LB 5203 Sustainable LB 5203 Sustainable Enterprise Enterprise

IntroductionIntroduction

Dr Carol CheongDr Carol Cheong

Carol.cheong@jcu.edu.sgCarol.cheong@jcu.edu.sg

School of Business School of Business

James Cook UniversityJames Cook University

THE PERSONAL, THE PHILOSOPHICAL AND THE THE PERSONAL, THE PHILOSOPHICAL AND THE STRATEGIC ISSUESSTRATEGIC ISSUES

The subject provides challenges to the future-both The subject provides challenges to the future-both personal and professional personal and professional

Views of self , views of roles in society, views of Views of self , views of roles in society, views of society and business and their role in relation to the society and business and their role in relation to the natural world.natural world.

Be prepared to confess to being ignorant-that is seek to Be prepared to confess to being ignorant-that is seek to learn rather than profess to know. learn rather than profess to know.

Definitional concerns Definitional concerns Enterprise = an endeavour in the public or business sector Enterprise = an endeavour in the public or business sector

which aims to develop the multi-faceted well being of a which aims to develop the multi-faceted well being of a group or community group or community

more than “corporations”, but corporations are very more than “corporations”, but corporations are very important because of the scale of their operations and their important because of the scale of their operations and their influence on other businessesinfluence on other businesses

Our focus is on sustainability in a business/enterprise Our focus is on sustainability in a business/enterprise context, not a specialist environmental or social justice context, not a specialist environmental or social justice course but building on evidence from these concernscourse but building on evidence from these concerns

Aggregating perspectivesAggregating perspectives Sustainability?-how do we define itSustainability?-how do we define it a myriad of definitionsa myriad of definitions

Our Common FutureOur Common Future "Sustainable development is development that "Sustainable development is development that

meets the needs of the present without meets the needs of the present without compromising the ability of future generations to compromising the ability of future generations to meet their own needs."meet their own needs."

from Page 8, from Page 8, World Commission on Environment and Development. World Commission on Environment and Development. Our Common FutureOur Common Future. (Oxford, Great Britain: Oxford University . (Oxford, Great Britain: Oxford University Press, 1987). (Frequently referred to as the Brundtland report Press, 1987). (Frequently referred to as the Brundtland report after Gro Harlem Brundtland, Chairman of the Commission)after Gro Harlem Brundtland, Chairman of the Commission)

Aggregating perspectivesAggregating perspectives World Business Council on Sustainable World Business Council on Sustainable

DevelopmentDevelopment

"Sustainable development involves the "Sustainable development involves the simultaneous pursuit of economic prosperity, simultaneous pursuit of economic prosperity, environmental quality and social equity. environmental quality and social equity. Companies aiming for sustainability need to Companies aiming for sustainability need to perform not against a single, financial bottom line perform not against a single, financial bottom line but against the triple bottom line."but against the triple bottom line."

And more And more

Caring for the EarthCaring for the EarthIUCN/UNEP/WWF. Caring for the Earth: A IUCN/UNEP/WWF. Caring for the Earth: A

Strategy for Sustainable Living.Strategy for Sustainable Living. (Gland, (Gland, Switzerland: 1991)Switzerland: 1991)

"improving the quality of human life while living "improving the quality of human life while living within the carrying capacity of supporting eco-within the carrying capacity of supporting eco-systems."systems."

Note the subtle shift-sustainability-Note the subtle shift-sustainability-sustainable developmentsustainable development

"Sustainable development [is] the process "Sustainable development [is] the process of building equitable, productive and of building equitable, productive and participatory structures to increase the participatory structures to increase the economic empowerment of communities economic empowerment of communities and their surrounding regions.and their surrounding regions.

Interfaith Center on Corporate Responsibility, 475 Interfaith Center on Corporate Responsibility, 475 Riverside Drive, New York, NY 10115, 212-870-2295Riverside Drive, New York, NY 10115, 212-870-2295

Sustainability in sectorsSustainability in sectors

Sustainable productionSustainable production Sustainable tourism Sustainable tourism Sustainable agricultureSustainable agriculture

Similarity of themes but subtle Similarity of themes but subtle differences at detailed level.differences at detailed level.

