GEOG 4330 SUSTAINABLE DEVELOPMENT PUAD 6806 POLICY DESIGN FOR SUSTAINABLE FUTURES

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GEOG 4330 SUSTAINABLE DEVELOPMENTPUAD
6806POLICY DESIGN FOR SUSTAINABLE FUTURES

• Michael D. Lee Ph.D.
• Dept. Geography Environmental Studies

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CLASS 4Sustainable Business

• Michael D. Lee Ph.D.
• Dept. Geography Environmental Studies

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Sustainable Business

• Following on from last weeks discussions on
  sustainable lifestyles, a number of tricky
  questions bring us to the topic of sustainable
  business
• How can individuals pursue sustainable lifestyles
  when industry seems unable/unwilling to offer
  realistically competitive, environmentally and
  socially sound goods and services to help us do
  so?
• How should consumers become better educated to
  seek out and demand more sustainable goods and
  services and put pressure on manufacturers to
  deliver them?
• What different ways should individuals use to try
  and influence business inside and outside the
  market place?
  
• Inside - green consuming and investing (see last
  weeks notes).
  
• Outside - organizing boycotts, staging protests,
  performing acts of civil disobedience?
  

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Rethinking the goals of business

• It can be argued that every business should
  fulfill three sets of obligations
  simultaneously
  
• Obligations to shareholders to give them the best
  possible returns to their investment.
  
• Obligations to customers to give them the
  products that they want.
  
• Obligations to society to conduct their business
  in a way that is reasonable and as
  environmentally and socially benign as possible.
  
• The last of these obligations have frequently
  been ignored or minimized in the pursuit of the
  first two.
  

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Whats wrong with business as usual?

• Why do many observers believe that our modern
  free-market economies and the businesses that
  drive them are a key element of
  unsustainability?
• They practice a high degree of externalization of
  costs to the environment and the public.
  
• They fail to value natural capital and to account
  for the depreciation and future costs caused by
  intensive resource exploitation and the
  production of waste.
• They adopt very short time horizons when
  formulating business plans, designing products
  and calculating costs and revenues.
  
• They concentrate predominantly on the
  manufacture-to-sale portion of product cycles
  rather than the full life-cycle that includes use
  and disposal.

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Symptoms of neglect

• Businesses seek to avoid costs of production that
  would otherwise move us to greater
  sustainability.
  
• The result is that we have lower sticker prices
  but higher running costs, cheaper products but
  shorter product lifecycles, lower costs of
  production but greater environmental
  externalities.
• Businesses have failed to invest in pollution
  controls and other environmental safeguards on
  the upstream side of the sales register it
  keeps costs of production low.
• Businesses have sought to minimize costs that
  would otherwise promote greater equity and
  achieve social goals in their pursuit of greater
  profit - ditto.
• Businesses have focused on selling products not
  services and thus promote disposability,
  obsolescence and lower performance expectations
  (e.g. operation warrantees), etc. keeps demand
  high.

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We are part of the problem!

• Consumer attitudes are important factors in
  explaining the genesis of such unsustainable
  practices and their persistence over time.
  
• Many consumers fail to consider life-cycle costs
  in making a purchase, thus issues of operating
  costs and disposal costs are not factored in.
  
• Consumers notions of utility encompass many
  non-essential attributes of products that are
  stylistically rather than functionally driven.
  
• Consumers value product attributes that
  perpetuate intensive resource use, environmental
  damage and high waste levels (e.g. automobiles,
  packaging).
• Consumers fail to consider the full costs of
  products and/or support measures to require
  full-cost pricing and the end to hidden subsidies
  and the externalization of costs (to be born as
  taxation or loss of future welfare).

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The goals of sustainable business

• Reflecting the historical lip-service paid to
  social and environmental issues, sustainability
  gurus propose that sustainable businesses must
  give equal weight to the triple bottom line.
• Economic Performance
• Social Equity
• Environmental Responsibility
• "Sustainable development involves the
  simultaneous pursuit of economic prosperity,
  environmental quality and social equity.
  Companies aiming for sustainability need to
  perform not against a single, financial bottom
  line but against the triple bottom line." World
  Business Council on Sustainable Development.

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Views on corporate responsibility

• Bjorn Stigson, President, World Business Council
  for Sustainable Development has said "Corporate
  social responsibility is about doing smart
  business. Although the rationale for the
  existence of business is to generate returns for
  its shareholders and investors, business leaders
  also need to satisfy a much broader group of
  stakeholders in far-reaching countries."
  (green_at_work, March/April 2000)
• Instead of following, corporations should lead
  the way in helping to shape public policy and in
  driving changes in consumer behavior (Hart,
  1997).

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The Stakeholders are.

• Sustainable businesses are those that have found
  that their stakeholders, the parties they need to
  satisfy, are not just shareholders of their stock
  and consumers of their goods and services.
• Stakeholders that drive businesses to greater
  sustainability (i.e. that sustainable businesses
  will seek to satisfy) include shareholders,
  customers, employees, communities and
  regulators.
• (views of Kim Swenson, KPMG sustainability
  expert, as reported in green_at_work , March/April
  2000).

