Key Skills for Corporate Transition - Sustainable Business 2024/2025 PDF

30/10/2024 Key Skills for Corporate Transition Sustainable business 2024/2025 Aurélie Peyron Your teacher Aurélie Peyron PhD in CSR aurelie.walas-...

30/10/2024 Key Skills for Corporate Transition Sustainable business 2024/2025 Aurélie Peyron Your teacher Aurélie Peyron PhD in CSR [email protected]  30/10/2024 KEY SKILLS FOR CORPORATE TRANSITION Understand the dependance and impact of businesses on environmental systems and society Be aware of the social acceptability issues of various technological transitions aimed at reducing environmental impact Be able to balance pros and cons in a social and environmental perspective of various technological options 3 KEY SKILLS FOR CORPORATE TRANSITION 5 sessions with 5 teachers : #1 : Economics (02/10 – Ioannis BOURNAKIS ) #2 : Life cycle analysis (16/10 – Yoann Guntzburger ) #3 : Sustainable business (30/10 – Aurélie Peyron) #4 : Innovation (20/11 – Sophie CHLELA ) #5 : Artificial intelligence (27/11 – Margherita PAGANI ) 4  30/10/2024 KEY SKILLS FOR CORPORATE TRANSITION Assessment End session Quiz on K2 – 20% Midterm 30min: 30 MCQs - 30% Final exam 1h30: open questions - 50% 5 1. What is sustainable business? 1) Business organizations participate to sustainable development’s society model 2) Corporate philanthropy 3) Corporate Social Responsibility 4) Shared value  30/10/2024 What is a sustainable business? A sustainable business is a business that contributes to Sustainable Development We face a lot of different environmental and social problems Business organizations participate to these problems and to the solution too. 7 What is a sustainable business? 8  30/10/2024 Environmental problems? https://youtu.be/LwRTw_7NNJs?feature=shared https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcTh154KNYBUDsBGOu1jHAEpc8_wbcJje_iX_-sn5Zl7kwF8QkZcHg 9 https://theoceancleaner.fr/wp-content/uploads/2016/04/5plasticgyres-1024x519.jpg.webp https://www.challenges.fr/assets/img/2018/01/11/cover-r4x3w1000-5a5717f0a55d1-pekin-gagne-la-bataille-contre-la-pollution-la-chine-non.jpg https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRlvKQcPNz0V2QXrOo924xj8yMMUjMa6UuXlKbifFQUI6Z2BjEO Society problems? 10 https://www.wsb.com/wp-content/uploads/2023/07/why-people-shouldnt-worry-about-ai-replacing-them.jpg http://markmcintire.blogspot.fr/2015/10/myth-of-economic-inequality.html http://3.bp.blogspot.com/-QBD9j4YBFpM/UH2habykTEI/AAAAAAAAMtc/eknKl0K1H_0/s1600/Press+TV+ban+tantamount+to+human+rights+violation.jpg  30/10/2024 Sustainable development The Brundtland Commission defines sustainable development as: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Holistic approach: 11 17 SDG https://www.youtube.com/watch?v=0XTBYMfZyrM  30/10/2024 Business contribution to sustainable development 1) Eliminate negative impacts on society and the environment 2) Reduce negative impacts on society and the environment 3) Compensate negative impacts on society and the environment 4) Increase positive impacts on society and the environment 5) Create new positive impacts on society and the environment 13 Hahn, T., & Tampe, M. (2021). Strategies for regenerative business. Strategic Organization, 19(3), 456-477. Business contribution to sustainable development Example of airline industry 1) Eliminate negative impacts on society and the environment 2-seater hydrogen-powered aircraft by 2026? https://aerodelft.nl/ Commercial hydrogen-powered aircraft by 2035? https://www.airbus. com/en/newsroom/ stories/2024-09- developing-a-global- ecosystem-to- support-hydrogen- powered-flight 14 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf  30/10/2024 Business contribution to sustainable development Example of airline industry – Air France - KLM 2) Reduce negative impacts on society and the environment 15 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf https://www.airfranceklm.com/sites/default/files/2024-03/afklm_fiche_deucarbonation_en-ca_hr.pdf Business contribution to sustainable development Example of airline industry – Air France - KLM 2) Reduce negative impacts on society and the environment https://www.honeywell.com/content/dam/honeywellbt/en/images /content-images/news/article-banners/hon-ab-sustainable- aviation-fuel.jpg 16 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf https://www.airfranceklm.com/sites/default/files/2024-03/afklm_fiche_deucarbonation_en-ca_hr.pdf  30/10/2024 Business contribution to sustainable development Example of airline industry – Air France - KLM 2) Reduce negative impacts on society and the environment https://www.openairlines.com /fuel-management-software/ 17 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf https://www.airfranceklm.com/sites/default/files/2024-03/afklm_fiche_deucarbonation_en-ca_hr.pdf Business contribution to sustainable development Example of airline industry – Air France - KLM 2) Reduce negative impacts on society and the environment 18 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf https://www.airfranceklm.com/sites/default/files/2024-03/afklm_fiche_deucarbonation_en-ca_hr.pdf  30/10/2024 Business contribution to sustainable development Example of airline industry – Air France - KLM 3) Compensate negative impacts on society and the environment When eliminating is not possible, and reducing not enough Projects that absorb and store carbon from the atmosphere in natural carbon sinks (forests, mangroves) https://corporate.airfrance.com/en/remove-co2-atmosphere 19 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf With a risk of being accused of greenwashing: https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf 20 https://www-francetvinfo-fr.translate.goog/economie/transports/greve-a-air-france/air-france-son-option-environnement-accusee-de-greenwashing-par-des- associations_5430043.html?_x_tr_sl=fr&_x_tr_tl=en&_x_tr_hl=fr&_x_tr_pto=wapp  30/10/2024 Business contribution to sustainable development Example of airline industry – Air France - KLM 4) Increase positive impacts on society and the environment Economic developments - HUBs 21 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf Business contribution to sustainable development Example of airline industry – Air France - KLM 4) Increase positive impacts on society and the environment Job creation and inclusion 22 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf  30/10/2024 Business contribution to sustainable development Example of airline industry – Air France - KLM 4) Increase positive impacts on society and the environment Health - Emergency long distance transport https://asf https://acting- -fr.org/en for-life.org/en/ 23 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf Business contribution to sustainable development Example of airline industry – Air France - KLM 4) Increase positive impacts on society and the environment Open-minded, tolerance - travelling and discovering other cultures 24 https://www.airfranceklm.com/sites/default/files/2024-04/af_urd_2023_uk_vmel2_260424.pdf https://static.wixstatic.com/media/8dd496_81f91d705310436ba8f262536d230b0d~mv2.png/v1/fill/w_1627,h_1080,al_c,q_90,enc_auto/8dd496_81f91d705310436ba8f262536d230b0d~mv2.png  30/10/2024 Business contribution to sustainable development 5) Create new positive impacts on society and the environment Enable sick children or children from economically disadvantage backgrounds to travel 25 Adapted from Carroll’s pyramid of CSR (1979, 1991) Corporate Social Responsibility Social Create positive Corporate philanthropy desirability social impact Shared value Social Reduce negative requirement social impact Legal Respect the legal Old vision of standards and constraint sustainable international norms business Economic Create economic imperative value and ensure revenues higher than costs on the long run 26 https://thehiddenedge.co.uk/portfolio/carrolls-csr-pyramid/  30/10/2024 1. What is sustainable business? 