Sustainability Exam Review PDF

Sustainability Exam Review Population growth always tends to outrun resource growth. It is impossible for civilizations to be self- sustainable without interventions such as natural disasters, famine, and war. In a sense, war is inevitable. Malthusianism: Truth or evil twist? From Thanos to Sustainable Development When facing resource constraint, a civilization can: ¬ Control population ¬ Genocide ¬ Birth control ¬ Increase resource production ¬ Increase eLiciency in production ¬ Acquire more resources ¬ Use sustainable resources ¬ Reduce resource consumption ¬ Reduce end consumption ¬ Reuse and recycle Focus of this course An integration of your understanding of sustainability and an exploration of topics in sustainability. v Key essence: § Sustainable Development § Triple Bottom Line § Sustainable Development Goals (SDGs) § Corporate Social Responsibility (CSR) § Governance at DiLerent Levels § The Concept of Stakeholder The Tipping Point “Critical thresholds in a system that, when exceeded, can lead to a signiﬁcant change in the state of the system, often with an understanding that the change is irreversible” --Intergovernmental Panel on Climate Change A tipping system is a system that has at least one embedded tipping point and can pass the tipping points under certain reachable conditions. Global Tipping Points Report v Three major categories: ¬ Cryosphere ¬ Biosphere ¬ Ocean and atmosphere circulations v Five major tipping systems are already at risk of crossing tipping points at the present level of global warming: ¬ The Greenland and West Antarctic ice sheets ¬ Permafrost regions ¬ Coral reefs ¬ Labrador Sea ¬ subpolar gyre circulation https://global-tipping-points.org/ At 1.5C temperature increase, 70-90% of the coral reefs will disappear. At the current rate of temperature increase without major change in human behaviour, by early 2030s, 99% of the coral reefs will exceed negative tipping point and decay beyond recovery. This would lead to massive loss in biodiversity in the ocean. 10 Deﬁning Sustainability “Meeting the needs of the present without compromising the ability of future generations to meet their own needs. ” (UN Brundtland Commission, “Our Common Future”, 1987) Sustainable development is just the development that meet the needs of the present without... Measuring Sustainable Development – the UN SDGs The ﬁrst version of the UN sustainability development goals is called the Millennium Development Goals (MDG). 8 goals, 2000-2015 2015 report says good achievements uneven achievements Shift of societal focus 15 Measuring Sustainable Development – the UN SDGs In 2015, UN Member States translated their vision of sustainable development into a blueprint for achieving it: the 2030 Agenda for Sustainable Development. The goal is to paint a better and more sustainable future for all by 2030. 17 global goals, 169 targets, 231 indicators. Universal call to action 16 UN SDGs and the Triple Bottom Line The study of sustainability goes beyond environmentalism as we are part of linked systems of humans and nature. Sustainability encompasses a broad range of issues and is commonly structured around three main pillars, i.e., the triple bottom line. Environmental Sustainability Economic Sustainability Social sustainability 17 Environmental Pillar v This pillar focuses on maintaining the health of the planet's ecosystems. ¬ It involves actions and policies aimed at conserving natural resources, reducing pollution and greenhouse gas emissions, protecting biodiversity, and managing natural resources responsibly. ¬ The goal is to ensure that the Earth can continue to support life and provide resources for future generations. v Why is environmental sustainability important? ¬ Wellbeing of current and future generations ¬ Decarbonize our planet and conserve natural resource SDGs 12-15: Environmental Sustainability Goal 12: Responsible Consumption and Production - Example: Encouraging the use of biodegradable materials. Goal 13: Climate Action - Example: Initiatives for reducing carbon emissions. Goal 14: Life Below Water - Example: Ocean cleanup projects. Goal 15: Life on Land - Example: Reforestation programs. 20 21 Social Sustainability v This pillar focuses on maintaining and improving social quality, including areas like social equity, human rights, labor rights, community development, and education. ¬ Social sustainability aims to create systems and practices that promote well-being, justice, and equal opportunities for all members of society. v What are the beneﬁts and advantages of social sustainability in business? ¬ Employee beneﬁts ¬ Business beneﬁts ¬ Social inclusion ¬ Improving risk management SDGs 1-6, 10, 11 & 16: Social Goal 1: No Poverty - Example: Microﬁnance services in rural areas. Goal 2: Zero Hunger - Example: Community-supported agriculture programs. Goal 3: Good Health and Well-being - Example: Vaccination drives in underdeveloped regions. Goal 4: Quality Education - Example: Online education platforms accessible worldwide. Goal 5: Gender Equality - Example: Legislation ensuring equal pay. Goal 6: Clean Water and Sanitation - Example: Clean water initiatives in arid regions Goal 10: Reduced Inequality - Example: Programs to support refugees and migrants. Goal 11: Sustainable Cities and Communities - Example: Green urban planning. Goal 16: Peace, Justice, and Strong Institutions - Example: International courts to address human rights violations. Economic Pillar v Economic sustainability is a broad set of decision-making principles and business practices aimed at achieving economic growth without engaging in the harmful environmental trade-oLs that historically accompany growth. ¬ It emphasizes the need for economic systems to be eLicient, resourceful, and resilient in the long term. v Why is Economic Sustainability important? ¬ The longevity of the global economy ¬ The preservation of human life SDGs 7-9, 16: Economic Sustainability Goal 7: ALordable and Clean Energy - Example: Solar energy projects in remote areas. Goal 8: Decent Work and Economic Growth - Example: Supporting small and medium enterprises (SMEs). Goal 9: Industry, Innovation, and Infrastructure - Example: Development of sustainable urban infrastructure. Goal 17: Partnerships for the Goals - Example: Global partnerships in vaccine distribution. 24 Are We Reaching The SDGs? The reality? At current trajectory, there will be a 56% water supply deﬁcit relative to demand by 2030. 