SUSTAINABLE BUSINESS = GREEN BUSINESS

A BUSINESS THAT HAS NO NEGATIVE IMPACT ON ENVIRONMENT, COMMUNITY, SOCIETY AND ECONOMY

Historical perspectives-Sustainable Historical perspectives-Sustainable agricultureagriculture

Farming on the frontier-An Australian exampleFarming on the frontier-An Australian example

Farming in GreenlandFarming in Greenland

Case comparisons are valuable in seeking cross situational Case comparisons are valuable in seeking cross situational principlesprinciples

ReferencesReferences

D.W. Meinig On the Margins of the good earth The South Australian Wheat Frontier 1869-1884.

J. Diamond (2005) Collapse

Farming (business) on the Farming (business) on the frontier/testing the limitfrontier/testing the limit

Mapping sentencesMapping sentences=A way to synthesise =A way to synthesise (Read, Identify key items, common ideas) (Read, Identify key items, common ideas) the case study and prepare for other the case study and prepare for other sustainability discussions. sustainability discussions.

Example:Example: The establishment of an ecological limit The establishment of an ecological limit

product demand product demand limit tested limit tested ecological ecological circumstances change circumstances change economic and economic and ecological loss ecological loss social and community social and community consequences. consequences.

Business phasesBusiness phases

Dunphy and Benveniste (2000) Dunphy and Benveniste (2000) suggest 6 phases in the development suggest 6 phases in the development of business or corporate of business or corporate sustainability. sustainability.

Phase 1: Phase 1: RejectionRejection

environment is regarded as a free good to be environment is regarded as a free good to be exploitedexploited

hostility to environmental activitieshostility to environmental activities production and extraction processes destroy production and extraction processes destroy

future capacity or damage the ecosystemfuture capacity or damage the ecosystem polluting by-products are dischargedpolluting by-products are discharged employees and sub-contractors are regarded as a employees and sub-contractors are regarded as a

resource to be usedresource to be used ““lip service” to health and safety issueslip service” to health and safety issues compliance required of workforce backed up by compliance required of workforce backed up by

threats/forcethreats/force little training; few career prospects for employeeslittle training; few career prospects for employees minimal community concernsminimal community concerns

Phase 2: Phase 2: Non-responsivenessNon-responsiveness

ecological environment not considered as ecological environment not considered as a relevant inputa relevant input

financial and technological factors financial and technological factors dominate business strategy dominate business strategy

efficiency rulesefficiency rules environmental resources wasted and costs environmental resources wasted and costs

not considerednot considered training in technical area onlytraining in technical area only wider social responsibility and community wider social responsibility and community

concern is ignoredconcern is ignored

Phase 3 Phase 3 Compliance/Risk Compliance/Risk ReductionReduction

senior management see the need to comply with senior management see the need to comply with environmental lawsenvironmental laws

attempt to limit liability of enterpriseattempt to limit liability of enterprise obvious environmental abuses eliminatedobvious environmental abuses eliminated employer seen as a decent employeremployer seen as a decent employer efforts at safety workplace standards appearefforts at safety workplace standards appear organisation practises benevolent paternalismorganisation practises benevolent paternalism awareness that negative community publicity awareness that negative community publicity

may be harmful so some community concerns may be harmful so some community concerns addressedaddressed

Phase 4: Phase 4: EfficiencyEfficiency poor environmental practice seen as an avoidable costpoor environmental practice seen as an avoidable cost review of environmental inputs and waste to minimise review of environmental inputs and waste to minimise

expenditure in these areasexpenditure in these areas environmental issues that do not generate avoidable costs environmental issues that do not generate avoidable costs

tend to be ignored (eg aesthetics)tend to be ignored (eg aesthetics) ISO 14001 procedure may be in place (International ISO 14001 procedure may be in place (International