1) Business organizations’ participation to sustainable development’s society model 2) Corporate philanthropy 3) Corporate Social Responsibility 4) Shared value What is Corporate philanthropy? Stricto sensu, corporate philanthropy is “voluntary donations of corporate resources to charitable causes.” (Gautier & Pache, 2015, p344) It is NOT a personal donation. This donation must be made by the company and not directly by a manager or employee, for example. It is NOT sponsorship. This donation must be made without any consideration. Sponsorship is a donation in exchange for an equivalent return. The sponsoring company benefits from direct consideration, often in the form of advertising from the company (you can see the sponsors' brands on the jerseys of professional athletes). 28 https://entreprendre.service-public.fr/vosdroits/F22263?lang=en  30/10/2024 Why do business organizations engage in corporate philanthropy activities? To manage their impacts on society and the environment: with corporate philanthropy, businesses - participate to create positive impacts on society and the environment by helping non-profit organizations to achieve their social/environmental missions and/or - compensate their negative impacts when - they do not have the expertise to do it with their employees, - It costs more to do it with the company's resources rather than to finance an association that does it 29 Corporate giving to non-profit organizations: example of SeaCleaners https://www.theseacleaners.org/corporatepartnership/ https://youtu.be/yiJxOK0_nBs 30  30/10/2024 Why do business organizations engage in corporate philanthropy activities? Main drivers behind, leading companies to engage in this type of management of the impacts on society and the environment (Gautier & Pache, 2015): - Profit maximization, corporate philanthropy creating goodwill and improving the firm’s image and reputation, used as unformal advertising - Greater prestige of the top executive directors and improved status in their community, using company’s resources to “support their own pet charities at shareholder expense’’ (Brown et al. 2006, p. 856) - Ethical motives: to do good, because it is the morally right thig to do (Wulfson, 2001), because of pro-social behaviors of the managers - Cultural motives (US) or investment motives (Porter & Kramer, 2011): to give back to its community - Stakeholders’ management (pressure, expectations, exposure) 31 What are the different ways to engage in corporate philanthropy? Business organization can provide resources through: 1) Financial giving 2) In-kind donations 3) Product-sharing 32  30/10/2024 1) Financial giving Financial donation, in cash (direct, foundation) Corporate philanthropy is the financial contributions of business organizations to nonprofit organizations “either in the form of direct grants or through vehicles like corporate foundations.” (Gautier & Pache, 2015, p344) There are different types of foundations. The company can choose which one to use, depending on the its desire for influence and on its short- or long-term commitment. 33 Foundations – examples in banking industry Influence Private funds Endowment > 15000 euros funds Declaration to the Prefecture Conformity Short term Long term 34  30/10/2024 Foundations – examples in banking industry Executive Members: Shareholders Influence Parent Employees directors (and client-shareholders) company Corporate > 150 000 euros > 5 years foundation Prefectorial order Endowment funds Conformity Short term Long term 35 Foundations – examples in banking industry Any Any Influence organization individual Fonudation No distinct moral under aegis and juridical personality from the Corporate sheltering foundation and same foundation advantages private law contract / Endowment testament funds Conformity Short term Long term 36  30/10/2024 Foundations – examples in banking industry Influence Public Benefit Foundation Foundation > 1,5 M euros under aegis > 10 years Decree by the First Corporate Minister, after approval of Council of State foundation Endowment funds Conformity Short term Long term 37 2) In-kind donations - Donations of - materials (e.g. company’s computers), 38 https://citefertile.com/wp-content/uploads/2020/04/appel-au-don-FB.jpg https://img.freepik.com/vecteurs-premium/piece-or-bouton-don-ecran-du-smartphone-concepts-dons-charite-modernes-illustration-vectorielle-design-plat_662353-893.jpg  30/10/2024 2) In-kind donations - Donations of - materials (e.g. company’s computers), - unsold products (e.g. clothes, food) 39 https://entreprise.monoprix.fr/wp-content/uploads/2024/03/entrepots-redi-1.png 2) In-kind donations - Donations of - materials (e.g. company’s computers), - unsold products (e.g. clothes, food) - real estate (local for free for a given period) 40 https://citefertile.com/wp-content/uploads/2020/04/appel-au-don-FB.jpg  30/10/2024 2) In-kind donations - Contribution of employees through skills- based volunteering: - the company allows an association to benefit from the working time and skills of its employees, - during the working hours for the company and - without changing the employees’ remuneration 41 https://sveswtrust.com/wp-content/uploads/2024/06/skills-based-volunteering-leveraging-professional-expertise-for-social-good.png skills-based volunteering GOVERNMENT Reimbursement up to 60% Maintain the Work for regular salary EMPLOYEES NON-PROFIT SOCIETY ORGANIZATIONS 42 https://cgtsafran.com/nacelles/wp-content/uploads/sites/14/2020/12/mecenat-1024x568.png  30/10/2024 Example of consulting industry: KPMG https://k pmg.co m/ie/en/ home/in sights/20 22/02/le go.html 43 https://assets.kpmg.com/content/dam/kpmg/uk/pdf/2024/01/community-impact-report.pdf 3) Product-sharing Customers give a % of the transaction or the price of the product Allows the consumer to contribute to social causes of an association by their purchase. Example: each time a client buy a one-liter water bottle, he/she pays 1 additional euro which will be allocated to an association developing access to drinking water. The advantage of such an operation, in terms of communication, is its visibility. However, this operation presents the risk of being perceived as the use of a social cause for marketing purposes. 44  30/10/2024 3) Product-sharing One way to give credibility to the product-sharing operation is to develop it in connection with the core business and over the long term. This is the case of the Volvic-Unicef opera on which focuses since 2007 on access to drinking water 45 1. What is sustainable business? 