GTCU2043 Corporate Sustainability and Industry Innovation (CSII) AY 2024 - 2025 Sem 1 PDF

GTCU2043 Corporate Sustainability and Industry Innovation (CSII) AY 2024 – 2025 Sem 1 1 课程目标： 课程预期学习成果 （ CILOS ） 成功完成课程后，学生应该能够 CILO Upon successful completion of the course, students should be able to: Identify major su...

GTCU2043 Corporate Sustainability and Industry Innovation (CSII) AY 2024 – 2025 Sem 1 1 课程目标： 课程预期学习成果 （ CILOS ） 成功完成课程后，学生应该能够 CILO Upon successful completion of the course, students should be able to: Identify major sustainability issues and discuss various measurements and tools that are used to assess the comparative sustainability. CILO 1 确定主要的可持续性问题，并讨论用于评估相对可持续性的各种衡量标准和工具。 Evaluate important business issues as they relate to sustainability for contributing to a better society; CILO 2 评估与可持续发展相关的重要业务问题，为更美好的社会做出贡献 ; Use multi-disciplinary skills to solve complex sustainability problems in their workplace through the understanding and application of innovation and communication concepts; CILO 3 通过理解和应用创新和沟通概念，使用多学科技能解决工作场所中复杂的可持续性 问题 ; Relate business sustainability principles to corporate responsibility and identify new approach in corporate sustainability reporting and communication to potential stakeholders. CILO 4 将企业可持续发展原则与企业责任联系起来，并确定企业可持续发展报告和与潜在 利益相关者沟通的新方法。 2 Assessment methods: Assessment Methods Weighting Due dates Class Participation 10% Every week, every lecture Individual Assignment 1 10% Week 4, 5 p.m. 27th Sept 2024. Individual Assignment 2 10% Week7, 5 p.m. 25th Sept 2024. Group Project – Final 25% Week 12 TBA Report Group Project – 15% Week 13 – Week 14 Presentation Final Exam 30% TBA 3  定义 Sustainability. 解释 the three dimensions （三个维度） of sustainability. 讨论 the origin （起源） of sustainability. 解释 the IPAT equation. 讨论 human consumption patterns （消费模式） and the rebound effect （反弹效应）. 了解 the complexity （复杂性） of sustainability issues and the challenges （挑战） for sustainability. 解释概念 : corporate social responsibility (CSR), 企业社会责任 stakeholders, 利益相关者 triple bottom line, 三重底线 The UN Global Compact, 联合国全球契约 4 Lecture 1: Sustainability 介绍 Chapter 1  What is Sustainability? - definition - 1 Sustainability is derived from two Latin words: sus which means up and tenere which means to hold. In its modern form it is a concept born out of the desire of humanity to continue to exist on planet Earth for a very long time, perhaps the indefinite future. Sustainability is, hence, essentially and almost literally about holding up human existence. (Theis & Tomkin, 2012, forward, para 1). 6  What is Sustainability? - definition - 2 The Brundtland Commission - 世界环境与发展委员会（ World Commission on Environment and Development, WCED ） issued its report: Our Common Future in 1987 defining Sustainable Development as “... development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (http://www.un-documents.net/wced-ocf.htm) “ 永续发展是一发展模式，既能满足我们现今的需求，同时又不损及后代子孙满足他们的需求。” The report uses the terms sustainable development, sustainable, and sustainability interchangeably, emphasizing the connections among social （社会） equity, economic （经济） productivity, and environmental （环境） quality. The pathways for integration of these may differ nation by nation; still these pathways must share certain common traits:  the essential needs of the world's poor, to which overriding priority 7 should be given, and  What is Sustainability? - definition - 3 Thus there are three dimensions that sustainability seeks to integrate: economic, environmental, and social (including sociopolitical). The Brundtland report sees these three elements as part of a highly integrated and cohesively interacting system. Figure 1.1: Overlapping Themes of the Sustainability Paradigm: A depiction of the sustainability paradigm in terms of its three main components, showing various intersections among them. Source: International Union for the Conservation of Nature 7 8  What is Sustainability? - definition - Economic interests define the framework for making decisions, the flow of financial capital, and the facilitation of commerce, including the knowledge, skills, competences and other attributes embodied in individuals that are relevant to economic activity. Environmental aspects recognize the diversity and interdependence within living systems, the goods and services produced by the world’s ecosystems, and the impacts of human wastes. Social (or socio-political) dimensions refers to interactions between institutions/ firms and people, functions expressive of human values, aspirations and well- 9  Sustainable Systems Environment ► Healthy Environment Society ►Just Society Economy ►Efficient Economy Sustainable State  The origin of sustainability issue - 1 Environmental effects of continuing industrialization, and increasing population have caused world leaders as well as industry to pause and examine the directions in which both politics and economics need to travel… Natural phenomena are exacerbated/ worsen by irrational human actions. Book: The Limits to Growth: A report for the Club of Rome's Project on the Predicament of Mankind. Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens (a Potomac Associates book), 1972. It has become increasingly evident that current practices cannot be permitted to continue without substantive change. 