Standards Organisation approach for reporting core Standards Organisation approach for reporting core environmental management practices)environmental management practices)

coherent HR systems practisedcoherent HR systems practised team work of staff acknowledged and training beginsteam work of staff acknowledged and training begins funding of community projects with a positive return for the funding of community projects with a positive return for the

companycompany

Phase 5Phase 5 : : Strategic Strategic SustainabilitySustainability

proactive environmental strategies seen as a strategic proactive environmental strategies seen as a strategic advantageadvantage

product redesign to reuse/recycle materialsproduct redesign to reuse/recycle materials environmental outputs are engineered to be usefulenvironmental outputs are engineered to be useful competitive leadership sought through spearheading competitive leadership sought through spearheading

environmentally friendly products and processesenvironmentally friendly products and processes workforce diversity sought and usedworkforce diversity sought and used intellectual and social capital seen as a strategic advantageintellectual and social capital seen as a strategic advantage flexible workplace to maximise talent useflexible workplace to maximise talent use community-enterprise partnerships to address adverse community-enterprise partnerships to address adverse

impactsimpacts

Phase 6Phase 6 : : Ideological Ideological CommitmentCommitment

organisation becomes an active promoter of sustainability organisation becomes an active promoter of sustainability environmental best practice is espousedenvironmental best practice is espoused organisation thinks about sustainability throughout its organisation thinks about sustainability throughout its

entire operation and product rangeentire operation and product range organisation uses its influence with government to promote organisation uses its influence with government to promote

positive sustainabilitypositive sustainability organisation accepts responsibility for upgrading human organisation accepts responsibility for upgrading human

knowledge and skillknowledge and skill strong promoter of workplace diversity and work/life strong promoter of workplace diversity and work/life

balancebalance has a corporate ethnical position and action plan to pursue has a corporate ethnical position and action plan to pursue

human welfare and equitable and socially just practiceshuman welfare and equitable and socially just practices

Enterprises are categorised on 2 Enterprises are categorised on 2 dimensionsdimensions

A categorisation of corporate sustainability A categorisation of corporate sustainability development profiles development profiles

Dunphy (2000) notes that these six phases Dunphy (2000) notes that these six phases can be considered as each having a can be considered as each having a human/social sustainability phase human/social sustainability phase (typically the last few dot points listed) (typically the last few dot points listed) and an ecological sustainability and an ecological sustainability component (typically the first 3-4 phrases component (typically the first 3-4 phrases listed in the notes above). listed in the notes above).

Quick task -2 businesses you know Quick task -2 businesses you know something about-where do they fit?something about-where do they fit?

Sustainability OriginsSustainability Origins

Long standing concerns about the sustainability of the planet and Long standing concerns about the sustainability of the planet and the quality of life for human beings lie in the work of the the quality of life for human beings lie in the work of the eighteenth century writer Thomas Malthus who emphasised the eighteenth century writer Thomas Malthus who emphasised the inability of the world to feed itselfinability of the world to feed itself

Malthus’ prediction was that world population would outstrip the Malthus’ prediction was that world population would outstrip the global community’s ability to provide food and would exceed the global community’s ability to provide food and would exceed the resources of the planetresources of the planet

Variants of the population-resource depletion debate continue and Variants of the population-resource depletion debate continue and are often labelled neo-Malthusian perspectives (for example in are often labelled neo-Malthusian perspectives (for example in Australia in 1992 a set of conferences re-ignited the debate on Australia in 1992 a set of conferences re-ignited the debate on how many people Australia can sustain – 25 million, 50 million or 5 how many people Australia can sustain – 25 million, 50 million or 5 million – million – see T Flannery The Future Eaters)see T Flannery The Future Eaters)

The population question-consider other countries?? Too hard to The population question-consider other countries?? Too hard to answer without further inquiry and understanding. answer without further inquiry and understanding.

