Business and Environmental Sustainability
Environmental sustainability is increasingly important to organisations, whether for regulatory, financial or ethical reasons. Business and Environmental Sustainability looks at the environmental aspect of sustainability for all organisations pursuing competitive advantage. The book provides theoretical foundations from science, economics, policy and strategy, introduces three environmental challenges (climate change, pollution and waste) and looks at how corporate functions can address these.
This textbook provides a thorough foundation by introducing readers to the science, reasoning and theory behind environmental sustainability and then delves into how these ideas translate into principles and business models for organisations to use. Next, it covers environmental challenges from climate change, pollution and waste, and then goes on to examine the different corporate functions (from supply chain management to human resources) to illustrate how environmental sustainability is managed and put into practice in organisations. Finally, a set of integrative case studies draws everything together and enables the reader to apply various analytical tools, with the aim of understanding how companies can not only reduce their environmental footprint but can positively contribute to environmental sustainability.
Written by an award-winning lecturer, Business and Environmental Sustainability boasts a wealth of pedagogical features, including examples from a range of industries and countries, plus a companion website with slides, quiz questions and instructor material. This will be a valuable text for students of business, management and environmental sustainability and will also be suitable for broader courses on corporate responsibility and sustainability across environmental studies, political science and engineering.
Sigrun M. Wagner is Senior Lecturer in International Business and Sustainability at Royal Holloway, University of London, UK, and Head of the Department for Strategy, International Business and Entrepreneurship in the School of Business and Management.
Business and Environmental Sustainability
Foundations, Challenges and Corporate Functions
SIGRUN M. WAGNER
First published 2021 by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2021 Sigrun M. Wagner
The right of Sigrun M. Wagner to be identified as author of this work has been asserted by her in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data
Names: Wagner, Sigrun M., 1978– author.
Title: Business and environmental sustainability : foundations, challenges and corporate functions / Sigrun M. Wagner.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2020. | Includes bibliographical references and index.
Identifiers: LCCN 2020012342 (print) | LCCN 2020012343 (ebook) | ISBN 9781138632387 (hbk) | ISBN 9781138632424 (pbk) | ISBN 9781315208275 (ebk)
Subjects: LCSH: Sustainable development. | Business logistics | Economic development—Environmental aspects.
Classification: LCC HC79.E5 W2645 2020 (print) | LCC HC79.E5 (ebook) | DDC 658.4/083—dc23
LC record available at https://lccn.loc.gov/2020012342 LC ebook record available at https://lccn.loc.gov/2020012343 ISBN: 978-1-138-63238-7 (hbk)
ISBN: 978-1-138-63242-4 (pbk) ISBN: 978-1-315-20827-5 (ebk) Typeset in Sabon
by Apex CoVantage, LLC
Visit the companion website: www.routledge.com/cw/Wagner
The Future
To our nephews and nieces, Bjarne, Lizzie, James, and Thea – may you grow up to live and work in a world where business takes its responsibility towards sustainability more seriously.
The Present
To my students who have helped shape this book by choosing to study business and the natural environment.
The Past
To my late father who passed away half-way through my writing of this
book and who implicitly and sometimes unknowingly lived out sustainability
principles throughout his life.
vii
C O N T E N T S
List of figures ix List of tables x List of boxes xi Acknowledgements xii Abbreviations xiii Author biography xix
CHAPTER 1 Introduction: the past and the present 1
PART I FOUNDATIONS 17
CHAPTER 2 Theoretical perspectives or “behind the scenes” of economics and science: why business should know and care about environmental sustainability 19
CHAPTER 3 Principles, philosophies and policies for corporate environmental sustainability: from tensions to tools for regulators and companies 44 CHAPTER 4 Strategies and business models for sustainability 81
PART II ENVIRONMENTAL CHALLENGES 121 CHAPTER 5 Climate change 127
CHAPTER 6 Pollution 167 CHAPTER 7 Waste 194
PART III CORPORATE FUNCTIONS: MANAGING FOR ENVIRONMENTAL SUSTAINABILITY 225
CHAPTER 8 Supply chain management for sustainability 229
CHAPTER 9 Design, production and operations: greener and (c)leaner 258
Contents viii
CHAPTER 10 Marketing, communication and sustainable consumption 280 CHAPTER 11 Information technology and management systems for the
environment 307
CHAPTER 12 Accounting: sustainability reporting, accounting and finance 323 CHAPTER 13 Human resource management for environmental sustainability 348
CONCLUSION 365
CHAPTER 14 Integrative case studies 367 CHAPTER 15 Conclusion: the future 389 Index 410
ix 1.1 The societal triangle: context for corporate
environmental sustainability 2 1.2 Three levels of sustainability 7 2.1 Ecosystem services 23 2.2 The five capitals model 27
2.3 Comparison of three economics models 29 2.4 World ecological footprint 34
3.1 (Environmental) Kuznets curve 48 4.1 The Natural Step Systems Conditions 93 4.2 ABCD planning in The Natural Step 94 4.3 The sustainable business model archetypes 104 5.1 Greenhouse gas emissions by economic
sectors 133
5.2 Detailed breakdown of global GHG emissions 134
5.3 Historical GHG emissions by sector 135
5.4 Carbon majors 136