11  The origin of sustainability issue - 2 The seriousness of the issue of Sustainability has become increasingly important and obvious over the last fifty years driven by 1) an increasing human population with 2) increasing per capita resource consumption on a planet which is after all finite. 1) The world population increased from approximately 3 billion in 1960 to about 7.0 billion in 2012. Total World consumption expenditures rose from about 171 Billion in 1960 to approximately 44,000 billions in 2010 expressed in 2012 U.S. dollars. 2) There are so many people consuming so many resources that both the world environment and human consumption will have to be managed with far more care and delicacy than has been necessary in all of the historical past. World resources are limited!! 12  The IPAT Equation -- How to measure global environmental impact IPAT expresses a balance among interacting factors. It can be stated as I=PxAxT (1.1) Where, I represents the impacts of a given course of action on the environment, P is the relevant human population for the problem at hand, A is the level of consumption per person(the average), and T is impact per unit of consumption (technology). Suppose we wish to project future needs for maintaining global environmental quality at present day levels for the mid-twenty-first century (i.e. I 2050 = I 2010). For this we need to have some projection of human population (P) and an idea of rates of growth in consumption (A). 13 Global population in 2050 will grow from the current (2010) 6.8 billion to about 9.2 billion, an increase of 35%. Worldwide Growth of GDP as a guide, an annual growth rate of 14  The IPAT Equation Thus if we wish to maintain environmental impacts (I) at their current levels (i.e. I 2050 = I2010), then 1+ With 3.5% growth rate for 40 35% years ~ 4 times of the level consumption. This means that just to maintain current environmental quality in the face of growing population and levels of affluence (supply of goods/services), our technological decoupling will need to reduce impacts by about a factor of five (the role of 15  Human consumption patterns and the rebound effect William Jevons (1835-1882) theorized that significant improvements in the efficiency of the steam engine had increased the utility of energy from coal and, in effect, lowered the price of energy, thereby increasing consumption. This is known as the Jevons Paradox ( 杰文斯悖论 ), the principle that as technological progress increases the efficiency of resource utilization, consumption of that resource will increase. (to know more about Jevons, see: 【第1讲：杰文斯】 我们为什么愿意加班？如何理解经济周期？为什么能源问题逃不出『杰文斯悖论』？_哔哩哔哩 _bilibili ） Increased consumption that negates part of the efficiency gains is referred to as rebound ( 反弹效应 ) , while overconsumption is called backfire （反效果 / 适得其反）. Such a counter-intuitive theory has not been met with universal acceptance, even among economists. Many environmentalists, 16  Human consumption patterns and the rebound effect If we let Q be the quantity of goods and services delivered (within a given time period) to people, and R be the quantity of resources consumed in order to deliver those goods and services, then the IPAT equation can be rewritten in a slightly different way as: which says simply that resources consumed are equal to the quantity of goods and services delivered times the resource intensity. 17  Human consumption patterns and the rebound effect The inverse of resource intensity [Q/R] is called the resource use efficiency, also known as resource productivity or eco- efficiency, an approach that seeks to minimize environmental impacts by maximizing material and energy efficiencies of production. Thus we can say: that is, Resources consumed are equal to goods and services delivered divided by eco-efficiency. Whether or not gains in eco-efficiency yield genuine savings in resources and lower environmental impacts depends on how much, over time, society consumes of a given product or service (i.e. the relative efficiency gain, ∆e/e ) must outpace the quantity of goods and services delivered ∆Q/Q. In the terms of Jevons 18  Human consumption patterns and the rebound effect Table 1.1 summarizes some recent findings from the literature on the comparative efficiency and consumption for several activities over extended periods of observation. Taken collectively these activities capture several basic enabling aspects of modern society: major materials, transportation, energy generation, and food production. In all cases the data show that over the long term, consumption outpaces gains in efficiency by wide margins. It should also be noted that in all cases, the increases in consumption are significantly greater than increases in population. It may not verify Jevons paradox, but does show a series of patterns that broadly reflect human consumption of goods and services that we consider essential for modern living and for 19 Historical efficiency 历史效率 Consumption trends 消耗趋势 ∆Q/Q ≥ ∆e/e ∆Q/Q ∆e/e 20 怎么测量 environmental impact? Environmental Impact: Resources use 资源使用 Water Land Energy Forest Mines (e.g., coal, metal, and salt…) Wild lives (e.g., mammals, birds, fish, insects…) Waste and pollution 废物和污染 Air pollution Water pollution Solid waste Climate change impact 21 怎么测量 environmental impact? Product life-cycle assessment 产品生命周期评估 制造 资源 分配 生命结束 使用 22  Economics 经济 sustainability Economics is the social science that studies the