2023 UN SDGs report: # of people living in extreme poverty ROSE to 714 million compared to 2019’s 689 million. At current speed, gender equality will be reached in 300 years. We are going to pass the 1.5C tipping point by 2035. v One of the major reasons: Lack of cooperation and various levels of governance. The Importance of Governance v Facilitate cooperations at the corporation and the government level. v Monitor unethical behaviours and set reporting mechanisms. v Ensure transparency in self-reporting. v Apply sanctions to business wrongdoings. v Mitigate international disputes and reduce geographical inequality. Governance in This Course v National governance ¬ Corporate governance ¬ Various levels of government interventions v Global governance ¬ International relations ¬ Geographic inequality ¬ The Role of the UN and its agencies Sustainability vs Corporate Social Responsibility (CSR) A Common Sustainability-Centred Model The relationship between Sustainability and CSR depends on how we deﬁne CSR. Tripple Bottom Line based deﬁnition: CSR is “The way a corporation achieves a balance among it economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations.” (Sexty, 2020, p.117) Sustainability vs Corporate Social Responsibility (CSR) Voluntarism based deﬁnition: A corporation’s voluntary and deliberate attentions to its legal, ethical and philanthropic responsibilities to society. (Caroll 1979) Sustainability Philanthropic Deliberations CSR Question of The Day What was the ﬁrst version of the UN Sustainable Development Goal Called? 31 Environment Deﬁning the Environment Deﬁnition #1: the natural world, as a whole or in a particular geographical area, especially as aLected by human activity. --Google Dictionary Deﬁnition #2: The physical surroundings or conditions in which human and other organism lives. --Oxford English Dictionary The diLerence? Deﬁning the Environment An ego-centric deﬁnition: the natural world, as a whole or in a particular geographical area, especially as aLected by human activity. --Google Dictionary A biocentric deﬁnition: The physical surroundings or conditions in which human and other organism lives. --Oxford English Dictionary Anthropocentric Perspective The word “Anthropos” refers to human beings in Greek. Anthropocentrism (also known as homocentricism) is the belief that considers that human beings are the most important entity in the universe or earth. In anthropocentrism, humans have greater intrinsic value in comparison to other species. Only human interests matter! 7 Biocentrism “is based on the idea that humans and their activities are inextricably interconnected with the rest of the natural world” (Brisman & South, 2019, p. 5). Biocentrism is an anti-anthropocentric belief in environmental philosophy. Biocentrism considers all living beings to have inherent value. It does not consider that humans are superior to other living species. It doesn’t mean that we should all be vegans! But there should be ethical principles in our societal value that protect the rights of all living things. It recognizes the value of biodiversity. 8 Ecocentrism Ecocentrism is the belief that ecosystems, including all things (living and nonliving), have inherent value regardless of their perceived usefulness or importance to human beings. Ecocentrism recognizes a nature-centred system of values. It also recognizes the value of biodiversity. Similar to biocentrism, ecocentrism opposes anthropocentrism, which states humans have more inherent value than other things. Unlike biocentrism and anthropocentrism, ecocentrism tends to include abiotic factors in the ecosystems. Example: Do rivers have equal rights as living things? 9 Environmental Issues - Global Loss of Biodiversity: Habitat destruction, pollution, invasive species, and climate change contribute to the loss of biodiversity Climate Change: more frequent and severe weather events like wildﬁres, ﬂoods, and droughts. Deforestation: We are losing forests at an alarming and accelerating rate. Resource depletion: Overexploitation of resources, Overproduction, and over consumption. 12 Environmental Issues – Canada Oil Sands Development: The extraction and processing of oil sands in Alberta has been regarded as “dirty oil” industry. Overﬁshing: Historically, overﬁshing has been a signiﬁcant issue in Canada, particularly in the Atlantic region, aLecting the sustainability of ﬁsh stocks. Arctic Sovereignty and Environmental Protection: The Arctic region faces unique challenges due to climate change, such as melting ice and increased interest in resource extraction and shipping routes. Indigenous Land and Resource Rights: There are ongoing issues related to the rights of Indigenous peoples in Canada, particularly in terms of land use, resource extraction, and environmental stewardship. Albedo eEects Heat reﬂection vs absorption Light reﬂects – high albedo Dark absorbs – low albedo What is biodiversity? An interconnected web of life We have lost 65% of wetland in Nova Scotia What problems biodiversity loss may cause? Anthropocentric view: Monetary value $100 trillion worth of goods and services per year Non-monetary values Loss of coral reefs Biocentric view: Right of the animals on our planet Conventional business process and its externalities Externalities: the external costs or beneﬁts that businesses do not count ﬁnancially (e.g., water, air, soil pollution) Inputs Conversion Processes Outputs Externalities What Is Climate Change? Long-term shifts in temperatures and weather patterns due to natural causes or human activities. Since the industrial revolution, human activities have been the main contributor to the issue of climate change we are currently facing. Climate change is often linked with our disruption of the natural carbon cycle. Carbon Cycle Deﬁnition: The constant movement of carbon from the land and water through the atmosphere and living organisms. --The government of Canada Carbon Capture: The natural process or human activities that capture carbon dioxide from the atmosphere. Carbon Sequestration: The natural process or human activities of carbon uptake and storage. Carbon Neutrality: The notion that the amount of CO2 we release to the atmosphere is equal to the amount of CO2 we capture from the atmosphere through carbon sequestration. The Impact of Human Activity on Carbon Cycle Burning fossil fuels (Coal, petroleum) Over population & Over consumption Deforestation Irresponsible production practices such as pollutions FOSSIL FUELS Dramatically increased since the industrial revolution. Coal, Oil, Gas used in production. Used for energy Materials for production (textile, plastics, pharmaceutical use, parts for machinery, wax, etc.) In comparison: Clean energy produces far less CO2 emissions. Wind, solar, thermal, hydro, bioenergy. Overconsumption Over population Greed: Needs vs Wants Planned obsolescence Fast fashion DEFORESTATION Natural causes due to climate change Forest ﬁre Draught Pests Purposeful clearing Infrastructure construction Production Aggressive agriculture Irresponsible Production Great Paciﬁc Garbage Patch 1.6 million sq. km (2x Texas) 100,000 tons approx. (740 Boeing 777s) How Do We Recognize the Rights of Businesses in Law? How do we recognize legal rights of human? How do we recognize legal rights of businesses? How Do We Recognize Nature Rights in Law? How do we recognize legal rights of human? How do we recognize legal rights of businesses? Can we do the same for the environment? Environmental personhood Christopher