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MayGodNourishusBoth,
MayweWorkTogetherwithEnergyandVigour,
MayourStudybeEnlightening,notgivingrisetoHostility,
Om,Peace,Peace,Peace.
IntroductiontoSustainableDevelopment&
CorporateSustainability
TataL.RaghuRam,XLRI
1. Individualresearchonsustainability:
15%
Chooseasustainabilitytopic/issueofyourchoice.Critically
analyzetheissuethroughresearchandsubmitastateoftheart
articlewhichwillbenolongerthan4pages+references.You
shouldhavereadatleast10journalarticlesandreferences
shouldbecited.Submissionwillbeduewithin30daysof
commencementofthecourse(July15,2015).
2.Attendance:
10%
3.Groupprojectandpresentation:
(15%forwriteup+10%forpresentation)
25%
4.Quizzes:
10%
5.Endterm:
40%
Grading:Gradingnormasperstudentmanual.
No repeat quizzes will be conducted.
Zero tolerance towards plagiarism. All written
submissions and group projects/ppts shall pass
through antiplagiarism software. Plagiarism will
attract F grade.
Zero tolerance towards use of laptops, mobile
phones, sleeping in the class, reading some other
courses material, proxy attendance etc.
No student will be allowed into the class after
attendance is taken.
SustainableDevelopment AContext&Direction
AResourceintensiveeconomy
The20thcenturywasatimeofremarkable
progressforhumancivilization
Unparalleledwealthcreationandhumanwell
being
Theextractionofconstructionmaterialsgrew
byafactorof34
Oresandmineralsbyafactorof27
Fossilfuelsbyafactorof12
Biomassbyafactorof3.6
Dr.RaghuRamTata,XLRIJamshedpur
Dr.RaghuRamTata,XLRIJamshedpur
Exponentialgrowthofresourceextraction
CommodityPriceIndices
Consequences?
Expansion&benefitsofconsumptionarenot
equitablydistributed
Dr.RaghuRamTata,XLRIJamshedpur
Poorest
Fifth
Consequences?
Profoundenvironmental&socialimpacts
Overexploitationofresources
climatechange
Pollution
landusechanges
lossofbiodiversity
Dr.RaghuRamTata,XLRIJamshedpur
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Dr.RaghuRamTata,XLRIJamshedpur
SustainableDevelopment
Developmentthatmeetstheneedsof
thepresentwithoutcompromisingthe
abilityoffuturegenerationstomeettheir
ownneeds Brundtland Committee1987
Amacroeconomicconcept
Anthropocentric
Inter&intragenerational
equity
Ambiguity
18
Abusinessapproachthatcreateslongtermshareholdervalue
byembracingopportunitiesandmanagingrisksderivingfrom
economic,environmentalandsocialdevelopments.
Corporatesustainabilityleadersachievelongtermshareholder
valuebygearingtheirstrategiesandmanagementtoharness
themarketspotentialforsustainabilityproducts
andserviceswhileatthesametimesuccessfullyreducingand
avoidingsustainabilitycostsandrisks
DowJonesCompany,1999
AmicroeconomicdefinitionthatcomplementstheBrundtlands
macroeconomicconcept
Growth&Development
HermanDalyillustratesthefundamentaldifferencebetween
growthanddevelopmentbythesedefinitions:
Growth the quantitative increase in size or throughput of
biophysical matter. Daly has argued economic growth is
based on the limitless transformation of natural capital into
manmade capital.
Development the qualitative improvement in economic
welfare from increased quality of goods and services as
defined by their ability to increase human wellbeing. This
infers promoting increased economic activity only insofar as
it does not exceed the capacity of the ecosystem to sustain
it.
Anorganismssurvivaldependsontwocriticalfunctionsfrom
itsenvironment:provisionofresourcesandabsorptionof
wastes.
Source
Provideresources:
Water
Cleanair
Nutrients
Environment
Organism
Sink
Absorbwastes
andbyproducts
Thesameprincipleappliesatlargerscales,e.g.,toacompany,industry,or
economy.
Hownatureworks?
Natureworksincycles
No
Waste
Thereisnowaste whatis
unusedbyonespecies
becomesnutrientsforthe
next
Thesunsenergydrivesthe
process:
Greencelledplantsusing
photosynthesiscreate
netconcentrationand
structure
Take
Make
Waste
Only 6% of
material flow
ends up in
products
Thisindustrialsystem,operatingonaneverlargerscale,is
embeddedinandaffectingnaturescycle.
CorporateResponsibility?
Oftheworlds100largesteconomicentities,44are
corporations.Inthetop150,theproportionrisesto
59%.
The44companiesgeneratedrevenuesofUS$6.4
trillion@11%ofglobalGDP.
Largerthanthecombinedeconomiesof155
countries
Together,theyemployedover13.5millionpeople,
@0.4%oftheworldseconomicallyactive
population.
(2009)
Dr.RaghuRamTata,XLRIJamshedpur
WithpowercomesRESPONSIBILITY
Compellingbusinesscaseforsustainability?
Orgoingbeyond,transcendingintoSustainabilityasthepurposeofbusiness?
XLRIsVision
Apassionforacademicexcellence
Uncompromisinghumanvalues
Asensitivesocialconscience
Anabidingcommitmenttoimprovingthequalityofthelifein
organizationsandsociety
Integrity
XLRIJamshedpurwasthefirstIndianBSchool toendorseUNGCsPRiME
FatherAruppe CentreforEcology&Sustainability(FACES)
CentreforRuralDevelopment
Socialentrepreneurshipfund
XLRIiscommittedtoachievecarbonneutralstatusinfiveyearswitha
capitalcommitmentofRs.75lakhs.
MiltonFriedmansargument
TheNobelPrizewinningeconomistMilton
Friedmanargues:
Fewtrendscouldsothoroughlyundermine
theveryfoundationsofourfreesocietyasthe
acceptancebycorporateofficialsofasocial
responsibilityotherthantomakeasmuch
moneyfortheirstockholdersaspossible
1962
Stakeholdertheory
Thebottomlineorprofitisnottheonlyconcernforthe
company.Stakeholdertheoryintegratesresourcebased
views,marketbasedviews,politicalviews,andsocietal
views(Freeman,1986).
R.EdwardFreemanisanAmericanphilosopher
CreatingSharedvalue
MichaelE.PorterandMarkR.Kramer
Societalneeds,notjustconventionaleconomicneeds,
definemarkets,andsocialharmscancreateinternalcosts
forfirms.
Companiescancreateeconomicvaluebycreatingsocietal
value.
byreconceivingproductsandmarkets
redefiningproductivityinthevaluechain
buildingsupportiveindustryclustersatthecompanyslocations
SHAREDVALUECREATION Porter&Kramer,2011
Mutualismisthewaytwo
organismsofdifferent
speciesexistinarelationship
inwhicheachindividualbenefits
fromtheactivityoftheother.
Stakeholders:WinWinoutcomes
Pleasemeetthemeanestshrewdeststrategistontheplanet
Costreduction,Riskavoidance,Revenuegeneration,Innovation,ethical
business
+SocialConsent+
TheartandscienceofManagement
hastocatchupwithsustainability
Freeman
Risk Management
Friedman
Environmental
Compliance
End-of-pipe
Limit impact of current
activities
Pollution prevention;
Management systems
Redesign to eliminate impacts
of activities
Strategic integration
Change activities and design
of industrial system
Kondratiev cycles
Economicgrowthcomesinwavesofprosperitydrivenbynewtechnology&structural
economicchanges