1) Business organizations’ participation to sustainable development’s society model 2) Corporate philanthropy 3) Corporate Social Responsibility 4) Shared value  30/10/2024 What is Corporate social responsibility (CSR)? The idea that the company has a responsibility towards society, has given rise to many definitions of CSR, the paternity of which certainly goes back to Bowen. Bowen defined CSR in 1953 as “the obligation of businessmen to carry out policies, make decisions and follow lines of conduct that meet the objec ves and values that are considered desirable in our society". There is therefore the idea of a correspondence between the ac vi es of the company and the values of society. 47 US VS EU American CSR is originally distinguished from European CSR by a more developed corporate philanthropy, as well as by CSR practices that are more explicitly articulated and communicated to stakeholders. According to Matten and Moon, this is explained in particular by the different roles of American and European governments. European governments collect more taxes and also distribute them more in social and solidarity activity, through health systems, retirement, unemployment system, protection of people with disabilities, or even public education… Furthermore, American culture is distinguished from European culture by its tradition of “giving back to society” 48  30/10/2024 US VS EU Finally, a major difference between the United States and Europe is that of legislative pressure and therefore the discretionary space left to companies to go beyond what the law imposes. There is greater self-regulation of companies in the United States, while in Europe, and particularly in France, the laws are much more stringent. The institutionalization of American CSR has been encouraged by the spread of American managerial practices within European companies, but also by the evolu on of our values and laws across Europe, according then more importance to the social consequences of business organizations, in comparison to the intentions, when adopting moral judgment (Lipovetsky, 1992; Jonas, 1995). 49. International consensus: the ISO 26000 standard’s definition of CSR CSR is “an organization's responsibility for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that: - contributes to Sustainable Development, including health and the welfare of society; - takes into account the expectations of stakeholders; - is in compliance with applicable law and consistent with international norms of behavior; - and is integrated throughout the organization and implemented in its relations.” 50 (source: AFNOR)  30/10/2024 Stakeholders Stanford Research Institute (1963): first definition of the stakeholders as “those groups without whose support the organization would cease to exist” Rhenman (1968): “the stakeholders in an organization are the individuals or groups dependent on the company for the realization of their personal goals and on whom the company is dependent for its existence” (p. 25) 51 Stakeholders Freeman (1984, p25): stakeholders are “any group or individual who can affect or is affected by the achievement of the firm’s objectives” Corporate Individuals or groups performance, of individuals activities, objectives 52  30/10/2024 Stakeholder approach to the firm Allows to identify the stakeholders and to categorize them depending on 1) Their contribution to the value creation process: Identification of primary and secondary stakeholders (Freeman, Harrison & Wicks (2007), Freeman et al. (2010) 53 Stakeholder approach to the firm Allows to identify the stakeholders and to categorize them depending on 2) Their relationships, expectations and level of influence (based on integrative social contracts theory: there is a set of explicit and implicit norms that govern exchange, the cooperation of individuals, the operation of firms, and the function of markets (Donaldson & Dunfee, 1994): Identification of power, legitimacy and urgency of the stakeholders, of their expectations (Mitchell, Agle & Wood, 1997). 54  30/10/2024 Conflict of interest? Society interests ? Stakeholders’ interests ? Shareholders interests ? 55 Why would business organizations engage in a CSR? 3 different kinds of drivers for organizations (Aguilera & al., 2007) Moral motivation Relational motivation Instrumental motivation 56  30/10/2024 Instrumental motivation VS moral motivation Mean Instrumental End Address society and environmental Economic growth and profits of challenges, people as means the business organization Mean Moral End Economic growth and profits of the Address society and environmental business organization challenges, people as ends 57 Corporate strategy & CSR “There is some level of CSR that will maximize profits while satisfying the demand for CSR from multiple stakeholders. The ideal level of CSR can be determined by cost-benefit analysis. To maximize profit, the firm should offer precisely that level of CSR for which the increased revenue (from increased demand) equals the higher cost (of using resources to provide CSR). By doing so, the firm meets the demands of relevant stakeholders-both those that demand CSR (consumers, employees, community) and those that "own" the firm (shareholders). …. 58  30/10/2024 Corporate strategy & CSR … On the demand side, managers will have to evaluate the possibility of product/service differentiation. Where there is little ability to differentiate the product or service, demand may not increase with the provision of CSR. On the supply side, managers will have to evaluate the resource costs of promoting CSR while being cognizant of the possibility that there may be scale and/or scope economies associated with the provision of CSR. In sum, managers should treat decisions regarding CSR precisely as they treat all investment decisions.” (McWilliams & Siegel, 2001 p125) 59 Identify the social Corporate strategy & CSR New market issues and the positive social opportunities and capital impacts to target investment Cost Resource Identify the reductions productivity enhancement stakeholders and the negative impacts to target Risk of financial Risk of penalty & new business Reputational regulations discontinuities risk 60 Based on Natixis A.M approach  30/10/2024 Corporate strategy & CSR For example, the more than 50 billions cost of Deepwater horizon scandal caused by British Petroleum who prioritized its internal cost reduction over its environmental risk management. https://www.nytimes.com/video/multime dia/1000000036368 53/a-look-back-at- Identify the the-devastating-bp- stakeholders and oil-spill.html the negative impacts to target Risk of https://www.nytimes financial.com/2020/04/19/cli penalty & new mate/deepwater- horizon- regulations anniversary.html 61 Based on Natixis A.M approach For example, after the subprime crisis Corporate strategy & CSR leading to Basel III or Enron crisis leading to the Sarbane Oxcley Act https://www.inves topedia.com/term s/b/basell-iii.asp Identify the stakeholders and the negative impacts to target Risk of https://www.invest financial opedia.com/terms penalty & new /s/sarbanesoxleya regulations ct.asp 62 Based on Natixis A.M approach  30/10/2024 Corporate strategy & CSR For example, in 2014, Coca-Cola in India had its bottling plant closed. The company was accused of creating water shortages and releasing pollutants https://www.theg uardian.com/envir onment/2014/jun/ 18/indian-officals- coca-cola-plant- Identify the water-mehdiganj stakeholders and the negative impacts to target Risk of financial Risk of penalty & new business regulations discontinuities 63 Based on Natixis