The Triple Bottom Line
The primary goal of a business is to make more profit, but
that's not all that managers consider. Corporate managers realize that they
must consider the impact of social responsibility and reputation on long-term
profits. High pollution is not only harmful to the environment but also
exacerbates social crises and inequality. Through the adjustment of industrial
structure, developed countries can transfer high-polluting industries to
developing countries and low-income countries.
Developed countries enjoy high profits upstream of the production chain,
while low-income countries get a small profit while destroying the environment.
Social issues are as important as economic and environmental ones. Wealth tends
to go to a few places or a few people, and poor countries like Kiribati and
Bangladesh don't even have the resources to withstand floods. To measure the
balance between people, planet and profits, researchers and management use the
Triple Bottom line to discuss sustainability issues.
The term triple bottom line (Elkington, 1997) is used to
consider social and ecological factors in addition to economic ones, to better
measure progress. They are basically a way to hold companies to the standards
that they should’ve been held to from the start. This idea of a triple bottom
line incorporates the use of social, ecological and economic factors within the
business practices. Social, economic, and environmental issues should all play
a role in the decision making for a firm's future goals. In today’s world, it
isn’t good enough to just complete your task and walk away with a bigger
wallet, we all need to be held accountable, especially the ones whose pockets
have been getting bigger the entire time. The pro’s heavily outweighed the cons
when it comes to striving toward TBL practices in everyday business decision
making. A large incentive for businesses to stay aligned with remaining
sustainable is that the younger generation pays attention to their
environmental impact and the health of the planet. Many of the younger
individuals (millennials, gen z), have that in the back of their minds when
searching for career opportunities, and they are aware of how just “pretending”
to care about the environment can lead to long term problems. Especially corporations
who hope to one day follow the lines of corporations like Nike and others in
their pursuit of eco-efficiency. Ecosystem services are also another major
focal point when discussing the combination of awareness and strategy that
should be pushed forward in every corporation. Many of these large companies
rely on natural services and reap the benefits without giving back anything at
all, as was explained that trees absorb carbon dioxide and produce oxygen, yet
deforestation is a problem, and insects pollinate agriculture which provides
crops that seek profits, but environmental impacts are on the lower side of the
majority of the list when it comes to a big corporation. Farmers are also the
ones who barely benefit from the crops they grow. Many of these crops come from
third world countries in the first place. Environmental issues show a full
circle incentive in an ironical manner, yet there is push back when deciding on
how sustainable is too sustainable. The list goes on for reasons why each company
should focus on their environmental impact and ways to benefit ecological
issues.
The part of the triple bottom line that affects the People,
can bring easier solutions to the issues at hand. Bringing a change to a
company’s global impact socially, although not as easy as it looks, can be
started by changing an image. This can be costly and time-sensitive but worth
it in the long run. Brand awareness
could help with trust from the consumers. For example, Toms shoes donated a
pair of shoes to countries without the resources to purchase shoes. Promoting a
“give back” mentality actually is what draws in many consumers to buy from
Tom’s shoes specifically so they could feel as though they are helping because
they are. Innovation and creativity can lead to a redesign of a corporation's
global image.
Sustainable development is driving innovation and providing
new ways to solve social and environmental problems. Ecosystem services (ES) can help governments
and businesses align business and environmental goals. Companies cannot ignore
the impact their business has on other people around the world. Creating
positive social impact is something managers must consider.
Shared value
Shared value and value creation are more important than
shareholder value. Not only making a profit but helping the world become a
better place is the standard by which corporations should be held today and in
the future. Value creation can be obtained through the reconceive products that
involve examples like Tesla, Interface carpets (companies that recycle
carpeting), and just the innovation from new ideas. Creativity breeds
innovation, innovation is good for business. The profits will come as long as
the process is trusted and understood. Shared value is the mixture of creating
profits while also creating value. Rethinking what works throughout the
education system and playing a pivotal part in the renovation of certain
housing inequalities in locations near the corporation can also be a way to
boost an image in the eye of a consumer. Doing something is always better than
doing nothing when it comes to these types of issues. “Less Talk and more
action” is starting to be the page everyone is on, so now the phrase “talk is
cheap” can actually be switched to “talk is expensive” when taking into the
consideration that you are putting your corporation at risk when you talk more
than you act, especially when involving next-generation talent who you intend
to recruit.
In the article, “Creating
Shared Value” the article begins with society’s capitalist market under attack
having businesses at the helm of triple bottom issues in today's world. Having
businesses pitted against one another in the climb to the top to make the most
amount of profit, in the long run can have a negative effect. “The solution
lies in the principle of shared value, which involves creating economic value
in a way that also creates for society by addressing its needs and challenges.”
(Porter, n.d.) Shared value then is not about personal value but rather
creating more value among the communities it resides in and creating more
competitiveness among the internals of companies. Addressing both social and
economic progress using value principles, which can be anything from innovation
to respect and integrity. This leaves it up to companies and their ‘corporate
responsibilities’ to make improvements and assist in the community along with
improvement for a business reputation and a necessary expense. Shared value can
be broken into 3 keys to creating shared value, 1. By reconceiving products and
markets. Considered the greatest unmet needs of the global economy, this has
openings to creating greater opportunities. 2. By redefining productivity in
the value chain. And finally, 3. By enabling local cluster development.
While in the past this
article goes on to explain that companies longing for economic growth does not
align with shared value, previously companies such as Google and Intel did not
use this way of thinking, a shared value way, but rather more stubborn.
Companies such as these have started making the adjustment to reconnecting
society and company values and performance to better enhance the world and its
effects we have had in the past to future generations.
Potor then goes on to
explain that Societal needs also contribute to defining a market not alone
conventional economic needs. Referring back to growth of local communities for
where companies may reside in this article goes on to explain the damage/
weakening of the connection between businesses and communities they’ve grown
from, using offshoring and outsourcing to dapen the strength of what once was
as society now tries to rekindle that once flame. While most companies now have
adopted a global companies/home and nowhere is home but earth due to this type
of action. Its created the society survival response as its taken an effect on
communities these said companies have grown from. Encouraging the move to a
more shared value economic society. Although this may not be the grandest idea
for corporations as it may slow economic growth as the article explains but for
society purposes shared value is the solution to bringing back the green to
communities and strengthening the connection between businesses and societal
outlook. With younger generations responding to the health of the planet and
how business interaction with society, Competitive advantage and societal
issues among businesses and whom they hire has been taken a significant upswing
as more and more hires are paying attention to how businesses interact with
communities and what if any shared value they bring to the table.
Lawrence Fink, founder
and CEO of BlackRock, believes that environmental sustainability will be a core
objective of investment decisions. BlackRock will avoid investing in companies
"with high sustainability-related risks." (Sorkin, 2020). Climate
change will affect financial markets. Businesses with sustainable capabilities
are likely to be trusted by investors and receive financing. Fink said he would
change BlackRock's investment strategy after coming under pressure from
environmentalists and MPs. It could spark a national dialogue between
financiers and policymakers. In addition, BlackRock's strategic shift may
affect other fund managers and financial firms such as Vanguard, T. Rowe Price
and JPMorgan Chase. Fink urged companies
to pursue sustainable innovations such as promoting renewable energy.
With the expansion of
production scale and globalization, the business of enterprises will affect
more stakeholders. Stakeholders can defend their interests through political
and electoral means. In Germany, the Green Party's entry into the ruling party
is a sign that Germans can use their power to protect themselves and the next
generation. The ruling party will listen to the views of more stakeholders to
secure enough votes. Companies must think about their reputation. Stakeholders
may refuse to buy products from companies with a bad reputation.
SDGs & COP 26
The United Nations
global impact is the representation of the governments of over 170 countries.
This group covers 10 core principles. The first two principles are targeted to
human rights practices, 1.) businesses should support and respect the
protection of internationally proclaimed human rights. 2.) Make sure they are
not complicit in human rights abuses. The next couple of principals are tied to
supporting fair labor, 3.) Businesses should uphold the freedom of association
and the effective recognition of the right to collective bargaining. 4) The
elimination of all forms of forced and compulsory labor. 5.) The effective
abolition of child labor. 6.) The elimination of discrimination in respect of
employment and occupation. The next few are a result of the progression of
reducing the environmental impact, 7.) Businesses should support a precautionary
approach to environmental challenges. 8.) Undertake initiatives to promote
greater environmental responsibility. 9.) Encourage the development and
diffusion of environmentally friendly technologies. The last principle involves
standing against corruption, 10.) Businesses should work against corruption in
all its forms, including extortion and bribery. These principles are the
deciding factors 13,000 corporations have volunteered their services to hold
themselves accountable for. I believe that more corporations and countries need
to join the conversation. I also believe that many of these corporations and
countries should be in competition with each other when it comes to holding
themselves to the standards.