Stone initially advanced the idea of environmental personhood in ”Should Trees Have Standing? Towards Legal Rights of Natural Objects” (1972). Stone argued that if an environmental entity is given legal personhood, it cannot be owned but it has the right to appear in court. Eco-centric perspective When he ﬁrst advanced the idea that forests and rivers should have a voice in court, it was met with ridicule. Nature Rights - A Growing Trend As of 2023, at least 30 countries have already proposed and/or given legal recognition to nature’s rights at the national or sub-national level through legal frameworks or judicial decisions. The Rights of Nature: A Global Movement - Feature Documentary The Indigenous Perspective Indigenous peoples have long recognized that nature has INHERENT rights and have actively integrated that philosophy into their stewardship. Mi'kmaq saw themselves as merely one life being within a natural world of many life beings. --The government of Nova Scotia Environmental personhood is natural to the indigenous perspective. Environmental Responsibility The concept of environmental responsibility explores our moral obligation to safeguard and sustain the natural world. This involves acknowledging the impact of human actions on the environment and taking active measures to minimize negative consequences. Environmental responsibility calls for recognizing the interconnectedness between human well-being and the health of the planet. Individual Responsibilities Our views matter How do we treat our relationship with the environment? Our actions matter How do we meet our needs in an eco-friendly way? Our words matter Talk about sustainability! Educate others! Inﬂuence others! Roles and Responsibilities of The Government Subsidize sustainability eLorts Direct subsidies (rebate, loans, etc.) Indirect subsidies (tax credits, government procumbent, etc.) Penalize irresponsible behaviours Direct penalties (ﬁnes, court rulings, regulations, etc.) Indirect penalties (Progressive tax strategies, unfriendly lists, etc.) Building infrastructure Encourage cooperations Public Education 16 Measuring Environmental Impact Deﬁne goals Deﬁne criteria Decide what to measure in each criterion Measuring Financial impact or ﬁnancial equivalent Non-ﬁnancial impact Guide decision making Consistent Monitoring Ethical Dilemmas Environmental dilemmas arise when the environmental sustainability conﬂicts with the other bottom lines, especially to an extent that an universally acceptable decision cannot be made. Environmental sustainability vs poverty Environmental sustainability vs culture Environmental sustainability vs economic growth Environmental sustainability vs ideological clash Society Deﬁning Social Sustainability “Social sustainability occurs when the formal and informal processes, systems, structures and relationship actively support the capacity of current and future generations to create healthy and livable communities.” --Western Australia Council of Social Services. Deﬁning Social Sustainability The consideration of social aspects of the sustainability of communities and societies. It is the eLort to ensure the survival and thriving of the society in a healthy, fair, and equal way. Amenities & infrastructure Voice & inﬂuence Social & cultural life Place (physical + virtual) and People Equity vs. Equality Both considers the rule of resource distribution in our society. Equity strives to achieve equal outcomes. Equal distribution of social resources. This often means to give certain groups advantages. Equality means equal opportunity to all participants. Equal chance to earn social resources. This often leads to unequal distribution of social resources. The two ways often trades oL each other, leading to social conﬂicts. Fairness and Justice Combines the rules of resource distribution with the rules of justice. Rule of law Protection of individual rights. Enforces universal values and rules such as non-discrimination, separation of power and justice. Economic justice: compensatory + retributive Conﬂict resolution Often submit to power both in the rule setting and rule enforcement processes. Corruption And Democracy Legal and social justice is the foundation for democracy. Unjust behaviour will be considered as the failure of the society and erode legitimacy. Eventually lead to Tacitus Trap: when a government loses its legitimacy, it will be hated no matter what it does, right or wrong. Caring and Kindness Genuine concerns for the well-being of other, especially the less represented minority. Stems from the feminist movement Deviation from equity, equality or justice. Strives to achieve reasonable social inequality. Psychological basis: empathy and sympathy Believes that a society should show more care to more vulnerable groups, even if doing so means suboptimal outcome in general. Based on social altruism and generosity Diversity and Inclusion Emphasizes recognizing and embracing the diLerences among individuals and ensuring that everyone feels valued and included. Diversity consideration: ensuring diverse representation of society in all aspects Inclusive consideration: ensuring the consideration of all value and perceptions in building culture. Not necessarily a principle of resource distribution, but provide guidance to how resources should and should not be distributed. Social Empowerment Refers to the process of enhancing the capabilities, inﬂuence, and opportunities of individuals and communities to participate fully in the economic, social, and political spheres of society. Advocacy: rights and responsibilities are advocated and protected. Representation: All groups have a chance to represent themselves in social decision making. Economic empowerment: providing chance to create and claim wealth. Provide chance to break the barriers of social classes with eLorts. Civic empowerment: providing chance for members to voice their opinions through democratic processes. Business: A Major Contributor to Both Social Issues and Solutions Many of the major social issues we are facing today are results of irresponsible business actions. Intentional actions Unintentional negative externalities Inequalities in Wealth Distribution Fair Wage & Employee beneﬁt Work force discrimination Gender and race-based pay dispersion 15https://www.epi.org/publication/ceo-pay-in-2022/ Employee Exploitation Stress and over exploitation Poor working conditions Work-related mental health issues Social Issues with Global Supply Chain Complexity adds uncertainty Destruction of local economy and market structure. Global inequality Overconsumption and resource waste Pollution Destruction of cultures Industrialization and Commodiﬁcation Commodiﬁcation: The process of transforming physical and virtual objects into commodities that can be trade in a market. Assigning economic value to things that have not been historically viewed as marketable items. Waterfront houses with private access to the beach. Major issues: Loss of non-monetary values. Loss of cultural identity. Pure anthropocentric perspective Linking Social Sustainability with Environmental Sustainability The question is: How do we incorporate environmental responsibilities in social decision-making systems? A question for next week’s class. Key Believes of Capitalism Self-interest: People are self-interest driven. Private Property: Social wealth (such as property and materials) should be owned and controlled by individuals. Free Market: acquisition, production and redistribution of resources and commodities should be free from control of the superstructures. The invisible hands: With enough competition, everyone will act in a socially acceptable way even if they are self-interest driven. Limited governance: the role of government should be limited to foreign aLairs. 