Sustainability in economics
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Environmental_BusinessEthics2021-2.pptxEthics
Business ethics for the environment
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Wisdom of Calvin
Many environmental problems are problems of the commons How to avoid “Tragedy of the Commons”
What is Tragedy of the Commons?
(Garrett Hardin 1968)
“Commons, or common-pool resources, are resources that can be used by anyone but can easily be depleted. Hardin posited that all commons are eventually destroyed. After all, if people can take as much as they want and there is a limited supply, then the resource will soon disappear. Hardin wrote that there are two, and only two, ways to prevent the “tragedy”: privatize the resource or impose government regulations. People, he thought, are just plain unable to control themselves in a commons.”
Writing Assignment
Many of you mentioned the responsibility of businesses for climate change
How do businesses do sustainability and why?
How is the larger economy responding to climate change? What are long-run decisions that may address carbon emissions?
Environmental Social and Governance Investment, Green, Sustainability, Climate Bonds
Business Ethics
Start with reading and answering questions in assignment.
Blackstone, philosophy (1974)
Schrader-Frechette, philosophy & world health (1991)
Payne and Raiborn, business ethics (2001)
Know why businesses might engage in sustainable development measures
Business ethics
Payne and Raiborn (p. 157, 2001)
“…what actions, beyond legal requirements, can be and are being taken by business to promote this concept with its resultant benefit to all business stakeholders?”
Section 1 Company Profile
Section 2a Sustainability evaluation
Betterworldshopper.com
Betterworldshopper.com
Betterworldshopper.com
Environmental Working Group (ewg.org)
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Section 2b Sustainability evaluation
4 Levels of effort
1) Basic – comply with laws
2) Currently attainable - engage in environmentally friendly behavior (maybe for wrong reasons)
3) Practical - environmental behavior reflects long- term views and concern for stakeholders
4) Theoretical - integrates sustainable development into its organizational strategy and core values (top to bottom, inside/outside, and short and long term)
Section 3 Recommendations
Businesses and sustainability
Ways to communicate
with consumers
other businesses
regulatory compliance
Things to do key word searches on during research
Triple Bottom Line
Developed by John Elkington – People, Planet, Profits
Trick is in measurement
Businesses
Economic – taxes paid
Social – worker training/retention and philanthropy
Environmental/safety – accident rate, greenhouse gas emissions, use of recycled material, waste to landfill, water consumption
UMD EFC Urban Forest Accounting SPENDING and BENEFITS TO HUMANS
Eco Certification (International Standards Organization, ISO)
External parties certify –began in 1980s (19000 series)
1990s ISO 14000 series focused on environmental management
ISO 14001
guidelines for the establishment or improvement of an environmental management system
220,000 organizations worldwide
Other relevant standards in the 14000 series include
14020 on environmental labels,
14040 on life cycle analysis, and
14064 on greenhouse gas emissions (carbon footprinting).
Focused on processes. Being certified does not necessarily result in improved environmental performance. Nevertheless, certification can provide business benefits, especially in a B2B environment, where certification may be needed to comply with customer requirements. Given the prevalence of the ISO 14000 standards, however, certification is rarely a source of competitive advantage.
Environmental Management System (EMS)
What is an EMS?
An Environmental Management System (EMS) is a framework that helps an organization achieve its environmental goals through consistent review, evaluation, and improvement of its environmental performance.
The EMS itself does not dictate a level of environmental performance that must be achieved; each organization's EMS is tailored to the its own individual objectives and targets. (http://www.epa.gov/ems/learn-about-environmental-management-systems#what-is-an-EMS)
Environmental Management System (EMS)
Basic EMS - address its regulatory demands in a systematic and cost-effective manner. This proactive approach can help reduce the risk of non-compliance and improve health and safety practices for employees and the public. An EMS can also help address non-regulated issues, such as energy conservation, and can promote stronger operational control and employee stewardship. Basic Elements of an EMS include the following:
Reviewing the organization's environmental goals;
Analyzing its environmental impacts and legal requirements;
Setting environmental objectives and targets to reduce environmental
impacts and comply with legal requirements;
Establishing programs to meet these objectives and targets;
Monitoring and measuring progress in achieving the objectives;
Ensuring employees' environmental awareness and competence; and,
Reviewing progress of the EMS and making improvements.
(http://www.epa.gov/ems/learn-about-environmental-management-systems#what-is-an-EMS)
Examples of implementation
TATA Global beverages
“We don’t trumpet our standards – they’re a business tool, not a marketing tool, there to drive performance. They help achieve consistency in our production processes, and drive the right behaviours.”
Denise Graham, Technical Manager, Tata Global Beverage
International corporation, 250 million servings of its brands – which include Tetley Tea– are consumed every day around the globe.