The “PRME” is short for Principles for Responsible
Management Education, this is another initiative. The concept is empowerment
and enabling education to students in sustainability. We are studying what we
are today in a figurative and literal sense. This is a “start them young”
mentality implements a unique variety of 6 principles. 1.) development of
“purpose”. This principle will mold a student’s capabilities toward the
becoming the model employee in a sustainable economy. The second principle
involves values, which is basically a way of incorporating the practices of
global social responsibility when put into perspective of international
initiatives through the UN global compact standards. The 3rd
principle involves the method, this involves the frameworks, materials,
processes, the actual way to enable the learning experiences should be
considered. The 4th principle involves research, which is the research and
analytical portion that puts the understanding into play, and comparing that to
a corporation's sustainable, social, environmental, and economic value. The 5th
and 6thprinciples involved partnership and dialog, which are
basically how each member will interact with managers and business
corporations, and the dialogue brings in the supporting debates amongst other
educators, students, governments, etc. I find this interesting because we are
applying these in our classroom daily. Both the UN Global Compact and the PRME
are both critical strategies that are used from a student’s understanding all
the way to the CEO of a major corporation. The advantages that we are currently
receiving the information through educational support that we will be applying
to our real life. This is where the personal experience can be shown, the
entire curriculum that we are exposed to now are formulated through the PRME
structure. Each core principle depicts an example of what exactly we are
striving for. I personally am applying my purpose and values that I am learning
from the everyday educational instructions and practices, with the hope to one
day be able to apply these principles on a global scale and for a corporation
that will help be a part of the sustainability initiative. I also have noticed
that most universities that accept and drive towards implementing the PRME
structure are providing a blueprint for younger generations for recruitment and
alumni’s willingness to maintain a valuable connection with the university.
The SDGs or Sustainable development goals
are a set of 17 rules of objectives created and adopted by the United Nations
member states, it is a blueprint for the planet and people to adopt peace and
prosper. The first 10 goals are for the people goals which include the
following. 1) No Poverty, ending poverty in all forms, 2) Ending global hunger,
ability to achieve food sustainability, improve nutrition and sustainable
agriculture. 3) Good health and well being, ensuring healthy living and well
being of all ages. 4) Quality education, ensure quality education and learning
opportunities for all. 5) Gender Equality, achieve gender equality and empower
all men, women and children. 6) Clean water and sanitation, ensure clean and
sustainable drinking water for all. 7) Affordable and clean energy, ensure
access to clean, affordable, reliable and sustainable modern energy for all. 8)
Decent work and economic growth, promote sustainable and economic growth, full
and productive employment and decent work for all. 9) Industry, innovation and
infrastructure, build resilient infrastructure, promote inclusive and
sustainable industrialization and foster innovation. 10) Reduce inequalities,
reduction of inequalities within and among countries. The goal for the initial
10 of 17 goals for SDG is for the optimization of the people and those who make
up our planet. Ensuring a positive and long lasting growth of humanity. Goals
11-15 are built upon that of the world and the environment. These include the
following, 11) Sustainable cities and communities, make cities and peoples
homes resilient, sustainable and safe. 12) Responsible consumption and
production, ensure sustainable consumptions and
production patterns. 13) Climate action, take urgent action to combat
climate change and its impacts. 14) Life below water, conserve and sustainably
use the oceans/seas and marine resources for sustainable development. 15) Life
on land, protect, restore and sustainable use of ecosystems, manage forests,
combat deforestation and halt land degradation and biodiversity loss. Goals
11-15 state reforestation of the already taken forests, taking care of the
oceans and marine life and anything that is used for ourselves. These next 5
goals are on the ecological level of the SDG pyramid with combating climate
change, taking care of our oceans/seas and saving the little of our forests
that remain. The final 2 goals are spiritual goals consisting of 16) Peace,
justice and strong institutions, promote peaceful and inclusive societies for
sustainable development. 17) Partnerships for the goals, strengthen the means
of implementation and bring back global partnership for sustainable development.
Bringing together the people to make the most sustainable and progressive race,
while using resources at a respectable use for sustainability.
The 2021 United Nations Climate Change
Conference, commonly known as COP26, is the 26th United Nations Climate Change
Conference, taking place at the SEC Centre in Glasgow, Scotland, UK, from
October 31 to November 13, 2021. At the conference, leaders or delegates at the
conference further discussed climate issues and reached a number of agreements.
The New York Times (2021) summarized the results of the conference into six
takeways.
Time for action is runnin
Although some countries have already
taken steps to prevent global temperature increases, the conference concluded
that countries should do more. U.N. The measures that have been taken are far
from sufficient to mitigate climate change. Secretary-General Antonio Guterres
said the world has warmed by 1.1 degrees Celsius and that countries must do all
they can to limit global temperature increases to just 1.5 degrees Celsius or
2.7 degrees Fahrenheit above pre-industrial levels. Exceeding this temperature
threshold will trigger more meteorological disasters. As Shauna Aminath,
Minister of Environment of the Maldives, said about the urgency for vulnerable
countries, the world should take more concrete steps such as reducing global
carbon emissions and curbing methane emissions.
Who needs to cut and how
much
The conference wants to clarify how much
and how fast each country should reduce its emissions over the next decade.
Wealthy countries emit a large amount of greenhouse gases as a small percentage
of their population. The United States, Canada, Japan and much of Western
Europe emitted 50 percent of the greenhouse gases for 12 percent of the global
population over the past 170 years.
Biden wants some countries, such as India, to take more responsibility
for climate protection, such as accelerating fuel switching, but these
countries accuse rich countries of not giving enough support. Rich countries
are falling short of their pledge to raise $100 billion a year in climate
finance for poorer countries by 2020. The conference noted that there are still
many developing countries that do not have sufficient funds to address climate
change and rising temperatures.
The call for disaster aid
and regulation increases
Wealthy countries emit large amounts of greenhouse
gases, which harm the ecology of those poor and vulnerable countries. The
conference called on rich countries to set up "loss and damage" funds
to compensate poor countries for the damage they have suffered. In addition,
the conference emphasized the effective regulation of the global carbon offset
market. Vulnerable countries, such as Solomon Islands, also want to get part of
the funds from the market to counteract the effects of climate change. But the
US and EU oppose this.
Other international
agreements came out of the summit
Mitigating climate change and global
temperature rise requires the participation and contribution of major countries
like the United States, China, India and others. China and the United States
have reached an agreement to work together to reduce greenhouse gas emissions.
More than 100 countries, including China, have committed to reducing methane
emissions. Furthermore, a commitment to reduce deforestation was reached.
India, one of the world's largest consumers of coal, also gave additional
commitments such as stopping greenhouse gas emissions into the atmosphere by
2070.
The different faces of
climate action
Conflicts erupt in Gender and Generation.
It is mostly young people and women who are calling for the protection of the
environment, but they do not have the power to decide on climate change that
older men have. The leaders involved in signing the agreement may not live to
2070, but that is the target time they have committed to zero emissions. There
seems to be a lack of public confidence in agreements reached by older people
compared to younger people who will live longer.
Just holding the talks
during the pandemic posed a challenge
The difficulty of holding an
international conference during the New Crown pandemic. The climate summit has
been postponed due to the epidemic. Leaders from many countries with important
environmental impacts have also been unable to participate due to the epidemic.
Sustainable Report
Sustainability reporting focuses on the interests of
stakeholders, whereas most previous reports focused on the interests of
shareholders. 1970s social reporting emphasized the value provided by various
stakeholders, such as employees and local communities, and it eventually
evolved into sustainability reporting. Since the mid-1990s, sustainability
reporting has encompassed all aspects of social and environmental reporting.
More and more companies are focusing on developing the triple bottom line
concept of people, planet, and profit.
The Global Reporting Initiative (GRI) and the International
Integrated Reporting Council (IIRC) provide guidance on sustainability
reporting.