5 From Capitalism to the Friedman Doctrine 6 A company’s ﬁduciary duty is only to its shareholders. Proﬁt is desirable and is the main motivation for human eLort that creates wealth in our society. Any managerial eLorts that steers away from this “ultimate goal” should be viewed as an agency problem (agents not following the will of the principle). Also known as shareholder supremacy. Sustainability Under The Friedman Doctrine In a nutshell, sustainability is only an issue to businesses when shareholders think it is. Shareholders will determine what social responsibility a company should undertake, not the manager, nor the society. All other social considerations are costs to doing business. Sustainable distribution of resources relies on everyone’s “capital input” in the society. This leads to dramatic increase in wealth inequality. 7 Deﬁnition: Stakeholder An individual or group who can inﬂuence and/or is inﬂuenced by the achievement of an organization’s purpose.” Who can exert the inﬂuence? Control scarce resources (TSMC to Huawei) Coercive power over the business operations Who can be inﬂuenced? What is at stake? How critical can the entity be inﬂuenced by the organization? From Stakeholder Theory to Corporate Social Responsibility If a ﬁrm’s duty of care is extended to its stakeholders (due to whether extrinsic or intrinsic reasons), then a corporation should have a series of responsibility to the society it resides in and interact with (all stakeholders). Corporate social responsibility is the created concept to deﬁne a corporation’s responsibility to the wellbeing of all other stakeholders besides shareholder. Deﬁnition of CSR “Corporate social responsibility can be deﬁned as the voluntary activities undertaken by a company, over and above legal requirements, to operate in an economically, socially and environmentally sustainable manner.” --The government of Canada Understanding Carroll’s Pyramid of CSR 1. Importance level by executives? Economic (3.5); legal (2.54); ethical (2.22); philanthropic (1.3) 2. Ethics permeates the pyramid 3. Tensions and trade-oLs Long-term and short-term proﬁtability 4. The pyramid is an integrated, uniﬁed whole 5. It is a sustainable stakeholder framework CSR and Social Sustainability The roles of corporations in a society are two-fold As key players in the economic system, corporations create wealth. Extract resources Production Distribution of products Provide services to society Corporations also play a vital role in the institutional system. Allocate resources (building facilities, buy and sell resources, etc.) Allocate wealth (employee salary, dividends, interests, tax, etc.) Allocate social goods (building infrastructures, managing social goods, create welfare, etc.) CSR and Social Sustainability As a vital player in the economic and institutional systems, a corporation’s social responsibility should adhere to, and enforce, the principles of social sustainability. Enforce equity and equality Ensure justice and fairness Practice caring and kindness Enhance diversity and inclusion Empower all stakeholders Ethical Dilemma An ethical dilemma is a moral situation where there is no clear distinction between right and wrong, and no perfect solution that can satisfy all stakeholders that are involved. The “Place” Dimension Infrastructure for the purpose oﬁmproving living standards. Access to services such asschools and hospitals. Community spaces for socialneeds. ALordable housing,transportations, etc. Represents the physical requirementsto be socially sustainable.23 The “Person” or “Population” Dimension Demographic characteristics of the population. Age Education Gender Race... Household characteristics. Marriage status Children?... Represents the human resource requirements to be socially sustainable. The “Perception” Dimension Feelings of safety and security. Crime rate Medical conditions Sense of justice and legal protection Community and economic stability Sense of job accessibility and security Represents the stability and safety requirements to be socially sustainable. The “People” Dimension Sense of community and sense of neighbour. Sense of belonging Attachment Social cohesion Social identity Social networks Represents the mental requirements to be socially sustainable. The “Process” Dimension Ability to adapt to changes. Ways to encourage participation. Flexibility to support future lifestyle. Methods to be inclusive. Represents the resiliency and ﬂexibility requirements to be socially sustainable. Economy Market failure in sustainability When free markets do not maximise society’s welfare, they are said to ‘fail’ and policy intervention may be needed to correct them (Bowen et al., 2024) As environmental [and social] problems are external to the market, they cannot be solved by market forces alone. In this sense, environmental problems are an example of a “market failure”. (Arimura, 2024) Emissions and nature destructions are not in ﬁnancial balance sheets Pursuing self-interest (as it is supported in the free market) can cause tragedy of common, e.g., overﬁshing in NS In the governance section we will learn how governments can play a role in avoiding this failures Sources: Arimura, T. H. (2024). Environmental Problems: A Market Failure. In Introduction to Environmental Economics and Policy in Japan (pp. 3-18). Singapore: Springer Nature Singapore. https://www.lse.ac.uk/granthaminstitute/explainers/why-do-economists-describe- climate-change-as-a-market-failure/ Economy “An economy is a system of production and consumption activities that determine how resources are allocated among all of its participants” (Investopedia). Traditional economic system Command system (more government, socialism) Free market (less government, capitalism) Mixed (all countries have a mixed system) Source: https://transportgeography.org/contents/chapter7/freight-transportation-value- chains/economic-system/ From Trading Economy to Business Economy The role of businesses in an economy Specialization role: Best at something vs. OK with everything Scale-economy role: More for less Knowledge creation role: Facilitate R&D & innovation Wealth distribution role: Who gets what Social responsibility role: be a good citizen Corporate Citizenship Deﬁnition: A corporation, just as a citizen of a society, have legal and social rights and responsibilities to buy, own, and sell properties, and to sue and be sued in court as a legal entity. It was meant to regulate the behaviour of corporations by outlining their rights and responsibilities. The ultimate goal of corporate social responsibility is to cultivate good corporate citizens. Legal citizenship: explicit rights and responsibilities outlined by law, violation leads to legal sanctions. Social citizenship: implicit rights and responsibilities set out by the society, violation leads to social sanctions. Issues with Corporate Citizenship Often, rights are emphasized, and responsibilities are ignored. Citizenship are used as shields for consequences of business wrongdoings. Coercive power on society due to size and wealth. 