Doughnut Economics: Planetary and Social Boundaries

Doughnut Model

• Nine planetary boundaries are defined as limits that shouldn't be crossed to maintain Earth's stability, including climate change, biodiversity loss, and deforestation
• Economist Kate Raworth added social boundaries to the model
• Social boundaries include ensuring basic needs like food, health, and education
• The Doughnut Model aims to stay within safe environmental limits while ensuring social well-being
• A tenth boundary of "novel entities" includes human-made chemicals and materials like plastics
• Novel entities pose a risk by accumulating in nature and harming ecosystems
• The current economy follows a "take, make, waste" model of resource extraction, production, and disposal
• A circular economy, which reuses, repairs, and recycles products, is needed for sustainability
• A circular economy reduces waste, pollution, and pressure on natural resources

History: Modern Times and the Industrial Revolution

• In 1637, René Descartes advocated for humans to become "masters and possessors of nature"
• Descartes' view reflected a growing belief in progress, science, and control over nature
• Resources were perceived as unlimited, and human intelligence was expected to drive continuous improvement
• The Industrial Revolution, fueled by these ideas, led to benefits like factories, medicine, and technology
• The Industrial Revolution also caused overexploitation of nature, leading to today's environmental crisis

The Loss of Nature and Shifting Perspectives

• By the mid-20th century, rapid industrial growth led some to realize nature was disappearing due to pollution, deforestation, and urbanization
• The Romantic Movement celebrated untouched nature through poets and artists
• The Conservation Movement in the U.S. resulted in Yellowstone National Park (1872)
• The National Parks Movement was established to protect natural areas

Ecology as a Science and Philosophy (1930s-1940s)

• In 1935, Arthur Tansley introduced the ecosystem concept, where living creatures interact with their environment as a system
• Aldo Leopold developed "The Land Ethic," advocating for humans to see nature as a community to belong to rather than exploit
• There was a shift from an anthropocentric view (humans at the center) to an ecocentric view (humans as part of a larger ecosystem)

Towards Environmental Governance (1948-1971)

• In 1948, the International Union for Conservation of Nature (IUCN) was founded
• The IUCN became the first major environmental organization
• In the 1960s, people in rich countries started worrying about pollution and environmental damage
• The World Wildlife Fund (WWF) was created in 1961 to protect endangered species
• Greenpeace was founded in 1971, focusing on activism against pollution and nuclear testing
• Governments began passing environmental laws, especially in the U.S. and Germany
• The OECD introduced the "polluter pays" principle in 1971
• The "polluter pays" principle meant that companies causing pollution should pay for the damage

Key Environmental Actions in 1972

• 1972 was a turning point for global environmental action
• The United Nations Environment Programme (UNEP) was created to lead international efforts
• The European Community launched its first environmental action plan
• The first environmental action plan recognized that pollution crosses borders
• The U.S. created the Environmental Protection Agency (EPA) to regulate pollution
• The first U.N. Conference on the Human Environment was held in Stockholm, initiating serious discussions on sustainability
• The Limits to Growth report warned that resources are not unlimited
• The Limits to Growth suggested that economic growth must be reconsidered

First Global Environmental Agreements

• CITES (Convention on International Trade in Endangered Species) was the first major environmental treaty in 1975
• CITES aimed to protect wildlife
• Today, there are over 250 similar agreements worldwide

Environmental Disasters and Awareness

• During this period, disasters shocked the world and increased media attention
• The Amoco Cadiz oil spill occurred in France in 1978
• The Three Mile Island nuclear accident occurred in the U.S. in 1979
• The Bhopal gas leak in India (the worst industrial disaster) happened in 1984
• The Chernobyl nuclear explosion occurred in the USSR in 1986
• These tragedies made governments and the public more aware of environmental risks

Major Environmental Policies

• The Global 2000 Report warned about biodiversity loss and species extinctions in 1980
• The U.N. Convention on the Law of the Sea set rules for using oceans sustainably in 1982
• The World Charter for Nature was adopted, promoting respect for ecosystems

The Sustainable Development Concept: Rio 1992

• In 1987, the Brundtland Commission introduced sustainable development
• Sustainable development is meeting present needs without compromising future generations
• In 1988, the IPCC (Intergovernmental Panel on Climate Change) was created
• The IPCC studies climate change
• In 1992, the Rio Earth Summit led to key environmental agreements on climate change, desertification, and biodiversity
• Agenda 21 was launched as a global action plan for sustainability
• The "Common but Differentiated Responsibility" principle was established
• The "Common but Differentiated Responsibility" established that developed countries are more responsible for environmental issues