The current version of the GRI is G4, which defines the
principles of content (what to include) and quality (setting standards). The content
guidelines include stakeholder inclusiveness, sustainability context,
materiality, and completeness. The quality guidelines include balance,
comparability, accuracy, timeliness, clarity and reliability. GRI requires
companies to consider the right stakeholders. Companies must identify their
stakeholders and work to meet their information needs. Then explain its
sustainability performance in the context of its overall strategy and the needs
of its local and global communities. GRI's quality guidelines relate to the
criteria for reporting. Balance means avoiding biased reporting that emphasizes
only positive impacts. Comparability is a standard that allows stakeholders to
compare results over time and across companies. Accuracy means that the company
explains how the data was collected. Timeliness means the data is up to date.
Clarity means that stakeholders can easily access and understand the
information, rather than using technical jargon that makes the report difficult
to read and process. Reliability means that an independent auditor is allowed
to examine the information and provide a statement of assurance.
IIRC emphasizes the link between strategy, governance,
policy and performance and how it leads to value creation. Capital is the stock
of value that is added, subtracted, or transformed through the activities and
outputs of the organization. They are categorized in this framework as
financial, manufactured, intellectual, human, social and relationship, and
natural capital.
Sustainability reports have been criticized for legitimizing
business. Companies can use these reports to build a positive view of their
social and environmental impact. Reporting is biased. Companies promote areas
where they are doing well and avoid areas where they are not doing well.
A shadow report may be more reliable. It relies not only on
the company's sustainability report but also includes data from external
sources such as other stakeholders and the media. It will help researchers and
society get a more accurate picture of all aspects of the company.
Sustainable reporting
starts off speaking about the original social reports back in the 1970s in
europe. A trend that would soon move across the globe, these reports identified
company stakeholders of the following, company’s activities, products and
services, and related positive and negative social impacts. As time progressed
toward the end of the 1970s these social reports began a decline yet during
some significant environmental catastrophes during the 1980s and 1990s companies
became under fire for these environmental accidents. Once again bringing in a
new kind of report for companies and businesses to adhere to, environmental
reports were newly introduced. With these it was the goal to explain to
stakeholders how the organizational activities impacted on the natural
environment and how to manage these impacts.
Although not always
positive, did bring a new light to social media and how businesses appeared to
execute their business strategies and plans. Over time since the 1990s more
attention has been given to sustainability reports, in these reports the goal
is to reflect companies’ claims to depict an overall picture of their
ecological, social and economic sus- tainability activities and performance,
and to inform stakeholders as to how and to what extent these corporations
contribute to sustainable development (Herzig). Compared to 1970s social
reports mainly targeted to employee-related issues and value creation for
stakeholders the reports of companies sustainability reports nowadays are more
globally accounted for using the reports for more moral and ethical concerned
manner and sustainable development.
As a growing
international interest and national guidance of documents of sustainable
development and reports has grown an evolution of sustainability reports and
framework shows to a new and accepted reporting framework. The GRI or Global
Reporting Initiative, developed by multinational stakeholders the GRI now in
its 4th edition G4, is a basic checklist or guidelines for GRI reporting.
Focusing on 2 main aspects of reporting 1. Content of the sustainability report
and 2. Standard quality for sustainability reporting. While focusing on these 2
aspects IR reporting or Integrated reporting has also been made an initiative
to enhance reports. With a larger need for these reports the internet has taken
its role as the base for these reports holding increasing information
accessibility and comprehension. Allowing for less printing of paper as the
main reasoning behind storing these reports via the internet. “Finally, the
range of communication possibilities through stakeholder engagement and
dialogue in online sustainability reporting extends much further than in
printed sustainability reports” the internet allows for better communication
and explanation of these reports for stakeholders. While the transition to reporting and reports
via the internet Chapter 6 concludes with having an issue of shadow reporting
or falsifying data in these reports leaving the global/ stakeholders in a
precautions position for actions to take and movement of business strategies
aline with ethical and moral value.
The banking pledge describes
how big banks play a key role in the oil and gas industry that are destroying
our planet and are one of the leading causes of the climate change. The article
“the third act” asks the younger generation to use its leverage to demand
listeners and readers to make a pledge, and to stop holding accounts for the
big banks including Citibank, chase, wells Fargo, and bank of America. The big
banks are the key to the destruction, they are the ones funding these large
projects that are doing the exact opposite of what they are portraying when it
comes to climate change. Talk is cheap, and these big banks use their pockets
to cover their voices and actions. The concept of “there is power in numbers”
will be behind the strategy and there will be an organized effort to act
together and move as one unit to cutting ties with the big banks. I personally
think this is a great idea, there aren’t many large movements that can make a
difference especially when it comes to bigger banks that are almost “too big to
fail”. There have been many situations involving a bank or groups of banks
being bailed out, and there are the reasons for customers and citizens to be
upset. We demand change to empower more young people to participate in climate
decision-making. We can change bank accounts to local banks and credit unions
that invest less in climate damage, or even online banks that emphasize
environmental awareness. We want to act now until the end of 2022 when banks
can decide whether they meet our requirements. Next year we will redouble our
efforts until our demands are accepted.
A CSR is a corporate
social responsibility report or also known as a sustainability report.
Sustainability reports are periodically published by companies with the goal of
sharing their corporate social responsibility actions and results. The report
communicates the corporations’ commitments and actions in social and
environmental areas. The goal is to improve transparency by communicating with
stakeholders and allowing the outsiders such as the investors and media to gain
a better understanding of the short term and long-term goals of the company.
There are also other goals of the sustainability reports that are to discuss
the impacts of decisions made that align with the triple bottom line. According
to the global reporting initiative website, “The Global Reporting Initiative
contains over 10,000 reporters in over 100 countries, and there’s determination
on proper reporting to deliver the highest level of transparency for impacts on
the economy, environment and people.” The idea behind sustainability reports
also puts a focus on how corporations can prioritize their internal data so
that they can engage their external parties. Increasing stakeholders' value.
The Base Of Pyramid
The base of the pyramid focuses on how companies can achieve
sustainable development goals through poverty reduction.
C.K. Prahalad believes that half of the world's population
is poor, and they constitute a huge undeveloped market which is ignored by many
companies. From an economic perspective, this undeveloped market can help
companies achieve economies of scale and thus reduce costs and prices. Emerging
markets can provide a new class of consumers. Besides, from a social
perspective, doing business with the poor can help companies create social
value and help achieve sustainable development goals such as gender issues,
education, clean air, and water. However, the company itself cannot solve
social problems. It requires the collaboration of all stakeholders.
The proposition, capturing, network and communication are
the four pillars of value creation. New business models can be created by
adapting or redefining existing pillars.
● Value proposition
refers to considering the economic background of the user. Companies can adapt
by scaling down or redefining by decoupling depending on different backgrounds.
● Value capture
refers to how the customer will pay for the product or service. Traditionally,
value is captured by the customer who pays the price of the product. However,
when your customers are poor, you can sell a miniature version of your product
or service. In addition, companies can redefine value capture through
non-ownership concepts such as sharing or leasing.
● Value network is
a network of partners including supply chains, NGOs and governments. The
adaptation strategy is that some parts of the grid are subsidized by another
part of the grid. In BoP, the government or non-government organizations or
private donors can subsidize the service.
● Value
communication relies on social capital and personal relationships. Engaging
customers to create community-based purchases is a way to redefine value
communication.
Stakeholder relationships are important in BOP. Companies
that focus only on the economic side of the BoP may cause significant harm to
the community. The system-centered approach, global action networks, and the
human-centered approach can help companies rethink stakeholder relationships.
● The
systems-centric approach makes the company one of many stakeholders, and
managers must respect the listener and be deeply sympathetic to the needs of
the BoP. Companies must be culturally sensitive and consider the impact of
products and services on the entire system.
● The Global Action
Networks build partnerships with NGOs and governments to address specific
issues. Managers should enable each participant to study the behavior of other
participants. They must identify the public interest, design opportunities for
learning and reflection, and share decision-making and leadership.
● The
human-centered approach to stakeholder relations does not view customers as the
target market but as individuals with their own stories. Managers must tailor
their solutions to these local communities.
GrameenPhone, a mobile
networking company out of Bangladesh aided men and women in a local rural
community to escape poverty. Enabling them to reshape and aid those less
fortunate a program was started there called ‘Village Phone'. This program
helped women start selling mobile services, granting them financial freedom and
the ability to help their communities. Creating a new entrepreneurial space in
mobile networking GrameenPhone used/using micro-enterprising which in turn has
more reach at a cost effective price, building on existing communities and
networks of cellular networks. teaching the women of local existing rural
communities GrameenPhone was able to become a major role in growing the market
in Bangladesh and India.
