Lesaantekeningen - Sustainable business development. 03/02/2015 Sustainability the basics. Wat is de Brundtland definition over duurzaamheid?

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1 Lesaantekeningen - Sustainable business development 03/02/2015 Sustainability the basics Wat is de Brundtland definition over duurzaamheid? De belangrijkste conclusie van het rapport was dat de belangrijkste mondiale milieuproblemen het gevolg waren van de armoede in het ene deel van de wereld, en de niet-duurzame consumptie en productie van het andere deel van de wereld. Het rapport riep voor het eerst op tot duurzame ontwikkeling. Dit werd gedefinieerd als: "een ontwikkeling die tegemoetkomt aan de noden van het heden, zonder de mogelijkheden van toekomstige generaties om in hun behoeften te voorzien in het gedrang te brengen". Wat is systems thinking? Systems thinking is the process of understanding how things, regarded as systems, influence one another within a whole. In nature, systems thinking examples include ecosystems in which various elements such as air, water, movement, plants, and animals work together to survive or perish. In organizations, systems consist of people, structures, and processes that work together to make an organization "healthy" or "unhealthy". Systems thinking has roots in the General System Theory that was advanced by Ludwig von Bertalanffy in the 1940s and furthered by Ross Ashby in the 1950s. Hoe werkt Earth as a system? Although the earth as a whole is a closed system, it can be divided into a number of open systems that exhange both matter and energy with each other. The most important subsystems are the bioshere and the lithosphere. The biosphere is the place where life exists. The lithosphere is defined where the earths crust begins Pagina 1 van 33

2 Wat is the funnel methaphore? Systematically increasing our consumption year after year --> in the process, we're systematically decreasing the ability of nature systems to provide the resources and services we need. Concept: things getting worse and the opportunities for change become more limited What state the world is in using funnel metaphor - Ecological and socio-economic systems - Sustainability is a supply and demand issue - Ecological footprint is a method to measure the demand side Welke 4 sustainability principles zijn er? In an sustainable society, nature is not subject to systematically increasing.. 1. Concentrations of substances extracted from the earth's crust 2. Concentrations of substances produced by society 3. Degration by physical means 4. In society people are not subject to conditions that systematically undermide their capacity to meet their needs Wat is people, planet profit? De balans tussen people, planet, profit en sustainability Pagina 2 van 33

3 Wat zijn satisfying human needs? This is an interesting theory about human needs developed by Chilean economist Manfred Max-Neef. He published in 1991 a book called Human scale development demonstrating that human needs are finite and classifiable; there are 9 fundamental human needs that are constant through all human cultures and across historical time periods; and what changes is the ways these needs are satisfied. These 9 human needs are: subsistence (we need food, water, shelter), protection (a safe place to live, social security), participation (being part of decisions that affect our life), idleness (some free time, relaxing), affection (we need friends, love), understanding (learning, meditating), creation (cooking, designing, inventing), identity (a sense of belonging, knowing oneself) and freedom (being able to choose how we live our lives). It can be used for social sustainability because being sustainable is about being able to meet our needs within our ecological constraints. Manfred Max-Neef s human needs can be very useful to find ways to satisfy needs using fewer resources. They provide a new lens and help us take another look at the system we are trying to change, which is crucial to stimulate innovation and to avoid superficial problem solving. 05/02/2015 Sustainability Pagina 3 van 33

