Final Exam Study Guide Sustainability Management Fall 2024 PDF

Final Exam Study Guide Sustainability Management Fall 2024 Key Topics: - Sustainability Management Treating the planet as if we intended to stay E ects of curre...

Final Exam Study Guide Sustainability Management Fall 2024 Key Topics: - Sustainability Management Treating the planet as if we intended to stay E ects of current business practice —> short term focus on nancial/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 —> fairtrade, 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 nance 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 has become more economical (LCOE = Levelized Cost of Energy) => competitive Energy Payback < 1.5 years Bene ts: very low GHG emissions, renewable resource/“unlimited supply”, higher e ciency/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 lm” technology (First Solar) Solar panels are more economical/popular in sunnier and warmer areas (e.g. Spain, Greece, Chile, Florida, Arizona, Nevada, etc) Env. Impacts Signi cantly lower impacts than coal, oil, natural gas Toxic chemicals are used in solar cell production —> concerns with recycling/disposal Possible con icts with water use and land use Low emissions in air/water during operation, still emissions in production Types of Solar: Photovoltaic panels (thin- lm, 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, a ordable electricity prices, avoid loss of nature, geopolitical issues, local needs and priorities 1  ffi ff fi fi fl fi fi ff fi fi  Solar Ecosystem/ Value Chain: there are many partners in modern business with everyone specializing in a certain part of the process and lots of people involved Upstream PV cell manufacturers) Midstream (utility scale solar project developers) Downstream (energy utilities that sell power to consumers) Concentration on core competence for best economic success (to avoid bankruptcy) 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) Energy Payback ~3-8 months **best of any renewable** 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) Bene ts: 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 => e ciency of electricity generation (solar PV is more e cient -> less energy loss) Many di erent sizes of turbines, currently developing larger o -shore turbines and on- shore too Testing alternatives like oating wind or airborne wind too O -shore wind: higher operating costs (e.g. maintenance) but popular because of stronger winds, more space, and less opposition —> large potential (especially in the US with lots of coastline) and costs are coming down (but still more expensive than on- shore) Recent growth in the the o shore wind market Floating wind also has high forecasted growth Env. Impacts Lower emission impact = reduces global warming (much better than fossil fuels & nuclear) Disturbs birds, bats, and radar Con icts with land and water use (e.g. building new roads to reach wind farms) Visual impact and noise Considerations for development rms: competence/past experience, previous record of budgeting/time use, quali ed project leaders, nancing, organizational power, economic viability, location, biodiversity impacts, safety, cost of construction and maintenance Energy Transition: Need 8x more solar panels and 5x more wind turbines by 2030 to meet Paris Agreement target of 1.5C warming by 2050 Transitioning to renewable energy is critical for mitigating climate change and reducing warming and the other e ects from pollution (e.g ocean acidi cation) Electricity supply tends to contain more renewables that energy supply (because of transportation, aviation, shipping, etc that still relies on fossil fuels) Levelized Cost of Energy (LCOE) = takes into account all required costs and subsidies for a new energy project —> also depends on geography 2  ff fl fi ffi ff fl ff fi ff fi ffi fi fi ff  In general, onshore wind has the lowest LCOE, solar has the second lowest (and has had the most signi cant decrease) Intermittency is a concern for both wind and solar —> combining multiple forms of renewable energy can help Improving energy storage (aka batteries) will also be important for expansion Other renewables include: geothermal, wood, hydro, nuclear (?), etc Solar is projected to grow the most by 2050 (biggest drop in price) —> projected to become the largest low carbon energy source by 2040 Important to also take into account the future costs of maintenance when determining the most economical option (renewables with maintenance still tend to be lower than nuclear, coal, etc) Orsted (Danish energy company) is a good example of a company with a sustainability transition Shift from 17% renewable to 99% renewables during a 20 year period Sometimes it is still more pro table for companies to be involved in oil and fossil fuels than renewables, which slows down the transition Ending subsidies for fossil fuels will be important for growing renewable energy - 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 —> cheap labor for pro t-maximizing companies (why it is still popular despite being illegal) Smuggle people into countries promising jobs, then take passports and trap them (human tra cking) Di cult to quantify (de nition of slavery, documentation, etc) but is present in every country Tens of millions in modern slavery, forced labor, and forced marriage Child labor and forced marriage Common in cocoa, cotton, and other agricultural industries & manufacturing Abuse of human rights Poverty, illiteracy, and class system perpetuate modern slavery Modern slavery is worse in some regions because of a cultural tradition of slavery/forced marriage (e.g. the Middle East) Slavery was made worse by Covid, which hit the poorest the hardest and put more pressure on to take any o er available for work (even suspicious ones) What can be done: Buying fairtrade products and supporting fair trade Improving education —> ability to read can help people know/understand labor laws Fighting poverty Insisting on fairness and social responsibility in business Enforcement from police and customs against human-tra cking Providing honest and good job opportunities for poor people William Wilberforce: British politician who helped to abolish the slave trade and slavery in the British empire Child Labor: adults aren’t paid a living wage which forces children to also work Working instead of getting an education contributes to illiteracy and lack of other skills which perpetuates poverty Poverty: people living with large debt or with income less than $2 per day Lack of education Deaths (and lower life expectancy) 3  ffi ffi fi fi ff fi fi ffi  Hunger/Malnutrition/Malnourishment Multidimensional Poverty: health, living standards, and education are all poor Lots of Poverty in African countries Fairtrade: helping producers in developing countries reach equitable and sustainable trade relationships (over 2 million farmers globally) international certi cation that supports farmers and workers in poor countries Widespread and strict standards = good certi cation scheme Guaranteed minimum price (mitigates price uctuations and can help raise the price for others in surrounding areas) Fairtrade premium paid to farmers that goes towards many di erent things (e.g. education, health, sanitation, anti-hunger (largest), and others related to the UN Sustainable Development goals) Works against slavery, helps alleviate poverty, assists in climate change adaptation, improves working conditions, etc Lower climate emissions (e.g. FT roses from Kenya vs non-FT from Netherlands) Principles of Fairtrade: Market access for producers Transparency and accountability (aka monitoring the process) Fair trading practices Payment of fair price (balance of a ordability and fairness) No child or forced labor Good working conditions Respect for the environment (often organic, but not