A.M approach Corporate strategy & CSR For example, the boycott of Nike in 1990 and the call for boycott in 2017 Identify the https://www.fastcompany.com/40444836/escalating- stakeholders and sweatshop-protests-keep-nike-sweating the negative impacts to target Risk of financial Risk of penalty & new business Reputational regulations discontinuities risk 64 Based on Natixis A.M approach  30/10/2024 Corporate strategy & CSR For example, using fewer resources and less energy reduces its negative impact on the environment while reducing its internal costs. Reducing employee travel reduces bills while having a positive impact on the environment in the short term Cost Identify the reductions stakeholders and the negative impacts to https://www.n ytimes.com/20 target Risk of 07/03/10/tech financial Risk of nology/10goog penalty & new business Reputational le.html regulations discontinuities risk 65 Based on Natixis A.M approach Corporate strategy & CSR For example, when employees feel good in the company, avoiding hidden costs such as those related to attrition rate and absenteeism can contribute to better productivity Cost Resource Identify the reductions productivity enhancement stakeholders and the negative impacts to target Risk of financial Risk of penalty & new business Reputational regulations discontinuities risk 66 Based on Natixis A.M approach  30/10/2024 Improve well-being and productivity On March 9, 2023, an article from France info warned about the psychological distress of the French at work (Add source link: FranceInfo.fr by Duport Philippe: “Well-being at work: 44% of French employees are in a state of psychological distress”, published on 03/09/2023: https://www.francetvinfo.fr/replay-radio/c-est-mon-boulot/bien-etre-au- travail-44-des-salaries-francais-sont-en-etat-de-detresse- psychologique_5673998.html) In 2020, the overall cost of workplace discomfort per year and per employee is estimated at more than €14,000 (source: Mozart Consulting: “IBET: sectoral study 2020”, published on 29/10/2020: https://www.mozartconsulting.eu/2022/05/24/ibet- etude-sectorielle-2020/) 67 Improve well-being and productivity Google therefore developed solutions to keep its employees at work: - Trainings and feedbacks ensuring quality of human relations and the clarity of objectives at the managerial level https://www.nytimes.com/201 - Schedule flexibility: no obligation to 1/03/13/business/13hire.html arrive and leave at a certain time, - 20% of time allocated to a personal project https://www.nytimes.co - geographic flexibility m/2016/02/28/magazine (teleworking/on-site work but also /what-google-learned- from-its-quest-to-build- mobility of furniture and possibilities https://www.nytimes.com/20 the-perfect-team.html of working outside for example) 21/04/30/technology/google- back-to-office-workers.html 68  30/10/2024 Identify the social CSR differentiation New market issues and the positive social opportunities and capital impacts to target investment Cost Resource Identify the reductions productivity enhancement stakeholders and the negative impacts to target Risk of financial Risk of penalty & new business Reputational regulations discontinuities risk 69 Based on Natixis A.M approach Example of the Caisses d’Epargne (French bank) 70  30/10/2024 Example of Schneider Electric 71 Example of ecotree https://ecotree.green/en/?forceLocale=en 72  30/10/2024 1. What is sustainable business? 1) Business organizations’ participation to the sustainable development’s model 2) Corporate philanthropy to create positive social impacts with non-profit organizations 3) Corporate Social Responsibility to manage positive and negative impacts of the organization 4) Shared value to scale, focusing on making profits while addressing environmental and social issues What is share value? (Porter & Kramer, 2011) Create shared value by tackling society issues with a for https://www.ted.com/talks/micha el_porter_the_case_for_letting_bu profit business model, so with scalability and sustainability siness_solve_social_problems https://moodle.luniversitenumerique.fr/pluginfile.php/6274/mod_folder/content/0/8.%20La% 74 20valeur%20partage%CC%81e%20-%20Micheal%20Porter.pdf  30/10/2024 3 level of actions 75 Corporate philanthropy conceived by Porter & Kramer CORPORATE PHILANTHROPY TAKING ACCOUNT OF GLOBAL ISSUES 76  30/10/2024 Social partnerships focusing on the sustainability of its ecosystem Companies are embedded in their ecosystem INFRASTRUCTURE OPTIMAL VALUE HEALTHY SUPPLIERS CHAIN PURCHASE POWER LONG TERM HEALTH CARE CAPITAL SYSTEM COMPANY HEALTH OF THE DEMAND FOR EDUCATION COMPETITIVENESS COMMUNITIES PRODUCTS MEDIAS PRODUCTIVE JUSTICE, EMPLOYEES REGULATION GOVERNMENT ACCESS TO SUPPORT MARKETS, ENERGY, WATER 77 Based on Porter & Kramer (2011) Share value concept blurs the boundaries between for-profit, nonprofit and goverment zones 78  30/10/2024 Exemple of banking industry Banks have realized that when their customers can no longer repay their loans, it is usually not due to their poor financial management, but to a difficulty in life that suddenly causes a loss of income : when people lose their jobs and/or get divorced. The monthly repayment of the loan then becomes too high compared to the new lower income. What can the bank do in such a situation? 79 Exemple of banking industry 80  30/10/2024 CSR conceived by Porter & Kramer CORPORATE SOCIAL RESPONSIBILITY TAKING ACCOUNT OF THE NEGATIVE IMPACTS 81 Shared value conceived by Porter & Kramer SHARED VALUE TAKING ACCOUNT OF STAKEHOLDER VALUE 82  30/10/2024 Corporate philanthropy, CSR and Share value CORPORATE CORPORATE SOCIAL SHARED VALUE PHILANTHROPY RESPONSIBILITY CREATING VALUE AND GIVING MONEY TO HELP INVESTING IN THE POSITIVE IMPACTS BY ADRESSING SOCIETY REDUCTION OF NEGATIVE ADRESSING SOCIETY ISSUES IMPACTS ISSUES REDISTRIBUTION OF CORPORATE STRATEGY PROCESS, MANAGEMENT PROFITS AND BUSINESS MODEL NON-BUSINESS PERIPHERY BUSINESS CORE BUSINESS SPECIFIC TO EACH KIND OF SPECIFIC TO EACH NON-SPECIFIC COMPANY INDUSTRY REPUTATION STAKE VIABILITY STAKE BUSINESS STAKE 83 Critics: social, environmental and economic values are not always conciliables Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating shared value”. California management review, 56(2), 130-153. McDonald C. and A. Marcoux (2013), “Creating Shared Value: the one-trick Pony Approach”, Business Ethics Journal Review, vol.1, n°17, p.106-112. 84 https://www.elmayorportaldegerencia.com/Documentos/Estrategia/%5BPD%5D%20Documentos%20-%20Crane%20Contesting%20the%20value%20of%20CSV.pdf  30/10/2024 2. Examples of sustainable business 1) Value propositions of sustainable business 2) Addressing environmental issues 3) Addressing society issues 4) Test on K2 Value proposition The red blocks corresponds to your value propositions. It consists of answering the following questions: - Why should your company exist? - What value added can you provide to your customers and more broadly to all your stakeholders? - What interests will your stakeholders find in contributing to the success of your company? In the case of a sustainable business model, it is essential to answer these questions with the three value propositions: economic, social and environmental. 