Foundation ideasFoundation ideas The reports to the Club of Rome (early 1960’s) which stressed a The reports to the Club of Rome (early 1960’s) which stressed a

limit to growth approach and quite pessimistic predictions about limit to growth approach and quite pessimistic predictions about energy and fossil fuel shortages. energy and fossil fuel shortages.

The Worldwatch Institute begins publication of annual State of The Worldwatch Institute begins publication of annual State of the World reports and Vital Signs reportsthe World reports and Vital Signs reportsIn 1981 Brown (the Worldwatch Institute Director and principal In 1981 Brown (the Worldwatch Institute Director and principal author) provided a first definition of sustainability.author) provided a first definition of sustainability.

Reports on international development (such as the “Brandt” Reports on international development (such as the “Brandt” report (Independent Commission on International Development report (Independent Commission on International Development Issues 1980) highlighted the growing differentiation between Issues 1980) highlighted the growing differentiation between north (affluent) and south (less developed) countries. north (affluent) and south (less developed) countries.

The International Union for Conservation of Nature (IUCN) in The International Union for Conservation of Nature (IUCN) in 1980 established sustainable development as a policy 1980 established sustainable development as a policy consideration. consideration.

The World Commission on Environment and Development The World Commission on Environment and Development (WCEO 1987) known as the Brundtland report focussed on (WCEO 1987) known as the Brundtland report focussed on sustainable economic growth -Brundtland’s definition of sustainable economic growth -Brundtland’s definition of

sustainability is the base for many modified definitions.sustainability is the base for many modified definitions. Business Council on Sustainable Development Business Council on Sustainable Development

1993 continued the themes of integrating economic 1993 continued the themes of integrating economic and ecological well being. and ecological well being.

The Earth Summit in Rio de Janeiro in 1992 with The Earth Summit in Rio de Janeiro in 1992 with its non-binding resolutions – the Rio Declaration its non-binding resolutions – the Rio Declaration and Agenda 21 provided guidelines for regions and and Agenda 21 provided guidelines for regions and businesses. businesses.

A follow-up Earth Summit + 5 in New York in A follow-up Earth Summit + 5 in New York in 1997.1997.

Further key meetingsFurther key meetings The Kyoto Protocol a United Nations framework The Kyoto Protocol a United Nations framework

convention on climate change in Japan 1997.convention on climate change in Japan 1997.

The South African Millennium declaration in The South African Millennium declaration in Johannesburg 2000 outlining Millennium Johannesburg 2000 outlining Millennium Development Goals (MDGs)– included Development Goals (MDGs)– included sustainability as one of the goals (poverty sustainability as one of the goals (poverty reduction, education, gender equality, child reduction, education, gender equality, child mortality, maternal health, HIV/AIDS, mortality, maternal health, HIV/AIDS, partnerships) were other goals for the partnerships) were other goals for the development of nations. development of nations.

And in 2009 and on……And in 2009 and on……

Key issuesKey issues Power, the north-south divide-the true politics of the environment.Power, the north-south divide-the true politics of the environment.

Cultural differences=A complex influenceCultural differences=A complex influence

Either countries with belief systems which place a strong primacy Either countries with belief systems which place a strong primacy on individual freedom rather than social responsibility such as the on individual freedom rather than social responsibility such as the United States United States

OR countries emphasising certain aspects of Confucian thought OR countries emphasising certain aspects of Confucian thought emphasising filial piety and the family are emphasising filial piety and the family are

BOTH less likely to be initially predisposed to broad-scale social BOTH less likely to be initially predisposed to broad-scale social responsibility.responsibility.

Why? both cultural patterns result in less concern for those Why? both cultural patterns result in less concern for those beyond the self or small clan group. beyond the self or small clan group.