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Sustainable business..the bigger picture.

• Sustainable businesses are those that
• Replace nationally and internationally produced
  items with products created locally and
  regionally.
  
• Take responsibility for the effects they have on
  the natural world.
  
• Engage in production processes that are human,
  worthy, dignified, and intrinsically satisfying.
  
  
• Create objects of durability and long-term
  utility whose ultimate use or disposal will not
  be harmful to future generations.
  
• Change consumers to customers through education.
• The views of Paul Hawken. The Ecology of
  Commerce. (New York, New York Harper Business,
  1993), p 144.

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Why should any business transform?

• Modifying the points made by Dexter Dunphy
  concerning implementing the sustainable
  corporation, corporations stand to gain
  considerable advantages in the long term by
• 1. Eliminating reward systems for unsustainable
  practices.
  
• 2. Reducing or eliminating unsustainable
  practices, particularly the generation of waste.
  
• 3. Innovating products and processes and
  enhancing corporate responsiveness to promote
  sustainability improvements and competitive
  advantage.
• 4. Contributing visibly to overall community
  welfare.

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Sustainability to stay in business

• Many corporations will have to change their
  business model, core operations and product
  portfolio to stay in business, especially those
  in the field of non-renewables or highly
  dependent on non-renewables or undervalued/high
  externality inputs.
• For example, British Petroleums slogan is now
  BP-Beyond Petroleum they are investing
  heavily in solar technology research and
  companies among other things.
• Corporations interested in long-term
  profitability will need to reduce their exposure
  to risk associated with changing upstream
  (supply-side) or downstream factors (demand-side)
  critical to their business including regulatory
  and opinion type changes.

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Sustainability to improve market share

• With changing customer attitudes both with
  respect to end products and supply chains,
  earlier and/or more extensive adoption of
  sustainability principles may provide a
  competitive edge, improve market share or fill
  specialist niches allowing for greater revenues
  and profitability.
• Participation in certification programs related
  to environmental issues (e.g. Forestry
  Stewardship Council sustainable wood products)
  or certification within the UNs Total Quality
  Environmental Management ISO 14001 or the EUs
  Eco-Management and Audit Scheme (EMAS) may prove
  critical in generating or retaining sales.
• Anticipation of change and early investment in
  sustainability may create a leaner, more
  competitive operation at a time when those who
  delayed must scramble and raise their costs.

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Sustainability to avoid penalties

• As environmental degradation worsens or standards
  tighten and polluter-pays-principles and other
  such equity-driven policy instruments are
  implemented to meet public goals, those who have
  already switched to renewable fuels, clean
  technologies, recycling and so forth will be
  positioned to avoid taxes, capital projects or
  penalties imposed by regulators.
• Where tradable permits are implemented based on
  baselines pollution levels (e.g Kyoto Protocol
  and its notion of using 1990 greenhouse gas
  levels), those with significant improvements
  stand to benefit from credits offered in
  market-based solutions.
• As social and humans rights issues receive more
  attention, independent efforts to improve social
  performance will provide insulation from
  protests, boycotts or other public responses that
  could affect market-share.

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Interesting perspectives.
On sustainable production..

• Building off the ideas put forward by the Lowell
  Center for Sustainable Production (U.Mass), the
  following five principles must be applied
  
• Principle 1 Products and services must be safe
  and ecologically sound throughout their life
  cycle as appropriate, designed to be durable,
  repairable, readily recycled, compostable, or
  easily biodegradable produced and packaged
  using the minimal amount of material and energy
  possible.

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Principles of sustainable production

• Principle 2 Processes must be designed and
  operated such that
  
• wastes and ecologically incompatible byproducts
  are reduced, eliminated or recycled on-site
  
• chemical substances or physical agents and
  conditions that present hazards to human health
  or the environment are eliminated
  
• energy and materials are conserved, and the forms
  of energy and materials used are most appropriate
  for the desired ends
  
• work spaces are designed to minimize or eliminate
  chemical, ergonomic and physical hazards.

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Principles of sustainable production

• Principle 3 Workers must be valued and
• their work organized to conserve and enhance
  their efficiency and creativity
  
• their security and well-being must be a priority
  
  
• they must be encouraged and helped to
  continuously develop of their talents and
  capacities
  
• their input to and participation in the decision
  making process must be openly accepted.

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Principles of sustainable production

• Principle 4 Communities related to any stage of
  the product lifecycle (from production of raw
  materials through manufacture, use and disposal
  of the final product) must be respected and
  enhanced economically, socially, culturally and
  physically.
• Principle 5 Continued economic viability must
  not depend on ever-increasing (i.e.,
  unsustainable) consumption of materials and
  energy.

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Natural capitalists?