86  30/10/2024 Social value proposition – to your customers Lower price (low-cost companies) More attractive price for the same features Local product Best data protection policy Lower CO2 emission of your business activities (Schneider's environmental efficiency solutions, Airbus' less polluting aircraft) Reduction in risks (guarantees) Better product features (cars with more options) Greater statutory value (luxury products) Greater complementary services (the Air France lounge) Greater modularity of the product Inclusive value beyond the low price (example of microcredit) Pleasant design (example of car manufacturers, the fashion sector) New functionalities (autonomous cars) Better quality of service (5 stars hotels) Greater performance (computer and smartphone innovations) Greater customization by benefiting from economies Product/service adapted to situations of disability of scale (example of banking services) Fair trade product Greater ergonomics 87 Organic product Environmental value proposition – to your customers Lower price (low-cost companies) More attractive price for the same features Local product Best data protection policy Lower CO2 emission of your business activities (Schneider's environmental efficiency solutions, Airbus' less polluting aircraft) Reduction in risks (guarantees) Better product features (cars with more options) Greater statutory value (luxury products) Greater complementary services (the Air France lounge) Greater modularity of the product Inclusive value beyond the low price (example of microcredit) Pleasant design (example of car manufacturers, the fashion sector) New functionalities (autonomous cars) Better quality of service (5 stars hotels) Greater performance (computer and smartphone innovations) Greater customization by benefiting from economies Product/service adapted to situations of disability of scale (example of banking services) Fair trade product Greater ergonomics 88 Organic product  30/10/2024 Economic value proposition – to your customers Lower price (low-cost companies) More attractive price for the same features Local product Best data protection policy Lower CO2 emission of your business activities (Schneider's environmental efficiency solutions, Airbus' less polluting aircraft) Reduction in risks (guarantees) Better product features (cars with more options) Greater statutory value (luxury products) Greater complementary services (the Air France lounge) Greater modularity of the product Inclusive value beyond the low price (example of microcredit) Pleasant design (example of car manufacturers, the fashion sector) New functionalities (autonomous cars) Better quality of service (5 stars hotels) Greater performance (computer and smartphone innovations) Greater customization by benefiting from economies Product/service adapted to situations of disability of scale (example of banking services) Fair trade product Greater ergonomics 89 Organic product Economic value proposition – to your customers A sustainable business model can offer higher social and environmental value but not at the expense of the economic value. Economic value created and delivered to your customer is the first reason why people will buy your product. While you try to improve the social and environmental impact of the industry you are working on, do not forget to work on the economic value. Sometimes, working on the social/environmental value leads to change the economic value. It is the case when you change for a product-service business model as Volswagen did with MOIA or BOCAGE did with its shoe rental. 90  30/10/2024 2. Examples of sustainable business 1) Value propositions of sustainable business 2) Addressing environmental issues 3) Addressing society issues 4) Addressing governance issues Test on K2 Addressing environmental issues 1) Sustainable supply with regenerative business model 2) Ecodesign with modularity 3) Decarbonization with reshoring and disintermediation 4) Responsible consumption with product-service model 5) Longer lifetime for products and inputs 92  30/10/2024 Circularity models: address environmental issues (resource depletion, biodiversity loss, pollutions) Sustainable use of inputs Eco-efficiency of Responsible purchasing, Eco-efficiency of the production? shipping, distribution shipping eco-efficient? and use of products? OUTPUTS (poducts & services) Eco- INPUTS Product- (resources, raw CONSUMPTION service design? materials) model? END-OF-LIFE OR 2nd LIFE OF PRODUCT High durability of the Responsible purchasing, good, maintenance / shipping eco-efficient? Re-use, recycling and de-pollution? reconditioning? 93 1) Sustainable supply with regenerative business model Examples of sustainable agriculture Social inequa- Transport em- Unsustainable Use of chemical Less nature in lities & Human issions, large- industrialized pesticides cities right violations scale farms agriculture Small local Urban Organic farmers farms, Agroecology, Fair trade agriculture using organic rooftop permaculture agriculture farmers (AMAP) 94  30/10/2024 1) Sustainable supply with regenerative business model Regenerative mindset: transition from a 'mechanistic' to an 'ecological' or living systems worldview, Conceptualized in the 1970s by Charles Krone and Bill Mollison & David Holmgren. Example of Permaculture: alternative agricultural development framework, with protection, preservation, regeneration and improvement of the fauna and the flora, the biodiversity of the land. working on potential working on existence Mang, P., & Reed, B. (2012). Designing from place: A regenerative framework and methodology. Building Research & Information, 40(1), 23-38. 95 1) Sustainable supply with regenerative business model Objective of addressing the negative environmental impacts of intensive industrial agriculture with another approach to nature, less instrumental, more based on coexistence. For the company Arbraculture, permaculture is a way to take car of people and nature thanks to a fair sharing of the resources and adopting an ecosystem approach following 4 steps that are in accordance with permaculture principles: 1) Arriving in a space, understanding its limits and opportunities -> principle 1: observe and interact 2) Identifying the needs of the users of the space: principle 1: observe and interact https://www.arbrac ulture.com/presse- 3) Developing the land to meet these needs, and those of nature -> principle 2: media.php catch and store energy + principle 3: obtain a Yield 4) Maintaining this ecosystem for the long term. All the other principles, including principle 10: use and value diversity (not all the eggs in one basket) 96 https://www.permacultureprinciples.com/wp-content/uploads/2013/02/Essence_of_Pc_EN.pdf  30/10/2024 1) Sustainable supply with regenerative business model The “permacompany” concept of Sylvain Breuzard (2021) Adaptation to the permaculture model of agriculture sector to secondary and tertiary companies with 3 principles: - Social: Taking care of humans, of their physic and mental health, their personal aspirations - Environmental: preserving the Earth, achieving a positive carbon balance, relying on resource regeneration and sufficiency - Economic: setting limits to financial objectives, and fair sharing of the managerial slack (see stakeholder value) 97 https://www.sekoiacity.fr/de-la-permaculture-a-la-permaentreprise-un-modele-inspirant-pour-lentreprise-de-demain/ 2) Ecodesign with modularity The modular and sustainable design of the product can further