4 Wat is het tragedy of commons? Optelling van individueel rationele handelingen leiden tot collectief irrationeel resultaat. Bijv overbevissing. Ontbossing, afvalproblematiek The Tragedy of the commons can partially describe why people don't work together and conserve certain resources. If nobody owns the resource and everyone is allowed to use it, or because of the scope of the resource people don't have power over others, then people just use it as much as they want. It's basically just found money. Just use it as much as you can before someone else does or you will miss out on the bounty. But if people are able to organize private property rights or work together through communal ownership then they can use the resource for longer. The Tragedy of the commons works for both extracting resources like trees and fish and sink resources like clean air, clean land, and clean water and is affected by pollution. The incentives in the Tragedy of the Commons is similar to the Prisoner's Dilemma - Metaphorefororigin of environmentalproblems - Individuals acting independently and rationally according to each one's self-interest, behave contrary to the whole group's long-term best interests by depleting some common resource. - "Commons" in this sense includes such as - Atmosphere, oceans, rivers, fish stocks, the office refrigerator, or any other shared resource which is not formally regulated. - Solution: regulation & legislation, co-operation Wat voor soorten ecological damage is er? Aantasting ozonlaag, zure regen Ozonlaag: Deze laag beschermt ons tegen ultraviolette stralen. Casus 6.2 pagina 244 CFK s, Chloorfluorkoolwaterstoffen breken ozon af. Een speciaal soort zuurstof. Rond 50 km boven de aarde, de bovenste laag van de stratosfeer. Ze werken als katalysator zonder zelf afgebroken te worden. Sinds 1980 zit een groot gat in de ozonlaag boven de zuidpool. Ecotoxiteit: Eutrofiering: Een oververzadiging met voedsel in water waardoor een algengroei optreedt die het water verstikt en van zuurstof beroofd zodat vissen en andere organismen sterven. Door het gebruik van kunstmest, natuurlijke mest en pesticiden in de landbouw en in de aquacultuur draagt bij aan de watervervuiling. Slechts 20% van het afvalwater in China wordt gereinigd. Pagina 4 van 33

5 Wat is hetr prisoner's dilemma? The prisoner's dilemma is a canonical example of a game analyzed in game theory that shows why two purely "rational" individuals might not cooperate, even if it appears that it is in their best interests to do so Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The police admit they don't have enough evidence to convict the pair on the principal charge. They plan to sentence both to a year in prison on a lesser charge. Simultaneously, the police offer each prisoner a Faustian bargain. Each prisoner is given the opportunity either to betray the other, by testifying that the other committed the crime, or to cooperate with the other by remaining silent. Here's how it goes: If A and B both betray the other, each of them serves 2 years in prison If A betrays B but B remains silent, A will be set free and B will serve 3 years in prison (and vice versa) If A and B both remain silent, both of them will only serve 1 year in prison (on the lesser charge) It is implied that the prisoners will have no opportunity to reward or punish their partner other than the prison sentences they get, and that their decision will not affect their reputation in the future. Because betraying a partner offers a greater reward than cooperating with them, all purely rational self-interested prisoners would betray the other, and so the only possible outcome for two purely rational prisoners is for them to betray each other. The interesting part of this result is that pursuing individual reward logically leads both of the prisoners to betray, when they would get a better reward if they both cooperated. In reality, humans display a systematic bias towards cooperative behavior in this and similar games, much more so than predicted by simple models of "rational" self-interested action. A model based on a different kind of rationality, where people forecast how the game would be played if they formed coalitions and then they maximize their forecasts, has been shown to make better predictions of the rate of cooperation in this and similar games given only the payoffs of the game. Wat is een sociaal dilemma? = Moeilijke keuze tussen je eigen belang en het belang van de samenleving. Bijv. Kies je voor het gemak van je eigen auto, of het belang van ons aller schone milieu? Oplossing: belangen gelijkschakelen door autorijden duurder te maken Pagina 5 van 33

6 Why an engineer can contribute? Each step in design, production, use and disposal of a product can result in: Resource depletion Ecologicaldamage Impact human health (indirect unfair allocation) Welke methodes zijn er voor sustainable product/process development? - The natural step - Industrial Ecology - Biomimicry - Cradle-to-cradle - LiDS-Wheel - Eco-design - Design for sustainable behaviour - Design for X 10/02/2015 Environmental impact What is the macro environment of sustainability? Milieugebruik = productie x milieu-intensiteit Productie = bevolking x productie per hoofd Leg uit hoe de bevolkingsgroei, groei van de productie per hoofd van de bevolking, de daling van het milieugebruik per eenheid product bijdraagt aan de omvang van het milieubeslag. bevolkingsgroei Þ milieubeslag productie per hoofd van de bevolking Þ milieubeslag milieugebruik per eenheid product âþ milieubeslag â Pagina 6 van 33

