms with all stakeholders (Broman and Robert 2017).
Stakeholder Management and Sustainability
Reference
Broman, G.I. and Robèrt, K.H., 2017. A framework for strategic sustainable development. Journal of Cleaner Production, 140, pp.17-31.
Sustainable or green business creates least negative impact on the society, community, economy and the environment. Sustainable business models are significant as every model helps in attaining benchmark and provides clear guidance for managing the organizations. Industrial ecology is referred to a man-made ecosystem which is similar to a natural ecosystem, with an additional advantage of reducing negative social, economic and environmental impact. Natural capitalism is a way of redesigning of production system for restoring natural capital, reducing resource inputs and others. The cradle to cradle design relies on two critical concepts- waste equals food and living off solar income. The Natural Step model relies on the four conditions namely- must not be systematically exposed to increased substance from the earth’s crust; optimum utilization of resources; must not be systematically exposed to increases in concentrations of substances created by society; must not be systematically degraded. The above concepts can be applied in real-world successfully for ensuring sustainability. The Kalundborg Park located in Denmark uses each other’s waste and further becomes a by-product. More examples of industrial ecology are using second generation bio-fuels in which the grease can be converted into biodiesel for fuel vehicles. Further, cradle to cradle design can be used in a shoe manufacturing company where the sole is made of biological nutrients and upper portion may be made of technical nutrients. Additionally, disposable bottles, cups and wrappers can be made of biological materials. In this manner, sustainable business models can be useful in attaining sustainability (Leigh and Li 2015).
Reference
Leigh, M. and Li, X., 2015. Industrial ecology, industrial symbiosis and supply chain environmental sustainability: a case study of a large UK distributor. Journal of Cleaner Production, 106, pp.632-643 .
Australia’s major source of carbon emission is the electricity generation using fossil fuels. It leads to greenhouse gas emission and Australia is in the top 20 list of greenhouse gas emitters showing that the carbon emission in Australia is one of the highest in the world. Transportation, consumer goods, housing and agriculture industry are the major contributors of the carbon emission. BHP Billiton is emitting 50mn tonnes in excess, of its carbon dioxide equivalent. The cost of carbon at $20 per tonne, to become carbon neutral, it is going to cost them $1 Trillion. This signifies the impact of emission in Australia and the businesses need to check their consumption of resources that emit carbon and reduce them. The carbon footprint analysis helps in data collection. It helps in measuring the carbon emission identifying the energy sources. Carbon accounting system will help by providing information regarding the emission and will support the reduction of the same. It involves cost of data collection and is more useful in large scale organisations. The management of carbon emission can be done by carbon footprint analysis, strategic assessment of climate risk, identifying and implementing efficient measures, switching to renewable sources, emission trading and investing in carbon credit (offset) schemes. There are various ways of managing the sustainability. The climate management options can be considered but it depends on their effectiveness and efficiency. Geoengineering is the large scale deliberate manipulation to counter the global warming effects but leads to increase in waste (Thiele 2018).
Ethics in Business and Sustainability
Reference
Thiele, L.P., 2018. Geoengineering and sustainability. Environmental Politics, pp.1-20.
Sustainable investment is an important aspect of sustainable development as it helps in incorporating social, environmental and governance factors in decision making. Various agencies such as Ethibel, Vigeo, Sustainalytics and others help in providing ESG information. It is argued if embracing sustainability has an impact on returns. It may not always be possible to receive returns on investment. Moreover, it is argued that expenditure on sustainability impacts returns in a positive manner while improving share price. Bigger the firm, higher is the sustainability score. This argument is supported by the information gathered for reviewing big corporations like Samsung, Microsoft, Marks and Spencer and multiple others. Samsung has an overall score of 63 for sustainability (Csrhub.com 2018). Apple has an overall score of 59 for sustainability (Csrhub.com 2018). It is observed that investment for sustainability must be socially responsible. The socially responsibly investment is important and it must be applied in real world. The investors must carefully read through fund prospects for determining the exact philosophies determined by finance managers. The social investors may invest for social impact and financial gain. Another example of socially responsible investing is community investing, which goes directly toward organizations that have a track record of social responsibility through helping the community and have been unable to garner funds from other sources, such as banks and financial institutions. The goal is to improve the quality of the community by reducing its dependency on government assistance such as welfare, which in turn has a positive impact on the community’s economy.
Reference
Csrhub.com, 2018. CSR information for Samsung Electronics Company Limited. [online] CSRHub – Sustainability and Corporate Social Responsiblity (CSR) ratings on over 17,913 of the world’s largest public and private companies. Available at: <https://www.csrhub.com/CSR_and_sustainability_information/Samsung-Electronics-Company-Limited> [Accessed 4 May 2018].
Csrhub.com, 2018. CSR information for Apple Inc.. [online] CSRHub – Sustainability and Corporate Social Responsiblity (CSR) ratings on over 17,913 of the world’s largest public and private companies. Available at: <https://www.csrhub.com/CSR_and_sustainability_information/Apple-Inc> [Accessed 4 May 2018].
The basic principles of marketing includes identification of target customers and the market, preparation of the perfect marketing mix, creating and maintaining a brand value and image of an organisation and satisfying customer needs. Marketing helps in developing a good relationship with the target customers and including their feedback in planning the next policies and strategies. The company needs to market the green products that help in generation of awareness for sustainable goods and services. The key concepts that link sustainability to the consumers is sustainable problem related awareness and solutions, desirability of behavioural change and accepting information of sustainability, adoption of sustainable lifestyle and addressing the challenges related to sustainability. Sustainable marketing lays down the practice of developing and implementing marketing strategies in such a way that it satisfies the customers’ needs while taking care of the environmental issues as well as the social responsibilities of the organisation. Sustainable marketing should be the core of an organisation because of the depleting environmental and social conditions today. The sustainable marketing mix has four elements namely costs, solution, communication and convenience. This helps in persuading the stakeholders in adapting the practice of sustainable development. Social marketing is the practice of applying marketing principles and techniques to generate and deliver values which influences the target audience and their behaviour so as to ultimately benefit the society as a whole. The organisation needs to implement the proper marketing strategies that help in environmental and social development that leads to sustainable development altogether (Hull et al. 2017).
Reference
Hull, C.E., Russell, J.D. and Kukar-Kinney, M., 2017, May. Abstract on Evaluating Sustainability as a Core Competency: Consumer Response to Sustainable Products. In Academy of Marketing Science Annual Conference (pp. 529-530). Springer, Cham.
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