Cemex, a Mexican cement
making company created a community based scheme called ‘Patrimonio hoy’. This
system allowed those at BoP to come together and purchase materials for their
homes. Community based purchasing has created an opportunity for BoP
communities to have more stable homes making for safer, urban areas cleaner and
stronger communities. Redefining the value of communication in communities
brings those living in the community together and making better living
conditions in the lowest/unsafe of rural areas and building stronger
communities.
M-Pesa story was very interesting
about the mobile phone being used as a repayment system. of mobile phones. The
purpose of this was to deepen the financial penetration into the banking
industry. Nick Hughes came up with the idea that micro-loans could be repaid
through mobile phones but through the trial held in Kenya, they realized the
mobile devices were being used to send money to each other. after the committee
approved the initiation. In 2006 the e-commerce and e-business system launched
with little idea of how relevant and important the idea originated from a
smaller idea. Those who were involved in the infrastructure launching in 2007
hit their designated peak in customers by 1.2 million customers in December of
that year despite the problems with combating fraud and agent training. Today
they have over 15 million active customers. The ability to charge way less than
competitors and banks almost gives this a decentralized feeling. M-Pesa is a
global initiative that unknowingly disrupted the banking industry by offering
lower fees and bringing customers to customers.
Leaf shoes are an example
of how non-government organizations can make better efforts to expand the
awareness of helping poorer communities. Leaf Shoes provides fashion quality
footwear with recycled materials. They focus on developing products and
protecting the environment. Leaf is a social-minded apparel company. High
fashion and for every pair sold TECHO receives the primary financial benefit.
Each customer will be supporting a noble cause. These are what can draw younger
people to the cause. They work locally instead of using large corporations
whose labor tactics aren’t good. This I feel is how the world needs to change
step by step working with local factories, developing soles from used tires,
and using recycled carton boxes. Closed loop systems are drawing them in, and
they are building houses in slums to reduce poverty.
In New York, a discussion
about whether homeless people should be moved from hotels back to shelters has
received a lot of attention.
To reduce the spread of
coronavirus during the COVID-19 pandemic, the New York City government moved
10,000 adults (more than half of the non-family homeless population) from group
shelters (where an average of 10 to 12 people shared a room) to hotel rooms (Iverac,
2020). The de Blasio administration believes this would help protect homeless
people from the new coronavirus. There were 104 homeless New Yorkers who died
after being infected with COVID-19. However, the infection rate is gradually
decreasing after these individuals are housed in hotels (Iverac, 2020).
Placing homeless people
in hotels has sparked some criticism and concern. Residents of the Upper West
Side complain of homeless people engaging in public drug use, loitering, and
indecent behavior. Mayor Bill de Blasio met the demands of UWS residents and
said the city would move homeless people out of the nearby Lucerne Hotel, which
has drawn the most complaints (Iverac, 2020).
However, there are many
professionals and experts oppose the transfer of homeless people from hotels to
shelters. They believe this would put homeless people in danger. Isaac McGinn,
a spokesman for the Department of Social Services, states it is not safe for
individuals to return to congregate shelters and that the government will
continue to evaluate all factors/facts (Iverac, 2020).
The settlement contract
between the city and hotels may be extended. The original contract value was
close to $300 million. The city government will pay an average of $120 per room
(Iverac, 2020). The president and CEO of the Hotel Association, Vijay
Dandapani, said the contract extension benefits his members as well as the
homeless because the hotels were largely vacant during the pandemic. These
hotels do little business in tourism or business travel during a pandemic.
ESG Issues
Environmental, social, and governance (ESG) criteria are a
set of standards for a company’s operations that socially conscious investors
use to screen potential investments.
It considers how a company manages its relationships with
employees, suppliers, customers and the communities in which it operates.ESG
issues governance involves a company's leadership, executive compensation,
audit, internal controls and shareholder rights.
The Environmental standards may address how a company deals
with pollutants, conserves energy makes and protects the environment. The
standard may also help assess the environmental risks to which the company is
exposed and how the company manages those risks.
The Social Standard looks at a company's business
relationships and stakeholders. Companies need to work with suppliers who hold
the same values. Sustainable companies may donate a percentage of their profits
to the local community or encourage employees to volunteer there. In addition
to this, a company's working conditions should place a high priority on the
health and safety of its employees and take into account the interests of other
stakeholders.
The Governance standards relate to how a company uses
accurate and transparent accounting methods to disclose appropriate financial
information to shareholders and stakeholders and whether the company allows
shareholders to vote on important issues. Investors may want to ensure that the
company avoids conflicts of interest when selecting board members, does not use
political contributions to obtain improper preferential treatment, and
certainly does not engage in illegal practices.
The environmental,
social, and governance (ESG) issues that are most relevant or material to shareholder
value can improve themselves financially and performance (ESG) wise. The 4
stages to becoming a part of this performance frontier is to identify which ESG
issues directly affect their business. 2nd stage is to quantify the financial
impact that improvements on those issues would have. The 3rd is to Undertake
major innovation in products, processes, and business models to achieve the
improvements. The 3rd is to communicate with stakeholders about those
innovations. Integrated reporting. Also, one must undertake innovation in
products, processes, and business models, and lastly one must communicate with
stakeholders about the innovations. This is the way for barriers to be broken
and innovation possesses a path to lead itself.
Sustainability strategy
Sustainability strategy refers to how a company can focus on
environmental and social achievements while still maintaining its primary goal
of increasing shareholder value. A good sustainability strategy can lead to
innovation and higher profits. There are
five stages that lead to full sustainability. The first stage is being the
regulation compliance. The second stage incorporates how companies make “value
chains sustainable", they do this by working with suppliers and retailers
to improve practices. Stage 3 involves the recognition of consumer segments who
prefer sustainable products and services. Stage 4 explains how firms can
develop new business models by rethinking the process and products. Adidas uses
this stage well in their product development. Adidas strives for a closed-loop
fully lean system when it comes to operations. Stage 5 includes the process of
how companies constantly need to create next-practice platforms and
consistently question their current business practices to find if they could be
optimized.
In the article
sustainability Is the new driver of innovation they explain their research
based off of 30 corporations, and they find out that sustainability is the
mother lode of organizational and technological innovations yielding both bottom-line
and top-line returns. Ram Nidumolu explains that becoming environmentally
friendly lowers costs because companies eventually reduces their inputs used,
and simultaneously this process generates additional revenues from better
products and can enable companies to create new businesses. This is why they
explain that they’ve come to a realization that smart companies treat
sustainability as a new frontier. They go further to explain how this is almost
a first come first serve situation, and the quicker the companies are to become
more sustainable the harder the competitors will be too late to the party
essentially. They explain that only companies that make sustainability a goal
will achieve competitive advantages, and this leads to the rethinking of
products, processes, and tech. The stages as explained in the notes are 1.)
Viewing compliance as opportunity, the laws and standards. The example they use
is how in 2007 San Francisco banned supermarkets from using plastic bags at
checkouts. I personally think that all supermarkets should implement the same
idea. Plastic bags rarely see a recycled garbage bag, and the cost of producing
them could go elsewhere. The Laws and pressure from competitors and consumers
could all help these situations. They explain how Hewlett-Packard realized the
lead came at a cost, and created an alternative in compliance with the European
Union’s restriction of hazardous substances. In 2007 the HP platform created
for recycling worked with more than 1,000 companies in 30 countries and
recycled 20% of the equipment. This platform created for sustainability saved
the company $100 million and increased awareness for the brand. Stage 2.)
Making Value Chains Sustainable, this includes the constant need to reduce
nonrenewable resources such as gas, coal, and petroleum, while also reducing
their usage of renewable resources like water and timber. This is the stage
where corporations work with suppliers and retailers to develop eco-friendly
raw materials and components to reduce waste. This is where the supply chain
comes to be so important, and where Walmart is so highly regarded. They explain
how in 2008, CEO Lee Scott managed to reduce waste and emissions, cut packaging
costs by 5%, and increase energy efficiently of products supplied in stores by
25%. In this stages tools such as enterprise carbon management, carbon and
energy footprint, and life cycle assessments help companies identify the source
and cut the slack. The life cycle assessment captures the environment-related
inputs and outputs of entire value chains, from raw-materials supply through
product use to returns. Stage 3 is the designing sustainable products and
services stage. This is focused on developing sustainable offerings and
redesigning existing ones. This is where companies need the skills to know
which products environmentally friendly and which ones are not, how to avoid
greenwashing and implement real change, and scale management through green
products and materials. The 4th stage is developing new business models, and
this is where a corporation needs to capture value and find new ways to
continue doing so. This takes understanding what consumers need and want and
meeting demands, and also this involves understanding how partners can enhance
the value of offerings. The fifth stage is creating Next-Practice Platforms,
and this is achieved by questioning the sustainability process by putting it
through a microscope and comparing it to the sustainable practices of today's
world. A benefit of this stage could be designing technologies that will allow
industries to use energy produced as a by-product.
