Sustainability Management Overview
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Sustainability Management Overview

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What is a significant challenge faced by fair trade initiatives?

  • They often result in corruption and ineffectiveness (correct)
  • They are universally low in price
  • They encourage excessive consumption of coffee
  • They include all plantations worldwide

    • What does the concept of Corporate Social Responsibility (CSR) entail for corporations?

  • Avoiding accountability for societal impacts
  • Focusing solely on maximizing profits
  • Meeting economic and legal responsibilities only
  • Considering ethical and discretionary responsibilities as well (correct)

    • What is one of the components of the Triple Bottom Line (TBL)?

  • Product innovation
  • Social responsibility only
  • Environmental sustainability (correct)
  • Profit above all

    • What must a responsible company be willing to do in relation to its customers?

    <p>Refuse certain customers for social or environmental reasons</p> Signup and view all the answers

    Which initiative provides guidelines for businesses regarding their ethical responsibilities?

    <p>UN Global Compact</p> Signup and view all the answers

    What is a common characteristic of businesses like Co-operatives and B-corps?

    <p>They create an ecosystem of stakeholders including local communities.</p> Signup and view all the answers

    Which factor is often prioritized over environmental objectives by most companies?

    <p>Long-term survival of the company.</p> Signup and view all the answers

    What is an essential step for companies to demonstrate environmental responsibility?

    <p>Taking steps to mitigate harm and reduce resource use.</p> Signup and view all the answers

    Which policy framework is aimed at promoting global sustainable development?

    <p>Agenda 21.</p> Signup and view all the answers

    What is the primary challenge in implementing a Broader Social Responsibility Model in large organizations?

    <p>Difficulty in achieving the model's objectives.</p> Signup and view all the answers

    Which of the following companies demonstrates values beyond just maximizing wealth?

    <p>Ben and Jerry’s.</p> Signup and view all the answers

    What is one aspect of environmental accounting as a policy response?

    <p>Developing management systems to address environmental impacts.</p> Signup and view all the answers

    Which of the following is NOT one of the UN Sustainable Development Goals mentioned?

    <p>Market Growth.</p> Signup and view all the answers

    What are upstream emissions in the context of Scope 3 emissions reporting?

    <p>Emissions from the use of the product by the consumer</p> Signup and view all the answers

    Which principle emphasizes taking preventative action despite uncertainties?

    <p>The Precautionary Principle</p> Signup and view all the answers

    Why is environmental management considered necessary?

    <p>To address unsustainable situations like biodiversity loss and climate change</p> Signup and view all the answers

    What does eco-footprinting measure?

    <p>The amount of land necessary to support a specific entity</p> Signup and view all the answers

    How does integrated environmental management differ from other approaches?

    <p>It considers both environmental and human issues and their connections</p> Signup and view all the answers

    What is a potential disadvantage of internet reporting for environmental data?

    <p>Websites can be easily altered and not verified</p> Signup and view all the answers

    Which of the following is an example of the Polluter Pays Principle?

    <p>A factory being taxed for emissions produced</p> Signup and view all the answers

    What is the focus of the prevention principle in environmental management?

    <p>Taking action at an early stage to prevent problems</p> Signup and view all the answers

    What is the main focus of BS7750, the first major environmental management standard?

    <p>Management practices and audit trails</p> Signup and view all the answers

    What distinguishes EMAS from ISO 14001?

    <p>EMAS incorporates ISO 14001 requirements and mandates improvements and reporting</p> Signup and view all the answers

    What is a key requirement of ISO 45001?

    <p>Training and safety manuals to reduce injuries</p> Signup and view all the answers

    What is the main advantage of incorporating sustainability managers into business governance?

    <p>To integrate sustainability with overall business strategy</p> Signup and view all the answers

    What does a sustainable business model aim to achieve beyond economic value?

    <p>Create social and environmental value</p> Signup and view all the answers

    What is one potential cost associated with EMAS registration?

    <p>Costs for staffing and reporting</p> Signup and view all the answers

    What is a core aspect of transforming dis-value into value in sustainable business practices?

    <p>Identifying and addressing waste in processes</p> Signup and view all the answers

    Which standard does NOT require specific reporting obligations?

    <p>ISO 14001</p> Signup and view all the answers

    What is an important aspect of shifting towards circular business models?

    <p>Enhancing resource efficiency and sustainability</p> Signup and view all the answers

    What does ISO 26000 focus on?