production, distribution, and consumption of goods and services in an economy. It studies how individuals, businesses, governments, and nations make choices on allocating resources to satisfy their wants and needs, trying to determine how these groups should organize and coordinate efforts to achieve maximum output (utilities, welfare…). A market economy ( 市场经济 ) is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. Based on the price mechanism （价格机制） in the market economy, every consumer would try to maximize his/her utilities and each firm would try to maximize its profit and 23 Market equilibrium 市场均衡 24  Economics 经济 sustainability Unfortunately, many conditions can lead to market failure （市场失调） such that the market outcome does not maximize social welfare (where marginal benefit does not equal marginal cost). People and firms do not always bear the full costs and benefits associated with the actions they take. When this is true economists say there are externalities 外部 , and individual actions do not typically yield efficient outcomes. A negative externality 负外部性 is a cost associated with an action that is not borne by the person who chooses to take that action. 与选择 采取该行动的人不承担的行动相关的成本。 A positive externality 正外部性 is a benefit associated with an action that is not borne by the person who chooses to take that action. --- 相关 的利益。 （ check more details and examples in notes ） 25 Efficiency 效率 and Externalities 外部 Market failure 市场失 灵 Social Social marginal ≠ marginal benefit cost Negative Externalities 负外 部性 Social marginal cost Private ¿ (e.g., external marginal cost environmental marginal cost) Positive Externalities 正外 部性 Social marginal Private benefit marginal ¿ (e.g., external benefit environmental marginal benefit) 社会边际利益 社会边际成本 26  What is Sustainability? - Summary - Sustainability is about a long-term perspective. 长远的视 角。 Sustainability is about how to protect the nature environment–our ecological system. 如何保护生态系统。 Sustainability is about carrying capacity. 承载能力 Sustainability is about ethics: justice, equity and responsibility (to achieve intra- and inter-generational equities). 道德 Sustainability is about stakeholders. 利益相关者 Sustainability is about balancing economic, social and environmental aspects. 平衡 3d 27  Corporate (Business) Sustainability 含义 “… conducting operations in a manner that meets existing needs, without compromising the ability of future generations to meet their needs and has regard for the impacts that business operations have on the life of the community.” (United Nations report on corporate governance, 2010) “… meeting the needs of the firm’s direct and indirect stakeholders (such as shareholders, employees, clients, pressure groups, communities etc.) without comprising its ability to meet the needs of future stakeholders as well” (Dyllick and Hockets 2002) Two important concepts regarding business sustainability: Stakeholders 28  What are Stakeholders? Stakeholder Any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization. An Interest A Right Ownership Stake Corporate Social Responsibility Actions of an organization that are targeted towards the achievement of a social benefit over and above: maximizing profits for its shareholders and meeting all its legal obligations. 29 30 The Pyramid of Corporate Social Responsibility The Triple Bottom Line What is bottom line? (profit or loss) Organizations pursue operational efficiency through detailed monitoring of their bottom line—that is, how much money is left over after all the bills have been paid from the revenue generated from the sale of their product or service – income statement is also called as profit and loss statement. The Triple Bottom Line includes: Financial Performance Social Performance Environmental Performance  The converge of corporate sustainability and CSR The Bottom Line The Triple Bottom Line  Challenges for sustainability - 1 Sustainability is the relationship between environmental damage and economic development. Sustainable development requires that the quality of the environment must be sustained, while the economy continues to develop. Is the term of sustainable development an oxymoron? Oxymoron: Combination of two contradictory terms, such as “only choice”, “jumbo shrimp...” 34  Challenges for sustainability - 2 The concept of sustainability has engendered broad support from almost all quarters. In a relatively succinct way it expresses the basis upon which human existence 人类存在 and the quality of human life depend: responsible behavior directed toward the wise and efficient 睿智高 效 use of natural and human resources. Such a broad concept invites a complex set of meanings that can be used to support divergent courses of action. Even within the Brundtland Report a dichotomy exists: alarm over environmental degradation that typically results from economic growth, yet seeing economic growth as the main pathway for alleviating wealth disparities (a very important social issue). 35   Challenges for sustainability - 3 This has led to the notion of strong sustainability, where tradeoffs 权衡 among natural, human, and social capital are not allowed or are very restricted, and weak sustainability, where tradeoffs are unrestricted or have few limits. Whether or not one follows the strong or weak form of sustainability, it is important to understand that while economic and social systems are human creations, the environment is not. Rather, a functioning environment underpins both society and the economy. This inevitably leads to the problem of metrics: what should be measured and how should the values obtained be interpreted, in light of the broad goals of the sustainability paradigm? 