required to be —> certain products like bananas and co ee are more likely to be both) Common Products: co ee, owers, tea, bananas, chocolate, sugar, organize juice, footballs, cotton/clothes, rice, spices, metals, etc Fairtrade towns = promotion of Fairtrade and Fairtrade products used by city council —> requires criteria and active reporting Fairtrade schools, universities, and churches = promotion of Fairtrade, uses Fairtrade products at meetings, Fairtrade products for sale on campus, and a Fairtrade working group Fairtrade at USN: USN unintentionally lost its fair trade status during covid when the fair trade coordinator resigned and wasn’t replaced amid the chaos and the new sustainability center didn’t incorporate fair trade Regain status: promote fair trade and raise awareness, re-establish a working group for fair trade to lead the e ort (e.g. students, sta , principal/executive, canteen director), and try to get more fair trade products and events into the school again Challenges/Critiques: mainstreaming, lack of demand/high prices, doesn’t include plantations, only bene ts certain farmers, costs/time for certi cation, corruption, ine ectiveness, abuse of fairtrade, over-focus on co ee, and good in principle but falls short in practice Corporate Social Responsibility (CSR): corporations have ethical and discretionary responsibilities in addition to economic and legal responsibilities, such as how people and the planet are treated Enterprises are responsible for their impact on society Respecting human rights, upholding core labor standards, and ensuring decent working conditions Triple Bottom Line (TBL): Economic, environment, and social A responsible company must: Act responsibly in its core business (addresses impacts and is willing to change) Meet and exceed legal demands (including environmental and social) 4  ff fi ff ff fi ff fl ff fl ff fi ff fi ff  Be willing to say no to (some) customers (for environmental and social reasons) Initiatives: UN Global Compact: guidelines for what businesses should do —> e.g. protect human rights and not complicit in human right abuse, precautionary approach to environmental challenges and promote more environmental responsibility encourage environmentally friendly technologies, etc UN Guiding Principles - Human Rights: outlines businesses responsibility to protect against human rights abuses, respect human rights, and access to remedies for victims of human rights abuses —> reporting/policy framework (into integrated reporting) UN Principles for Responsible Investments (PRI): includes integrating Environment, Social, Governance (ESG) into investment analysis and disclosing ESG, active ownership, and reporting on activities ISO 26000 CSR Standard Bene ts: avoid costly problems/litigation, stay ahead of legal requirements, avoid negative consumer pushback, stakeholder theory (its the right thing to do morally/ethically), avoid nes and costs, improved reputation Risks: little substance, all voluntary, ignores “real” issues, di cult to operationalize, boundaries by current system, di erent models produce di erent results, taxes, political lobbying, global standards, corruption and bribes, and planetary boundaries - Environmental Accounting and Investment Ethical Investment: approach to investing that includes ethical/environmental goals in addition to conventional nancial criteria when determining whether to acquire, hold, or dispose of a certain investment —> principles/values of the investor determine how they use their power as a shareholder Sustainable Investment: uses the EU environmental and social taxonomy to de ne 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 and ethical funds —> DNB, KLP, Storebrand Limits for unethical interests/dirty assets in the fund Players: churches, charities, pension funds, SRI funds, companies, consultants, states, NGOs, etc Norwegian Providers of Environmental funds: DNB, KLP, Nordea, and Storebrand Firms in Ethical/SRI Funds: Vestas Windsystems, Norsk Hydro, SiemensGamesa, Scatex, Equinor Ethical Strategies Avoidance/Exclusion = prohibit investment in “dirty” industries (e.g. alcohol, weapons, GHG, etc) —> most popular/common Positive Emphasis/SD Theme = speci cally investing in the environment (e.g. renewable energy, reporting, etc) and positive products (e.g. public transport, environmental tech, etc) Engagement/Voting = using power as a shareholder to raise issues with management and at the annual general meeting —> forcing the company to change its behavior by voting against the board/management Environmental Social Governance (ESG) Integration = using all ESG issues to inform investment decisions SRI/ethical/sustainable investments can still achieve good nancial performance Pension funds are becoming more popular in sustainable investing and incorporating SRI/ ESG Challenges: SRI funds ignore many areas (aka focus on doing good but not avoiding the bad), some funds are lax on ethics and/or do not engage with ethical issues, poor people 5 fi  fi fi ff fi ff fi ffi fi  don’t bene t, and many investments are only in large American and European companies (rather than small businesses/startups in developing nations) Environmental Management Accounting: identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating nancial and non- nancial environmental information that helps managers ful ll corporate environmental objectives Environmental accounting can focus on the national, rm, or division level and can have internal and external audiences Environmental issues a ect national accounting, management accounting, and nancial accounting Environmental costs: Direct costs -> e.g energy, safety, insurance, resource use, etc Indirect costs -> waste, nes, clean-up, R&D, emergencies, etc Hidden costs -> preliminary site studies, future decommissioning, R&D, training, etc Contingent costs -> costs that may be incurred in the future Image/relationship costs -> company image, relationship with customers/investors/ regulators/insurers etc Societal costs -> impacts on the environment and society for which the business is not legally accountable e.g. negative externalities Conventional costs Full cost accounting: attempt to measure ignored costs —> many environmental costs aren’t captured by ordinary accounting systems Material Flows of a company/product: Mass-balance: uses weight as a metric to analyze input-output or eco-balance to help evaluate environmental performance and eco-e ciency Environmental sustainable cost approach —> don’t leave the planet worse o by calculating the di erence from before and after an action Life Cycle Assessment (LCA): assess a product’s eco-friendliness over the entire life- cycle Three stages: Life cycle inventory (data collection) Impact assessment (environmental evaluation) Improvement analysis (company response) Inputs & outputs (and Scope 1,2,&3 emissions) What is accounted for: Natural Capital (e.g. biodiversity) Task-force for nature related nancial disclosures (TNFD) standards Biodiversity is in CSRD and EU Taxonomy Biodiversity funds Energy Steps to use/consume less energy Assessing usage Identifying trends in cost and use Waste Minimize and manage waste (reduction, reuse, recovery, repurpose, disposal) Separate waste management and disposal costs Non- nancial system to track waste Social Capital (e.g. trust) Carbon Accounting: a part of environmental or sustainability accounting that measures the CO2e and organization or state emits Important for carbon credits and/or carbon markets Basis for calculating carbon footprint Uses Scope 1,2,&3 emissions 6  fi fi ff ff fi fi fi fi ffi fi fi ff fi  Carbon emissions from important investment funds/SRI funds Accounting for these things can help reduce costs, address climate change, and save the environment - Environmental Policy, Objectives, and Reporting Expanding economy and