Global Climate and Biodiversity Agreements Post-1992

• The Kyoto Protocol, created in 1997, set targets for reducing greenhouse gas emissions
• The Nagoya Protocol, created in 2010, aimed to protect biodiversity
• The U.S. has often been reluctant to ratify global environmental agreements

Rio+20 (2012) and COP Conferences

• Rio+20 (2012) reinforced commitments but didn't make major breakthroughs
• COP (Conference of the Parties) meetings continue to shape global climate action
• A future with COP 29 and beyond depends on stronger commitments from all nations

Business Joining Sustainability Efforts

• Before the 2000s, businesses viewed environmental issues as government problems and focused only on profit
• The World Business Council for Sustainable Development (WBCSD) was created in 1995
• The WBCSD represents businesses in sustainability discussions
• Multinational Companies (MNCs) like the Johannesburg Summit signed agreements with NGOs in 2002
• The agreements marked their first major commitment to environmental action

Shift in Business Thinking

• Companies understand they must balance profit with responsibility toward the planet and people
• The Paris Agreement (2015) and Sustainable Development Goals (SDGs) provide global guidelines for businesses to transition to sustainability
• Change is still too slow, requiring organizations like WBCSD to push companies to lead the way in ecological transition

WBCSD’s Vision 2050

• The world is facing climate change, biodiversity loss, and inequality
• The COVID-19 pandemic showed inter-connectivity and how unprepared we are for global shocks
• WBCSD's Vision 2050: Time to Transform aims to create a world where 9+ billion people live within planetary limits by 2050
• To achieve this, businesses must drive transformation in key areas: energy, transportation & mobility, living spaces, products & materials, financial services, connectivity, health & well-being, water & sanitation and food

Aligning with SDGs and the Paris Agreement

• The Vision 2050 plan is aligned with the Sustainable Development Goals (SDGs) and the Paris Agreement
• Each of the nine transformation pathways includes ten action areas
• The ten action areas help companies shift their strategies and operations for real impact

Mindset Shifts for Businesses

• Reinventing Capitalism shifts beyond profit to reward true value creation for people and the planet
• Building Long-term Resilience prepares for future challenges, not just short-term gains
• Taking a Regenerative Approach goes beyond "doing no harm" to actively restore and improve ecosystems.

Collaboration in Business

• Driving real change needs business to work with scientists, policymakers, investors, innovators, and consumers
• Unprecedented collaboration can achieve everyone living well within planetary limits by 2050

CSR Integration Pyramid

• The CSR Integration Pyramid is a framework on how companies evolve in Corporate Social Responsibility (CSR)
• It moves from philanthropy to embedding sustainability into strategy and operations

Levels of CSR

• Level 1: Traditional CSR involves basic activities like donations and volunteer programs with limited systemic changes
• Level 2: Low Compliance involves adopting international standards (e.g., ISO, UN frameworks) without full integration
• Level 3: High Compliance involves systematic CSR with strict implementation of standards and reporting
• Level 4: Embeddedness involves integrating sustainability into business strategy, focusing on key risks and opportunities
• In the Embeddedness Phase, CSR is no longer an add-on but a core element of business success

EU Environmental Governance: Phase 1

• The main focus between 1974 and the mid-1990s was on environmental issues
• Over 250 technical directives were created, but not fully implemented in national laws
• Phase 1 used a "command-and-control" approach, with government setting rules for businesses

Key Milestones in Phase 1

• In 1987, The Single Act made environmental protection a full objective of the Single Market
• In 1992, the Maastricht Treaty established Sustainable Development for the EU and allowed the EU to sign international agreements

EU Environmental Governance: Phase 2

• Phase 2 (late 1990s-2010s) integrated approach considers environmental protection, business, and society together
• It sought to balance sustainability with economic and market objectives

Key Phase 2 Developments

• The 6th Environment Action Plan ("Environment 2010: Our Future, Our Choice") was created in 2001-2010
• The 6th Environment Action Plan included diversification of policy tools like taxation and Emission Trading Systems (ETS)
• A sectorial approach addressed key areas like transport, energy, and agriculture
• There was a challenge in finding the right balance between environmental protection and market needs
• Multi-Stakeholder Decision Making involved businesses and non-business stakeholders