5.5 Scenarios of GHG emission pathways 141 5.6 Carbon crunch 146
5.7 GGP scope and emissions across value chain 150
7.1 Waste hierarchy 201 7.2 EU waste legislation 207 8.1 Supply chain management 231 10.1 Market segmentation according to
pro-environmental behaviour 290 10.2 Multiple certification 299 11.1 EMAS process 315
12.1 The value creation process 333 14.1 Broken bamboo cup 371
14.2 Festival wristbands at Greenbelt 382 15.1 Three levels of sustainability 402
F I G U R E S
ix
x
TA B L E S
1.1 Overview of selected historical developments in environmental sustainability 4
2.1 Examples of ecosystem services and their estimated economic value 24
2.2 Strong versus weak sustainability 38 3.1 Steps in cost-benefit analysis 70
4.1 Shifts in thinking – how ecological factors are treated 85
4.2 Corporate sustainability buzzwords 105 4.3 Steps of change towards corporate
sustainability 109
4.4 Business sustainability – roadmap of key characteristics and shifts 115
II.1 Classification of environmental themes, wider dimensions and systems perspective 123 II.2 Classification of environmental thematic
priorities and trends 123
II.3 Evolution of environmental challenges 124 5.1 Greenhouse gases and their sources 128
5.2 Consequences of temperature rises 129 5.3 Key characteristics of the scenarios collected
and assessed for WGIIIAR5. 142 5.4 Strategies in stabilisation wedges 144 5.5 Policy instruments 145
5.6 Overview of clean technologies 155 6.1 Overview of major air pollutants 171 8.1 Matrix for sustainable procurement
strategies 241 9.1 DfE guidelines 264 9.2 DfE principles 264
9.3 Principles of cleaner production 268 12.1 GRI reporting principles 332 12.2 Key reporting differences 334 13.1 Training Methods for Green HRM 358 14.1 United Nations International Standard
Industrial Classification of All Economic Activities (ISIC) 368
15.1 Matrix of integration 404
xi 2.1 Spotlight on pioneering payment for ecosystem
services 25 2.2 Externalities 31
2.3 Water footprint and other footprint examples 36
3.1 Benefits and principles of environmental regulations under win-win scenario between competitiveness and environmental protection 46
3.2 Anthropocene – humanity’s impact 49 3.3 Values 49
3.4 Unintended consequences of technology – examples 51 3.5 Tense times 53
3.6 Risk 56
3.7 Standard philosophies 59
3.8 Examples of principles and regulations in action 61
4.1 Examples of sustainability-driven generic strategies 86
4.2 Examples of sustainability-driven blue ocean strategies 87
4.3 Summary of the resource-based framework 89
4.4 Resource-based view example 89
4.5 Examples of companies going Beyond Greening 90
4.6 Ray Anderson and Interface – applying The Natural Step in practice 95
4.7 Other examples of The Natural Step 96 4.8 General biomimicry principles 98 4.9 Natural capitalism strategies in action 99 4.10 The role of entrepreneurs and intrapreneurs in
sustainability 111
4.11 Acquisitions as a route to change towards sustainability 113
5.1 Climate change scepticism 137 5.2 Geoengineering 139
6.1 Spotlight on light pollution 172 6.2 Spotlight on noise pollution 173 6.3 Spotlight on pollution in China 176 6.4 Solutions to light pollution 184 7.1 Great Pacific garbage patch 200 7.2 Waste legislation in the EU 206 8.1 Spotlight on international supply chain
management and sustainability 251
9.1 Biomimicry – innovation inspired by nature 262 10.1 Greenwashing 291
15.1 The future of agriculture, manufacturing and services – examples 398
B OX E S
xii
T
his book has been a result of teaching the course Management and Environmental Sustain- ability (MN2805), now Business and the Natural Environment. Without students choos- ing to take this course, the book would not have come about, so I am very grateful to each and every one of you who chose and chooses to study this important topic.I have enjoyed writing this book, though it has taken a lot longer than initially planned. In the process, a number of people provided feedback, support, and above all, encouragement to keep going. I would like to thank them all, in particular the following.
Four anonymous reviewers provided valuable suggestions for which I am grateful and which improved the end result. I am thankful to the visiting academics at Royal Holloway who gave of their time to offer feedback and advice: Prof Jen Babbington, Dr Michelle Greenwood, Prof Joseph Sarkis.
The staff at Routledge – Isobel Fitzharris, Judith Lorton, Rebecca Marsh, Sophie Peoples, Natalie Tomlinson and Natalie Tomlinson – who answered my questions without fault and were kind and patient enough to let me take the time needed to write. Thank you!
I’m very grateful to Mary Corfield and the Greenbelt Festival for agreeing to be part of one of the case studies. Keep up the good work!
All current and former colleagues in the Centre for Research into Sustainability and in the School of Business and Management at Royal Holloway, University of London. In particular, thank you to Prof Gloria Agyemang, Dr Stephanos Anastasiadis, Dr Donna Brown, Dr Lauren McCarthy, Mr Jus- tin O’Brien, Prof Bob O’Keefe, Prof Laura Spence, Prof Helen Tregidga, Prof Jeffrey Unerman and Prof Diego Vazquez-Brust for their feedback, support and trust as well as words of encouragement.
All the staff in the Department for Strategy, International Business and Entrepreneurship, who I am privileged to lead as Head of Department, for their patience, trust and support – thank you!
All the other writers whose work has fed into the book and who have inspired me. Where I have used their work, every effort has been made to trace copyright holders and to obtain per- mission to reproduce copyright material, which I gratefully acknowledge – if anything is amiss, please get in touch. All remaining errors are, no doubt, of my own making.