empower customers ability to engage into a responsible consumption. FairPhone promises the consumer to regain full ownership of their phone thanks to software protected from planned obsolescence and thanks to a modular hardware. The Fair Phone is designed in a way that its parts are easily changeable https://shop.fairphone.com/about-us 98  30/10/2024 2) Ecodesign with modularity Modularity can also address social challenges such as the autonomy of the seniors, or the inclusion of people with disabilities. It is the case of Viktor, a smart (connected ) cushion, allowing the seniors to call, change the TV program, listen to music or call hospital staff in case of a problem (aid button) https://solylend.com/en/projets/18-viktor-the-social- innovation-service-for-digital-inclusion-of-seniors https://frenchhealthcare.com/viktor-the-smart- cushion-for-the-elderly/ 99 3) Decarbonization with disintermediation – AMAP example 100 https://www.collidu.com/media/catalog/product/img/9/6/96f47b11b4c111c1e8f1a946d6d73602147da0e845457925a0d8c1e78162e94f/disintermediation-model-slide1.png https://www.comptazine.fr/wp-content/uploads/2022/04/amap.jpg https://www.consoglobe.com/wp-content/uploads/2011/02/amap-pomme_shutterstock_1058018063_ban.jpg  30/10/2024 3) Decarbonization with reshoring 101 4) Responsible consumption with product-service model - BOCAGE (ERAM GROUP) example 102  30/10/2024 4) Responsible consumption with product-service model - BOCAGE (ERAM GROUP) example 103 https://latelierbocage.fr/ 4) Responsible consumption with product-service model - BOCAGE (ERAM GROUP) example Focus on products model Product-service model SELLING SHOES RENTING SHOES 104 https://latelierbocage.fr/  30/10/2024 4) Responsible consumption with product-service model - BOCAGE (ERAM GROUP) example Focus on products model Product-service model Performance based on the Performance based on service quality & number of shoes sold products’ maintenance/reconditioning 105 https://latelierbocage.fr/ 4) Responsible consumption with product-service model - BOCAGE (ERAM GROUP) example Focus on products model Product-service model Fashionable obsolescence, High durability of the good & quality of damaged heel & production the heel and local production (made in efficiency France) 106 https://latelierbocage.fr/  30/10/2024 5) Longer lifetime for products and inputs – Example of Aircraft industry AIRCRAFT Maintenance activity extend the lifespan of aircraft USE This activity represents the 3rd profession of the Air France-KLM group, with a turnover exceeding one billion euros. MAINTENANCE The Air France-KLM know-how and expertise attract external customers (so other airline companies) who represent one third of the maintenance turnover. In 2015, Air France-KLM has launched a PROGNOS predictive maintenance solution to anticipate and avoid breakdowns 107 5) Longer lifetime for products and inputs – Example of Aircraft industry Providing a second life to the aircraft: 1) Leasing (give back the aircraft to its owner) / sell AIRCRAFT aircraft to other companies 2) Second life in another industry: The company Jumbo Stay which offers bedrooms and conference rooms inside a grounded aircraft (you USE can book the cockpit suite) https://www.jumbostay.com/ MAINTENANCE SECOND LIFE 108  30/10/2024 5) Longer lifetime for products and inputs – Example of Aircraft industry RAW AIRCRAFT MATERIAL Aircraft recycling field of activity represents various expertise in pollution control, dismantling, recycling and re-use of aircraft RECYCLING/ materials and components. RE-USE For example, Airbus and its partners, via their company Tarmac Aerosave, deconstruct and recycle planes in Tarbes MAINTENANCE and Toulouse in France, as well as in Teruel in Spain SECOND LIFE 109 2. Examples of sustainable business 1) Value propositions of sustainable business 2) Addressing environmental issues 3) Addressing society issues 4) Test on K2  30/10/2024 Addressing society issues 1) Social inclusion with BOP and pay what you can 2) Social finance: social impact bonds and microfinance 3) Democratic models: cooperative status and freedom leadership 4) Stakeholder’s governance: stakeholder value and purpose of the organization 5) Sharing economy 111 1) Social inclusion with Bottom of the pyramid (BOP) BOTTOM OF THE PYRAMID (BOP) The “base of the pyramid” principle was conceptualized by Dr. Prahalad and popularized in his book The Fortune at the Bottom of the Pyramid Many people do not have access to goods and services because they cannot afford them. To include these populations and give them access to offers of goods and services and to employment, companies are rethinking the characteristics of the offers and their production method to reduce their selling price. 112  30/10/2024 1) Bottom of the pyramid – example of Tata Nano This involves removing Indispensable features that are costly and role Keep Re-design are not essential to meet the objective of selling at the lowest possible price. The TATA nano does not have Question Remove any driving aids such as the Subordinate ABS system, for example. role Low cost High costs 113 1) Bottom of the pyramid – example of Tata Nano On the contrary, it is necessary Indispensable to keep the features that are role Keep Re-design essential and inexpensive. TATA has thus kept the minimum safety standards for the nano such as a solid metal Question Remove structure, deformation zones Subordinate and lateral reinforcements. role Low cost High costs 114  30/10/2024 1) Bottom of the pyramid – example of Tata Nano The features that are not Indispensable essential and inexpensive role should be questioned. Keep Re-design If removing them would shock customers, disrupt them or risk slowing down their Question Remove purchase, then it will cost Subordinate more to remove them than to role keep them. Low cost High costs 115 1) Bottom of the pyramid – example of Tata Nano Finally, the functionalities that are essential and expensive Indispensable role must be rethought to keep Keep Re-design them in another form (with other materials or production methods, etc.). Question Remove Many of the metal parts of the TATA nano have been replaced Subordinate role with costless plastic Low cost High costs 116  30/10/2024 1) Bottom of the pyramid – example of Tata Nano The example of Tata shows the limits of a BoP approach when this approach meets a need and not a demand. Understanding consumer needs in order to satisfy them is an important first step in defining a viable economic model. This step cannot be sufficient on its own. It requires going beyond the need to satisfy a demand. For example, we all need to eat. However, what guides our shopping is our desires. The Tata car met mobility needs and offered the lowest selling price on the market, but it did not meet the market demand. 117 https://www.lepoint.fr/automobile/tata-nano-la-fin-du-reve-pour-la-voiture-a-1-500-euros-27-01-2019-2289134_646.php 1) Bottom of the pyramid – example of Tata Nano Le Point headlined in its Automobile section on January 27, 2019: "Tata Nano: the end of the dream for the 1,500-euros car“ Its author went back on the 2 major difficulties which penalized the Tata Nano, and you need to overcome during a BoP approach: 1) Do not remove essential features when reducing features. Here this reduction has involved revising downwards the safety standards, which poses a problem for families. 