BUSINESS

SUSTAINABILITY,
GOVERNANCE AND
ETHICS
Sridevi Nair
School of Business and Management
CHRIST (Deemed to be University)
 • This is a core course offered in the sixth trimester
to the students across all specializations.
• The purpose of the course is to instill a
sustainability, good governance and ethical-
COURSE oriented mindset and aspiration among students, at
DESCRIPTION the broad level.
• To inspire them to apply it further in their
respective streams, career and lives, so as to
contribute to the society and the planet as holistic,
responsible individuals and ethical business
leaders.
 • To identify sustainability issues from business
perspective.
• To analyze stakeholder’s perspectives and
sustainability in a supply chain context.
COURSE
OBJECTIVES • To Plan for Sustainable business models through
appropriate tools and develop value-based
leadership.
• To evaluate the role of various stakeholders in
ensuring corporate governance.
• To formulate the code of ethics for corporate setup.
SUSTAINABLE BUSINESS MANAGEMENT STRATEGIES
SUSTAINABILITY

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• Sustainability implies meeting current needs in a way that does not undermine future welfare
 BRUNDTLAND COMMISSION

Center for Our

Common Future
Brundtland
(1988)
Commission (1983)
World Commission
on Environment
and Development
• Also known as the Brundtland Report
• Published in October 1987
• By the United Nations through the Oxford
University Press
 SUSTAINABLE DEVELOPMENT

• As development that meets the needs of the

present without compromising the ability of
future generations to meet their own needs.
SUSTAINABLE DEVELOPMENT AN OXYMORON

• 1970s: Resource scarcities was the major concern

• Early 21st century: the means we have used to overcome resource scarcity were
causing environmental issues
• Do needs change with time? Can we predict the needs of the future?
• Are needs the same in all cultures?
PRINCIPLES OF A SUSTAINABLE BUSINESS
MODEL

• Triple Bottom Line (TBL)

• The societal impact of a company/business
and/or its commitment in building a better
society.
• How businesses manage, monitor, and report
their resource and energy consumption as well
as waste and emissions output.
• Sustainable practices will also drive better
revenue
- Network for business sustainability
UN GLOBAL COMPACT

• Principle 1: Businesses should support

and respect the protection of
internationally proclaimed human
rights; and
• Principle 2: make sure that they are not
complicit in human rights abuses.
• Principle 3: Businesses should uphold the
freedom of association and the effective
recognition of the right to collective
bargaining;

• Principle 4: the elimination of all forms of

forced and compulsory labour;

• Principle 5: the effective abolition of child

labour; and

• Principle 6: the elimination of

discrimination in respect of employment
and occupation.
• Principle 7: Businesses should support a precautionary
approach to environmental challenges;

• Principle 8: undertake initiatives to promote greater

environmental responsibility; and

• Principle 9: encourage the development and diffusion of

environmentally friendly technologies.
• Principle 10: Businesses should
work against corruption in all its
forms, including extortion and
bribery.
UN GLOBAL COMPACT
 ENABLERS, RISKS, OPPORTUNITIES AND CHALLENGES OF
SUSTAINABLE BUSINESSES

• Choose an Indian company.

• Provide a brief description of the business scenario that the firm functions in.
• What were the factors that enabled adoption of sustainable practices?
• What were the risks of moving towards sustainable practices?
• Identify the challenges they faced while implementing sustainable practices
• Identify potential opportunities for the firm
 FRAMEWORK

• Introduction: Overview of the company, sector

• Sustainability practices
• Title: Times new roman, 16 size
• Challenges and enablers in implementing
• Heading: Times new roman, 14 size
• Risks of implementing the sustainability practices • Body: Times new roman, 12 size
• Opportunities for improvement or new practices
• Your suggestions
INDICATORS OF SUSTAINABILITY

• Reduce emissions/air pollution

Objective

• Reduce mercury emissions from electric

utility steam generating units
Goal

• Mass of mercury emitted per unit of energy

Indicator delivered.

Metric • Grams of mercury per kilowatt-hour.

• A sustainability indicator can be defined as a measurable aspect of environmental, economic, or

social systems that is useful for monitoring changes in system characteristics relevant to the

continuation of human and environmental well being

Environment/
Social Economic
Ecological
GRI REPORT
BUSINESS OPPORTUNITIES FOR INTEGRATING SUSTAINABILITY ISSUES WITHIN
THE CORE BUSINESS STRATEGY.