The Göteborg Sustainable Development Strategy (2009)

• The EU developed a Triple Bottom Line (TBL) approach, focusing on environmental protection, social equity and cohesion, and economic prosperity
• The EU aimed to be a key player internationally, fulfilling global responsibilities as a signatory to Multilateral Environmental Agreements (MEAs)

Sustainability and Business in the EU

• Corporate Social Responsibility (CSR) was defined in 2001
• CSR definition requires companies to voluntarily integrate social and environmental concerns into their operations and relationships with stakeholders

EU Environmental Governance: Phase 3

• Phase 3 (2011 and beyond) shifts CSR and sustainability into strategic business thinking and emphasizes smart regulation

Key Phase 3 Developments

• In 2011, the EU Commission defined CSR in terms of social, environmental, ethical, and human rights concerns integrated into core business strategy
• CSR practices have fundamental guiding principles like the precautionary principle, polluter pays, and extended producer responsibility
• The Europe 2020 Strategy aimed for smart, sustainable, and inclusive growth
• The Europe 2020 Strategy addressed both creating sustainable economies and tackling social and environmental issues, as well as economic development
• The Better Regulation Agenda (mid-2010s) emphasized fewer, impactful regulations
• Included cross-sectoral frameworks

From Soft Law to Hard Law in the EU

• EU transitioning from soft law (guidelines) to hard law (binding regulations)
• Transition involves ambitious goals and complex legislative framework

Key Elements of the Transition

• The Green Deal aims for climate neutrality by 2050: no net emissions of greenhouse gases (GHG)
• "Fit for 55" aims to cut GHG emissions by at least 55% by 2030 (vs. 1990 levels)
• There's a focus on transparency, double materiality, and improving business conduct
• The Non-Financial Reporting Directive (NFRD) (2014) is evolving into the Corporate Sustainability Reporting Directive (CSRD)
• Companies will have to report on financial, environmental, social, and governance (ESG) factors
• The Green Taxonomy classifies activities that can be considered environmentally sustainable
• The Sustainable Finance Disclosure Regulation (SFDR) requires financial institutions to disclose how their investments align with sustainability goals
• The Corporate Sustainability Due Diligence Directive (CSDDD) is for a sustainable supply chain
• The CSDDD makes companies more accountable for human rights and environmental impacts across their entire supply chain
• There are political and practical challenges, including lobbying
• There's a focus on aligning environmental sustainability with social cohesion and economic competitiveness

CSRD: Corporate Sustainability Reporting Directive

• CSRD is an EU law requiring large companies and listed SMEs to regularly report on their environmental and social impacts
• The CSRD aims to standardize how companies report their non-financial data
• The directive affects approximately 50,000 companies across Europe
• Align reports with CSRD covering the 2024 financial year starting January 1st 2025
• It applies to large companies (over 250 employees, €40M turnover, or €20M in total assets) + all listed companies
• Micro-enterprises (under 10 employees or under €20M turnover) are exempt
• The CSRD, is part of the EU effort to improve transparency in sustainability and responsible business practices
• The CSRD builds on the NFRD (Non-Financial Reporting Directive) requirements for large companies to report information on: environmental protection, social responsibility, human rights, anti-corruption, and diversity

CSRD Updates

• Double Materiality must report on how sustainability risks affect the company and the company's impact on society
• Forward-looking Information must include targets and progress
• Intangible Assets must cover: social, human, and intellectual capital
• Sustainability Risk Impact must disclose how sustainability risks might affect financial performance
• It Aligns with Sustainable Finance Disclosure Regulation (SFDR) and EU Taxonomy Regulation
• The CSRD aims to enhance transparency and provide clearer, more forward-looking sustainability data

EU Governments

• The European Commission starts the process of creating new laws and ensures they are followed
• The Commission works based on guidelines from the Council of the EU (government leaders)
• Consultation involves the Commission doing studies and talking to groups to gather opinions
• The Ordinary Procedure is that both the Council of the EU and Parliament need to agree on the proposed law
• Various groups with different interests attempt to influence the outcome and lobbying
• If the Council and Parliament don't agree, the Commission helps to resolve disagreements
• The EU is the only place in the world where environmental laws are made and enforced at a supra-national level

"Participatory Democracy" in the EU

• "“Participatory Democracy" involves active involvement from citizens, not just voting for representatives
• Citizens can directly participate in decision-making on issues that affect them
• Citizens have a say in laws and policies via public consultations, referendums and community meetings
• The system's goal gives people more control and a voice in the decisions