2) Do not send the signal that your buyers are the poorest. The Tata Nano sent such a signal, affecting the social status of the buyer. 118 https://www.lepoint.fr/automobile/tata-nano-la-fin-du-reve-pour-la-voiture-a-1-500-euros-27-01-2019-2289134_646.php  30/10/2024 1) Bottom of the pyramid – example of Grameen Danone Foods In 2007, Danone launched a BoP approach with Grameen, through a joint venture, Grameen Danone Foods. In Bangladesh, many children suffer from malnutrition. A significant part of the local population is poor and excluded from employment. Social missions behind profits: 1) Fight against malnutrition, offering a fortifying yogurt, enriched with vitamins and minerals: the Shokti + 2) Fight against poverty, producing locally this yogurt, creating jobs for the local population. 119 1) Bottom of the pyramid – example of Grameen Danone Foods manufacturing process minimizing costs of production, distribution and promotion: 1) Danone uses micro-factories that are energy-efficient due to their very low automation. 2) Danone does not need to incur advertising costs: the local distribution network is responsible for word-of-mouth communication 3) Danone supplies locally and in a short circuit. The company does not use intermediaries between milk producers and selling. It works directly with local producers, eliminating intermediation costs, benefiting from low labor costs and reducing transport and storage costs. 4) Danone benefits from a network of women who sell yogurt door-to- door and transport it by rickshaw. 120  30/10/2024 1) Bottom of the pyramid – example of Grameen Danone Foods Danone is thus expanding its consumer integration into the market to include local populations in employment The BoP approach is a way of building physical accessibility to the company's offering for populations living in areas excluded from traditional distribution schemes. To succeed, the approach must be based on strong territorial anchoring The local production, distribution and employment secure the supply chain 121 1) Bottom of the pyramid – conclusion The base of the pyramid model is based on local production and distribution of the product. This organization allows local populations to be included in the job market. On a societal level, redefining an offer to make it accessible to populations with the lowest incomes is a form of combating poverty and exclusion by providing access to goods. For a company already positioned on a market, the base of the pyramid model is a way to diversify the offer by rethinking it for populations with the lowest incomes. 122  30/10/2024 1) Social inclusion with pay what you can Pay what you can business model is based on a cost-revenue structure that does not depend on the prices set for products/services but on participatory pricing centered on the buyer. Customers pay for the product/service based on their financial capacity and the benefits they perceive in obtaining the product/service when purchasing. It can be adopted by associative organizations, then depending on trust and generosity to succeed. Example of Wikipedia associative organizations in different countries (united under the aegis of the Wikimedia Foundation) 123 1) Social inclusion with pay what you can Pay what you can is a model different from Pay what you want. With the Pay what you want business model, customers pay for the product/service based on the benefits they perceive. Example of the album In Rainbows by Raidohead released in 2007. A limit price can be set by the company to cover its costs, or a suggested price from which the buyer can pay more or less. When payment is made after the experience of using the product/service, this is comparable to a tip. If it occurs before this experience, it is comparable to a bait or a way to know the value perceived by customers without going through a costly survey. 124  30/10/2024 2) Social finance: social impact bonds mechanism 125 2) Social finance: microfinance - example of Grameen Grameen Bank is a microfinance organization that offers credits without requirements of collaterals to the marginalized poor in Bangladesh, excluded from mainstream commercial banks due to their greater risk of non-repayment of the credit. Grameen Bank allows small amounts to be lent at low interest rates. Grameen Bank does not lend to a single individual as usual, but to a group that is united in terms of repayment. The group ensures the risk control function, having every interest in ensuring the proper use of the loan by each member of the group and their repayment capacity. The members of the borrower group have every interest in associating themselves with reliable people, thus carrying out a self-selection that reduces the risk of default. The financial collateral is replaced by a “social warranty”. 126 https://www.kazamagrameen.org/img/partners/kgmi-grameen-banking-for-the-poor.jpg https://www.results.org.au/wp-content/uploads/2014/10/MicroFinance.jpg  30/10/2024 3) Democratic models: cooperative status Clients and shareholders Specific shares with the principe 1 person = 1 voting right Administrators of the Sociétés Locales d’Épargne Administrators of the local Caisses d’Épargne 127 3) Democratic models: cooperative status - The majority of the employees are their own shareholders - Capital disengagement = termination of the employment contract - 1 person = 1 voting power - Do not confuse with employees’ shares (Air France, Schneider Electric…) - Examples: 128  30/10/2024 3) Democratic models: freedom leadership Getz and Carne define the liberated company as “an organizational form that allows employees complete freedom and responsibility to take actions they decide are best” (2012, p34) "wherever the people are well informed they can be trusted with their own government" Thomas Jefferson (1789) The concept of freedom leadership has been developed in a context of denunciation of the malaise at work in a Taylorized world with dehumanized processes that do not allow, or only slightly, employees to fulfill themselves through their work. It disengages, thus creating new issues of work control. This control has an infantilizing aspect. Work is standardized: we do things this way because the procedure requires it, even if doing things differently would save time or would be just as efficient but more fulfilling. 