    <p>Social Responsibility Standards</p> Signup and view all the answers

    What was a significant outcome of the Fukushima Disaster?

    <p>Heightened awareness of the risks associated with nuclear energy</p> Signup and view all the answers

    What was one of the main consequences of the Deepwater Horizon Disaster?

    <p>Long-term environmental and social damage</p> Signup and view all the answers

    What does the Hydro Alunorte Disaster illustrate regarding environmental conditions?

    <p>The importance of responsible corporate behavior</p> Signup and view all the answers

    What health issues were linked to the Texaco (Chevron) Disaster in Ecuador?

    <p>Health impacts on nearby human populations</p> Signup and view all the answers

    Which disaster raised concerns about safety standards in nuclear production?

    <p>Chernobyl Disaster</p> Signup and view all the answers

    In relation to environmental pollution, what issue did the Hydro Alunorte disaster expose?

    <p>Lack of corporate responsibility for pollution</p> Signup and view all the answers

    What major health concern resulted from the Union Carbide - Bhopal India Disaster?

    <p>An increase in chronic health conditions among locals</p> Signup and view all the answers

    What kind of environmental damage was primarily caused by the Deepwater Horizon spill?

    <p>Long-term damage to marine ecosystems</p> Signup and view all the answers

    What is the primary goal of the European Green Deal?

    <p>To achieve climate neutrality by 2050 and protect nature</p> Signup and view all the answers

    Which of the following is NOT considered an ethical strategy for investment?

    <p>Profit Maximization</p> Signup and view all the answers

    What does the EU Eco-Management Audit Scheme (EMAS) require that ISO 14001 does not?

    <p>Annual sustainability reporting and public disclosure</p> Signup and view all the answers

    How does the EU Taxonomy help investors?

    <p>It establishes criteria to evaluate environmental and social sustainability</p> Signup and view all the answers

    Which aspect of environmental risk assessment is primarily evaluated?

    <p>Potential harm caused to the environment</p> Signup and view all the answers

    What is a key characteristic of ethical/sustainable investment?

    <p>Inclusion of ethical and environmental goals</p> Signup and view all the answers

    What is the primary function of the European Sustainability Reporting Standards (ESRS)?

    <p>To provide a structured approach for reporting sustainability initiatives and impacts</p> Signup and view all the answers

    What does ethical investment primarily depend on?

    <p>Principles and values of the investor</p> Signup and view all the answers

    Study Notes

    Sustainability Management

    • Treating the planet as if we intended to stay
    • Effects of current business practice -> short-term focus on financial/economic goals rather than long-term focus on environmental and social issues
    • Trying to change business practices to reduce problems -> Environmental accounting, altering priorities, and environmental management
    • Developing businesses that include the social and environmental aspects -> fair trade, EM, and reporting, measuring environmental impacts, and ethical/sustainable investments
    • Understanding the business implications of environmental issues
    • Sustainability Management is needed because the current situation/world is not perfect and mainstream accounting and finance theory fails to include environmental and social impacts and risks.
    • Systems Theory: everything is interlinked, therefore we can't fully understand business without understanding nature and an overall interdisciplinary understanding of social, environmental, and economic issues.