Companies that focus on
sustainability issues are known as "walkers" and have placed
sustainability on their highest management agendas and developed sustainability
business cases. In an MIT Sloan Management Review and Boston Consulting Group
report (Kiron et al., 2013), about two-thirds of the 1,000 senior corporate
officials surveyed thought sustainability issues were important. But the
reality is that only 10% of companies have solved the relevant problems.
Nidumolu et al. (2009)
state that companies with sustainability as a core value or mission can foster
and drive innovation, thereby providing them with a competitive advantage. They
identified five stages in an organizational pathway to sustainability:
● In Stage 1, companies “view
compliance as an opportunity” and comply with the most stringent
regulations.
● In Stage 2, companies make “value
chains sustainable” by working with suppliers and
retailers to develop more sustainable practices and products.
● In Stage 3, companies recognize consumer
segments that prefer sustainable products and services and begin to design or
redesign products for them.
● In Stage 4, firms “develop
new business models” by rethinking both process and
product.
● In Stage 5, companies must “create
next-practice platforms” by questioning the assumptions
underlying their current business practices.
There is a large and
growing body of research and case studies that support the idea that sustainability
drives innovation. Eccles et al. (2014) state that over the 18-year period from
1993 to 2010, companies with a high commitment to sustainability outperformed
"low sustainability" companies in financial terms such as stock
performance and profitability. Eccles & Serafeim (2013) also state that
high commitment involves a strategic focus on the most critical environmental,
social and governance (ESG) issues and the ability to generate significant
innovation in the products, processes and business models that address these
issues. Companies that prioritize the most important ESG issues through
innovative products, processes, and business models can help them achieve
significant financial success.
Sustainable Operation
There are many opportunities for competitive advantages and
increased profits by engaging in sustainable operation management initiatives,
this reasoning reflects a shift from viewing business expenditures in an
aesthetic world to viewing them in a dynamic one based on innovation. There are
three distinct approaches to improving performance objectives. The first
approach is the “Trade-Off” frontier uses the operations between existing
assets and lets management policies decide on the relative importance of the
performance objective. The second approach is called the “Technology” approach,
which invests in new assets (tech) that shifts the asset frontier to the right
and influences the operating frontier with no change to current policies. The
third approach is called the systems approach, which changes the policies and
practices associated with the operating frontier and improves the overall
performance that is associated with lean thinking. This final approach involves
cultural change.
It is important to align delivery systems to meet the needs of
different customer priorities. In trade-offs, green competition can cause a
company to race to launch sustainable products to gain the first-mover
advantage. The technology approach can come with its competition because
corporations are finding ways to develop and use new technology that improves
multiple performances and objectives simultaneously. Things such as solar
panels, battery technology and LED light bulbs. The third approach the Systems
Approach can catch in competition when designing products and delivery systems
that better embrace a wider systems perspective encompassing the overall
life-cycle, an example of this can be using materials more efficiently to meet
environmental standards. Adidas uses this to its advantage because it is
consistently looking for innovative ways to improve its sustainable impact
within its product design.
Lean systems focus on just-in-time, waste elimination, value
stream and continuous improvement. They go further to explain that companies
that adopt the lean manufacturing philosophy are benefiting the environment
through energy efficiency, waste reduction, recycling opportunities, etc. Lean
focuses on reducing non-value-added activities and producing only the amount of
a product that is needed, and this provides the sustainable operating system
with systemic improvements. Minimization of waste and pollution can only help a
company in the long run. The Life Cycle Assessment is an environmental tool
that can be graded through a company's lean productivity. The reason why lean
and green companies could benefit each other is because as they explain, what
company would not welcome a reduction in waste (be it time, energy or
resources) that leads to increased profits, as well as developing the maturity
to embed environmental responsibility within its processes? This will increase
competitive and environmentally friendly practices and can contribute to a
company's sustainable development goal, and improve a company's climate action
awareness.
The life cycle assessment is a process to evaluate the
environmental burdens associated with a product, process, or activity by
identifying and quantifying energy and materials used and wastes released to
the environment. The LCA assesses the impact of those energy and materials used
and released into the environment to identify and evaluate opportunities to
affect environmental improvements. The assessment assesses the entire life
cycle of the process, product, activity or service system, and this encompasses
extracting and processing raw materials, manufacturing, transportation and
distribution, use, reuse, everything. Often referred to as the “cradle to
grave” assessment. Standardized by ISO, 14040. Assesses inputs such as
processing of raw materials, use of energy, water, and fuels. And outputs such
as consumer products, waste to landfill, CO2 emissions, heat and energy loss. I
didn’t know that one pair of Levi's consumed over 4,000 liters of water during
its lifetime and 49% during the early stages of turning the cotton into denim.
This caused a light bulb to go off and innovation to take place, and now Levis
is teaching the concept to its farmers of using less water. The information
provided by LCA’s can be valuable because they provide alternative ways of
cutting costs and waste, raising profits, while at the same time reducing
environmental impact.
Sustainable product design is an approach where the design
stage of a product is intended to be more sustainable. This causes an
equilibrium between the demands of the environment, social responsibility and
economic needs while still demonstrating the traditional product requirements.
The way toward sustainability will not happen overnight, but a step by step
gradual integration of environmental requirements into the product development
process at every stage will do the trick quicker than a full out sustainability
change. Companies that legislate for sustainable product design are able to
reduce their environmental impact at the design phase and experience fewer
disruptions in disposal later on. Some strategies for a more sustainable
product design or, economic use of materials, involves using less material or
the reuse of recycling of natural resources as a material input for product
design. Another strategy is designed for ease of repair/disposal, this involves
a focus on design for dismantling, reuse and recycling. Another strategy is
lifecycle design, and this technique enables firms to understand the process
from the beginning of production to the end of consumption. another strategy is
innovative environmental product design, this is a sustainability-driven design
that balances both customers' expectations as well as the needs of the
environment
The adoption of systems such as TQM, Lean and TOC has
enabled the operating frontier to move closer to an asset frontier thereby
improving overall performance. Adopting a sustainability perspective extends
this system's view to consider the material and energy lifecycle as well as
opportunities for sustainable product design. Many organizations have strived
to improve efficiency and productivity through sustainable operations
management, such as life cycle assessment, sustainable product design, and lean
and green manufacturing practices.
The potential for supply chain management to contribute to
the companies is reflected in the specialist advisory group on supply chain
sustainability established by the UN global compact. Supply change management
is the management of upstream and downstream relationships with suppliers and
customers to deliver superior customer value at less cost to the supply chain.
The upstream to downstream represents the flow of materials from their source
to finish goods or services at the point of distribution. The discipline of
supply change management incorporates numerous business functions ranging from
product design, facilities management, production, logistics, marketing,
finance, and distribution. There is rapid growth and outsourcing world
organizations get a third-party supplier to carry out a specific activity.
Another common use is offshoring which is where activities are undertaken in a
different country from the sourcing organization. And the final portion is
global sourcing which is where supply chains span different countries.
Companies that work closely with their suppliers and impose controls throughout
the whole supply chain and add suppliers’ facilities can help to prevent human
rights and environmental violations and improve environmental and social
conditions. They can avoid the risk of bad publicity, enhance their brand,
reduce cost, ensure product quality and innovation, and attract new markets.
There are two broad aspects, social and environmental sustainability within the
supply chain. Social sustainability relates to international Labor Standards
such as minimum wage, reasonable working hours, and overtime, right to
collective bargaining, freedom of association, health, and safety.
environmental codes include managing productive stewardship production and
logistics throughout the supply chain to minimize the negative impacts of using
energy, materials, water, and other harmful substances.
Social sustainability in the supply chain focuses on the
social aspects of sustainable supply chain management, this is where the
question comes of how the working conditions of those laboring and supplier
factories in developing countries improve over time. To maintain ethics and
protect brand value, western importers started developing corporate codes of
conduct, these were ethical guidelines that specified the social and
environmental conditions under which goods and services are to be produced at
supplier factories in developing countries. Most of these codes of ethics were
borrowed by the international labor organization. This code of ethics basically
forced large corporations to be more honest about their workers’ rights and
labor laws. Modern slavery was the focus, this is the exploitation of a person
who is deprived of individual liberty anywhere along the supply chain, from raw
materials extraction to the final customer.