36  Challenges for sustainability - 4 Organizations such as the World Commission on Environment and Development, the Millennium Ecosystem Assessment, and several others including Twenty-first Session of the Intergovernmental Panel on Climate Change, the Organization for Economic Cooperation and Development, and the National Academy Report to Congress have all issued reports on various aspects of the state of society and the environment. The members of these groups are among the best experts available to assess the complex problems facing human society in the 21st century, and all have reached a similar conclusion: Absent the enactment of new policies and practices that confront the global issues of economic disparities, environmental degradation, and social inequality, the future needs of humanity and the attainment of our aspirations and goals are not assured. 37  Challenges for sustainability - 5 the World Commission on Environment and Development, https://sustainabledevelopment.un.org/milestones/wced the Millennium Ecosystem Assessment, https://www.millenniumassessment.org/en/index.html Twenty-first Session of the Intergovernmental Panel on Climate Change, https://www.ipcc.ch/ the Organization for Economic Cooperation and Development, http://www.oecd.org/ The National Academy Report to Congress https://www.nationalacademies.org/annual-report 38  The UN Global Compact The UN Global Compact is voluntary corporate citizenship 自愿企业 公民（非政府） initiative endorsing 10 key principles that focus on: Global human rights ( 人权 ) Welfare of workers around the world （劳工） Environment （环境） Anticorruption （反腐败） The UN Global Compact is not a regulatory instrument. 不是监管工具 It does not police, enforce, or measure the behavior or actions of companies. It relies on public accountability, transparency and the enlightened self-interest of companies, labor and civil society to initiate and share substantive action in pursuing the principles. https://www.unglobalcompact.org/  The UN Global Compact “…more and more we are realizing that it is only by mobilizing the corporate sector that we can make significant progress…The corporate sector has the finances, the technology and the management to make all this happen”. Kofi Annan (former UN Secretary General) 40  The UN Global Compact Human rights Businesses should support and respect the protection of internationally proclaimed human rights. 支持并尊重人权保护 Businesses should make sure that they are not complicit in human rights abuses. 不参与侵犯人权 Labor standards Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. 企业应维护结社自由和对集体谈判权的有效承认 Businesses should uphold the elimination of all forms of forced and compulsory labor. 消除一切形式的强 迫和强制劳动 Businesses should uphold the elimination of discrimination in respect of employment and occupation. 消除就业和职业方面的歧视  The UN Global Compact Environment Businesses should support a precautionary approach to environmental challenges. 预防措 施 Businesses should undertake initiatives to promote greater environmental responsibility. 主动行动 Businesses should encourage the development and diffusion of environmentally friendly technologies. 鼓励开发 Anti-corruption 和传播环保技术 Businesses should work against all forms of corruption, including extortion 敲诈勒索 and bribery 贿赂. 努力打击一切形式的腐败 https://www.unglobalcompact. org/  The UN Sustainable Development Goals The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. The 17 SDGs are integrated—that is, they recognize that action in one area will affect outcomes in others, and that development must balance social, economic and environmental sustainability. Through the pledge to Leave No One Behind, countries have committed to fast-track progress for those furthest behind first. That is why the SDGs are designed to bring the world to several life-changing ‘zeros’, including zero poverty, hunger, AIDS and discrimination against women and girls. Everyone is needed to reach these ambitious targets. The creativity, knowhow, technology and financial resources from all of society is necessary to achieve the SDGs in every context. The UN Sustainable Development Goals https://www.un.org/development/desa/ disabilities/envision2030.html Targets and indicators for each SDG 1 Goal 1. End poverty in all its forms everywhere Goal 2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture Goal 3. Ensure healthy lives and promote well-being for all at all ages Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Goal 5. Achieve gender equality and empower all women and girls Goal 6. Ensure availability and sustainable management of water and sanitation for all Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation Continue next page  Targets and indicators for each SDG 2 Goal 10. Reduce inequality within and among countries Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable Goal 12. Ensure sustainable consumption and production patterns Goal 13. Take urgent action to combat climate change and its impacts Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels Goal 17. Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development