Friends and family, near and far, and the community in Northwood, for encouragement and acceptance as I have not been around much during the writing of the book. Especially my partner’s family and my awesome siblings and their lovely families, who have also seen less of me as a result of this project. My loving parents, Solveig and Manfred, who instilled in me the values of the pursuit of knowledge and hard work, product stewardship and a love of the outdoors. In particular, my late father (‘Papa’) who saw me start the book but didn’t get to see me complete it. He embodied the values of sustainability without using its vocabulary. He bought things that were made to last (often at a price!), reused what was left over, repaired what was broken and admired good craftsmanship.
He still showed me how to sharpen kitchen knives with his father’s grind stone so they would last us longer in the month before he died. May I honour his memory with what I write, teach and do.
Last but certainly not least, my wonderful partner Ann – the first plans for the book were drawn before we met, but you have been with me throughout the writing process and without you, your untiring encouragement and support in action and in word, this would not have been possible.
Here’s to our next adventure and finally getting that electric car we’ve been talking about for years.
SDG
A C K N OW L E D G E M E N T S
xiii µg microgram
μm micrometre 3BL triple bottom line 3D three-dimensional 3PL third-party logistics
3P pollution prevention pays (3M programme) 3Ps people, planet and profit
3Rs reduce, reuse and recycle
A4S The Prince’s Accounting for Sustainability Project AA AccountAbility
AASHE Association for the Advancement of Sustainability in Higher Education ABC activity-based costing
AFOLU Agriculture, Forestry, Other Land Use AI artificial intelligence
AIP American Institute of Physics AR5 IPCC Fifth Assessment Report BAT best available technology
BATNEEC best available technology/techniques not entailing excessive costs BAU business as usual
BCG Boston Consulting Group
BIS Department for Business, Innovation and Skills BoP base of the pyramid
BPEO best practicable environmental option BPM best practicable means
BPR Business Process Re-engineering
BREEAM Building Research Establishment Environmental Assessment Method BSC balanced scorecard
BSI British Standards Institutions CBA cost-benefit analysis
C2C Cradle to Cradle (certification)
CCS carbon capture and storage (or sequestration) CDSB Climate Disclosure Standards Board
CDP Carbon Disclosure Project CDR carbon dioxide removal CEO chief executive officer
CERES Coalition for Environmentally Responsible Economies CFCs chlorofluorocarbons
CH4 methane
CHP combined heat and power
CLRTAP Convention on Long-range Transboundary Air Pollution CMI Carbon Mitigation Initiative
A B B R E V I AT I O N S
Abbreviations xiv
CO carbon monoxide
CO2 carbon dioxide CO2e CO2 equivalent COP Conference of Parties
CRM customer relationship management CRT cathode ray tube
CSR corporate social responsibility
CSS Center for Sustainable Systems, University of Michigan DDT dichloro-diphenyl-trichloroethane
Defra Department for Environment, Food and Rural Affairs DfE Design for Environment
DG Directorate General (of European Commission) DIN Deutsche Industrie Norm
DMAIC define (the problem), measure, analyse, improve and control EEA European Environment Agency
EIA environmental impact assessment EKC environmental Kuznets curve ELV end-of-life vehicles
EMAS Eco-Management and Audit Scheme EMF Ellen MacArthur Foundation
EMIS Environmental Management Information Systems EMS(s) Environmental Management System(s)
EPA United States Environmental Protection Agency EP&L environmental profit and loss
EPP environmental(ly) preferable purchasing EPR extended producer responsibility EPS expanded polystyrene (Styrofoam) EQOs environmental quality objectives ERP enterprise resource planning
ESG environmental, social and governance EV electric vehicles
e-waste electronic waste
FAO Food and Agriculture Organization of the United Nations FLW food loss and waste
FOG fat, oil and grease
FSC Forest Stewardship Council FT Financial Times
GDP Gross domestic product
GEMI global environmental management initiative GEO Global Environmental Outlook
GGP Greenhouse gas protocol GHG(s) greenhouse gas(es)
GICS Global Industry Classification Standard GLP Green Loan Principles
GPI Genuine progress indicator GRI Global Reporting Initiative
GSSB Global Sustainability Standards Board
Abbreviations xv GWP global warming potential
HAPs hazardous air pollutants HCs hydrocarbons
HFCs hydrofluorocarbons
HP Hewlett Packard
HR human resource(s)
HRM human resource management HSE health, safety and environment
HVAC heating, ventilation, and air conditioning
IAASB International Auditing and Assurance Standards Board IASS Institute for Advanced Sustainability Studies, Potsdam ICT information and communication technology
IEA International Energy Agency
IFAC International Federation of Accountants IIRC International Integrated Reporting Council IOGP International Association of Oil & Gas producers
IPAT IPAT equation where I equals environmental impact, P population, A affluence and T technology
IPBES Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services IPCC Intergovernmental Panel on Climate Change
IPIECA global oil and gas industry association for environmental and social issues IS Information Systems
ISAE International Standard on Assurance Engagements ISEA Institute of Social and Ethical Accountability ISEW Index of Sustainable Economic Welfare
ISIC International Standard Industrial Classification of All Economic Activities ISO International Standards Organisation