Roots of sustainability through the contributions of Roots of sustainability through the contributions of

individual authors, academics and researchersindividual authors, academics and researchers. . Carson, R., (1962). Carson, R., (1962). Silent SpringSilent Spring, Boston: Houghton Mifflin , Boston: Houghton Mifflin

Company Company – – popularised the challenge to sustaining ecological systemspopularised the challenge to sustaining ecological systems√√ Commoner, B., (1967). Commoner, B., (1967). Science and SurvivalScience and Survival Penguin Penguin – – advocate for grass roots environmental movementsadvocate for grass roots environmental movements Ward, B., (1962). Ward, B., (1962). The Rich Nations and the Poor NationsThe Rich Nations and the Poor Nations, New , New

York: W.W. NortonYork: W.W. Norton – – plea for better  more responsible ecological behaviourplea for better  more responsible ecological behaviour Freire, P., (2000). Freire, P., (2000). PedagogyPedagogy of the Oppressed of the Oppressed Continuum Continuum

International Publishing GroupInternational Publishing Group -moral demand for social equity, justice and fairness including -moral demand for social equity, justice and fairness including

educational opportunityeducational opportunity Hardin, G., (1986). The Tragedy of the Commons, Hardin, G., (1986). The Tragedy of the Commons, Science, Science, 162162 -Proposed the “commons dilemma” where absence of targeted -Proposed the “commons dilemma” where absence of targeted

responsibility for a resource leads to its overuseresponsibility for a resource leads to its overuse

More formative authorsMore formative authors Schumacher, E., (1973). Schumacher, E., (1973). Small is Beautiful: Economics as if People Small is Beautiful: Economics as if People

Mattered, Mattered, New York: Harper & RowNew York: Harper & Row - rejection of infinite growth and unlimited consumption and proposed - rejection of infinite growth and unlimited consumption and proposed

small is beautifulsmall is beautiful Capra, F., (1982). Capra, F., (1982). The Turning Point, The Turning Point, New York: Simon & SchulsterNew York: Simon & Schulster– – identified a global crisis of awareness and the need for re-aligning identified a global crisis of awareness and the need for re-aligning

society’s picture of the world’s resources.society’s picture of the world’s resources. Sax, J., (1980). Sax, J., (1980). Mountains Without Handrails, Mountains Without Handrails, USA: University of USA: University of

MicheganMichegan – “ – “Mountains without handrails” – proposed that there is an intrinsic Mountains without handrails” – proposed that there is an intrinsic

value of little altered landscapes with their own benefits for human value of little altered landscapes with their own benefits for human well-being. well-being.

Nader, R., (2000). Nader, R., (2000). The Ralph Nader Reader, The Ralph Nader Reader, New York: Seven Stories New York: Seven Stories PressPress

– – advocated consumer rights and the social responsibility of corporationsadvocated consumer rights and the social responsibility of corporations Wilson, E., (1975). Wilson, E., (1975). Sociobiology: The New Synthesis, Sociobiology: The New Synthesis, USA: Belknap USA: Belknap

PressPress– – proposed socio-biology the interdependence of human organisation and proposed socio-biology the interdependence of human organisation and

life on its biological rootslife on its biological roots

And the list continues with many And the list continues with many contemporary contributions contemporary contributions

Task for class-to review at least 2 of Task for class-to review at least 2 of the contemporary contributionsthe contemporary contributions

Sustainability – a Further Intellectual Sustainability – a Further Intellectual ChallengeChallenge

a thoughtful critical approach to a thoughtful critical approach to knowledge areas knowledge areas

not a set of rules or technical procedures not a set of rules or technical procedures for managers to apply for managers to apply

pragmatic systematic courses of action to pragmatic systematic courses of action to pursue in enterprises as a result of pursue in enterprises as a result of considering sustainability issues but the considering sustainability issues but the pathway to reaching such conclusions pathway to reaching such conclusions needs to be a considered one. needs to be a considered one.