Environmentally sustainable supply chain management, often
referred to as green supply chain management is integrating environmental
thinking into supply chain management. This entails saving energy and reducing
carbon emissions in production, service delivery and logistics, achieving
economies of scale, using alternative energy sources and efficient equipment,
and adopting waste reduction strategies. This relates to the environment in the
long term, the economy and infrastructure, as well as water and energy security
through productivity improvements. The green supply chain management involves
reducing energy in products, they use and after use with the intent to
hopefully reduce marine and land ecosystem impact. Implementing a successful
sustainable supply chain requires marketing and purchasing functions working
together. Achieving a sustainable supply chain involves multidisciplinary
tasks, encompassing relationships, networks, channels, and partnerships
throughout the sourcing and product processing stages. This is where logistics
come into play, they use the example of built-to-order about reducing food
miles and lowering the distance travelled when it comes to sharing local
suppliers and consumers. logistics involves the planning, control, and implementation
of moving goods and exchanging information throughout the supply chain and this
also involves getting the right product to the right place at the right time.
Logistics could also come into play when it comes to the mode of transport,
whether Rd, rail, air, or freight. Vehicle designs, reducing vehicle emissions,
can play a big factor in the environmental impact. West production when it
comes to over-ordering of materials or overproduction all falls on logistics in
the supply change management. Organizations are starting to reclaim and recycle
materials within their supply chains. Adidas has teamed up with the campaign
platform “Parley for the Oceans” to launch a range of shoes made from plastic
debris reclaimed from the sea, with souls made from 3D printed fibre recycled
from fishing nets. The reverse supply chain is a growing phenomenon not having
to worry about cost and shortages because it uses materials from recycled items
back into the supply chain, known as cradle to cradle design.
The supply chain has traceability and transparency.
Traceability is the ability to identify and trace the history, distribution,
location and application of products, parts and materials, to ensure the
reliability of sustainability claims, in the areas of human rights. The usage
of data systems enables businesses to maintain knowledge of each step of the
supply chain to underpin claims of sustainability, quality and authenticity.
Implementation of traceability involves a high level of collaboration and
organization and the usage of internal teams and suppliers to identify issues,
collect data and implement improvements. Transparency in the supply chain
involves making details about the products and materials available to customers
and stakeholders by tracking technology such as RFID, radio frequency
identification devices and the Internet.
The video “The life cycle of a t-shirt” by Angel Chang
discusses the impact t-shirts have on society, the planet and the wealth/health
of those producing t-shirts. The video begins explaining how the average
t-shirt takes 2,700 liters of water to produce. Followed by the impact of
chemicals such as pesticides and insecticides spread over cotton to produce
t-shirts. Cotton uses the most pesticides and insecticides in the world among any
crop in the world. Which lead to pollinates entering farmers and underpaid
workers' lungs, impacting workers' health, as well as the atmosphere, damaging
the surrounding ecosystems. After this process they are sent to factories to be
turned into yarn and produce sheets of cotton, finally they are sent to human
labor where underpaid workers spend long hours producing t-shirts of all
colors. This system lays claim to 10% of global carbon emissions, while still
escalating, turning t-shirt production into the second largest polluting
industry in the world after oil. The video goes on to explain how thrifting and
reducing, reusing and recycling t-shirts can better the environment that's
already taken so much damage. With the potential to slow down the t-shirt industry.
The video “Explaining the
Circular Economy and How Society Can Re-think Progress” begins to explain the
life process of natural global ecosystems and how the world itself before
humans has done this millions of years before, an established process. Whilst
in the human era people have gone for a more direct approach, making, taking
and disposing of. It follows to question how society can make less waste and
more healthy decomposition of materials to help regrow things and be more
efficient. With businesses adopting a licensing system business can be more
efficient and make more sustainable profits reusing old materials to create new
products. While transportation of these new materials and refurbished products
via electronic vehicles save on pollutants entering the environment. Explaining
that a circular economy is better for people the planet and profits, opening
the eye to new and innovative possibilities.
Information System
Information systems refer
to the hardware, software, data, people, and procedures that collect and
process data into information. Firms use information systems to support their
sustainability strategy. Firms can use energy-efficient and non-toxic
information technology products or “green IT”. They can use “green information
systems” to help them track and reduce their carbon footprint and waste in
their operations.
At its core information
systems are a collection of related elements that interact to achieve a common
goal. An information system consists of a collection of processing elements
that transform data into information. The elements included are hardware,
software, data, people, and procedures. Systems thinking implies that
information systems can broaden the scope and expand a firm, pulling it away
from a silo mindset of an information system within a department not shared to
other departments.
Firms buying computers
that are energy efficient and focusing on reducing their energy usage of
technology can be a depiction of green IT. Some companies collect used and
recycled electronic components for reuse or repurposing. Dell’s agreement with
Goodwill allows them to collect old computers, fix them and donate them. Green
data centers have hundreds of powerful computers called servers which use huge
amounts of energy. Managers have begun to focus on ways to make these data
centers energy efficient. Virtualization allows multiple applications to run on
a single server, and this reduces the number of servers needed. With the start
of cloud computing, data centers could be located in remote locations, often
with access to renewable energy sources such as solar, wind and geothermal.
Some companies go as far to implement Data Center Infrastructure Management
software or DCIM. These systems combine facilities management and data center
management information to allow for the right decisions to be made in
considering the needs of both departments. DCIM monitors ventilation and air
conditioning (HVAC) aspects of the data center, and provides reports on metrics
such as Power Usage Efficiency (PUE).
The usage of information
systems to reduce and monitor the social & environmental impacts of the
whole firm and not just the I.S. The department is called Green Information
Systems. There are a variety of different types of Green information systems
that can monitor and reduce environmental impact outside of the I.S
departments.
sustainability systems
can also be used to drive innovation, and the usage of information systems can
complement sustainable progression. The systems can benefit everyday situations
especially through times of crisis, the example used explains how blackboard is
a learning management system that changed the way universities can conduct
their education services. The sharing economy enables a large number of
innovations through the use of smartphones and apps, and this alternately
reduces consumption and waste by sharing resources. Having sex with zoom,
Zipcar, Uber, are all usages of sharing resources, but the cars are located
through a smartphone app and this app can quickly handle payment electronically
and provides convenient access to transportation. Before he left Air-bnb, Verbo
are examples of how resources can be better for officials. These companies and
they work from vision technology to elevate the world. They also invented a new
concept of trust through the usage of information systems. Without star ratings
nobody will enter an uber because of the likelihood of something bad to happen.
However, obviously everything that glitters is not gold. Many of the benefits that
workers and unions have fought for are being dismantled. There have been
incidents where Uber drivers have been accused of rape and other crimes. AirBnB
is also controversial. There are also many other uses of this technology such
as 3D printing, self-driving cars, energy efficient homes, smart grids called
mom innovative and product designs through crowdsourcing, and the Internet of
Things. Crowdsourcing is a type of open innovation using large numbers of
people from outside organizations and connecting all of them via the Internet.
There are six types of crowdsourcing: labor, funding, creativity, innovations,
wisdom, and governance. It uses its platforms and social media to reach
millions of people.