7 What is the difference between Political, economic and technical solutions? Political: NGO s are challenging the gouvernmentto take action againstenvironmentaldamagingsituationsbyintroducingregulations. Economic: Payforemitting more CO2 thanaccepted/ payforyouowngarbagedisposal/ supply chain cooperation Fair tradesolutions What are the limits to growth? Limits - materialsand energy we take out from Earth àseetns (principle 1 and 3) -The capacity of the Earth to absorb pollution (ook principle 2) -Speed with which processes can recover Where depends the limits of materials and energy of? Speed with which the resource depletes depends of : - Populationgrowth - Economicgrowth - Relative robustness of the source Robuustheid regenereerbaarheid Resource depletion is the consumption of a resource faster than it can be replenished. Resources are commonly divided between renewable resources and non-renewable resources. (See also Mineral resource classification.) Use of either of these forms of resources beyond their rate of replacement is considered to be resource depletion. Resource depletion is most commonly used in reference to farming, fishing, mining, water, and fossil fuels.[1] What is peak-oil? Peak oil is the point in time when the maximum rate of extraction of petroleum is reached, after which the rate of production is expected to enter terminal decline. Pagina 7 van 33

8 What is the recoverability of resources? Technicallyrecoverable - resource is recoverable using current exploration and production technology without regard to cost Economicallyrecoverable -Resource is technicallyrecoverableandprovideseconomicprofit The proven and recoverable resources change constantly! Where depends on the availability of resources? - Discovery of new renewable sources - Development of new techniques - Social acceptability of risks and consequences - New scientific knowledge provides more insight into the risks and consequences What is the amount of resources? Resource base - Is defined as the total metered amount present in the crust. Resources - Are those quantities of crude materials that are economically recoverable. Reserves - Are the amount of sources, which are shown at this time. Pagina 8 van 33

9 Where is energy needed for material extraction? Energy needed for: - win of ore and win of metals from ore Energy is scarce & - Extraction of materials is limited Inventories are very dependent of the cost associated with the extraction of minerals from the earth An Engineer can contribute because? Influence at the: - Concept design - Detail design - Production - Usage - Dismissal What is sustainable development? Definition Brundtland-rapport (1987); Sustainable development is the development that meets the needs of the present without compromising the ability of future generations to meet their own needs Pagina 9 van 33

10 What is the environmental impact of human activities? I=P A T This formula is used to illustrate the influence of human activity on the environment. (PR Ehrlich, JP Holdren, Impact of population growth, Science, 1971) I = impact on environment P = Population (amount of people) A = Affluence (averageconsumption per person) T = Technology (environmental impact technology) What is the environmental impact of technology I=P A T - The environmental impact during the production, transport and disposal of goods, services and facilities. Environmental impact is the impact on - Depletion resources - Human health - Eco-system What calculations of the environmental impact are possible? - LiDS Wheel - MET- Matrix - Ecological footprint - ECO-It - LCA- method Pagina 10 van 33

11 How can you reduce the environmental impact per product? - Use material - Energy use - Transport - Emissions What are the methods for eco-efficiency? Zie afbeelding What is impact affluence? I=P A T Affluence (prosperity / abundance ) represented the average consumption per person of total population. If the consumption of each person rises, the overall environmental impact is increasing too. What is eco efficiency? - Less impact - Problems are postponed Pagina 11 van 33

12 12/02/2015 Circular economy What are linear systems? The Story of Stuff exposes the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world. It'll teach you something, it'll make you laugh, and it just may change the way you look at all the stuff in your life forever. What is the cradle-to-cradle philosophy? Waste equals food Materials and substances from products must at the end of their life, without quality loss, be reused in an endless cycle. Materials are being re-used in technical or biological cycle. Safe for humans and animals. What are the differences between Biological and Technical cycle? Zie afbeelding Assessment materials, what is the definition of cradle to cradle metabolism scenario Hazard definition --> scenario context --> Risk assessment: Risk= f(hazard,exposure,consequences) --> cyclability --> Categorization ABC-X What is down cycling? The practice of recycling a material in such a way that much of its inherent value is lost (e.g. recycling plastic into park benches) Pagina 12 van 33