• In their book Natural Capitalism, Hawken and the
  Lovins call for a revolution to take place in
  business principles and practices, emphasizing in
  particular
• Resource productivity CEOs should increase
  productivity 10-100 times that of present - boost
  energy efficiency, increase recycling rates,
  improve packaging design, etc.
• Ecological redesign CEOs should reject the
  standard model - take resources, make products,
  generate waste - in favor of biologically-oriented
  production systems - closed loops in which waste
  becomes resources.

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Natural capitalists?

• Service and flow CEOs should shift focus from
  sales to services. When businesses merely sell
  products, they seek only to maximize volume,
  caring little about low long they last or how
  they are disposed of. When businesses sell
  services, both the buyer and the seller have a
  vested interest in minimizing the cost of the
  service in cheaper and more durable ways.
• Invest in nature CEOs should consider both
  direct local benefits and both indirect and
  longer-term benefits when assessing capital
  investment and product development choices.

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Eco-efficiency? Or..

• In the 1990s, sustainability experts largely
  promoted eco-efficiency steps by which we could
  make better use of our exploited resources.
  
• Eco-efficiency simply means creating additional
  value from a business operations while better
  meeting customers needs and reducing
  environmental impacts.
• It involves doing more with less creating less
  waste and so forth (see DeSimone L.D. et al, 1997
  Eco-Efficiency, MIT Press)
  
• The accepted wisdom with eco-efficiency is now
  that this concern with cradle-to-grave merely
  represents buying time to sustainability judgment
  day - delaying the time that non-renewable
  materials, in the form of worn-out, discarded and
  unrecycled/unrecyclable products are sent to some
  environmental sink such as a municipal
  land-fill.
• Better, many believe, is cradle-to-cradle.

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Eco-effectiveness?

• The idea is gaining support that a
  cradle-to-grave mentality will not solve the
  essential problems we face with our finite
  resource base, vulnerable ecological support
  systems and exponentially expanding population
  and consumption.
• We thus must promote eco-effectiveness
  minimizing and stabilizing what we need to
  exploit by changing designs completely to
  eliminate the grave altogether for non-renewable
  materials
• The objective - establish a cradle to cradle
  approach to production in which the secondary
  uses of all component materials in a product are
  envisioned, planned for and achieved, often by a
  single manufacturer or suites of manufacturers
  planning and acting in a coordinated fashion
  industry as ecology!

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Sustainable product design

• Cradle-to-cradle involves the design of
  sustainable products that can be used or their
  components reused indefinitely or that are made
  of wholly organic materials and can be recycled
  using renewable energies.
• Where are we with respect to designing such
  sustainable products?
  
• According to Tischner and Charter, we are still
  tinkering with eco-efficiency and
  dematerialization rather than approaching
  full-blown sustainability and the
  cradle-to-cradle concept underlying industrial
  ecology.
• But what will a sustainable world characterized
  by sustainable products look like?
  

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BioThinking Internationals view

• Cyclic make it from organic materials or from
  minerals continuously cycled though a closed
  loop.
  
• Solar make and operate it using solar energy or
  other renewable forms that are cyclic and safe.
  
• Safe make it to be non-toxic, its manufacture
  should not release toxics and its use should not
  create toxins.
  
• Efficient it should meet the 90 rule for
  energy and materials compared to 1990 versions
  providing equivalent functions/utility.
  
• Social its manufacture and use should not
  impinge on basic human rights or justice.

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McDonoughs Vision

• Waste equals food eliminate the notion of waste
  completely and design all industrial processes
  such that the products themselves and any
  leftover production materials or byproducts
  become the input to another productive process.
• Current solar income only all businesses should
  use only non-carbon fuels and should redesign
  processes to be the most energy efficient
  possible.
• Preserve biodiversity every design must be
  evaluated to eliminate potential impacts on
  biological systems.

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How to get there?

• In researching what designers have done to move
  their products closer to sustainability,
  observers have seen one or more of the
  following
• Products have used more recycled materials and/or
  been made easily recyclable (e.g Patagonia
  fleece)
  
• Products have been made from grown materials
  (e.g. bamboo bicycle, molded gourds).
  
• Products have been designed to use renewable
  energy (e.g. Huqvarna solar lawnmover).
  
• Products have been made in factories designed to
  use renewable energy (e.g. shampoo factory
  powered by wind turbines).
  
• Products have been made substituting less toxic
  or damaging components (e.g. CFC-free
  refrigeration).
  

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and also through the following

• Producers extend stewardship over component
  chains to ensure lower-impact sources (e.g.
  sustainably harvested lumber, dolphin-safe tuna,
  fair-trade coffee beans).
• Products have increased functional utility in
  their design so the consumer can do more with
  less (e.g. BD screwdriver/saw/sander).
  
• Products have greater durability and ease of
  repairability (e.g. Spacepen).
  
• Products have greater efficiency of energy, water
  and materials in their manufacture and use (e.g.
  IKEA inflatable chairs).
  
• Did this miss anything????