In the paper, From Green
IT to Sustainable Innovation, Wietske van Osch, and Michel Avital explain the
main focal points are to discuss two primary approaches to save ability. One
focuses on how to reduce the negative ecological impact of information
technologies, and the other focuses on how to leverage information technologies
for solving our environmental problems. The first approach is called green
information technology, and that focuses on how information technologies can
better themselves come on then we do stare at ecological footprint CO2
emissions, energy consumption, and waste. The other approach is better in green
information systems, which are the information technologies or information
systems and utilizing their analysis in helping organizations to manage their
environmental footprint better. I agree with the notion that as explained in
the text, green information technology has been driven by regulation, while
green information systems are driven by the desire to reduce costs. This
disregards the potential added value and disregards the potential added value
to sustainable innovation. The overall end goal is to implement information
technology and information systems towards sustainable innovation as a source
of social, environmental, and economic value for all stakeholders involved. As
explained in the text they focus on the sustainable innovation lens, which
builds on conceptions of green information technology and information systems
and the designing and implementing sustainable organizational processes and
practices to generate social, environmental, and economic worth for
stakeholders. Applying the sustainable innovation lens offers reforming the
underlying issues within an approach to sustainability that addresses
environmental, social, and economic values in context information technology. It
also brings attention to the importance of innovation and addressing the
challenges and opportunities of sustainability. The goal of the paper yesterday
addressed the issue by stimulating firms to take on social and environmental
challenges as business opportunities, sustainable innovation serves as a source
of creativity and innovation that enables firms to aim for generating bigger
wins for business, environment to, and societal issues overall. The sustainable
innovation lens broadens the green information technology and information
systems, and in the text, they explain that the need for radical innovation is
necessary. They highlight the three perspectives of sustainable information
technology. The first perspective is to highlight the fact that most corporations
focus on greening all stages of their information technology lifecycle
including manufacturing use and disposal, but they overlooked the importance of
creating social value. There's also an explanation that the greatest driver of
green information technology is regulation. Another approach in the paper
explains how great information systems need a greater role. There needs to be
greater information systems rather than information technology when dealing
with environmental management. The most prominent driver of green information
systems is it designed to reduce the cost energy and carbon emissions companies
need to integrate an environmental management system and allow it to focus on
their environmental performance. Sustainability is a business approach to
creating long-term shareholder and stakeholder value by embracing opportunities
and risks derived from economic, environmental and social developments. As
explained in the paper the focal point is generating environmental, social, and
economic sustainability and not allowing that to be a burden for businesses,
but an innovation challenge, and a potential source for competitive advantage.
The paper also focuses on
how adopting a sustainable innovation perspective can provide a great
foundation by redirecting the attention to all facets of sustainability and by
highlighting the need for multi stakeholder innovation. This is better than the
green information technology approach and the green information system approach
which only focuses on environmental sustainability and overlooks social
sustainability which centers on regulatory compliance, cost reduction,
mitigating negative environmental impacts, managing environmental footprints,
and other things of that nature.
The paper focuses on
Hewlett Packard and its ability to adapt and become one of the key drivers of
several industry initiatives for green information technology and information
systems and sustainable innovation. From 1994 until now “HP” has been the most
prominent and leading sustainable innovator. The data was taken from the
Financial Times in the New York Times. They explain how in 1990 Hewlett-Packard
innovative its green information technology system by integrating a wide
recycling scheme in response to German recycling laws, they utilized free
recycling programs in response to California State legislation, and they
eliminated hazardous waste in response to the EU directive and this led to
energy efficiency in products to earn their EPA Energy Star label. In 2000,
Hewlett Packard integrated this green information system and gained
certification of environmental management system the ISO40001 award. In 2003
Hewlett Packard utilized its sustainable innovation by collaborating with key
stakeholders through organizing recycling events for informing consumers,
stimulating university research and education on social responsibility, and
setting up digital inclusion projects. This led to a radical rethinking and
redesign of electronic products and manufacturing processes, and eventually
shaped legislation and initiating industry initiatives. They also assessed
their managing stick will the impacts along with their supply chain, and
they're committed to a multi stakeholder production innovation.
They then explain how
green information technology, green information system, and sustainable
innovation phases in a step model explain the progression of sustainability
efforts a company chooses as it moves from a reactive green approach to a
proactive sustainable innovation approach. When HP engaged in sustainable
related challenges they acted in a reactive approach, greening information
technology. And then the greening efforts became more difficult, and
Hewlett-Packard adopted the environmental management system green information
system, which spurred innovation rather than regulation allowing Hewlett
Packard to engage in sustainable innovation efforts. This expanded the
sustainability efforts of their entire supply chain, and helped them organize
community projects, and improve their radical product and process innovation.
As explained in the
paper, it is believed that adopting the sustainable innovation lens could
provide researchers with leverage necessary to transcend beyond the study of
environmental sustainability and jump into a wider context of innovation. By
studying how companies move through their information technology efforts,
corporations can contribute to sustainability, diversity, human rights, and
play relations, safe and clean products, and good governance structures. The
approaches to sustainability are as stands, one sustainable innovation, two
green information systems, three green information technology. Sustainable
innovation provides multi stakeholder innovation which can contribute to
community and opening new markets, and this can also shape legislation which in
turn will shape stakeholder impact and sustainable value. Green information
systems focus on environmental management and reducing processed costs as
sustainable value. Green information technology focuses on responding to regulations
and reducing energy waste as sustainable value. They explained that in order
for new information technologies and systems to generate environmental and
social value for stakeholders the ideas need to be reinforced, and current
efforts need to be focused on incremental and reactive innovation. This all
needs to be related to the reduction of energy consumption and waste disposal,
with more radical technology innovations used to reshape current practices.
Only responding to social and economic factors and assuming that this will
trigger a need for more sustainable technologies isn't as efficient.
Corporations need to apply sustainable innovation, in adopt A leading role in
shaping radical new technologies that provide environmental, social, and economic
value to stakeholders. This sustainable innovation approach can serve as a
foundation for understanding the opportunities associated with sustainability
related challenges.
Using GRI of 6 individual
companies with investments in IS (information systems) this article, "A
longitudinal exploratory investigation of innovation systems and sustainability
maturity using case studies in three industries", articulates the effect at each stage of
sustainability maturity and their specific role to each company and growth. The
article then uses green IT, green SI and sustainable IS to look deeper into how
each method is applied to the triple bottom line. Finally this article presents
a method to using and finding data from companies GRI reports for IS scholars
with an interest in sustainability. The article explains that sustainability
drives innovation using 5 stages in any organization's path to sustainability
maturity. The article presents six companies (Biogen, Johnson & Johnson,
Coca-Cola, General Mills, Volvo group, and Caterpillar) to make comparisons
within and outside the industry. The authors coded the different information
systems as automation, informatization, transformation or infrastructure assets
and categorized them in different stages (S1-S5). The research focuses on IS
can influence social and environmental sustainability at the same time.
Businesses, open
innovation and crowdsourcing can provide a number of advantages over
traditional approaches, all of which impact the bottom line:
1. Improved discovery and
development of new technologies, approaches and creative solutions, enhanced by
greater diversity of problem-solvers and a wider pool of intellect addressing
the issue.
2. Accelerated
time-to-market and opportunities for first-to-market advantages, which also
mean competitive advantage and a more agile organization able to adapt to
changing customer needs and business environments.
3. Higher hit rate of new
product development (and new solution development) from greater breadth of
ideas considered, more knowledge and know-how brought to bear, and a high level
of
experimentation, testing
and consumer/user feedback throughout the design process (this also reduces the
risk of innovation and enables faster abandonment of, and greater learning
from, failed ideas).
Reductions in both intensity of and total
energy use, carbon footprint and water use and the circular economy: for
example, the Ellen MacArthur FounDation is building partnerships to accelerate
the transition to a circular economy, and cost reduction from faster
time-to-discovery, participating teams willing to donate or invest time (often
incentivised by the chance they might win prizes), or external sources willing
to work for no or reduced fees. Participation and engagement increasing the
likelihood of behavior change, which is important given that ‘innovation’
refers to the entire innovation process from ideation and invention through
design, engineering, production, go-to-market strategy, sales and distribution,
to market adoption 2 While no company is truly sustainable, and all these
companies still have significant negative environmental and social impacts,
many of them are genuinely working to find sustainability-focused improvements
and innovations. more participatory, more decentralized approach to innovation,
based on the observed fact that useful knowledge today is widely distributed,
and no company, no matter how capable or how big, could innovate effectively on
its own. ... For example,Michael Katz defines innovation as: The successful
generation, development and implementation of new and novel ideas, which
introduce new products, processes and/or strategies to a company or enhance
current products, processes and/or strategies leading to commercial success and
possible market leadership and creating value for stakeholders, driving
economic growth and improving standards of living. Academics, consulting firms
and business magazines distinguish between different forms or application areas
of innovation (such as product/service, technology, production process), types
or levels of innovation (such as incremental, breakthrough, transformational),
and steps in the innovation process (such as idea generation and mobilization,
advocacy and screening, experimentation and testing, commercialisation,
diffusion and implementation) The full range of potential alternatives
− ‘Ground-truth’
information and data
− Collective insights
drawn from prototyping and experimentation
There are parallel
advantages for non-profits, foundations and mission driven businesses, such as
gaining new, more innovative approaches, a deeper understanding of the context
in which their planned services are being delivered/received, and insights
about the most effective design
and approach. This
includes citizen science, soliciting public input on scientific processes—data
collection, analysis and interpretation, technology and app development,
problem-solving and finding scientific discoveries; crowd mapping, obtaining
geographic information to produce meaningful collaborative maps such as
Ushahidi and customer crowdsourcing, gathering customer needs, preferences,
opinions, input, feedback and testing, such as My Starbucks Idea (http://mystarbucksidea.force.com).