Set Sustainable
Stakeholder Design and execute
development
Analysis implementation plan
policies

Develop a
Develop standards
supportive corporate
and measures
culture
• Stakeholder Analysis
• Identify all parties
• Needs and expectations
• Highlight conflicting needs
Recognizing the critical link between a healthy environment and sustained economic growth, we are
committed to leading the telecommunications industry in protecting and enhancing the environment.
Such stewardship is indispensable to our continued business success. Therefore, wherever we do
business, we will take the initiative in developing innovative solutions to those environmental issues
• Set
that Sustainable
affect our business. development policies
The operating units of the Dow Chemical Company are committed to continued excellence,
We will:
• Setenvironmental
leadership
• Integrate
basic valuesconsiderations
and stewardship in protecting
intoand
ourconserving the environment
business planning for future generations.
and decision-making processes,
This product
including is a primary management responsibility as well as the responsibility
methods and of every employee
Set targetsresearch
• worldwide. and development, new manufacturing
We are sensitive to the concerns of the public and accountable to them for our
acquisitions/divestitures
decisions
• Policy
• Identify, and
assess actions.
statement
and We environmental
manage believe in the responsible integration
risks associated of operations
with our environmental
and and economic
products
considerations
throughout in all to
their life cycle, decisions affecting
reduce or ourthe
eliminate operations.
likelihoodWeof are continuously
adverse reducing our
consequences
• Set clear
emissions to all measurable
protect humanlegal objectives
health
• Comply with applicable andand the environment.
regulatory Our and,
requirements goal to
is the
the extent
elimination of wastesitand
we determine
emissions.
• Alignadopt
appropriate, more stringent
business standards
strategies to thefor the protection policy
development of our employees and the
communities in which we operate
• Establish
• Establish a formalmonitoring
Environmental plans
Protection Program, and set specific, measurable goals;
• Design and execute implementation plan

• Communicate the BS policy to stakeholders

• Analyze and modify the business processes

• Modify structure to create accountability

• Modify daily operations

• Develop a supportive corporate culture

• Encourage employee participation

• Reward desirable behaviour

• Continuous learning

• Active and visible involvement of seniors

• Develop standards and measures

• Meaningful reports

• External reports

• Internal monitoring processes

SUSTAINABLE SUPPLY
CHAIN
Supply chain
Vs.
Value chain
“a set of three or more entities (organizations or individuals) directly involved
in the upstream and downstream flows of products, services, finances, and/or
information from a source to a customer.”

 “organizational sustainability consists of three components: the natural

environment, society, and economic performance and at the intersection of
these triple bottom of line, there are activities that organizations can
engage in which not only positively affect the natural environment and
society, but which also result in long-term economic benefits and
competitive advantage for the firm.”
 Incorporate environmentally conscious
thinking in all processes in the supply chain
 “a supply chain that closes the loop of upstream and
downstream flows of products and materials by
recycling and recovering used-items and re-entering
them in production cycles and engages in
sustainability-conscious practices taking goals from
all three dimensions—economic, environmental and
social—of sustainable development into account,
which are derived from the customer and stakeholder
requirements.” 
 LIFE CYCLE ANALYSIS

• What did Unilever promise?

• How did Herman Miller calculate DfE scores?

• Can sustainability be achieved alone?

• Life cycle analysis (LCA) is a method used to

evaluate the environmental impact of a product

through its life cycle encompassing extraction and

processing of the raw materials, manufacturing,

distribution, use, recycling, and final disposal.

Identifying and quantifying Assessing the impact of
energy and materials used, those energy and materials
and wastes released into the used and released into the
environment environment

Identifying and evaluating

opportunities to affect
environmental improvements
• An LCA is a systems-based, quantitative method for evaluating the
environmental impact of a product.

• It is a tool used to assess the stages and impact of a product’s entire life, from
raw material extraction (cradle) to waste treatment (grave).

• An LCA typically does not include:

– Social impacts

– Economic impacts
LCA BY LEVI’S
This Photo by Unknown Author is licensed under CC BY
• Levi Strauss & Co. (LS&Co.) conducted the apparel industry’s first lifecycle assessment (LCA)
study in 2007 to assess the entire lifecycle impact of a core set of products.

WORLD’S PRIMARY COTTON • Cotton production

FUNCTIONAL UNIT PRODUCING
COUNTRIES
STUDIED • Fabric production
Levi’s® 501® jeans
• United • Brazil
States
• Garment manufacturing
• China
• India • Australia
CONSUMER • Packaging
MARKETS INCLUDED • Pakistan
• Sundries
PRIMARY DATA SOURCES
• United States • Transportation &
• United Kingdom
• LS&Co.
• France distribution
• 11 supplier factories
• China • 6 fabric mills • Consumer care
• End of life
THE LIFECYCLE OF A LEVI’S® 501® JEAN
CATEGORY DESCRIPTION UNITS

CLIMATE CHANGE Global warming potential of greenhouse gases released to the kg CO2-e
environment
WATER INTAKE Freshwater taken from the environment liters