13 What is Upcycling? The practice of recycling materials in such a way that it maintains and/or accrues value over time (the opposite of downcycling What does this classification of different ways of recycling mean for design proces? - Look at the entire life-cycle determine what goes where and whom it comes into contact - Look at the chemical composition of the materials - Use fewer chemicals and make use of natural materials - Apply Design for Disassembly What are the economic benefits of recycling? - Control over material management - Materials are easier to recycle - No costs waste disposal - Easy to Disassemble saves time in assembly What is ABC-X materials? A: Optimal B: Optimising C: Tolerable X: Not acceptable What is the cradle-to-cradle goal? Our goal is a delightfully diverse, safe, healthy and just world, with clean air, soil and power - economically, equitably, ecologically and elegantly enjoyed. Celebrate abundance. Tress animals and insects do not close the loop or minimize. They produce abundant opportunities for others. Cradle-to-cradle is an innovation platform for improving quality and good business. Pagina 13 van 33

14 What are Cradle-to-cradle principles? - Waste equals food -Material reutilization recyclability / compostability - 100% renewable energy -Solar energy, wind energy, kinetic energy - Celebratediversity B io diversity Culturaldiversity Conceptualdiversity Why is design according to the Cradle-to Cradle principle different from conventional sustainable design? The difference is between unidirectional vs closed system What is Eco-efficiency? Reduce environmental impact. Problem less but postponed Eco-efficiency begins with the assumption of a one-way, linear flow of materials through industrial systems: raw materials are extracted from the environment, transformed into products, and eventually disposed of. In this system, eco- efficient techniques seek only to minimise the volume, velocity, and toxicity of the material flow system, but are incapable of altering its linear progression. Some materials are recycled, but often as an end-of-pipe solution, since these materials are not designed to be recycled. Instead of true recycling, this process is actually downcycling, a downgrade in material quality, which limits usability and maintains the linear, cradle-to-grave dynamic of the material flow system. In contrast to this approach of minimisation and dematerialisation, the concept of ecoeffectiveness proposes the transformation of products and their associated material flows such that they form a supportive relationship with ecological systems and future economic growth. The goal is not to minimise the cradle-to-grave flow of materials, but to generate cyclical, cradle-to-cradle metabolisms that enable materials to maintain their status as resources and accumulate intelligence over time (upcycling). This inherently generates a synergistic relationship between ecological and economic systems, a positive recoupling of the relationship between economy and ecology. Pagina 14 van 33

15 What is Eco-effectiveness? Closed material loops - No waste - Re-usematerials No use of hazardous materials for humans and animals Contributetoeco-systeem What is the re-thinking progress: the circular economy? 'Re-Thinking Progress' explores how through a change in perspective we can re-design the way our economy works - designing products that can be 'made to be made again' and powering the system with renewable energy. It questions whether with creativity and innovation we can build a restorative economy. How do you contribute to eco-effectiveness? Ask yourself the question : - Not how we can reduce CO₂emissions, but how we can use CO₂as a source - Not how we can use less energy but how can we generate more energy with positive energy buildings? - Not " paper or plastic? " But how does the packaging fit within the bio- or technosphere? Pagina 15 van 33

16 17/02/2015 CSR How does the ABCD approach work to create effective & rigorous sustainability plans? A: Awareness B: Baseline C: Compelling vision D: Decide on priorities What is Backcasting? - Backcasting from sustainability principles - an approach to planning and decisionmaking for sustainability (end-state just like chess - conditions for success) using principles Scenario s vs principles The future is not a road to be discovered, it is a place to be created. Building a vision of succes. Does not have to be a likely future and based on current trends. If you rely on forecasting you risk unsustainable trends will continue. Your vision is the desirable future of a sustainable global society. What is the 5 level framework? The 5 Level Framework is a way to organize our thinking and information, so we can be more clear and strategic as we discuss and plan for moving towards sustainability. - Systems level - Succes Level - Strategic Level - Actions Level - Tools Level Pagina 16 van 33