There are improvements, for example, in: Impact assessment, disclosure and
reporting (as of 2015 over 5,000 companies are reporting their carbon-related
impacts and risks to CDP (www.cdp.net) and, in 2013, 93% of the global 250
largest companies reported on their sustainability impact, performance and
plans) 2016), found that those Interbrand ‘Best Global Brands’ already using
crowdsourcing in a significant way between 2004 and 2014 increased their usage
by over 30% from 2014 to 2015, that the fast-moving consumer goods (FMCG)
sector is leading the application of creative crowdsourcing (followed by
consumer electronics), and that the fastest-growing application is ideation
(crowdsourcing for ideas).Corporations have traditionally looked to their
research and development(R&D) departments for new technologies and product
development, and to manufacturing engineers and process improvement experts for
operational improvement. Crowd innovation: Generate ideas or develop solutions
to a problem or part of a problem; for example, the Ansari XPRIZE offered $10
million to the team best able to build a reusable manned vehicle capable of
carrying three people 100 km above the surface of the Earth and back twice in
the span of two weeks, effectively launching the commercial private space
industry. The chapter found the 20 leading major brand consumer products
companies using crowdsourcing, in order of most use, are: Coca-Cola, Danone,
Nestlé, Pepsi, Samsung, Hewlett-Packard, Ford, Nokia, Toyota, General Electric,
Microsoft, Google, J&J, Budweiser, Chevrolet, Shell, Intel, Phillips,
Santander and Nescafé. This is explained further in Target 17.16, which calls
for action to ‘Enhance the global partnership for sustainable development,
complemented by multi-stakeholder partnerships that mobilize and share
knowledge, expertise, technology and financial resources, to support the
achievement of the sustainable development goals in all countries, in
particular developing countries. Open innovation stimulates more transformative
solutions and business models because it engages the broader
business/organizational ecosystem in better understanding.
System Thinking
Systems thinking refers to big picture analysis and relating
to how they affect the overall environment. The perspective of what we do and
how it affects the world on a larger scale. System thinking enables critical
analytical thinking to be used to reduce larger problems in the smaller
problems, and tackling each problem one by one. From our information systems
course, we've compared silo thinking, two systems thinking. Silo thinking is
when an information system cannot be used in different departments of the
company. A system is a set of components that work together towards a common
goal, a company creates value for its stakeholders by turning raw materials
into useful products, the company turns inputs into outputs and all the
information is connected. Each system has a boundary that decides what elements
should be included in the system. For example, a narrow scope will lead to silo
thinking, in a broad scope includes too many variables and making decisions too
complex. Long term decisions need they're broad scope, while short term
decisions are in our scope. Unfortunately, high paid executives in these
companies have a short term profit mentality towards many of these situations.
close systems, or systems that do not interact with the environment while open
systems do. everything is connected in the world around us, and that theory
named the butterfly effect backs that. The point of the theory is that we
should consider that there could be a bigger picture, and we should be more
open to understanding that we are all connected. As explained the changes in
the air due to climate change kind of felt the water cycles and that can affect
the land. Another concept that is explained is called the feedback loop, which
explains the output of the system can be either negative or positive, negative
meaning stabilizing and positive meaning reinforcing. Text apple that they use
as if a student does well exam, the student receives reinforcing feedback that
motivates the student to study more and do even better on the next exam
(virtuous cycle), , but another student who does poor in the exam reinforces
their study habits and does even worse on the next exam creating a (vicious
cycle). The question comes into play, imagine if the student who received the
poor grade fed his motivation instead of reducing it, he will prove his teacher
wrong and possibly relax and take it easy for the next exam and do poorly
again. And negative feedback loop stabilizes the grade, and rides the mentality
of never get too high on win, and never too low on a loss. Mainly, there are
multiple ways to show how systems thinking can be visualized. There are system
diagrams that show inputs, outputs, processes, boundaries, etc. And there are
spray diagrams which are mind maps that show the same exact thing in a more
interactive way. The major idea behind the concept is to imagine if at one
point all systems can be connected the way we are actually all connected.
Homeowners with solar panels, electric vehicles, smart grids and wind turbines,
all sharing resources and information to make the world a better place. All
people, especially large corporations should recognize that the decisions have
major impacts. Decisions can impact employees, other departments, and
societies. It is imperative that we as innovative thinkers utilize system
thinking so that we are not wasting the natural resources that we were given.
G.M. stock jumped after
its announcement and closed up 3.5 percent, reflecting a growing consensus
among investors that electric cars represent the future, and that Tesla and
other electric carmakers will eventually dominate the auto industry, while
businesses that do not make the transition to electric vehicles will do poorly.
General Motors said Thursday that it would phase out petroleum-powered cars and
trucks and sell only vehicles that have zero tailpipe emissions by 2035, a
seismic shift by one of the world’s largest automakers that makes billions of
dollars today from gas-guzzling pickup trucks and sport utility vehicles.
G.M.’s announcement comes
just one week after Mr. Biden signed an executive order directing the
Environmental Protection Agency and the Transportation Department to quickly
reinstate tough auto fuel economy rules put in place during the Obama
administration, and one day after he signed a follow-up order directing the
federal government to purchase all-electric vehicles. “This move by G.M. is a
big deal,” said Margo Oge, a former Obama administration official who played a
lead role in developing the tough fuel economy standards and now informally
advises the Biden administration and auto companies. A spokesman for Ford Motor
declined to directly comment on G.M.’s move but said his company was “committed
to leading the electric vehicle revolution in the areas where we are strong.” The
Obama-era standards had required automakers to achieve an average of 54.5 miles
per gallon by 2025, which would have eliminated about six billion tons of
planet-warming carbon dioxide pollution over the lifetime of the vehicles, and
required a large-scale transition to hybrid and electric vehicles. The company
plans to spend $27 billion over the next five years to introduce 30 electric
vehicles, including an electric Hummer pickup truck that it expects to start
delivering to customers this year. The chief executive of Audi, the luxury car
company owned by Volkswagen, said customers would ultimately determine the
speed of the transition to electric cars. Ferdinand Dudenhöffer, a veteran
industry analyst, said that even if European carmakers had not put a date on
internal combustion’s demise, there was a consensus that electric cars would
dominate within 10 or 15 years. That history continues to dog G.M., and some
experts said they were not convinced that the company would make the transition
to electric cars as quickly as it had promised, in part because Ms. Barra or
her successors could simply change their minds. “To borrow a phrase from Thomas
Edison, what consumers and the climate need are commitments that are 1 percent
inspiration and 99 percent perspiration,” said David Friedman, a vice president
of Consumer Reports. Of course, even if G.M. and other automakers are able to
move to an all-electric fleet by 2035 or 2040, combustion engine cars and
trucks are likely to be on the roads for at least several decades to come in
the absence of a huge government program designed to encourage people to
replace them more quickly. The vision of an all-electric future represents a
dramatic shift in thinking of G.M. Just over 20 years ago, it developed an
experimental electric car called the EV1 and leased it to a select group of
customers. “This is a guardedly bold move,” said Erik Gordon, a business
professor at the University of Michigan who follows the auto industry. G.M.
said its decision to switch to electric cars was part of a broader plan to
become carbon neutral by 2040. Daimler, which makes Mercedes-Benz cars, has
said it would have an electric or hybrid version of each of its models by 2022,
and Volkswagen has promised an electric version for each of its models by 2030.
It even went so far as to take cars back from customers and destroy them, an
episode chronicled in the documentary “Who Killed the Electric Car?” Electric
cars today are the fastest-growing segment of the auto industry, but they still
make up a small proportion of new car sales: about 3 percent of the global
total, according to the International Energy Agency. “Ten years ago, nobody
would have been able to foresee the enormous speed of change,” Markus Duesmann,
the chief executive, who is also head of technology for Volkswagen, said in a
statement. But the group’s senior vice president, Frank Macchiarola, said
policymakers ought to protect the right of consumers “to choose what kind of
car they want to drive.” He is also pushing for a new economic recovery package
to include funding to build 500,000 electric vehicle charging stations, and to
create a system of rebates and incentives for purchasing electric vehicles.