WATER Net freshwater taken from the environment minus liters

CONSUMPTION water returned to the same watershed at the same
quality or better
EUTROPHICATION Oxygen depletion as a result of nitrogen and g PO4-e
phosphorous deposit into freshwater or marine
environments
LAND Total land occupied to support the product system assessed m2-yr
OCCUPATION
ABIOTIC A measure of the depletion of non-renewable resources mg Sb-e
DEPLETION that includes fossil energy, metals and minerals
IMPACT ANALYSIS
 COTTON AND CONSUMER HABITS HAVE A BIG IMPACT ON
WATER AND ENERGY USE

General Findings:
• Water Consumption: Fiber production, predominantly cotton, contributes by a wide margin to water
consumption.
• Climate Change: Consumer care and fabric production are the most significant phases for climate
change impact and energy.
• Expanded Scope: By expanding our scope to include the leading cotton-producing countries, we’ve
seen the water consumption from cotton cultivation increase to 68% of the total impact.
•Consumer Use Findings:

• Washing every 10 times a product is worn instead of every 2 times reduces energy use, climate
change impact, and water intake by up to 80% .
• Significant differences between regions:
‐ Consumers in China are leading the pack: when it comes to laundering their jeans, they mostly
wash in cold water and air dry
‐ American consumers had the highest water intake and use of non-renewable energy. The good
news is that Americans more prevalently use cold water
‐ Consumers in the UK and France mostly air dry their jeans but they use more hot water than
American or Chinese consumers
‐ Consumers in the USA, UK and France wash their jeans more frequently than in China
 WHO IS A STAKEHOLDER?

• Stakeholders are a group or individuals with the power to influence as well as an interest
in the corporate's action.

• Stakeholders depend on the organisation to fulfil their own goals and in turn the
organisation depends on Stakeholders.

• Stakeholders may be internal or external.

• Internal stakeholders may include employees, owners

• External stakeholders include customers, suppliers, financial institutions and unions

STAKEHOLDER
ENGAGEMENT
MODELS
 Identify

Think and plan

Act, review Analyze and

and report plan

Prepare and engage

Design and Strengthen

engage capabilities
Respond and measure
 SUSTAINABLE BUSINESS MODELS

• A sustainable business model can be defined as a business model that creates,

delivers, and captures value for all its stakeholders without depleting the natural,
economic, and social capital it relies on.
1. Diversity: The firm needs a diverse set of resources, people and investments to be resilient.

2. Modularity: Organizations need to be less interdependent, and focus on modularity (keeping functions
separate), so they can be insulated from shocks.

3. Openness: Resilient firms must know what’s going on outside their boundaries.

4. Slack resources: Firms that can ride storms must allow for a little more time to accommodate new ideas,
scenarios, and shifts in thinking. Slack resources, both assets and capabilities, are always considered as very
important to shape a sustainable business model.

5. Matching cycles: Understanding the rhythms of business and the environment will allow the firm to
synchronize with them meaningfully, and not overreact to what is likely just a cycle.

https://www.nbs.net/articles/five-principles-of-a-sustainable-business-model
 PRODUCT SERVICE SYSTEM (PSS)

• Cohesive delivery of products and services.

• A means to enable collaborative consumption of both products and services.
• The aim is pro-environmental outcomes.
• Driven by the understanding that services in combination with products could provide higher
profits than products alone.
• It stems from the idea that companies must offer the function of the product, not the product
itself.
• Also called servitization of a product or the productization of a service.
 ADVANTAGES

• More sustainable economy

• Increase in jobs in the service sector
• Lowers the financial threshold that customers must meet to acquire expensive equipment
• Opportunity to innovate in the market
• Greater alignment between consumers and business needs
• Creation of a long-term relationship between consumers and companies
• Reduction of problems related to the reuse of waste
• eliminates consumer burden of end-of-life disposal and recycling
 CHRIST
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TRIPLE LAYERED BUSINESS MODEL CANVAS

● The Triple Layered Business Model Canvas is a tool for exploring sustainability-oriented business
model innovation.
● It extends the original business model canvas by adding two layers: an environmental layer based on a
lifecycle perspective and a social layer based on a stakeholder perspective.
● When taken together, the three layers of the business model make more explicit how an organization
generates multiple types of value economic, environmental and social.
● Visually representing a business model through this canvas tool supports developing and communicating
a more holistic and integrated view of a business model; which also supports moving towards more
sustainable business models

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ELEMENTS IN A BUSINESS MODEL CANVAS

A manufacturing enterprise that changes from the fabrication of products to offering PSS solutions and
transforms its supplier base into an ecosystem of network partners will have to analyze and adapt the
elements in all model parts to create a new and competitive BM.
● Value proposition
● Customer segments
● Channels
● Customer relationships
● Key resources
● Key activities
● Key partners
● Revenue streams
● Cost structure Excellence and Service
 CHRIST
PROFIT Deemed to be University