growth puts pressure on biodiversity, increases pollution, impacts poverty, inequality, and unemployment, and can cause social alienation => how we do business matters a lot! Company/Firm Objectives —> three di erent views Shareholder Model/Theory = maximizing the value for shareholders Many businesses are run like this Taught to nance students Tensions between health, safety, the environment, and pro ts Stakeholder Model/Theory = considers the interests of other groups that impact or are impacted by the rm, not just shareholders/investors (e.g. employees, supplies, local community, customers, etc) —> creates an “ecosystem” of stakeholders Common in businesses such as Co-operatives, B-corps, etc Work to minimize damage (but not prevent it altogether) Broader Social Responsibility Model/Theory = rm should overall be a bene t to society instead of damaging it for pro ts Based on faith/love based ethics Di cult to successfully achieve in large organizations It is rare for companies to prioritize environmental objectives, but rather focus on serving customers/community, long term survival, and maximizing wealth for shareholders (required for publicly listed rms, more freedom in private companies) Listed rms can still have values other than maximizing wealth (e.g. Ben and Jerry’s, Novo Nordisk, and Tesla (?)) Environmental Responsibility of Business: recognize problems and legal compliance, take steps to mitigate harm, reduce/restrain use of resources, operate in an ecologically sustainable manner, etc Any size rm can do sustainability reporting, but more pressure on larger rms Policy —> a response to real issues (responding to environmental agenda, developing management systems, environmental reviews/audits, life cycle assessments, and environmental accounting) Global, Regional, and National Policy Agenda 21 (United Nations - Sustainable Development Policy) UN Sustainable Development Goals (address massive social and environmental challenges in the world) -> the problems are interlinked 1. No Poverty 2. Zero Hunger 3. Good Health and Well-Being 4. Quality Education 5. Gender Equality 6. Clean Water and Sanitation 7. A ordable and Clean Energy 8. Decent Work and Economic Growth (Important in CSR reporting) 9. Industry, Innovation, and Infrastructure 10. Reduced Inequalities 11. Sustainable Cities and Communities 12. Responsible Consumption and Production 7  ff ffi fi fi fi fi fi fi ff fi fi fi fi  13. Climate Action (Important in Sustainability Reporting) 14. Life Below Water 15. Life on Land 16. Peace, Justice, and Strong Institutions 17. Partnerships for the Goals Kyoto Protocol (Reduction of GHG emissions (CO2) in industrial countries/economies) Montreal Protocol (Reduction of Ozone depleting substances) Paris Agreement (Limit warming to 1.5C by 2050) EU Policy: cut CO2 emissions by 55%, increase renewable energy to 42%, and energy e ciency gain by 32% by 2030 (Norway beats these goals) European Green Deal Emissions trading, Cap and Trade, Renewable Energy Subsidies, etc EU Taxonomy (For environmentally sustainable investments) 1. Climate Change Mitigation 2. Climate Change Adaption 3. Sustainable Management of water and marine resources 4. Transition to a circular economy 5. Pollution prevention and control 6. The protection and restoration of biodiversity and ecosystems National Policy (e.g. US Toxic Release Inventory; UK Pension Fund environmental/social disclosure; Danish wind power support; Dutch green fund system; Finland lead free petrol regulation) Creating Policy (within a rm) Scope Assess current situation Company speci c issues Content and draft policy Set targets and dates (both long and short term goals) Assign responsibility and monitor performance Feedback, rewarding, and reporting External Policies (voluntary) International Chamber of Commerce (ICC) Business Charter for Sustainable Development Less demanding Very popular No required disclosure No sustainability Coalition for Environmentally Responsible Companies (CERES) Principles Protecting biosphere, reduce and proper disposal of waste, conserve energy, reduce risk, produce safe products/services, restore the environment Fairly successful voluntary code Demanding Commitment to Disclosure Concerned with sustainability Global Compact Human rights principles (support, respect, and protect), labor standards (e.g. eliminate forced and child labor), environmental principles (precautionary approach) Global Reporting Initiative (GRI) Voluntary Speci c economic, environmental, and social indicators E.g. total material use (weight/volume), direct energy use (joules), and impacts on biodiversity Responsible Care (Chemical industry) 8  ffi fi fi fi  Compliance (monitoring/measuring) Performance against law, codes of practice/sustainability policies, and ethical/ environmental policy Monitoring all areas/aspects of policy Analysis of complaints, nes, etc —> taken into consideration and used for improvement Employee suggestion box Systematic review of data and data collection systems Reporting There is a need for uniform reporting guidelines/standardization to prevent businesses from interpreting sustainability di erently Many companies/organizations (thousands) reporting on environmental and social performance, but still many do not report E.g. Skagerrak Energi Reporting is not always reliable EU Green Deal: Policy package to achieve climate neutrality by 2050 and protect nature Includes: renewable energy, emission trading, CO2 emission standards for cars, aviation regulation, land use, forestry, and agriculture regulation, etc Government and EU regulation are important for increasing/improving reporting Approaches to Reporting: reports can be produced for external consumption by the reporting body (voluntary and mandatory), produced by independent bodies, or produced by organizations themselves Compliance based reporting —> reporting because you have to (e.g. government owned utilities) Toxic Release inventory based reporting —> required reporting for toxic chemical companies in the US Impact based reporting —> environmental footprint Science Based Target initiative (SBTi) for climate Environmental burden / impact scores Global Reporting Initiative (GRI) / Triple Bottom Line / Sustainability Reporting —> speci c guidelines/standards for reporting on environmental, social, etc Triple Bottom Line (TBL): economic (pro t), environmental (planet), and social (people) dimensions of sustainable development 5 stage model of reporting: marketing->one policy related report->annual reporting with EMS->annual reporting with more data->ideal reporting with climate, biodiversity, etc [reporting improves over time] Bene ts of reporting: lower interest rates/insurance premiums, satisfy legal requirements, satisfy information needs for stakeholders, comply with regulation, helps implement environmental strategy, competitive advantage, and saves time for information requests Reporting Standards/Directives EU Eco-Management Audit Scheme (EMAS) Global Reporting Initiative (GRI) —> goal is to improve the quality of sustainability reporting UN Global Compact Integrated Reporting: includes everything (social, environmental, economic) in the annual report EU Corporate Sustainability Reporting Directive (CSRD) Successor of EU Non-Financial Reporting Directive (NFRD) European Sustainability Reporting Standards (ESRS) —> mirrors the EU taxonomy International Sustainability Standards Board (ISSB) —> develops global reporting standards International Financial Reporting Standards (IFRS) Sustainability Accounting Standards Board (SASB) 9  fi fi fi ff fi  **Many reporting initiatives are connected or interlinked** Important things to be included in company reporting: Top management statement Environmental Policy Environmental Management System Material use (& disposal) Energy Consumption Air Emissions (& GHG