Sustainability – a Further Intellectual Sustainability – a Further Intellectual ChallengeChallenge

Optimists, Pessimists and the LitanyOptimists, Pessimists and the Litany Another view-Lomberg,B., (2001). Another view-Lomberg,B., (2001). The Sceptical The Sceptical

Environmentalist: Measuring the Real State of the Environmentalist: Measuring the Real State of the WorldWorld. Cambridge: Cambridge University Press.. Cambridge: Cambridge University Press.

powerful pervasive litany about the environment powerful pervasive litany about the environment (and human society). The litany is that everyone (and human society). The litany is that everyone knows the planet is in bad shape and we live in knows the planet is in bad shape and we live in

an ever deteriorating environmentan ever deteriorating environment. .

The sceptics' viewThe sceptics' view Let us really look at what the overall statistics say and Let us really look at what the overall statistics say and

not focus on one or two cases. not focus on one or two cases. Let us look at the original examples of the “evidence” Let us look at the original examples of the “evidence”

and see how accurate they are, or how limited and and see how accurate they are, or how limited and circumscribed they were before being endlessly re-circumscribed they were before being endlessly re-quoted and citedquoted and cited

Saying that the ecosystems and man’s lot are improved is Saying that the ecosystems and man’s lot are improved is not not the same as saying it is good enough – but being able the same as saying it is good enough – but being able to establish that things are improving (e.g. fewer people to establish that things are improving (e.g. fewer people starving) is different and more optimistic and more starving) is different and more optimistic and more constructive in terms of work to be done than saying it is constructive in terms of work to be done than saying it is all getting worse. all getting worse.

We need to look at the scientific evidence not the media We need to look at the scientific evidence not the media reports since the media is predisposed to report “news” reports since the media is predisposed to report “news” and negativity.and negativity.

it is the communication of our environmental knowledge it is the communication of our environmental knowledge which is one core of the problem. which is one core of the problem.

The sceptics' viewThe sceptics' view it is not being suggested that the primary research in the it is not being suggested that the primary research in the

environmental field is incompetent or unprofessionalenvironmental field is incompetent or unprofessional the communication of environmental knowledge taps the communication of environmental knowledge taps

deeply into “doomsday” overly dramatic accounts of the deeply into “doomsday” overly dramatic accounts of the state of the worldstate of the world

environmental organisations, Worldwatch Institute, environmental organisations, Worldwatch Institute, Greenpeace and the World Wide Fund for Nature, individual Greenpeace and the World Wide Fund for Nature, individual commentators and the media do exaggerate and distort the commentators and the media do exaggerate and distort the evidence. evidence.

The litany, now that it is established, has its own “life”. It is The litany, now that it is established, has its own “life”. It is a social representation, an organised system of shared a social representation, an organised system of shared everyday knowledge, so we “know” that the environment is everyday knowledge, so we “know” that the environment is not in good shape making it all the more possible for people not in good shape making it all the more possible for people to make erroneous claims without evidence. For this to make erroneous claims without evidence. For this reason (our existing social representation) we also tend to reason (our existing social representation) we also tend to be extremely sceptical towards anyone who says the be extremely sceptical towards anyone who says the environment is not in such a bad state. environment is not in such a bad state.

The efficiency of interventions – what we do – to make The efficiency of interventions – what we do – to make enterprises more sustainable should be based on a rational enterprises more sustainable should be based on a rational critical approach to the factual data not on a presumed critical approach to the factual data not on a presumed topical myth based news item. topical myth based news item.

Critical approach and OptimismCritical approach and Optimism

In summary, as students doing an MBA subject on In summary, as students doing an MBA subject on sustainability, the topic matters to enterprises but sustainability, the topic matters to enterprises but a critical thinking approach to how it matters and a critical thinking approach to how it matters and how to work in this area is core to a sophisticated how to work in this area is core to a sophisticated understanding of the topic. understanding of the topic.

The work of Martin Seligman (2000) on Optimism The work of Martin Seligman (2000) on Optimism a solution might be found -learned optimism a solution might be found -learned optimism becomes a part of people’s personal style. becomes a part of people’s personal style.