17 What is Corporate Social Responsibility (CSR)? CSR refers to companies taking responsibility for their impact on society. As evidence suggests, CSR is increasingly important to the competitiveness of enterprises. It can bring benefits in terms of risk management, cost savings, access to capital, customer relationships, human resource management, and innovation capacity What is the brundtland definition of sustainability? Sustainable development is development what meets the needs of the future without compromising the ability of future generations to meet their own needs What is the environmental impact, macro environment of sustainability? Milieugebruik = productie x milieu-intensiteit Productie = bevolking x productie per hoofd Leg uit hoe de bevolkingsgroei, groei van de productie per hoofd van de bevolking, de daling van het milieugebruik per eenheid product bijdraagt aan de omvang van het milieubeslag. bevolkingsgroei Þ milieubeslag productie per hoofd van de bevolking Þ milieubeslag milieugebruik per eenheid product âþ milieubeslag â Pagina 17 van 33

18 Why CSR? CSR becauseitsmandatory - laws and regulations CSR because of morality - personal conviction CSR becauseitgenerates money -self-interest Costsavings - Reduction waste, energy savings Increased market demand -For sustainableproductsand companies Necessary on long term - Limitstogrowth, scarceresources License tooperate & corporate image - Consumer boycots, actions Why does CSR lower cost? - Reducinginputs - Betterproducts - Create New businesses Necessarybut notenough: -Tougher regulation -Education of consumers Pagina 18 van 33

19 The journey towards sustainability 5 stages 1)Viewing Compliance as opportunity 2)Making Value ChainsSustainable 3)Designingsustainableproductsand services 4)Developing new business models 5)Creating next-practice platforms 19/02/2015 Sustainable Risk analysis How does sustainability risk analysis to determine the Baseline works? Sustainability risk management (SRM) is a business strategy that aligns profit goals with a company's environmental policies. identify emerging issues of concern that may affect supply chain, operations and production. Examples of emerging issues include the availability of renewable energy sources, the depletion of non-renewable resources or changing government regulations. Sustainabilty trap -Formuleren van strategische doelstellingen (passief, actief, proactief) -Bepalen duurzaamheidsexposure (kans of bedreiging à macro en stakeholdernivo) - handelingsurgentie (relevantie, impact en tijdsdruk) - beheersen van duurzaamheidsrisico s (doelen smart, activiteiten, resultaten, SWOT) -Communicatie -evaluatie Pagina 19 van 33

20 What are the stages of CSR? The Stages of CSR According to CSR International Founder, Dr Wayne Visser, the evolution of business responsibility can be viewed in terms of five overlapping economic periods the Ages of Greed, Philanthropy, Misrepresentation, Management and Responsibility each of which typically manifests a different stage of CSR, namely: Defensive, Charitable, Promotional, Strategic and Transformative CSR (which can also be called CSR 2.0, Systemic CSR or Radical CSR). Our contention is that companies tend to move through these ages and stages (although they may have activities in several ages and stages at once), and that we should be encouraging business to make the transition to Transformative CSR in the dawning Age of Responsibility. If companies remain stuck in any of the first four stages, I don t believe we will turn the tide on the environmental, social and ethical crises that we face. Simply put, CSR will continue to fail. 1. Defensive CSR in the Age of Greed is where all corporate sustainability and responsibility practices which are typically limited are undertaken only if and when it can be shown that shareholder value will be protected as a result. Hence, employee volunteer programmes (which show evidence of improved staff motivation, commitment and productivity) are not uncommon, nor are expenditures (for example in pollution controls) which are seen to fend off regulation or avoid fines and penalties. 2. Charitable CSR in the Age of Philanthropy is where a company supports various social and environmental causes through donations and sponsorships, typically administered through a Foundation, Trust or Chairman s Fund and aimed at empowering community groups or civil society organisations. 3. Promotional CSR in the Age of Misdirection is what happens when corporate sustainability and responsibility is seen mainly as a public relations opportunity to enhance the brand, image and reputation of the company. Promotional CSR may draw on the practices of Charitable and Strategic CSR and turn them into PR spin, which is often characterised as greenwash. 4. Strategic CSR, emerging from the Age of Management, means relating CSR activities to the company s core business (e.g. Coca-Cola and water management), often through adherence to CSR codes and implementation of social and environmental management systems, which typically involve cycles of CSR policy development, goal and target setting, programme implementation, auditing and reporting. 5. Transformative CSR in the Age of Responsibility focuses its activities on identifying and tackling the root causes of our present unsustainability and irresponsibility, typically through innovating business models, revolutionising their processes, products and services and lobbying for progressive national and international policies. DNA of CSR 2.0 DNA of CSR 2.0 Transformative CSR represents a new holistic model of CSR. The essence of the CSR 2.0 DNA model are the four DNA Responsibility Bases, which are like the four Pagina 20 van 33