    Economics of Renewable Energy

    • Solar Power
      • New utility-scale solar PV has lower generation costs than new coal & natural gas plants => solar is becoming more economical (LCOE = Levelized Cost of Energy) => competitive
      • Energy Payback < 1.5 years
      • Benefits: very low GHG emissions, renewable resource/“unlimited supply,” higher efficiency/less wasted energy (compared to fossil fuels and wood), avoids hidden costs (e.g., respiratory disease, toxic waste, etc)
      • China is currently the largest producer and installer of PV panels
      • Lots of potential for installation expansion in India
      • US is the leader in “thin film” technology (First Solar)
      • Solar panels are more economical/popular in sunnier and warmer areas (e.g., Spain, Greece, Chile, Florida, Arizona, Nevada, etc)
      • Environmental Impacts
        • Significantly lower impacts than coal, oil, natural gas
        • Toxic chemicals are used in solar cell production -> concerns with recycling/disposal
        • Possible conflicts with water use and land use
        • Low emissions in air/water during operation; still emissions in production
        • Types of Solar: Photovoltaic panels (thin-film, silicon-based, etc); solar thermal; passive heat; rooftop solar
        • PV requires "daylight" not "sunlight"
        • Solar panels have more pure substances, which make them easier to recycle than wind turbine blades
        • Many interests to balance (Climate crisis, secure energy supply, affordable electricity prices, avoid loss of nature, geopolitical issues, local needs, and priorities)
    • Wind Power
      • New onshore wind installations have lower generation costs than new coal & natural gas plants
      • On-shore wind is often slightly cheaper than Solar PV (unless in a prime location for solar)
      • On-shore wind is currently more economical in Canada/Northern Europe (where there is less sun and more snow)
      • China is the biggest installer of wind power, and has 4 of the top 5 wind manufacturers (e.g. Goldwind and Envision)
      • Vestas and Siemens Gamesa are large European wind manufacturers (GE Renewable Energy is another top manufacturer (US/France))
      • The US is the second leading wind power installation country (on-shore)
      • Benefits: low GHG emissions, enough wind potential to power all global electricity needs, economically competitive, relatively fast and easy to construct, low environmental externalities
      • Approximately 30% capacity/load factor => efficiency of electricity generation (solar PV is more efficient -> less energy loss)
      • Many different sizes of turbines; currently developing larger off-shore turbines and onshore too
      • Testing alternatives like floating wind or airborne wind too.
      • Off-shore wind: higher operating costs (maintenance), but popular because of stronger winds, more space, and less opposition -> large potential (in the US), and costs are coming down

    Fair Trade and Social Responsibility

    • EU Social Taxonomy: decent work, adequate living standards and wellbeing for end users, and inclusive and sustainable communities and societies
    • Modern slavery -> illegal cheap labor for profit-maximizing companies
    • Difficult to quantify (definition of slavery, documentation, etc), but is present in every country
    • Common in cocoa, cotton, and other agricultural industries & manufacturing
    • Abuse of human rights
    • Slavery is worse in some regions because of a cultural tradition of slavery/forced marriage (e.g. the Middle East)
    • What can be done:
      • Buying fairtrade products
      • Improving education
      • Fighting poverty
      • Insisting on fairness and social responsibility in business
      • Enforcement from police and customs against human-trafficking
      • Providing honest and good job opportunities for poor people

    Environmental Management Accounting and Investment

    • Ethical Investment: approach to investing that includes ethical/environmental goals in addition to conventional financial criteria
    • Sustainable Investment: uses the EU environmental and social taxonomy to define a sustainable fund
    • Socially Responsible Investment (SRI) = investing money in companies that have a positive social (including environmental) impact -> promotes environmental management and reporting

    Environmental Policy, Objectives, and Reporting

    • Business matters a lot!
    • Company/Firm Objectives -> three different views
      • Shareholder Model/Theory = maximizing the value for shareholders
      • Stakeholder Model/Theory = considers the interests of other groups that impact or are impacted by the firm, not just shareholders/investors
      • Broader Social Responsibility Model/Theory = firm should overall benefit society instead of damaging it for profits
    • Environmental Responsibility of Business: recognize problems, take steps to mitigate harm, reduce/restrain use of resources, operate in an ecologically sustainable manner, etc.
    • Any size firm can do sustainability reporting.
    • Global, Regional, and National Policy
    • Agenda 21 (United Nations - Sustainable Development Policy)
      • UN Sustainable Development Goals (address massive social and environmental challenges)

    Environmental Management

    • Environmental accounting can focus on the national, firm, or division level
    • Environmental issues affect accounting, management accounting, and financial accounting
    • Environmental costs:
      • Direct costs
      • Indirect costs
      • Hidden costs
      • Contingent costs
      • Image/relationship costs
      • Societal costs
    • Full cost accounting: attempt to measure ignored environmental costs
    • Material Flows of a company/product
    • Compliance
    • Performance against law, codes of practice and ethical / environmental policy
    • Reporting
    • Uniform reporting standards
    • Many/many companies are reporting
    • Reporting standards/directives (e.g., EU Eco-Management Audit Scheme (EMAS), Global Reporting Initiative (GRI), EU Corporate Sustainability Reporting Directive (CSRD), etc)
    • Environmental management systems

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    Description

    This quiz explores the principles of sustainability management, emphasizing the importance of integrating environmental and social considerations into business practices. It delves into the impact of current financial-focused strategies and highlights the need for responsible, long-term business approaches that prioritize environmental health and social equity.

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