emissions) Scope 1 = direct emissions from production Scope 2 = indirect emissions (e.g. from electricity used) Scope 3 = upstream emissions (e.g. from use of the product by the consumer) - usually the largest source of emissions in reporting Water E uents Safety information: sick leave, accidents at work, health and safety issues, training, etc There are reporting awards from independent/third party organizations —> awards generate good PR Internet Reporting is becoming more common because of convenience , however, websites can be easily/quickly changed and are often not veri ed - Environmental Management (And Sustainable Business Models) De nition/Goals of EM Managing the impacts of political and social systems on the natural environment Sustaining/improving existing resources, prevention/solution of environmental problems, establishing limits, research & policy recommendations, warning of threats & identifying opportunities, improving quality of life, and identifying new helpful technologies Environmental management is needed because the current situation (biodiversity, pollution, climate change, poverty, etc) is unsustainable Improve environmental stewardship, take better care of the planet, and recognize the interdependence of business, ecology, policy, development, etc Approaches to EM Ad Hoc, Systems, Regional, Specialist, Commercial Local, Regional, National/State, Global, Company Integrated EM: takes into account environmental and human issues and their interconnections Supporting Principles of EM The Precautionary Principle: taking preventative action in the face of uncertainty The Prevention Principle: take action at early stage The Polluter Pays Principle: those who generate emissions are nancially responsible The Proximity Principle: deal with waste locally if possible Tools of EM Eco Foot-printing: amount of land needed to support a city, company, individual, nation, etc Env. Accounting Env. Risk Assessment Env. Impact Assessment (EIA): assessment of environmental impacts/consequences before a decision is made (project level) —> what are the e ects and the alternatives Environmental Management Systems (EMS) Life Cycle Assessment (LCA) —> important for product development Encompasses all stages of a product’s life cycle: raw material extraction, manufacturing, distribution/transport, product use & maintenance, and disposal Helpful for developing more environmentally conscious products that use low impact materials, reduce the use of materials, more e cient manufacturing and use, better disassembly and disposal, etc 10  fi ffl ffi ff fi fi  Scenario Analysis: using models to predict/test di erent scenarios/outcomes (e.g. IPCC climate scenarios) Environmental Management Systems (EMS): system that integrates environmental policy, environmental accounting/auditing, targets and objectives, monitoring, training, reporting, etc to reduce the organizations negative environmental impact and improve e ciency Needed for environmental accounting, reporting, and putting policy into practice Assess impact, develop policy, set concrete targets, identify speci c responsibilities, integrate environmental policy, procedures and controls, training/communication/IT, and reporting (internal and external) Environmental and nancial bene ts Reduce risk of company —> cheaper credit —> increased company value Better prepared to meet challenges and aware of issues that need to be managed (reduce environmental impacts) Environmental Management Accounting (for the company) **important** Energy accounting, materials accounting, environmental related nancial management, life cycle assessment and LCA cost assessment, environmental impact assessment, and environmental externalities costing (e.g. carbon/emissions pricing) Finding the link between nancial and environmental elements and data collection for inputs/outputs Environmental Information Systems = computer software used to do the auditing (good software is important for good information collection) Standards: BS7750 (British Standards): rst major EM standard, based on management practices and the audit trail of them, not on environmental impact EMAS (European Management Audit Scheme) (European standard) Site based Incorporates ISO 14001 requirements and goes beyond them Requires targets and improvements and annual sustainability reporting (public disclosure) Criteria: Policy, review of site, EMS, audits, targets, validated environmental report (that includes environmental impacts, policy, EMS, and deadline for next report) Cost savings for legal compliance, increased e ciency (energy and resources), improve reputation and company culture Registration costs, costs for sta ng and reporting ISO 14001: Environmental Management Systems (Global standard) No required reporting Most popular Environmental policy, assessment of environmental aspects and legal and voluntary obligations, management system, objectives, and internal audits ISO 45001: Occupational Health and Safety Standards Also important for sustainable businesses to have Reduce injuries and fatalities, linked to safety manual, requires training Other Standards: ISO 26000 Social Responsibility Standard and ISO 50001 Energy Management System Sustainable Business Models: creating social and environmental And./or ecological value (in addition to economic value) Long term customer relationship (end of the product life cycle vs end of sale) Transforming dis-value into value Sustainable value creation, value capture, and value delivery Sustainable premium, responsible customers, end of life Minimize negative impact and maximize positive impact 11  fi fi fi ffi fi ffi ff fi fi ffi  Conclusions from Eva Niesten: Couple sustainable technologies Cumulate many consumers buying sustainable technologies Collaborate upstream and downstream in the value chain and horizontally with competitors and local communities Concentrate on core competence (focus on what you’re good at) Incorporating sustainability/environmental managers into economics/business departments and the overall company to become part of the overall governance Interactions between public and private (cannot think of business models in a private sense when business is in all sectors) Shift to circular business models and away from linear models (e.g. reduce consumption and reduce/eliminate waste) Smart Grid: integrates information and communication technologies in to the electricity network to allow for a two-way ow of information and electricity between producers and consumers (Dis)charges electric vehicles and batteries Integrates renewable energy Connects energy-e cient homes and o ces Create value for consumers —> lower energy bills and lower carbon footprint Capture value —> connecting renewable energy, electric vehicles, and energy-e cient appliances to the grid and cumulate many customers to make a pro t Energy Utilities Renewable Electricity Generation Smart Electricity Management Emerging Technologies Sustainable Mobility Circular Business Models: a company, along with partners, uses innovation to create, capture, and deliver value to improve resource e ciency by extending the lifespan of products and parts, thereby realizing environmental, social, and economic bene ts (and keep goods and materials owing in cycles) Principles of CBMs: Providing services instead of products Renewability (using renewable and recyclable materials and renewable energy in product design and manufacturing) Sharing platforms (maximizing the use of goods and extending their life cycles by using digital platforms for renting, selling, and sharing goods) Product-life extension (using products according to their original purpose for as long as possible or enabling multiple instances of reuse through maintenance, repair, refurbishment, repurposement, etc) Resource E ciency and Recycling (material and energy-e