IT information technology
ITPS Intergovernmental Technical Panel on Soils JIT just-in-time
KPI key performance indicator(s) LCA life cycle assessment (or analysis) LCD liquid-crystal display
LED light-emitting diode
LEED Leadership in Energy and Environment Design LNG liquefied natural gas
LOHAS Lifestyles of Health and Sustainability
m3 cubic metre
MARPOL International Convention for the Prevention of Pollution from Ships MEA Millennium Ecosystem Assessment
MIS management information system MNE multinational enterprise
MOOC Massive Online Open Course MRP micronised rubber powder MSCI Marine Stewardship Council
MSCI Morgan Stanley Capital International MSW municipal solid waste
Abbreviations xvi
N2O nitrous oxide
NACE Nomenclature statistique des activités économiques dans la Communauté euro- péenne (Nomenclature of Economic Activities in the European Communities) NAICS The North American Industry Classification System
NASA National Aeronautics and Space Administration NBS Network for Business Sustainability
NCC Natural Capital Coalition
NDC nationally determined contributions NGO non-governmental organisation
NH3 ammonia
NO nitric oxide
N2O nitrous oxide NO2 nitrogen dioxide
NO3 nitrate
NOAA National Oceanic and Atmospheric Administration NOX/NOX nitrous oxides
NPP net primary product
O3 ozone
OECD Organisation for Economic Cooperation and Development OED Oxford English Dictionary
OSPAR Oslo Convention for the Prevention of Marine Polluting by Dumping from Ships and Aircraft and the Paris Convention for the Prevention of Marine Pollution from Land-based Sources
PAHs polyaromatic hydrocarbons Pb lead
PCBs polychlorinated biphenyls PDCA Plan-Do-Check-Act PDSA Plan, Do, Study, Act
PES payment for ecosystem services
PET polyethylene terephthalate (form of plastic) PFCs perfluorocarbons
pH measure of acidity and alkalinity in water-based fluids PHA Planetary Health Alliance
PM particulate matter
PM10, PM2.5 particulate matter (less than 10 μm (micrometres) and 2.5 μm) POPs persistent organic pollutants
ppb parts per billion ppm parts per million ppt parts per trillion
PRI Principles for Responsible Investment PRM product recovery management
PRME (United Nations) Principles for Responsible Management Education R&D research and development
RCP representative concentration pathways RoHS restriction of hazardous substances RORO roll-on roll-off
SA Standards Australia
Abbreviations xvii SAM Sustainability Assessment Model
SASB Sustainability Accounting Standards Board SBSC Sustainability Balanced Scorecard
SCAP Sustainable Clothing Action Plan SCM supply chain management SCU Science Communication Unit
SDGs (United Nations) Sustainable Development Goals SEA strategic environmental assessment
SEHN Science and Environmental Health Network SF6 sulphur hexafluoride
SIC Standard Industrial Classification
SIGMA Sustainability Integrated Guidelines for Management SMEs small and medium enterprises
SO2 sulphur dioxide SO2 or “sox” sulphur oxides SO3 sulphur trioxide
SRM solar radiation management
SSCM sustainable supply chain management SSE Sustainable Stock Exchanges initiative STP segmentation, targeting and positioning SWSR Status of the World’s Soil Resources TBL triple bottom line
TEEB The Economics of Ecosystems and Biodiversity TCFD Task Force on Climate-related Financial Disclosures TNS The Natural Step
TPM total preventive maintenance TPS Toyota production system
TQEM total quality environmental management TQM total quality management
TRBC Thomson Reuters Business Classification TRI Toxic Release Inventory
UEL uniform emission limits
UKCIP UK Climate Impacts Programme
UKSIC United Kingdom Standards Industrial Classification of Economic Activities
UN United Nations
UNCED United Nations Conference on Environment and Development (Earth Summit) UNECE United Nations Economic Commission for Europe
UNEP United Nations Environment Programme UNFCC UN Framework Convention on Climate Change UNGC UN Global Compact
UNPRI UN Principles for Responsible Investment VOCs volatile organic compounds
VRIN valuable, rare, inimitable, non-substitutable (resource-based framework) WBCSD World Business Council for Sustainable Development
WCED World Commission on Environment and Development WEEE Waste of Electrical and Electronic Equipment
WEF World Economic Forum
Abbreviations xviii
WHO World Health Organization
WMO World Meteorological Organization WNA World Nuclear Association
WRAP Waste Reduction Always Pays (Dow Chemical programme) WRAP The Waste and Resources Action Programme (UK initiative) WRI World Resources Institute
WWF World Wide Fund for Nature ZEV Zero Emission Vehicle
xix
D
r Sigrun M. Wagner is the Head of Department for Strategy, International Business and Entrepreneurship in the School of Business and Management at Royal Holloway, Univer- sity of London, UK. She is an award-winning Senior Lecturer in International Business and Sustainability, and a Senior Fellow of the UK’s Higher Education Academy. Her interest in business and sustainability stems from her different experiences of environmental perspectives when living, working and studying in the UK, Germany and Norway as well as a high school year in the United States as a 17-year-old. She gained her PhD from Loughborough University, which was on corporate political activities by the automotive industry regarding environmental regulations in the European Union – research that involved fieldwork in Brussels with a number of EU institutions, NGOs, companies and industry bodies. At Royal Holloway, she was instru- mental in the introduction of a sustainability and corporate responsibility pathway for business and management students on the undergraduate BSc programmes. She can be found on Twitter@DrWagner_RHUL.