Adopted from: Osterwalder A, Pigneur Y (2013) Business model generation: a handbook for visionaries, game changers, and
challengers. Wiley, Hoboken, NJ Excellence and Service
 CHRIST
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PEOPLE

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PLANET Deemed to be University

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TOOLS FOR TRANSFORMATION –INNOVATION, COLLABORATION AND
TECHNOLOGY

Technology Collaboration

Innovation
 CHRIST
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FRUGAL INNOVATION
• The process of reducing the complexity and cost of a good and its production.
• Smart, cheap solutions to people’s biggest problems.
• In India, potter Mansukh Prajapati has created a fridge made entirely of clay that uses no
electricity and can keep fruits and vegetables fresh for many days.
• In Africa, if your cell phone battery runs low on power, you can often find resourceful
entrepreneurs who’ll recharge it with their bicycle.
• A reason for the increased interest in Frugal Innovation Bottom of the Pyramid (BoP) discourse
in innovation management and business organization literature in the early 2000s.
• “When commodities are scarce, people are forced to go within themselves to tap that most
abundant all-natural resource — human ingenuity — and use it to solve problems.”- Navi
Radjou

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External Collaboration

Research

Internal Knowledge and Resource Base

Analytical Detailed Redesign and Distribute and

Identify Design design produce market
Opportunity Understand
consumer
recognition Context
needs Efficiency enhancing measure
Complementary innovations

Compassion

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TRASHPRESSO

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● Client: MINIWIZ CO. & Jackie Chan Group

● Location: April 2017-Shanghai, China / September 2017-London, UK
● TRASHPRESSO is the world’s first mobile plastics and fabric waste recycling plant. It was designed to
tackle waste by creating a mobile, automated, and self-powered, industrial grade recycling platform.
●  The TRASHPRESSO plant is housed in a 40-foot container platform that is movable anywhere by a
trailer truck. Unlike existing recycling systems, the TRASHPRESSO plant runs on solar power, making
it deployable off-grid.
●  Once stationed, the TRASHPRESSO container opens much like a satellite unpacking in orbit.
● Trash is collected locally, then washed, shredded, melted, and molded through an automated process.
The water required for cleaning the trash is reused by being cycled back into the process.
● The output of the TRASHPRESSO’s recycling process is up-cycled architectural tiles. They showcase
how to present circular economy manufacture in a portable way.

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NIKE LABS

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PROCESS IMPROVEMENT THROUGH BIOMIMICRY

● “Bioinspired design” is a term that is generally accepted as

an umbrella category for design and engineering

approaches, including biomimicry, that use biology as a

resource for solutions. 

● An important factor that differentiates biomimicry from

other bio-inspired design approaches is the emphasis on

learning from and emulating the regenerative solutions

living systems have

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PRINCIPLES OF BIOMIMICRY

1. Nature runs on sunlight

2. Nature banks on diversity
3. Nature uses only the energy it needs
4. Nature demands local expertise
5. Nature fits form to function
6. Nature curbs excesses from within
7. Nature recycles everything
8. Nature taps the power of limits
9. Nature rewards cooperation

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MEASURING AND REPORTING SUSTAINABILITY

• Sustainability reports on the triple bottom line of people, planet, and profit.
• Global climate change, stakeholder requirements, corporate values, economic risks, and government
regulations are all factors driving the increase in sustainability reporting.
• Radical transparency is an emerging trend in which organizations publicly display the positives and
negatives of their companies.
● Sustainability measurement and reporting comes in many shapes and forms;
○ Risk assessment
○ Life-cycle assessment
○ Cost-benefit analysis
○ Triple bottom line reporting
○ Environmental, social and governance (ESG) reporting
Excellence and Service
INDICATORS OF SUSTAINABILITY

• Reduce emissions/air pollution

Objective

• Reduce mercury emissions from electric

utility steam generating units
Goal

• Mass of mercury emitted per unit of energy

Indicator delivered.

Metric • Grams of mercury per kilowatt-hour.

https://www.menti.com/7uojy
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 COMMON
MEASURES
• Planet
• Global warming potential
• Acidification potential
• Ozone depletion potential
• Aerosol optical depth
• Eutrophication potential
• Ionization radiation potential
• Waste treatment
• Freshwater use
• Energy resources use
 COMMON
MEASURES
• People
• Employment generated
• Equity
• Health and safety
• Education
• Housing/living conditions
• Community cohesion
• Social security
 COMMON
MEASURES
• Profit
• Gross domestic product
• Trade balance
• Local government income
• Profit, value and tax
• Investments
SUMMARISE
• Traditionally the systems were linear while the planet is finite

• Corporations are now bigger than the governments

• 99 percent of the goods that come through our production systems is trash n 6 months

• Planned obsolescence = Designed for the dump

• Perceived obsolescence = Personal value

• Now we have a lot of stuff but lesser time for things that make us happy

• Linear model=> Circular economy/Closed loop