12 Economic Sustainability: The UN Perspective Economic sustainability refers to practices that support long-term economic growth without negatively impacting social, environmental, and cultural aspects of the community SDG 7: ALordable and clean energy SDG 8: Decent work and economic growth SDG 9: Industry innovation, and infrastructures SDG 12: Responsible consumption and production https://sustainability.umw.edu/areas-of-sustainability/economic- sustainability/#:~:text=Economic%20sustainability%20refers%20to%20practices,cultural %20aspects%20of %20the%20community. SDG 7: AEordable and Clean Energy Energy is the fuel of business and economic growth We need energies that do not harm people and planet (renewable energies) In Canada: 60% from renewable sources In Nova Scotia: 51% from coal and 18% from Natural gas Why? Are all renewable energies harmless? Source: https://natural-resources.canada.ca/our-natural-resources/energy-sources- distribution/renewable-energy/about-renewable-energy-canada/7295 Electricity generation in Canada, by source (2022, in gigawatt hours) SDG8: Decent Work and Economic Growth How is economic growth measured? Deﬁnition: An increase in the amount of goods and services produced per head of the population over a period of time. (Google Dictionary) It is usually measured by GDP (Gross Domestic Product) GDP measures the monetary value of ﬁnal goods and services (International Monetary Fund) It creates job and convenience GDP is growing all around the world, should we be happy? Source:International Monetary Fund https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWOR LD What’s the problem with economic growth? GDP growth is not the problem. The problem is how GDP growth is fueled. GDP growth is highly correlated with material extractions and GHG emissions GDP cannot grow forever on the ﬁnite planet GDP growth destroy nature in developing countries as the production sites The growth is not fairly distributed among countries and social classes Rich people and developed countries beneﬁt more Some of us are producing and consuming more than capacity of the earth MF= Rae Material Extraction Source: Wiedmann, Thomas, et al. "Scientists’ warning on aLluence." Nature communications 11.1 (2020): 3107. SDG 12: Responsible consumption and production “From 2000 to 2022, domestic material consumption grew by 69 per cent, from 56.6 billion metric tons to 96.0 billion metric tons” (UN.org). Now we are using 1.75 earth, and “If the global population reaches 9.8 billion by 2050, the equivalent of almost three planets will be required to provide the natural resources needed to sustain current lifestyles” (UN.org). Many products are unethically produced and many are not needed (e.g., junk foods) Many product are based on planed obsolesce logic Sustainability Inequality Induced By Garbage Source: https://www.theguardian.com/us-news/2019/jun/17/recycled-plastic-america- global-crisis Shipping garbage to the developing countries has been a common practice for all developed countries, including Canada. This creates tremendous environmental concerns in the recipient countries. In the meantime, developed countries has been criticizing the worsening environment in the developing countries such as India, China, Malaysia, and Vietnam, all are dumping yards for the western world. What happens if we reduce consumption? Reduction in consumption would: Reduce production Reduce GDP growth and Job creation (contradiction with goal 7) Reduce materialistic lifestyle conveniency However, it can Help saving environment So, SDG 12 cannot be achieved by current way of living and we need innovation 19 SDG 9: Industries, innovation, and infrastructures Innovations... create new products and jobs can reduce our dependence to fossil fuels can make production process more eLicient At the same time Can have unknown side eLects for human health and nature Can make products so complex, which can reproduce inequality and centralize power Can create new pollutions and environmental issues https://unstats.un.org/sdgs/report/2024/goal-12/ Economic Feasibility Deﬁnition: The degree to which the economic advantages of something to be made, done, or achieve are greater than the economic costs. DiLerentiate economic feasibility to a business vs to society. To a business, economic feasibility simply means that the producing of a product/providing of a service brings non- negative proﬁtability to the ﬁrm. To society, economic feasibility means that the social beneﬁt of an activity out weights the social cost. The two may contradict each other. damage the environment to increase eLiciency – beneﬁt the ﬁrm but generates negative social beneﬁt. Innovation spill over – beneﬁt to the society but not necessarily feasible to businesses. 21 Government Intervention to Address Economic Feasibility When a project is socially beneﬁcial but not economically feasible to businesses, government intervention is usually necessary. Takeover: Education, healthcare, utility, insurance, Infrastructure Tax incentives: Innovation, NPOs, eco-products Direct subsidies: R&D, transportation, renewable energy Legal protections: Patent, copyrights, license The goal is to transfer at least partial costs and risk to the public and to inspire the desired types of innovation. Issues With the Current Model Capability issues: Customers don’t have the ability to recycle. Incentive issues: No incentive for businesses to help waste control. Practicality issues: Costly recycling, inconvenience. Legislation issues: DiLiculties to meaningfully sanction individuals DiLiculties to set legislation on businesses. What Happens to Products After Use? Source: https://www.iainrankin.ca/otter-lake-landﬁll-update-2 They typically goes to landﬁll. Domestic landﬁll – dump it in our backyard. International disposal – dump it elsewhere. And the cost is bore by the customers and the government. GLOBAL WASTE - The accumulation of discarded materials, including solid waste, pollutants, and debris, on a global scale. - Waste generation is expected to jump to 3.4 billion tons over the next 30 years, compared to 2.2 billion