A U T H O R B I O G R A P H Y
1
I
n contemporary society, businesses are increasingly faced with the challenges of addressing sustainability as a result of legislation, stakeholder pressure, financial motivation or a desire to do the right thing. The chapter at hand introduces the book, making the case for environ- mental sustainability for both businesses and students, and drawing the wider context before providing an overview of the book and suggestions for its uses.THE CASE FOR A BOOK ON BUSINESS AND ENVIRONMENTAL SUSTAINABILITY
The case for business
Why should business leaders take an interest in environmental sustainability beyond simply the opportunity for efficiencies and cost-savings as well as the ethical imperative? Whilst these consid- erations indeed play an important part, what cannot be neglected is the opportunity for innova- tion, for transformation, for resilience and even future survival, in other words, the flourishing of business.
For businesses, unfamiliarity with environmental sustainability could place them at a serious competitive disadvantage, particularly in a business context that in ten years’ time is likely to be very different from today’s, both nationally and internationally. Taking environmental manage- ment seriously presents opportunities for businesses in gaining first-mover advantages.
Environmental sustainability is not just about achieving compliance with legislation or answering public expectations and meeting stakeholder pressure; it is about recognizing and real- izing business opportunity, as already Piasecki and colleagues (1999) put it. This means going beyond compliance and working with external and internal partners who are increasingly asking for sustainability, whether stakeholders or consumers, employees or shareholders.
It is therefore imperative of the financial bottom line for firms to engage in environmental sustainability. A conceptual tool that is used in this respect is the Triple Bottom Line (TBL or 3BL) proposed by Elkington (1997) in an effort to “capture the full business agenda” (Robertson
CHAPTER
1
Introduction
The past and the present
CHAPTER 1 Introduction 2
2017: 333). The TBL is comprised of the economic/financial bottom line, the social bottom line and the environmental bottom line, also called the three pillars of sustainability: planet, people, profit (Elkington 2012: 55).
The case for students and educators
Although for businesses “sustainability” and “environmental issues” are often synonymous, aca- demic textbooks on corporate sustainability tend to have a social focus. Emphasising the social aspect of sustainability, textbooks on ethics and on CSR (corporate social responsibility) abound, leaving a distinct lack of material addressing the environmental aspect of sustainability and the so-called triple bottom line.
Furthermore, sustainability textbooks in this area tend to cover either all aspects of sustain- ability (social, environmental, economic) or specialise in one corporate function (e.g. market- ing, operations, or accounting) rather than provide a sustained environmental focus on business and management across functions. In general, conventional (or mainstream) management and organisation studies have not embraced environmental topics, leaving students underexposed to the topic and underprepared for an employment context where sustainability is increasingly important.
This book addresses this gap of teaching material for business and management students and their lecturers, teachers and educators. It could also be used by students in other fields. A student- friendly and academic textbook based on theory, literature and practical examples is provided that encourages active learning through a variety of suggested learning (and teaching) activities.
THE CONTEXT
In order to place the book into the appropriate context, a brief historical excursion is necessary, looking at the various developments in business, politics and society.
History and politics
Politics and business as well as civil society – which van Tulder and van der Zwart (2006: 8) call the “societal triangle” of state, market and civil society (see Figure 1.1) – have shaped the context
FIGURE 1.1
The societal triangle: context for corporate environmental sustainability Government
Market Civil Society
Environmental sustainability
The context 3 for business and environmental sustainability. The section here introduces this context, looking at the history of corporate environmental disasters and responses to them from a corporate per- spective, environmental policy perspective and the societal perspective. All this has been accom- panied and underpinned by academic and non-academic publications on the environment, many of which have become “classics”, as highlighted by Vaz (2012) and Visser (2009).
Following the destruction by war in the 1940s and the rebuilding of societies in the 1950s, it was the 1960s that marked the beginning of the environmental movement, with Rachel Car- son’s Silent Spring published in 1962. Both Vaz (2012) and Visser (2009) add Aldo Leopold’s A Sand County Almanac from 1949 to the list of classics to read, in which Leopold calls for a new
“land ethic”, and Walden or Life in the Woods by Henry Thoreau from 1854 is considered an even earlier precursor (Vaz 2012), alongside George Perkins Marsh’s Man and Nature (1864, Robertson 2017). It is in the US, in the latter half of the 19th century that the first environmental organisation (The Sierra Club) and the first national park (Yellowstone in 1872) were founded (Buckingham 2008b).
The first use of the term sustainability appears in its German version (Nachhaltigkeit) in 18th-century forest management in Germany, which sought to avoid deforestation damages of the Middle Ages (Robertson 2017).1 In the same century, Thomas Malthus was concerned about humanity’s ability to feed geometrically increasing populations in light of arithmetically increas- ing food stocks (Kedia et al. 2011). This is reflected in the definition Kedia and his colleagues provide of sustainability (2011: 73):
Sustainability implies Malthusian concern regarding the carrying capacity of nature in rela- tion to human consumption patterns.
Going back even further, the origins of sustainability in agriculture can be traced back to Meso- potamia where the irrigation and subsequent salinisation of arable land led to changes in land use, including deforestation, and, possibly, ultimately to the collapse of the Babylonian empire (Roorda et al. 2012). Similar problems were found on Easter Island where a lack of ability to shape a social-economic-political system that would avoid the exhaustion of forest resources essential for survival led to the demise of the entire island population (Nemetz 2013).
As a full discussion of the historical context is not possible here, Table 1.1 illustrates the parallel nature of developments within the societal triangle as underpinned by literature over the last 60 years. Often environmental policies at the national level have been the result of twin pres- sure from international agreements at the regional (e.g. EU) or global level (e.g. UN) and from grassroots (NGOs) and local governments (Buckingham 2008b). The previous image of business as part of the societal triangle illustrates the linkages.