cient solutions and the collection and reuse of products and raw materials that reach the end of their life) Two types of CBMs: Use oriented business model: a rm makes a product available under rental/lease agreements but retains ownership and is paid for making the product available to the customer for a certain time period Results orientated business model: the rm provides a a customer with a prede ned result or outcome and is paid for the result and delivery of the outcome Transition to CBM (for existing/mature rms) Initiate circular business model transformation Audit the current business model Design and develop a circular business model Scale up the circular business model 12  ffi ffi fl fl fi fi ffi fi ffi ffi fi fi fi ffi  - Sustainable Development Brundtland Report (World Commission on Environment and Development) Ensuring that development meets the needs of the present without compromising the ability of future generations to meet their own needs UN Sustainable Development Goals, EU Taxonomy (Both environmental and Social taxonomies), Millennium goals, Sustainability System Conditions, Sustainability Principles (Precautionary, Prevention, Polluter Pays, and Proximity) System based concept State of being/a journey - not a destination/end goal Eco-justice (everyone has the same right to environmental protections/regulations), Eco- e ciency (reduce negative impacts/mitigate harm), and Eco-e ectiveness (increase positive impacts/restore ecosystems) Challenges: loss of biodiversity and genetic diversity, biochemical ows (nitrogen and phosphorus), climate change, ocean acidi cation, ozone depletion, land system change, freshwater use, chemical pollution, atmospheric aerosol loading, GMOs, etc Un-sustainability: caused by humans and both natural and social Threatened biology, persistent deprivation, declining resources, altered biochemistry Di erent views from the North and South Unsustainable thinking (greed, addition to consumption, large population, etc) Biases in thinking based on biology, worldview, psycho dynamics, and the contemporary E.g. Disconnection, atomism, denial, e ciency, narcissism, techno-optimism, and sustainable thinking The need test: what is the function, bene ts, need/demand, impact, etc of the product and would it be sustainable in an equitable world of 10 billion people? Consumption is unequal (20% of the population consumer >60% of all electricity, paper, metal, chemicals, etc and are responsible for 70% of CO2 emissions) Sustainable development also includes social aspect: access to clean water, poverty, slavery/ human rights, and starvation (SDG 1, 2, 8) —> when dealing with these themes in developing countries, it is important to listen to the local communities/inhabitants to understand their real needs and issues (Sustainability role play game) Circular Economy: a sustainable economy that works without waste, saves resources, and is in synergy with the biosphere Inspired by nature (restorative and regenerative) Reduce demand for materials and reuse materials in the system Extend the life of materials and products Waste is valuable Retain embedded energy, water, and other inputs Use systems thinking Regenerate or conserve nature Regulation (taxes are market mechanisms that support product stewardship) Circular Business models - Good Business Examples Sustainable businesses take responsibility for social and environmental issues (focusing on the triple bottom line rather than only on pro ts): Divine Chocolate: farmer owned colocate company —> environmental and social bene ts of certi cation programs like Fair trade and B-Corp Scatec: Norwegian renewable energy company —> aiding in the energy transition and hybrid renewable energy system solutions 13  ffi ff fi ffi fi fi fi ff fl fi  Cafe Direct: grower oriented co ee company owned by charities —> addressing inequities in the agriculture industry while addressing environmental issues by going beyond requirements from fair-trade and B-Corp certi cations Tinfos: Norwegian hydropower tech rm —> important for renewable transition and Norway’s reliance on hydropower BYD: a Chinese electric vehicle company and former battery manufacturer (largest in the world) —> importance of electric vehicles and China’s large impact in the renewable sector Fairphone: Dutch sustainable smartphone company —> concepts of circular economy (repair, maintenance, remanufacturing, etc) and fair and safe labor conditions Tony’s ChocoLonely: Dutch chocolate company focused on fair chocolate (human rights and the environment) —> desire to reduce inequality in the chocolate industry, such and child labor and modern slavery) Iberdrola: Spanish electricity company/group —> focus on renewables, energy storage, smart grids, and mobile electricity NextEra Energy: Largest U.S. renewable energy producer focused on wind and solar (and some nuclear and other) —> sustainability transition and sustainability goals of carbon free, economic growth, and a ordable electricity prices for consumers Tesla: electric vehicle manufacturer—> creation of sustainable jobs, increased popularity of EVs (very important to lower emissions from fossil fuels), and creation of other innovative products that go beyond the automotive industry REC Silicon: Norwegian silicon materials manufacturer —> important component in PV solar panels which are needed for the transition away from fossil fuels Novo Nordisk: Danish pharmaceutical company that is good at reporting —> reports on dilemmas, renewable goals, environmental impact, eco-balance, etc Manaaki Whenua: New Zealand Research organization that has an EMS, is carbon neutral, uses full cost accounting, and is good at reporting —> uses ISO 14001, reports on sustainability transition, animal use, emissions, anti-slavery statement, and externally veri ed Mester Grønn: Norwegian ower store chain that sells fairtrade owers and takes sustainability actions —> reduction of electricity use, care for employees, etc SiemensGamesa: renewable energy rm —> sustainable product development, protects human rights, good environmental/CSR reporting Skagerak Energi: Norwegian electric utility company working to improve sustainability —> good example of reporting initiatives (E.g. SDGs, CSRD, EU Taxonomy) within a business and integrating sustainability into the nancial side of the business [also an example of a company with a speci c role within the solar ecosystem] - Bad Business Examples / Environmental Disasters Sustainable management is needed to prevent disasters and improve businesses: Fukushima Disaster: major nuclear accident in Japan caused by earthquake/tsunami—> concerns about the bene ts of nuclear with increased threat of natural disasters Chernobyl Disaster: major nuclear accident in Ukraine —> concerns about the safety standards and the toxic/radioactive byproducts of nuclear production Deepwater Horizon Disaster: massive oil spill from BP operation in the Gulf of Mexico —> long term environmental and social damage from the fossil fuel industry beyond air emissions and lack of responsibility for damages Hydro Alunorte Disaster: aluminum and renewable energy company in Brazil ooded by heavy rains that resulted in residues polluting the local water —> concerns about extreme environmental conditions and lack of responsibility for environmental pollution Texaco (Chevron) Disaster: American oil company generating toxic water in Ecuadorian Amazon —> health impacts on local humans, animals, natural resources along with underpaid workers, deforestation, and a lack of reparations for damages 14  fi fi ff fi fl ff fi fi fi fi fl fl  Union Carbide -Bhopal India Disaster: U.S. pesticide plant gas leak and explosion in India —> result of cutting costs (didn’t focus on more than pro t) that caused water and soil contamination, wildlife health, human deaths, and long term health consequences