in 2019. - The United States is the world’s most wasteful country, with each American producing a whopping 809 kg (1780 lbs.) of waste every year. - Canada: 706 kg/pp year - Italy: 489 kg/pp year Venditti, B., & Dander, A. (2022, September 13). One Year of Global Waste Visualized. Visual Capitalist. https://www.visualcapitalist.com/sp/one-year-of-global-waste-visualized/ Sustainability Consideration in Production and Consumption (Economic) Are we thinking about growth in the right way? (Business) Are we thinking about product life cycle in the right way? (Business) Are we thinking about Business Models in the right way? (Individual) Are we thinking about ownership in the right way? (Individual) Are we thinking about consumption in the right way? Rethinking Economic (Growth) Models “For over 60 years, economic thinking told us that GDP growth was a good enough proxy for progress, and that it looked like an ever-rising line. But this century calls for quite a diLerent shape and direction of progress.” Kate Raworth Measuring success diEerently: Alternatives to GDP GDP is a one-dimensional measurement of growth: Only ﬁnancial considerations. Other options: Genuine Progress Index: The GPI consists of 26 indicators, grouped into three categories (social, economic, and environmental). (Investopedia) Happy Planet Index: The Happy Planet Index measures what matters: sustainable wellbeing for all. It tells us how well nations are doing at achieving long, happy, and sustainable lives ( https://happyplanetindex.org/). Sustainable Development Goals The key takeaway is that growth should be measured in connection with sustainability criteria. https://www.researchgate.net/ﬁgure/GDP-vs-GPI-genuine-Progress- indicator-1950-2005-39_ﬁg3_354017647 Doughnut Economy balance the needs of humanity with the ecological limits of the planet Inner Circle (Social Foundation) Outer Circle (Ecological Ceiling) Chang in deﬁning success Post-growth economy Steady economy, degrowth, post-growth Growth of underdeveloped, degrowth of developed Focus on distribution of wealth rather than increasing it Local/global balance Long-term thinking Quality over Quantity Consumption reduction and circular processes https://www.linkedin.com/pulse/steady-state-economy- sustainable-economic-model-laura-vivas The Circular Economy Ideally, the society would beneﬁt from a circular product life cycle. Deﬁnition: Instead of the make- use-dispose style of product life cycle, a product will be reused, repaired or recycled after it completes its life cycle. This is still an ownership model. Circular Economy Challenges Fear of change Consumer awareness and behavior Self-esteem Infrastructures for waste management Technology and innovation for material recovery Supply chain complexity: customers role Do We Even Need To Own What We Need? Can We Share What We Need? Sharing Economy: a social- economic system whereby consumers share in the creation, production, distribution, trade and consumption of goods and services. This is a non-ownership model. Sharing Economy: The challenges Self-interest driven nature of humanity Regulation and compliance Trust and safety Quality control Insurance and liability Inequality and access The reverse environmental impact (e.g., incentive more maintenance) Co-potation (Uber and Airbnb) From Proﬁt Maximization to Making Enough Proﬁt Psychological Perspective: Self-interest vs. virtue Is money a tool to facilitate exchanges, or a proxy of happiness? Do we as humans have intrinsic desire for virtue? Business perspective: Proﬁt vs. impact Capitalism: proﬁt = Motivations Alternative thinking: Should businesses also have an intrinsic desire to make social impact. Proﬁt maximization vs enough proﬁt. Social perspective: wealth creation vs wealth distribution Financial incentive vs social incentive Role of the legal system. 27 New Business Example: Slow Growth Intentional slow-/non-growing companies Stay small Grow very slowly Stay local Share their resources Teach others to be sustainable https://tallgrassbakery.ca/bakeries/ Consumer Sovereignty Deﬁnition: In a capitalist society, consumers have the ultimate power to determine what to buy and, thus, inﬂuence what is produced. Consumer Sovereignty and DiEerent Types of Market Buyer’s Market: An environment or a type of products that favours buyers over sellers. Seller’s Market: An environment or a type of products that favours sellers over buyers. Consumer sovereignty is usually more prominent in buyer’s markets, and less powerful in seller’s markets. Using of Intermediary is a typical strategy consumers use to combat sellers in a seller’s market. Our responsibilities as consumers Responsible consumption: Buyers need to make purchasing decisions based on not only the cost-beneﬁt consideration, but also take into consideration of environmental and social impacts. SDG goal 12: Sustainable consumption and production. Examples: Buy from responsible companies Use longer, repair, recycle, upcycle Buy local products, second hand Purchase purpose-driven products (e.g., tentree®) Buy products with reusable packaging. Sharing products Governance Colonialism Colonialism is deﬁned as “control by one power over a dependent area or people”. It generally involves one country taking control of another, often amid violence and involving killing, displacing, and/or marginalizing the existing population. Nowadays, colonialism takes many forms and is less obvious. Source: Lewis, K., (2023). What Is Climate Colonialism? What to Know About Why Climate Change and Colonialism Are Linked. https://www.globalcitizen.org/en/content/what-is- climate-colonialism-explain-climate-change/ https://www.sooﬁya.com/Climate-Colonialism Neocolonialism The control of less developed countries by developed countries through indirect means. --Britannica Financial controls Resource exploitation Exportation of ideology and culture Climate colonialism So, what’s climate colonialism? There are three main ways to look at climate change in the context of colonialism 1. Historic injustices: The ﬁrst is about the historical causes of climate change. The Global North is responsible for the climate crisis we’re currently living through — in fact, Global North countries are responsible for over 92% of carbon emissions since 1850. (Lewis, 2023) 2. Further exploitation: The second way climate colonialism is manifesting is through the exploitation of the resources of the Global South by countries in the Global North, to further their climate agendas. (Lewis, 2023) 3. First mover advantage: The global north has been shifting the economic structure from pollution intensive industries to innovation intensive industries. It outsources pollution intensive industries to the global south but enjoys the products. Source: Lewis, K., (2023). What Is Climate Colonialism? What to Know About Why Climate Change and Colonialism Are Linked. https://www.globalcitizen.org/en/content/what-is-climate-colonialism-explain-climate- change/ https://soundcloud.com/user-283077467/carbon-colonialism