The development of environmental issues in terms of perception, recognition, activism and policy in the 1960s was accompanied by a substantial expansion of higher education in Europe, North America and Australasia (Buckingham 2008b). Concrete developments in business and management education regarding environmental issues are more recent, where MBA programmes and business schools have leant on geography, politics, economics and law, amongst others, to reflect a changing business environment.
The historical context of corporate environmental disasters and of the public policy environ- ment provides an overview of the development of sustainability thinking and practice, allowing us to frame the book as offering a sustainable alternative to conventional, more unsustainable, ways of managing organisations across complex layers and levels, as discussed further in the following.
The most common usage of sustainability is in relation to sustainable development. Although the emphasis of the book is on business, environment and sustainability, it is important to
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CHAPTER 1 Introduction 6
acknowledge the developments behind it. The World Commission on Environment and Devel- opment (WCED) whose work culminated in the Brundtland report of 1987 (WCED 1987) was tasked to re-examine environment and development problems found in conventional growth and development models and to come up with proposals for solutions. It is here we find an acknowl- edgement that economic growth brings risk of environmental damage (WCED 1987: 40).
Sustainable development is defined in the report as development that “seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future”
(WCED 1987: 40). This carries within it the concept of “needs” and the idea of “limitations”
both from technology and society on how able the environment is to meet present and future needs (ibid. 42). The commission’s work gave rise to new definitions and concepts in a variety of disciplines, informing systems thinking (see Elliott 2013 for a further discussion). It provided an alternative response to conventional economic development and growth focused on gross domes- tic product (GDP) and per capita income, where many developing countries had experienced large debt service requirements to such an extent that essential investment in human capital (health and education) had to be reduced or curtailed (Hackett 2011). The goal of economic development to improve the well-being of members of society could not be met, and out of this failure the sustain- able development movement rose. Daly (2005) calls this uneconomic growth – when increases in production come at the expense of resources and well-being.
The WCED report (1987: 40) acknowledges that there is “no single blueprint of sustainabil- ity” to be found as the systems for economies and societies, and their ecological circumstances dif- fer widely. The book here recognises this, and whilst not delivering exact roadmaps for corporate environmental sustainability, provides tools companies can use, adapting it to the context of their industry, size, location and service or product offering.
The WCED provided a focal point following the emergence of the environmental movement and of policy responses to corporate environmental disasters. It led the way for the Rio Earth Summit in 1992 where the Business Council for Sustainable Development was founded and where we see the first serious corporate moves towards environmental sustainability. Sustainable development as a whole can be seen to emphasise sustainable society, which can be illustrated as a pyramid of environmental value, social value and economic value (or ecology, equity and economy), whereas sustainable organisations can be viewed through the three dimensions of profit, people and planet, as advocated by the triple bottom line concept of John Elkington in his landmark book, Cannibals with Forks (1997). The individual level is rarely discussed (Cavagnaro and Curiel 2012) though could arguably be the most significant, where leadership for sustainability is situated with care for me reflecting society’s concern for economic value and organisations’ concern for profit, while care for me and you parallels society’s interest in social value and organisations’ interest in people and care for all the environmental value for society and the planet for organisations. This synthesis of levels and dimensions is summarised in Figure 1.2.
As business organisations are made up of individuals, it is important to acknowledge how interdependent and interlinked these three levels of sustainability are – the societal, organisa- tional and individual form the complex context in which corporate environmental sustainability is situated and aimed for, often alongside social and economic sustainability, which Kleine and von Hauff (2009) illustrate in an integrative sustainability triangle (see also Lüdeke-Freund et al.
2018). The focus of the book is mostly on the organisational level, but acknowledging this com- plexity and the context is important. To the facets of people, planet and profit, Roorda et al.
(2012) add time and space. This complex context is thus embodied by a number of characteristics emphasising the dynamic environment in which sustainability works.
Overview of book 7
FIGURE 1.2
Three levels of sustainability
Source: Cavagnaro & Curiel, 2012, Greenleaf Publishing, used with permission.
Dynamic complexity
The context of sustainability is simultaneously global and local in terms of its scope – effects of climate change, for example, are felt locally and action to address it can be executed locally, but such a fragmented approach is only partially effective – a global approach is needed (Whit- field and McNett 2014: 14). Managing for environmental sustainability in a global context is a complex task, characterised by four attributes: multiplicity, ambiguity, interdependence and flux which are further considered by Lane et al. (2004):
j
j Multiplicity refers to the increasing number of stakeholders, perspectives and constraints.
j
j Interdependence refers to the increasing levels of interconnectedness of these stakeholders.
j
j Ambiguity refers to the lack of clarity concerning cause-effect relationships, and information and facts being subject to multiple interpretations.
j
j Flux is the result of the dynamic complexity and movements between the first three attributes.
As such, this book cannot provide the ultimate or definite answers or solutions, but it will intro- duce students and readers to the complexity of the task and provide tools and concepts with which to manage environmental sustainability across different challenges and corporate func- tions. What the book covers in particular is outlined in the following.
OVERVIEW OF BOOK
Part I: FoundationsFollowing this introductory chapter, part one provides the foundations for the remainder of the book, presenting both theoretical and practical underpinnings. Chapter 2 will look behind the scenes, introducing both science and economics in order to make the case for why business should
CHAPTER 1 Introduction 8
be concerned about environmental sustainability. Concepts covered in this chapter include exter- nalities, earth system and ecosystem services, the (five) capitals model and how this can be con- ceptualised into strong and weak sustainability. The distinction between natural and man-made capital can help measure ecosystem services through footprints and thereby carrying capacity, showing the limits of conventional growth models.