129 3) Democratic models: freedom leadership Values inspiring this model: Trust: right to make mistakes by focusing on learning rather than failure, elimination of postures such as pretending to be overwhelmed with work or presenteeism Equality: trusts can only exist on the condition that all people working within the company are considered as equal -> elimination of hierarchy, adoption of a flat structure (vertical decentralization) Freedom: self-organization, everyone is free to carry out their task in the most appropriate way for them, freedom of initiative -> autonomous teams with collective decisions on the organization of work https://aepsilon.com/ Responsibility: breaking down departments and partitions, transversal projects (horizontal decentralization); decision by employees themselves of their own remuneration (collectively) 130  30/10/2024 4) Stakeholders’ governance: stakeholder value Lynn Stout (1957 – 2018), professor of corporate and business law, was working on the purpose of business organization and challenged the belief that a company's sole purpose is to maximize shareholder profits, advocating for a more balanced approach to creating value. “Although many contemporary business experts take shareholder primacy as a given, the rise of shareholder primacy as dominant business philosophy is a relatively recent phenomenon” (Stout, 2012) « […] maximizing shareholder value is NOT a requirement; it is just one possible corporate objective out of many. […] Maximizing shareholder value is not a managerial obligation, it is a managerial choice » (Stout, 2012, p. 32) Let’s watch one of her videos: https://www.youtube.com/watch?v=k1jdJFrG6NY 131 4) Stakeholders’ governance: stakeholder value Shareholder value approach Critics formulated by Stout Shareholders own shares, corporations own themselves. If you are a shareholder Shareholders own corporations of Apple, you cannot go to a store and take an i-phone. You own a share you can sell whenever you want. Shareholders are residual claimants only when there is a bankruptcy; when companies are Shareholders are residual healthy, the legal entity is its own residual claimants claimant (the board decides where the profit goes) 132  30/10/2024 4) Stakeholders’ governance: stakeholder value Shareholder value approach Critics formulated by Stout Executives own a fiduciary duty to the Shareholders are principals and corporation —not to shareholders (i.e., the executive directors are the agent board exists prior to the ‘principals’). Executive working on behalf of principals must promote the interest of the company above their own, or some outside, interests Shareholders are human being. Some Shareholders focus only on making shareholders have pro-social behaviors, some a maximum of value for themselves shareholders are long term investors. They are at the expense of the other not so many people willing to become rich at stakeholders the expense of other, destroying their lives 133 4) Stakeholders’ governance: stakeholder value  Stakeholder approach to value creation process and value distribution  Stakeholder value measurement: measurement of the total value created by the different stakeholders  Stakeholder value = sales at a price of opportunity cost – sum of opportunity cost 134 (Charreaux & Desbrières, 2001; Charreaux & Wirtz, 2006)  30/10/2024 4) Stakeholders’ governance: stakeholder value  Example: - Price sales: €1800, customers were willing to pay €2,000 - Purchase price: €350, suppliers were willing to accept €300 - CEO compensation: €150, he would have accepted for €100 - Employees remuneration: €400, they would have accepted for €350 - Remuneration of lenders: €250, they would have accepted €200 - Remuneration of shareholders: €200, they would have accepted €150 135 (Charreaux & Desbrières, 2001; Charreaux & Wirtz, 2006) 4) Stakeholders’ governance: stakeholder value  SV = 2000 - (300 + 100 + 350 + 200 + 150) = €900  Breakdown by stakeholders: - Customers: 2000 - 1800 = €200 - Suppliers: 350-300 = €50 - Leader: 150-100 = €50 - Staff: 400-350 = €50 - Lenders: 250-200 = €50 - Shareholders: 200-150 = €50  Apparent accounting profit: 1800 - (350 + 150 + 400 + 250) = 650 € This profit is supposed to return to shareholders 136 (Charreaux & Desbrières, 2001; Charreaux & Wirtz, 2006)  30/10/2024 4) Stakeholders’ governance: stakeholder value  SV = 2000 - (300 + 100 + 350 + 200 + 150) = €900  Breakdown by stakeholders: - Customers: 2000 - 1800 = €200 - Suppliers: 350-300 = €50 - Leader: 150-100 = €50 - Staff: 400-350 = €50 - Lenders: 250-200 = €50 - Shareholders: 200-150 = €50  Managerial slack: 1800 - (350 + 150 + 400 + 250 + 200)= €450 How to manage the distribution of the value created? Reinvestment? Conservation in cash? Philanthropy?... 137 (Charreaux & Desbrières, 2001; Charreaux & Wirtz, 2006) 4) Stakeholders’ governance: purpose of the organization The “Benefit Corporation” More than 2,500 companies worldwide certified B-CORP by the B-Lab, a NGO created in the United-States in 2006 To obtain B-CORP certification, organizations, which can only be for-profit companies, must obtain a minimum score of 80 after answering more than 300 questions on their societal impact and how they manage it. It represents now a real legal status in many American states, leading to changes in traditional American law. The State of Maryland was the first American state to have integrated the status of Benefit Corporation into its law in April 2010. In France, the B-Corp is a certification and not a legal status. It is awarded by the independent organization B Lab France B-Corp slogan: "Do not seek to be the best company in the world, but to be the best for the world" 138  30/10/2024 4) Stakeholders’ governance: purpose of the organization The “Benefit Corporation” The Benefit Corporation present the benefit of not requiring to abandon the objective of profitability (like the Limited Liability Company or L3C in the United States does) The achievement of its social and environmental objectives is verified by an independent third party, for example the B Lab, the GRI, GreenSeal (unlike the Flexibility Purpose Corporation or FPC in the United States) The Benefit Corporation has no regulation of its corporate purpose or activity and the rights to shareholders' profits are not limited, unlike the Community Interest Company (CIC) created in 2005 in the United Kingdom The application to obtain the status of Benefit Corporation is voluntary, but subject to acceptance by the General Assembly Meeting ruling by a 2/3 majority, according to the Model Benefit Corporation Legislation 139 140  30/10/2024 4) Stakeholders’ governance: purpose of the organization The “société à mission” Article 1833 modified by the law n°2019-486 du 22 mai 2019 - art. 169 Any company must have a lawful object and be incorporated in the common interest of the partners. The company is managed in its social interest, taking into account the social and environmental impacts of its activity.. 141 4) Stakeholders’ governance: purpose of the organization Loi Pacte: LOI n° 2019-486 du 22 mai 2019 relative à la croissance et la transformation des entreprises « société à mission » status Article L210-10 of the «Code du commerce » Social and/or Publication in the “Raison d’être” environmental “registre du (company’s purpose) objectives commerce” 142  30/10/2024 4) Stakeholders’ governance: purpose of the organization Article 1835 modifié par la loi n°2019-486 du 22 mai 2019 - art. 169 The statutes may specify a reason for being, consisting of the principles which the company adopts and under which it intends to allocate resources when performing its activity. 143 4) Stakeholders’ governance: purpose of the organization Objectives: social / environmental Implementation: actions, measures Follow-up: mission & reporting committee Verification: independent third party 144  30/10/2024 145 5) Sharing economy Exchange of goods / services : Agriculture & food: Transportation: carpool, Real estate: Bartering & book swapping community garden, social care sharing dining Crowdfunding https://www.ville- valbonne.fr/actualite/jardins-partages- participez-a-la-consultation/ 146 https://www.eatwith.com/fr  30/10/2024 2. Examples of sustainable business 1) Value propositions of sustainable business 2) Addressing environmental issues 3) Addressing society issues 4) Test on K2