along with lack of compensation and low nes Total (Oilsands): high impact oil (expensive, requires more energy and water for extraction), dirtier oil production in Alberta Canada that has since “stopped” —> concerns of businesses separating their “clean” and “dirty” operations into separate businesses and highlights the need to leave oil reserves/assets untouched to reach Paris Climate Agreement targets —> stranded assets Ford Motor Company: produced climate change report, but little to no follow through —> focus on unattainable “big” cars, ghting against CO2 emission regulations, increased CO2 emissions, lack of electric vehicle, and not veri ed/audited by a third party - Environmental Issues (SDG 13) Climate Change: Market failure Damage to insurance companies (bankruptcy Changes in the automobile industry to low fuel, electric and hybrid cars and more public transport/bikes Energy and Power Generation industry needs to take part in energy transition away from fossil fuels towards renewables UN’s Intergovernmental Panel on Climate Change (IPCC) Assesses scienti c information and provides advice to policymakers (new report every ~6 years) Conference of Parties (COP) COP21 (2015) => Paris Climate Agreement Evidence for recent climate change Global temperatures (amount and speed of warming) since pre-industrial levels Change in precipitation Changes in ice sheets (Greenland and Antarctica —> decrease in sea ice + acceleration) Changes in extreme weather conditions (more heat waves and fewer frost days) Causes of climate change Greenhouse Gases (GHGs): CO2, CH4, N2O Stratospheric O3, Tropospheric O3 => disturb radiative forcing (balance between radiation being absorbed and emitted by Earth) and long atmospheric lifetimes causes increase in temperature Aerosols: solid particles or liquid droplets in the air (e.g. PM10 and PM2.5, SO2) Land-use changes: albedo e ect (percentage of solar radiation that is re ected) is impacted by the type of land (e.g. forests absorb radiation while ice/snow re ect radiation) Natural Forcings: changes in solar variability and volcanic activity (but they don’t explain the magnitude of current warming) Future Scenarios: Shared Socioeconomic Pathways (SSPs) = model projections Di erent areas will be impacted di erently (more warming in higher latitudes) Increase in sea level decrease in sea ice Change in strength of the thermohaline circulation (in the ocean) => less heat being transported to the north Changes in extreme weather Changes in food production (decreased yields in some places, longer growing seasons in others) Biodiversity: 15  ff fi ff fi ff fi fi fi fl fl  Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES): building a bridge between scientists (research & results) and policymakers Four Key Messages: #1: Biodiversity and Ecosystem functions and services are deteriorating Biodiversity: includes the number/range of species, the genetic variation within species, and biological communities/ecosystems. Millions of species exist worldwide, most of which are insects (even more if all forms of bacteria are included) The most biological diversity is found in tropical coral reefs and tropical forests (good environment for plant life, which supports other life) International Union for Conservation of Nature (IUCN) Redlist of Threatened Species: list of species that are in danger of extinction in the near future —> separated into categories based on how close to extinction (e.g. vulnerable, endangered, extinct in the wild, etc) We are currently on the way towards the 6th Mass Extinction event (>75% species loss), caused by human impact on the climate, rather than outside impacts (e.g. asteroid & the dinosaurs) Ecosystem Services: the bene ts that people obtain from ecosystems Supporting Services (e.g. soil formation, biodiversity, primary production, and habitat) Provisioning (e.g. food and ber, wood, clean water, and medicinals) Regulating (e.g. climate regulation, pollination of crops, store carbon, and control ooding) Cultural (e.g. inspiration, recreation, education, and aesthetic) The IPBES has developed “Nature’s Contribution to People (NCPs)” —> 18 di erent material, non-material, and regulating bene ts from ecosystem services/functions #2: The drivers of change (indirect and direct) have accelerated Increasing human population and consumption (e.g. agriculture, logging, shing, industry and fossil fuel use, urbanization and road construction, and international trade) causes: Damage to habitats (e.g. loss, fragmentation, and degradation) Climate Change Overexploitation Invasive species and disease Which leads to a loss of biodiversity (e.g. extinction of species and populations, degradation of ecosystems, erosion of genetic diversity and evolutionary potential, loss of ecosystem services, and erosion of support systems for human societies) Ecological footprint (consumption): the land area that is used to support our lifestyle, estimated in global hectares the footprint is increasing (overconsumption) Ecological de cit (looking at individual footprints) Human Development Index (indicator of how developed a nation is based on education, health conditions, and economic factors, etc) #3: Reaching goals for conserving and sustainably using nature by 2030 require transformative economic, social, political, and technological change Kunming-Montreal Global Biodiversity Framework (GBF): global targets for 2030 to safeguard and sustainably use biodiversity (23 targets to protect, avoid, secure, and act) Adapted at COP15 E ective conservation and management of 30% of land and 30% of oceans by 2030 E ective restoration of 30% of degraded ecosystems by 2030 Reduce risks and impacts from pollution 16 fl  ff ff fi fi fi fi fi ff  Sustainable use, harvesting, and trade of wild species Mitigate/eliminate the impacts of invasive species Minimize the impacts of climate change and ocean acidi cation Etc. #4: Nature can be conserved, restored, and used sustainably while also meeting other social goals if change is made Global Biodiversity Framework (GBF) targets Task Force for Nature-Related Financial Disclosures (TNFD) Pollution: the introduction by humans of substances or energy (heat, radiation, noise) into the environment resulting in harmful e ects CFCs, heavy metals, PCBs (chemicals), radioactive material, plastics, NOx, SOx, VOC, CO2, MH4, O3, PM2.5 & PM10, etc Negative externalities Leads to health problems, damage to nature, contaminated water, etc Key Terms/Acronyms: ★Agenda 21: UN non-binding action plan for sustainable development ★Albedo E ect: the percentage of solar radiation that is re ected and is impacted by and impacts climate change ★Biocapacity: estimate of an area or ecosystem’s production capabilities of certain biological materials, such as natural resources, and its ability to absorb spillover waste ★Biodiversity: includes the number/range of species, the genetic variation within species, and biological communities/ecosystems ★British Standards 7750 (BS7750): rst major EM standard, based on management practices and the audit trail of them, not on environmental impact ★Broader Social Responsibility Model: the idea that a rm should overall be a bene t to society instead of damaging it for pro ts ★Brundtland Report: a report by the World Commission on Environment and Development that focuses on ensuring that development meets the needs of the present without compromising the ability of future generations to meet their own needs ★Carbon Accounting: a part of environmental or sustainability accounting that measures the CO2e and organization or state emits ★Child Labor: adults aren’t paid a living wage which forces children to also work instead of attending school ★Circular Business Models (CBM): a company, along with partners, uses innovation to create, capture, and deliver value to improve