Chapter 3 translates these theoretical perspectives into principles and foundations for envi- ronmentally sustainable businesses. In doing so, we consider the tensions between various per- spectives, such as inside out and outside in and between competitiveness and environmental objectives, asking how the political context handles issues such as externalities and ecosystem services (e.g. through environmental legislation) and what principles and philosophies guide companies and regulators fundamentally. Principles and philosophies underlying environmen- tally sustainable management, such as technocentric versus ecocentric modes of thoughts and standard-setting philosophies for environmental regulations, such as the precautionary principle, cost-benefit/risk analysis and the polluter-pays-principle, are introduced as well as the triple bot- tom line and life cycle analysis alongside eco-efficiency, mission zero and The Natural Step.
Chapter 4 looks at how the theoretical and philosophical foundations of the previous two chapters translate into practice – what models guide businesses (and other organisations) practi- cally and strategically? We start with strategic responses to sustainability as value creation rather than value destruction before looking at models that put sustainability into practice, whether it is conventional strategy frameworks (e.g. generic strategies, resource-based view) or sustainability focused ones such as The Natural Step framework and natural capitalism, which includes bio- mimicry. We provide further context and guidance by looking at how companies can be analysed and then managed according to which phase or stage of sustainability they are at. Sustainability initiatives in businesses are covered by way of examples and by way of process – how are goals defined, how is progress measured and how is change implemented – in an incremental or trans- formational manner and by whom (e.g. change agents).
Part II: Environmental Challenges
Part two highlights the major (but not all) environmental challenges society as a whole and busi- nesses in particular face. A number of avenues could have been taken here, particularly in light of the systemic nature of most environmental challenges. One possible classification could be to look at food, energy and water. Unsustainable use of resources could be another avenue. The chal- lenges selected explicitly or implicitly cover these topics in the respective chapters and are taken to be the ones most pertinent to business, albeit other interpretations are, of course, possible.
A separate introduction to the part provides further context here.
Chapter 5 covers climate change, which has implications for business from a variety of per- spectives, in particular with relation to energy use. The chapter offers a brief explanation and reminder of what climate change is and how it affects businesses. The focus then shifts to the impact of business on climate change and how businesses can reduce this impact by managing their greenhouse gas emissions and by providing opportunities for consumers and other businesses.
This is set within the context of general and regulatory responses to climate change – mitigation, adaptation and geoengineering, but also provides insights into the transition movement as an alternative model that builds up resilience of society and its businesses in the face of climate change.
Chapter 6 draws a link to the previous one by outlining the distinction between climate change and air pollution before setting out the foundations of pollution in terms of definition,
Overview of book 9 types, sources and categories. It then investigates the three major kinds of pollution of air, water and soil, identifying the role of businesses in causing pollution and in remedying it internally and externally. Links will be drawn to the related issues of water scarcity in the context of the trag- edy of the commons and the effect of climate change on water, demonstrating the interconnected nature of environmental challenges.
In Chapter 7, the final environmental challenge for businesses is waste, which is closely related to how resources are used. Environmental impacts are identified on the basis of the differ- ent types of waste and waste streams. The options for waste treatment are discussed within the context of waste hierarchies (e.g. reduce, reuse, recycle), where the principle of re-think can be a game changer for businesses. Concepts such as zero waste and waste as a business model are explored where products are designed with the end of life in mind and a move away from planned obsolescence is encouraged. The international nature of waste (e.g. transboundary movements) is highlighted as well.
Throughout this part, examples of how companies have addressed these challenges will draw the link between sometimes seemingly abstract challenges and theories, and concrete actions on the ground.
Part III: Corporate functions
Part three moves on to cover different corporate functions to illustrate how environmental sus- tainability is managed and put into practice in organisations, by looking at primary activities in the value chain in the first three chapters and then at supporting activities in the second three chapters. The introduction to part three provides more background to management and corpo- rate functions in general.
Chapter 8 covers supply chain management (SCM). This serves as a valuable general starting point as supply chains cross company boundaries beyond the focal firm, and as their manage- ment incorporates many corporate activities, thus illustrating the complexity of sustainability in practice. Following a brief overview of supply chain management and its environmental impact, network design, logistics and transportation, sourcing and procurement are covered and the chal- lenges and opportunities for sustainability identified. Emphasis is put on collaborations and part- nerships with suppliers. Alongside tools and concepts such as the circular economy, closing the loop, cradle-to-cradle, life cycle analysis and reverse logistics, the role of labels and certifications in SCM is explored as well – a topic that re-occurs from different perspectives in later chapters (e.g. marketing and environmental management systems).
In Chapter 9, sustainable production and operations are a natural follow-up to supply chains.
The chapter starts with the concepts of extended producer responsibility and product steward- ship, indicating what kind of re-thinks and shifts are necessary (e.g. in research and development (R&D)) for cleaner and greener production such as for example shifting from cradle-to-grave to cradle-to-cradle in designing products (design for environment, linear to circular), shifting from providing a product to provision of a service, and shifting technology from part of the problem to part of the solution. Life cycle analysis is discussed as a core concept for this shift to happen, which is set within the context of industrial ecology that allows interdependencies to be identified where waste for one organisation becomes the input for another, as inspired by biomimicry – mimicking nature.