21 nitrogenous bases of biological DNA (adenine, cytosine, guanine, and thymine), sometimes abbreviated to the four-letters GCTA (which was the inspiration for the 1997 science fiction film GATTACA). In the case of CSR 2.0, the DNA Responsibility Bases are Value creation, Good governance, Societal contribution and Environmental integrity. 1. Value Creation is about more than financial profitability. The goal is economic development, which means not only contributing to the enrichment of shareholders and executives, but improving the economic context in which a company operates, including investing in infrastructure, creating jobs, providing skills development and so on. There can be any number of KPIs, but I want to highlight two that I believe are essential: beneficial products and inclusive business. Does the company s products and services really improve our quality of life, or do they cause harm or add to the low-quality? And how are the economic benefits shared? Does wealth trickle up or down; are employees, SMEs in the supply chain and poor communities genuinely empowered? 2. Good Governance is another area that is not new, but in my view has failed to be properly recognised or integrated in CSR circles. The goal of institutional effectiveness is as important as more lofty social and environmental ideals. After all, if the institution fails, or is not transparent and fair, this undermines everything else that CSR is trying to accomplish. Trends in reporting, but also other forms of transparency like social media and brand- or product-linked public databases of CSR performance, will be increasingly important indicators of success, alongside embedding ethical conduct in the culture of companies. Tools like Goodguide, KPMG s Integrity Thermometer and Covalence s EthicalQuote ranking will become more prevalent. 3. Societal Contribution is an area that CSR is traditionally more used to addressing, with its goal of stakeholder orientation. This gives philanthropy its rightful place in CSR as one tile in a larger mosaic while also providing a spotlight for the importance of fair labour practices. It is simply unacceptable that there are more people in slavery today than there were before it was officially abolished in the 1800s, just as regular exposures of high-brand companies for the use of child-labour are despicable. This area of stakeholder engagement, community participation and supply chain integrity remains one of the most vexing and critical elements of CSR. 4. Environmental Integrity sets the bar way higher than minimising damage and rather aims at maintaining and improving ecosystem sustainability. The KPIs give some sense of the ambition required here 100% renewable energy and zero waste. We cannot continue the same practices that have, according to WWF s Living Planet Index, caused us to lose a third of the biodiversity on the planet since they began monitoring Nor can we continue to gamble with prospect of dangerous and perhaps catastrophic and irreversible climate change. CSR 2.0 also proposes a new interpretation for these terms. Like two intertwined strands of DNA, sustainability and responsibility can be thought of as different, yet complementary elements of CSR. Hence, sustainability can be conceived as the destination the challenges, vision, strategy and goals, i.e. what we are aiming for while responsibility is more about the journey our solutions, responses, management and actions, i.e. how we get there. The challenge now is to admit that CSR 1.0 has failed, and to make CSR 2.0 weaving the strands of sustainability and responsibility into the new DNA of business Pagina 21 van 33

22 What is the difference between Strategic CSR and Transformative CSR? Hence, while Strategic CSR is focused at the micro level supporting social or environmental issues that happen to align with its strategy (but without necessarily changing that strategy) Transformative CSR focuses on understanding the interconnections of the macro level system society and ecosystems and changing its strategy to optimise the outcomes for this larger human and ecological system. Transformative CSR holds the key to making change happen, at a societal, organisational and individual level, and ensuring that we can all make a difference. Strategic vs Systemic CSR Strategic CSR is focused at the micro level - supporting social or environmental issues that happen to align with its strategy (but without necessarily changing that strategy) Systemic / Transformative CSR focuses on understanding the interconnections of the macro level system -society and ecosystems and changing its strategy to optimise the outcomes for this larger human and ecological system. Which steps to CSR 2.0 implementation are there? - Re-assess - Re-align - Re-define - Re-design - Re-structure Waar is Urgency to act van afhankelijk? - Macro environment - Company strategy - Stakeholder environment Relevant, impact, pressure of time Pagina 22 van 33

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