resource e ciency by extending the lifespan of products and parts, thereby realizing environmental, social, and economic bene ts (and keep goods and materials owing in cycles) ★Circular Economy: a model of production and consumption that reduces or eliminates waste and extends the life cycle of products and materials by keeping them in a cyclical ow ★Climate Change: long term shifts in temperature and weather patterns that are caused by humans (economically a market failure because of negative externalities) ★Coalition for Environmentally Responsible Economies (CERES) Principles: a successful voluntary code that is demanding, committed to disclosure/reporting, and concerning with sustainability, such as protecting the biosphere, reducing and proper disposal of waste, conserving energy, reducing risk, producing safe products/services, and restoring the environment 17  ff fl fi ff fi ffi fi fi fl fi fi fl  ★Compliance: following established guidelines or in the process of being aligned with them, which is often con rmed through monitoring and measuring ★Conference of Parties (COP): main governing and decision-making body of a convention made of members from participating nations that guides the convention to solve global problems and address nations needs ★Corporate Social Responsibility (CSR): a business model that is based on the idea that corporations have ethical and discretionary responsibilities in addition to economic and legal responsibilities, such as how people and the planet are treated ★Corporate Sustainability Reporting Directive (CSRD): EU mandatory reporting directive for businesses to report on their environmental and social impacts and requires an audit of those reports ★Eco-e ectiveness: increase positive impacts of a business and/or work to restore ecosystems ★Eco-e ciency: reduce negative impacts of business and/or work to mitigate harm ★Eco-Justice: everyone has the same right to environmental protections/regulations ★Ecological de cit: a population's ecological footprint surpasses the biocapacity of the area that is available to that population ★Ecological Footprint: the land area that is used to support our lifestyle/consumption, estimated in global hectares ★Ecosystem Services: the bene ts that people obtain from ecosystems that are categorized into supporting, provisioning, regulating, and cultural services ★Energy Payback: the amount time it takes for an energy generator to produce the amount of energy needed for its production ★Energy: the ability to do work (generated from fossil fuel or renewable sources) ★Energy/Sustainability Transition: transition from fossil fuels to renewable energy to mitigate climate change and meet the Paris Climate Agreement goal ★Environmental (Management) Accounting: identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating nancial and non- nancial environmental information that helps managers ful ll corporate environmental objectives ★Environmental and Ethical Funds: investment composition that uses environmental and ethical criteria to inform its composition and asset allocation strategy ★Environmental Costs: the direct and indirect costs associated with business faces that are related to the environment which can be categorized into hidden costs, contingent costs, image/relationship costs, societal costs, societal costs, and conventional costs ★Environmental Impact Assessment (EIA): an assessment of environmental impacts/ consequences of a project before a decision is made, including the possible e ects and alternatives ★Environmental Information Systems: computer software used to do environmental auditing and collect data that is important for implementing EMS and reporting ★Environmental Management (EM) / Environmental Management System (EMS): set of processes/principles that help a business reduce their environmental impact and improve e ciency through policy/objectives, reporting, accounting, etc to improve the current unsustainable situation. ★Environmental Risk Assessment: the process of assessing potential harm to the environment caused by a substance, activity, or natural occurrence 18  ffi ffi ff fi fi fi fi fi fi ff  ★Environmental Social Governance (ESG): issues that are used to make investment decisions and are disclosed in company reporting ★Ethical Strategies for Investment: Avoidance, Positive Emphasis, Engagement, and ESG integration ★Ethical/Sustainable Investment: approach to investing that includes ethical/environmental goals in addition to conventional nancial criteria when determining whether to acquire, hold, or dispose of a certain investment and the principles/values of the investor determine how they use their power as a shareholder. The EU taxonomy is used to determine ethical/ sustainable investments ★EU Eco-Management Audit Scheme (EMAS): a site-based environmental management tool that goes beyond the ISO 14001 standards by requiring targets, improvements, and annual sustainability reporting/public disclosure ★EU Taxonomy (environmental and social): criteria to evaluate whether an investment is environmentally or socially sustainable ★European Green Deal: a policy package to achieve climate neutrality by 2050 and protect nature that includes renewable energy, emissions trading, CO2 emission standards for cars, aviation regulations, land use, forestry, and agriculture regulation, etc ★European Sustainability Reporting Standards (ESRS): a structured approach for companies to report on their sustainability initiatives and impacts to be in compliance with CSRD requirements. It mirrors the EU taxonomy. ★Fairtrade Premium: money paid to the cooperative of fairtrade farmers in a community to be spent on projects related to the UN Sustainable Development Goals ★Fairtrade Price: guaranteed minimum price paid to Fairtrade producers to help mitigate price/market uctuations and possible raise the price for others in the surrounding area ★Fairtrade towns/schools: meeting requirements such as promoting and educating about Fairtrade and using/selling Fairtrade products ★Fairtrade: an international certi cation program that supports farmers and workers in poor countries and aims to create equitable and sustainable trade relationships ★Genetic variation: di erences in DNA within a species ★Global Reporting Initiative (GRI): independent standards organization that helps businesses to voluntarily report on speci c economic, environmental, and social indicators/ issues ★Greenhouse Gas Emissions (GHGs): gases in the Earth's atmosphere that trap heat, such as carbon dioxide, methane, sulfur dioxide, particulate matter, and ozone ★Habitats/Ecosystems: a place where an animal or organism lives and how they interact with other living things and the environment ★Human Development Index: indicator of how developed a nation is based on education, health conditions, and economic factors, etc ★Integrated Reporting: includes everything (social, environmental, economic) in the annual report ★Intergovernmental Panel on Climate Change (IPCC): group that assesses scienti c information and provides advice to policymakers and produces a new report every ~6 years ★Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES): independent inter-governmental body that serves to build a bridge between scientists (research & results) and policymakers 19  fl ff fi fi fi fi  ★International Chamber of Commerce (ICC) Business Charter for Sustainable Development: a voluntary code that is very popular, less demanding than CERES, doesn’t require disclosure/reporting, and isn’t as concerned with sustainability issues ★International Financial Reporting Standards (IFRS): global accounting and sustainability disclosure standards for how accounting events should be reported ★International Sustainability Standards Board (ISSB): creates global sustainability-related nancial reporting standards such