Chapter 10 looks at the final link of the supply chain, how environmentally sustainable products and services are marketed to consumers. The chapter highlights the limits to corporate sustainability by drawing the link to the wider context of sustainable (or ethical) consumption,
CHAPTER 1 Introduction 10
discussing the tension between consumers’ willingness to go green and their willingness to pay as well as the tension of sustainability’s goal of reduced use of resources and marketing’s goal of encouraging consumption. The role of credibility with regard to labels and greenwashing is explored after giving some thought to the distinction between marketing sustainable products or services and using sustainable marketing techniques. The chapter also includes material on com- munication, choice editing as well as the use of the 4P marketing mix for sustainability and its alternative, the 4Cs.
Chapter 11 addresses the question of how businesses can manage environmental sustain- ability systematically by using information technology and management systems. Environmental management is set in contrast to conventional economic management. The Deming cycle of con- tinuous improvement provides a starting point for looking at particular environmental manage- ment systems such as the ISO 14000 series and the Eco-Management and Audit Scheme (EMAS).
The theme of labels and certifications is re-visited in this context. The link between information systems and sustainability reporting and accounting is then made, which is covered in the follow- ing chapter.
In Chapter 12 on accounting, the focus is on how environmental accounting and reporting along with environmental auditing facilitates advanced management for sustainability as it pro- vides, structures and organises information in a way that allows organisations to understand the true costs and impacts of their products and processes on the environment. It enables the mea- surement of environmental sustainability and therefore facilitates the management of progress in this regard. The chapter will offer a brief overview of environmental/sustainability accounting before outlining some principles and frameworks, such as integrated reporting and the global reporting initiative. As finance and costs are an important influence in business decisions regard- ing sustainability, some space is dedicated to this as well.
Chapter 13 on human resource management draws together the third part as without the commitment of an organisation’s workforce, environmental sustainability is unattainable. The role of leadership is explored, looking particularly at change agents and the importance of pio- neers and innovators in finding entrepreneurial solutions to sustainability challenges in organ- isations (intrapreneurship, environmental entrepreneurship). As the sustainability profession is still an evolving one, the role of training and development in light of the need for multiple skills (e.g. project management) and their accreditation as well as the ability to understand systems is emphasised. Some pointers regarding corporate governance and the role of incentives such as for example linking the achievement of sustainability objectives to pay and bonuses in encouraging sustainability are also included in the chapter.
In part three examples play an important role as well as exercises, putting students and other readers in the position of designing and organising strategies and functions for environmental sustainability. International aspects of functions are highlighted in “spotlight on” sections and examples (e.g. international logistics and spotlights on examples from selected countries across the world).
CONCLUSION
Chapter 14 pulls the foundations, challenges and functions together, allowing students to encounter the management of environmental sustainability in a comprehensive way. A brief overview of sectors and their classifications opens this chapter before the integrative nature of the case studies encourages readers of the book to think, plan and act holistically, systemati- cally and strategically when putting sustainability into practice. The first case study is a longer,
Differentiations and limitations 11 three-part case study on a start-up manufacturing reusable coffee cup, whilst the second case study is of medium length and on a festival illustrative of services industries. The third case study is a short scenario set in the primary sector of soya farming. The case studies are set out in a way that allows the use of the individual cases and components (where applicable) after each part of the book (e.g. case study 1 part A after Chapter 4, case study 1 part B after Chapter 7 and so on) or the use of the whole case.
Chapter 15 is the final chapter and provides an outlook into the future for the environmental challenges and the corporate functions covered, drawing together the first chapter on the past and present with food for thought about what the future will hold for environmental sustainability in organisations. Are the current frameworks and regulations as covered in part one sufficient to tackle the complexities of environmental sustainability, or are new models and changes in culture, leadership and governance required in order to foster sustainable business behaviour? How are sustainability managers being prepared for this? A focus on the importance of an interdisciplinary approach and collaborations within and across functions and corporate levels (local vs global) as well as across organisations concludes the final chapter of the book.
SUGGESTED USES
The book at hand aims to offer a thorough preparation or introduction to students and interested professionals for an employment context in which environmental sustainability is increasingly important for commercial and other organisations, whether for regulatory, financial or ethical reasons. It can be used in a variety of ways:
j
j as an introductory book to environmental sustainability for business and management students or for non-management students,
j
j as a core textbook to be used in a course focusing on the subject matter,
j
j as a supplementary or complementary textbook in a course addressing all aspects of sustainability (social, economic, environmental), or
j
j as additional reading in an integrative or capstone course covering organisational sustainability challenges across corporate functions and disciplines.
The structure is designed with flexibility in mind for how the parts and chapters can be used.
Whilst the book can be used and read from start to finish, the parts and chapters could be used individually as well. The foundations set in part one serve as a general context and basis for the remainder of the book, where several of the concepts covered re-occur in more detailed or more applied form. The chapters of part two and three can therefore be used interchangeably in terms of order, and chapters could be used alternatingly (e.g. Chapter 8 followed by Chapter 5; suc- ceeded by Chapters 9 and 6; or Chapters 8 and 9 followed by Chapter 5; then Chapters 10 and 11 before Chapter 6).
DIFFERENTIATIONS AND LIMITATIONS
There are several ways in which this book is different from others in this area. It is not simply another book on sustainability, but a book on business and environmental sustainability, firmly placing it within a corporate and/or management context (though it can be used in a non-corpo- rate context as all organisations, whether for-profit or non-profit, have to be managed and should be managed in an environmentally sustainable way).