Multiple certifications including:
ISO 9001 (Quality Management),
ISO 14001 (Environmental Management),
ISO 50001 (Energy Management)
OHSAS 18001 (Occupational Health and Safety).
TATA example
“Whereas ISO 14001 is a generic standard for the environment, ISO 50001 focuses on the cost benefits of using utilities more efficiently. The business case for it is clear.”
Denise Graham explains, “ISO 14001 provides a framework for our continued attention to environmental issues – we’ve just reduced water consumption by 20%...”
(http://www.bsigroup.com/LocalFiles/en-GB/iso-50001/case-studies/BSI_Tata_220414_WR.PDF)
Environmental labeling for products
Ecolabelling is a voluntary method of environmental performance certification and labelling that is practiced around the world. An "ecolabel" is a label which identifies overall, scientifically proven environmental performance of a product or service within a specific product/service category
Green symbols, or claim statements developed by manufacturers and service providers, the most credible labels are based on life cycle considerations; they are awarded by an impartial third-party in relation to certain products or services that are independently determined to meet transparent environmental leadership criteria.”(Global Ecolabelling Nework)
Procurement is the act of acquiring, buying goods, services or works from an external source, often via a tendering or bid process.
Eco labeling
Eco labels work by:
Ecolabels
are an answer to the growing request from consumers (and recently from procurement professionals as well) to be better informed about the impact on environment and health of the products they buy. Ecolabels provide this complex information in a very straightforward way.
Greenwashing
Behavior of firms who falsely claim to have a sound environmental record
It is obvious that a good environmental claim should be true, based on scientifically sound elements
All relative information should be transparently available to anyone who asks for it
General descriptions such as “green”, “earth-friendly”, “non-polluting”, “all natural”, “good for the environment”, “sustainable” do not have any meaning; also pictures of globes, butterflies, flowers and trees, unless they have a direct connection to the product, can give the misleading impression that the product has particular environmental benefits.
(https://www.ungm.org/Areas/Public/Downloads/Env_Labels_Guide.pdf)
Life Cycle Analysis (LCA)
“Life cycle analysis (LCA) is the systematic approach of looking at a product's complete life cycle, from raw materials to final disposal of the product. It offers a “cradle to grave” look at a product or process, considering environmental aspects and potential impacts.” (www.istc.illinois.edu/info/library_docs/tr/tr40.pdf)
Life Cycle Analysis (LCA)
http://www4.ncsu.edu/~richardv/documents/LCAPaper62012.pdf
Environmental impacts in a products life
Raw material acquisition, which includes material harvesting and transportation to manufacturing sites;
Processing, which involves materials processing and transportation to production sites;
Manufacturing, which includes product manufacture and assembly, packaging, and transportation to final distribution;
Product life, which includes energy and emissions during normal product life, required maintenance, and product reuse (refurbishing, material reuse); and,
Waste management/end of life, which includes recycling, landfills, liquid waste, gas emissions, etc.
LCA example
Styrofoam vs paper cups
Which is “greener”?
A) Styrofoam cup
B) Paper cup
https:// www.bostonglobe.com/magazine/2014/04/02/why-paper-cups-just-aren-greener/W3TIBJ9dff8INlumPQvHSI/story.html
http://stosselintheclassroom.org/videos/foam_more_energy_efficient_than_paper /
The main purpose of Writing Assignment #1
Many environmental problems would benefit from “additional investment” or realigning investment.
The global finance market is paying attention to sustainability for many reasons.
Knowing what companies do to protect assets and production and the validity of the practices is very important .
Investors – especially young investors – care about social responsible investing (SRI).
Your exploration of one company helps to start understanding how companies do – or do not – deliver sustainability to investors or consumers.
International interest in sustainability investment
“In response, some of the world's largest financial institutions have launched new "sustainable" investment options and adorned them with a sweeping — and according to some experts, problematic — modern label: environmental, social and governance, or ESG, investing.
Since 2015, the number of sustainable investment options has boomed, with the launch of 133 new ESG funds, according to research by Morningstar. By the end of2018, more than 350 sustainable funds were available to investors, amounting to $161 billion worth of assets under management.”
Green Bonds
Uncertainty– but not going away
“Encourage sustainability and to support climate-related or other types of special environmental projects. More specifically, green bonds finance projects aimed at energy efficiency, pollution prevention, sustainable agriculture, fishery and forestry, the protection of aquatic and terrestrial ecosystems, clean transportation, clean water and sustainable water management. They also finance the cultivation of environmentally friendly technologies and the mitigation of climate change.”
https://www.investopedia.com/terms/g/green-bond.asp