as the IFRS and SASB ★International Union for Conservation of Nature (IUCN) Red-list of Threatened Species: list of species that are in danger of extinction in the near future and categorized based on how close a species is to extinction ★Internet Reporting: business reports on sustainability available online in the form of websites, which is becoming more popular, but causes credibility and validity concerns ★Invasive Species: a species that is introduced to a new environment and harms it, which threatens biodiversity ★ISO 14001: Environmental Management System: a popular global standard for environmental management that focuses on environmental policy, assessment of environmental aspects and legal and voluntary obligations, management system, objectives, and internal audits but does not required external reporting ★ISO 26000 CSR Standard: standard to help businesses assess and address social responsibilities ★ISO 45001: Occupational Health and Safety Standard: global standards that focus on reducing injuries and fatalities, links to safety manuals, and training requirements. It is an important aspect for sustainable businesses to incorporate. ★Kunming-Montreal Global Diversity Framework (GBF): global targets for 2030 to safeguard and sustainably use biodiversity. Speci cally, there are 23 targets to protect, avoid, secure, and act ★Kyoto Protocol: international treaty and agreement to reduce greenhouse gas emissions to reduce global warming ★Levelized Cost of Energy (LCOE): takes into account all required costs and subsidies for a new energy project as well as geographical location ★Life Cycle Assessment (LCA): assess a product’s eco-friendliness over the entire life-cycle ★Load Factor: the e ciency of an electricity generator, or the percentage of energy that is actually produced of their max capacity ★Mass Extinction: widespread and rapid decrease of biodiversity across Earth, where greater than 75% of species are lost ★Mass-balance: uses weight as a metric to analyze input-output or eco-balance to help evaluate environmental performance and eco-e ciency ★Material Flows: calculating the relationship between inputs and outputs using mass- balance or life cycle analysis ★Modern Slavery: cheap labor for pro t-maximizing companies based on human tra cking, forced marriage, child labor, etc ★Montreal Protocol: international treaty and agreement to phase out the use of chemicals that deplete atmospheric ozone ★Natural Capital: the resources and services provided by nature, such as biodiversity 20 fi  ffi fi ffi fi ffi  ★Natural Forcings: changes in solar variability and volcanic activity, not caused by human actions ★Nature’s Contributions to People (NCPs): 18 di erent material, non-material, and regulating bene ts that humans gain from ecosystem services/functions ★Non-Financial Reporting Directive (NFRD): mandatory EU reporting for large companies that requires a non- nancial report on ESG performance beyond regular annual report. This is the predecessor to the CSRD. ★O shore Wind: power generated by wind turbines located in the sea driven by stronger natural movements of air over open water ★Onshore Wind: power generated by wind turbines located on land driven by the natural movement of air ★Overexploitation: harvesting exceeds reproduction of wild plant and animal species, which threatens biodiversity ★Paris Agreement: limit warming to 1.5C by 2050 ★Pension Funds: employer fund for providing retirement bene ts to employees which have become large players in sustainable investments/SRI funds ★Photovoltaic Solar Panels (PV Solar): semiconductor materials made primarily of silicon that transform light into electricity and used as a renewable energy source ★Policy: a response to real issues such as responding to an environmental agenda, developing management systems, environmental reviews/audits, life cycle assessments, and environmental accounting ★Polluter Pays Principle: those who generate emissions are held nancially responsible ★Poverty: people living with large debt or with income less than $2 per day that results in lack of education, hunger, and death ★Precautionary Principle: taking preventative action in the face of uncertainty ★Prevention Principle: take action at early stage ★Proximity Principle: deal with waste locally if possible ★Radiative Forcing: the balance between radiation being absorbed and emitted by Earth ★Science Based Target initiative (SBTi) for climate: De nes and promotes best practice in emissions reductions and net-zero targets in line with climate science ★Scope 1,2,&3: the source of air emissions related to business activities (e.g. direct emissions from production, indirect emissions, and upstream emissions) ★Shared Socioeconomic Pathways (SSPs): model projections for di erent climate change outcomes based on how current policies address GHG emissions ★Shareholder Model: maximizing the value for shareholders and commonly taught in nance-related disciplines ★Socially Responsible Investment (SRI): investing money in companies that have a positive social and environmental impact, which promotes environmental management and reporting ★Solar Ecosystem: the collection of many partners in the solar industry, including upstream manufacturers, midstream project developers, and downstream electricity sales ★Species: population of similar organisms that can reproduce ★Stakeholder Model: considers the interests of other groups that impact or are impacted by the rm, not just shareholders/investors, such as employees, suppliers, customers, and the local community 21 fi  fi ff fi fi ff fi fi fi ff  ★Sustainability Accounting Standards Board (SASB): nonpro t organization that develops industry-speci c standards and voluntary framework for measuring and reporting the nancial impacts of sustainability ★Sustainable Business Model (SBM): businesses create social and environmental and/or ecological value in addition to economic value ★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 ★Task Force for Nature-Related Financial Disclosures (TNFD): a global framework for businesses to assess and disclose their environmental risks and opportunities ★Thermohaline circulation: deep-ocean currents that are driven by di erences in the water's density, which is controlled by temperature (thermo) and salinity (haline). These currents that bring warm water to Northern Europe are being impacted by climate change. ★Toxic-Release Inventory: required reporting for toxic chemical companies in the US ★Triple Bottom Line (TBL): the economic (pro t), environmental (planet), and social (people) dimensions of sustainable development ★UN Global Compact: guidelines for what businesses should do in regards to human rights and environmental responsibility ★UN Guiding Principles: a reporting/policy framework that outlines businesses responsibility to protect against human rights abuses, respect human rights, and aide in access to remedies for victims of human rights abuses ★UN Principles for Responsible Investments (PRI): network of investors promoting sustainable investment through integrating Environment, Social, Governance (ESG) into investment analysis and disclosing ESG, active ownership, and reporting on activities ★UN Sustainable Development Goals (SDGs): goals to address massive social and environmental challenges in the world and guide countries and organizations in sustainability e orts ★Value Capture: retaining some of the value from a transaction to generate pro ts ★Value Creation: the bene t that a company's products or services provide to customers ★Value Delivery: providing solutions/outcomes to consumers that meet or exceed their expectations ★Waste: unused or unusable energy and/or materials ★William Wilberforce: British politician who helped to abolish the slave trade and slavery in the British empire 22 fi  ff fi fi fi fi ff fi