Lobbying in the EU: Introduction

• There are approx. 25,000 - 30,000 lobbyists in Brussels
• Interest representation means activities aimed at influencing decisions made by the EU institutions
• Lobbying is important because the EU tries to make decisions through consensus and compromise
• Lobbying at the European level grew after changes in the EU in 2009
• Trade associations were the main players, now non-business groups and companies are powerful
• The EU is working to make lobbying more formal and structured

Article 11 of the Treaty on European Union

• Focuses on citizen participation
• EU institutions are required to give citizens and representative groups the chance to engage in discussions
• There should be two types of participation: ordinary citizens and specific groups that represent larger interests
• The EU should have open, transparent, and regular dialogues with these groups
• The European Commission is supposed to consult with concerned parties to ensure that the EU's actions are clear and consistent
• This process is still in progress

How Lobbying in the EU Evolved

• The European Parliament gained power in 1999 with the Co-decision procedure
• The EU has widened the scope of legislation
• The EU deals with more issues, including social, environmental, health, and regional matters
• The EU introduced Qualified Majority Voting
• The EU created the Transparency Register in 2011

Private, Public and Government Interests in the EU

• Private: Trade Associations, Pan-European Groups, Individual Companies and Legal Consultancies
• Public: NGOs and Think Tanks
• Government: Non-EU Embassies and Regional Delegations
• Public interest groups (like NGOs and think tanks) have more influence but private interests remain the strongest

The European Commission's legislative powers

• The Commission prepares laws by using green, white papers, internet public platform consultations for public input
• The Commission is seen as "elite pluralism"

The European Parliament committees and lobbying access

• Parliament's committees shape laws
• Access to 5,000 accredited lobbyists who are allowed to meet with members
• Since 2019 their must be disclosed meetings with lobbyists

The Council of Ministers

• Lacks transparency unlike the Commission and Parliament as it has no official registration system for lobbyists
• National governments have influence here

The Inter-Institutional Agreement (May 2021)

Key points:

• It Includes Councils Permanent Secretariat in transparency efforts
• Now have increased Incentives to register for lobbyists
• Both clients and lobbyists now have to register and are accountable

However

• It's Voluntary and not Mandatory
• There's No Obligation for Ex-EU Staff to not register new staff
• Meeting/conferences/campaigns/research all need to be registered
• Legal advice, social dialogue and personal activities are exempted
• EU members, organisations, authorities and religious parties are all exempt

To ensure true transparency and a participatory democracy in the EU its important to limit

• Elite Pluralism
• Historic club and new entrants who want to have a say

EU Chocolate Lobby Case Summary

• Was an EU dispute between 1973-2000 about chocolate production and the use of vegetable fats in chocolate
• The EU consumes most of the world’s cocoa and the issue was new and old members differed on chocolate ingredients
• A 1973 directive banning vegetable fats in chocolate for some but not all EU members
• The EU commissioned new changes but EU parliament did not agree
• A New vote finally happened in 2000
• Vegetable fats were allowed up to 5% and labels required

EU Chocolate Lobby Key Takeaways

• Big Chocolate Business benefited from the rule
• Small chocolate artisans couldn't compete and freedom of choice
• The European Commission pushed through
• Council of Ministers had stronger influence than the Parliament
• Countries like Germany and the UK supported due to tradition reasons
• EU is now focusing on sustainable cocoa production

Climate Change

• Measuring CO2 emissions for environmental impact divided into 3 scopes
• Direct emissions by owned company scopes 1
• Indirect emissions in company from purchased products scopes 2
• All company product and operations emissions scopes 3
• Scope 3 and why it's challenging
• Is difficult and complex since they are outside of its direct control
• Scope 3 has small focus therefore

Climate change - Mitigation v Adaptation

• Focus on reducing the causes of climate change the lowering CO2 emissions and adopting sustainable habits.
• Focuses on adjusting to the changes, like dealing with climate impacts and resource scarcity is Adapting
• Challenge is to both

Sustainability Terminology

• Reducing the amount of greenhouse gases emitted compared to the equivalent removed climate neutrality (no net impact.)
• Offset remaining emissions and reduce is Net-Zero
• Compensating emissions is Offsetting
• Climate positive means even more reduced than emitted to help reverse the climate change