The Concept of Governance v Governance is about the act of governing. v Add ‘good’ and the picture becomes complicated. How do we balance between individual will and collective interest? How do we balance between democracy and eLiciency? How do we address conﬂicting interests in our society? How do we view the role of the government in a Capitalist society? https://www.weforum.org/agenda/2016/02/what-is-governance-and-why-does-it-matter/ Principles of Good Governance Trust & Just are the two keys to a good governance Healthy legal framework ELectiveness and eLiciency Democracy, decentralization and participation in decision making Transparency and accountability Equity, fairness and caring What does governance for sustainability mean? A multi-dimensional concept covering diLerent actors, processes, structures and institutions involved in decision-making and implementation of sustainability related issues. International organizations. e.g., UN International agreements, e.g., Paris Agreement National and local governments, e.g., the NS government Private sector and corporations, e.g., individual companies Civil society organizations, e.g., NGOs 9 Glass, L. M., & Newig, J. (2019). Governance for achieving the Sustainable Development Goals: How important are participation, policy coherence, reﬂexivity, adaptation and democratic institutions?. Earth System Governance, 2, 100031. Global Governance Global governance functions through a set of institutions, rules, and processes that aim to manage cross-border issues – such as trade, ﬁnancial transactions, migration, and climate change. (World Economic Forum) Address collective concerns and mediate common interests. Create both privileges and obligations for the public and private sectors. Essential for solving shared problems: pandemics, wars, and ﬁnancial crises. Not just a set of treaties and organizations. Comprised of a vast network of collaborative processes, relationships, guidelines, and monitoring mechanisms. Using Global Governance to Address Colonialism Reforming global governance structures to ensure fair representation and decision-making processes that reﬂect the diversity and interests of all countries, particularly those from the Global South. Encouraging more inclusive and participatory global governance processes that actively engage developing countries and marginalized communities. Equitable Economic Policies: Promoting economic policies that address imbalances and support sustainable development in developing countries, including fair trade practices, investment in development, and technology transfer. Cultural and Knowledge Exchange: Valuing and integrating diverse cultural perspectives and indigenous knowledge systems into global governance. Equity and equality Fairness and justice Caring and kindness Diversity and Inclusion Social empowerment Sound Familiar? The United Nation Founded post WWII (1945) Place on earth where all world’s nations can gather together, discuss common problems and ﬁnd shared solutions that beneﬁt all of humanity (www.un.org). Sustainability becomes a main objective since 2000 (The MDGs) UN Sustainable Development Group is the governing body for sustainability issues. The latest legal binding sustainability agreement: The Paris Agreement (2015) https://unacov.uk/united-nations/ USMCA(Formerly NAFTA) US, Mexico, Canada Agreement Mostly about free trade and free ﬂow of labour. Chapter 24 is about the trilateral collaboration to protect and conserve the NA environment. Pollution Biodiversity Overﬁshing Invasive species Sustainable forest Management Indigenous rights LAURENS N, DOVE Z, MORIN JF, JINNAH S. NAFTA 2.0: The Greenest Trade Agreement Ever? World Trade Review. 2019;18(4):659-677. doi:10.1017/S1474745619000351 Democratic Governance Liberal Democracies: Characterized by free and fair elections, protection of civil liberties, the rule of law, and often a separation of powers among the branches of government. Examples include the United States, Canada, and much of Western Europe. Social Democracies: Combine elements of democracy with a strong emphasis on social rights and welfare policies, aiming to reduce inequality and provide a broad social safety net. Scandinavian countries like Sweden and Denmark are often cited as examples. Autocratic Governance Autocratic governance refers to a system of government in which a single entity or leader holds absolute power, with little to no input or opposition from other members of the government or the governed population. This type of governance is characterized by centralized decision-making, with the autocrat making decisions without the need for consensus from a legislative body or the electorate. Issues with A Small Government Certain industries are just too important to be privatized. Utility Education Healthcare Certain industries are too important to be left unchecked regularly. Financial industry Insurance Military contractors Mercenaries National governance Ways that national governments can promote sustainability For example, Species at Risk Act (SARA) Laws and regulations For example, Environment and Climate Change Canada Dedicated Ministries/Agencies For example, Pan-Canadian Framework on Clean Growth and Climate Change National Strategic Plans and Initiatives Tax and subsidies. For example: Canadian Carbon TaxIncentives For example, Canadian Environmental Sustainability Indicators (CESI) Monitoring and Reporting Provincial Governance: Nova Scotia Ministry of Environment and Climate Change Inspection, Compliance, and Enforcement Division Policy Sustainability and Applied Science The Sustainable Development Goals Act since 2007 Green and Inclusive Community Buildings program Atlantic Salmon Conservation Energy Reform Act in Spring 2024. Why Aren’t We Having SuEicient & EEective Governance? Public awareness Economic concerns: impact on economic growth (e.g., oil and gas dependent countries) Political will: for example, in the US, climate action is a polarizing issue Short-termism and Self-interest DiLiculty in global coordination Combat Colonialism: Resource allocation in developing countries Inﬂuence of special interests: business and industries lobbying (will be covered in the next class) Why do Organizations Attempt to Inﬂuence Policy Legitimacy Companies need to appear legitimate in society. Example: NRA Competitive advantage Companies are proﬁt driven. Political inﬂuence may provide competitive advantage. Example: Elon Musk Leader’s personal reasons Self actualization/esteem Legal Channel: Business Lobbying Deﬁnition: the “oral or written communication with a public oLicial to inﬂuence legislation, policy or administrative decisions” (OECD, 2010). Lobbyists (a legal/formal job) have some tools: Fundraising for political campaigns. Providing expertise. Organize grassroots eLorts to rally public support for or against speciﬁc policies. Cultivate relationships with lawmakers and their staL. https://nbs.net/how-business-leaders-can-lobby-for-climate-action/ Business Lobbying: Common Channels Members from diLerent industry, e.g., champers of commerceUmbrella/peak associations Members from one industry. e.g., National Restaurant AssociationsTrade associations For a speciﬁc issue/or limited time. e.g., Alliance to Feed the Future Ad hoc organizations, corporate front groups, coalitions Research groups, e.g., Coca Cola foundationThink tanks and foundations Inﬂuence important stakeholders, e.g., UberGrassroot Lobbying 8 Aid From Trade Associations Opposing Climate Change Policies in the US, 2008-2018 Spendings Brulle, R., & Downie, C. (2022). Following the money: trade associations, political activity and climate change. Climatic Change, 175(3), 11. Deﬁnition: A peak trade association is a major interest group or organization that represents an industry in a country. Canadian Examples: Canada Cleantech Alliance Mining Association of Canada Association of Canadian Port Authorities. Legal Channel: Business-Government Collaboration Business-government collaboration refers to the cooperative eLorts between private sector companies and government entities to achieve shared objectives that contribute to economic growth, public welfare, or societal progress. Public-Private Partnership (PPP) Innovation and R&D Workforce Development Sustainability Initiatives Regulatory Collaboration Illegal Channel: Corruption and Bribery Bribery refers to the act of oLering, giving, receiving, or soliciting something of value—such as money, gifts, favors, or services—to inﬂuence the actions or decisions of an individual or organization, typically for personal or corporate gain. Corruption refers to the abuse of entrusted power for private gain. Undermines sustainability eLorts. The two often come together. Corruption is often solicited by businesses through under-the-table trade or bribery. Diverts of resources Distorts policies Weakens institutions Lack of accountability/transparency Inequality Undermines international cooperation Collusive Exchange Deﬁnition: Collusive exchange involves secret or illicit agreements between business leaders and government oLicials, where favors, information, or ﬁnancial beneﬁts are exchanged to inﬂuence policy, regulatory decisions, or resource allocation in favor of the business. Sometimes through family members of government oLicials Personal beneﬁt over social beneﬁt Unethical, sometimes even illegal Threat to institutional integrity Threat to fairness in the market system 14 https://voices.transparency.org/10-quotes-about-corruption-and-transparency-vol-2- 802020c68574 Revolving Door Appointment Deﬁnition: The movement of individuals between inﬂuential roles in government and high-level positions in the private sector, often within the same industry, which can lead to conﬂicts of interest and undue inﬂuence on public policy. Could be beneﬁcial given the expertise. Potential conﬂict of interest and Erosion of public trust. Inﬂuence on policy and regulations before and after revolving door appointments. The question is: How do we regulate it? Revolving Door Appointment Deﬁnition: The movement of individuals between inﬂuential roles in government and high-level positions in the private sector, often within the same industry, which can lead to conﬂicts of interest and undue inﬂuence on public policy. Could be beneﬁcial given the expertise. Potential conﬂict of interest and Erosion of public trust. Inﬂuence on policy and regulations before and after revolving door appointments. The question is: How do we regulate it? How is Business Governance Related to Sustainability? Owners Board of Directors CEO Functional areas Internal and external Auditors Advisory committees Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. The goal of corporate governance is to manage the business to maximize long-term value while safeguarding the interests of all stakeholders. Businesses need to have clear policies and practices for boards, and mangers to support sustainability Board members and managers with sustainability orientation Setting goals and KPIs on social and environmental aspects Considering social and ecological risks Third party auditors and certiﬁers Connecting executive compensations to sustainability performance Creating dedicated teams: Sustainability committee, oLicers Sustainability reporting: ESG, SGDS, CSR, SASB, TCFD reporting 18 Role of Board Members and Managers A board sets broad policies and makes important decisions as a ﬁduciary on behalf of the company and its shareholders (Investopedia) Board composition: Board with socio-ecological mindsets Board from diverse backgrounds Female board members Promoting long-term thinking https://board-room.org/blog/what-is-an-executive- committee/ Considering Social and Ecological Risks Companies with regulatory and reputation risks associated with climate change are likely to have established governance structures and knowledge related to climate risks. 20 https://corpgov.law.harvard.edu/2023/12/05/2023-climate-disclosures-in-the-russell- 3000-and-sp-500/ Issues with TMT Compensation Connecting Executive Compensations to Sustainability Performance Among S&P 500 companies, approximately 32% (n=159) include an “E” performance metric in their incentive plans, with the most common metric being related to Carbon Footprint and Emission (43%). https://corpgov.law.harvard.edu/2024/07/23/environmental-perform ance-metrics-in-incentive-plans-incentive-trends-and-key-design-co nsiderations/ Our Role as Individuals Voting and political engagement, Vote as a citizen. Vote as a shareholder. Engage as a community member. Advocacy and Activism, rally for social and ecological causes. Support for local economies. Be knowledgeable about socio- ecological issues to make inform decisions rather than being impacted by Think Tanks. 24 Humanity vs. Nature Weak sustainability: Nature is not that important to the sustainability of human race. The sum of natural and manmade capital must not decline. But natural capital can be replaced by us through technological improvement. Strong sustainability: Nature is very important because many natural capital cannot be substituted. Neither the natural nor the manmade capital should decline over time. Sustainability will only happen when all three layers of sustainability are met. Weak vs Strong Sustainability Weak Sustainability Strong Sustainability Philosophical background Egocentric / Anthropocentric Biocentric or eco-centric Attitudes towards triple bottom lines Social and economic sustainability All three pillars are equally important. Attitudes towards technology Solutions to environmental issues Tools to aid the sustainability of the natural environment. Attitudes towards resource consumption Inﬁnite potential for growth but constrained by technology. Non-negotiable ecological limits. Attitudes towards motivation for environmental protection Extrinsic and growth driven Intrinsic value of the environment

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