SUSTAINABLE ISSUES

1. Presented by | Hannan O. Mimbisa (MBA – 1)
MBACC 113
Social Responsibility
and Good Governance
Sustainable
Issues

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Topic Objectives:
• Global Environmentalism
• Sustainability
• Business environment responsibility
• Business opportunities in a
sustainable economic
• Why be businesses be sustainable?
• Principles for a sustainable business

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O R G A N I C S C O M P A N Y
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Questions to ponder:
• Why should we act in ways
that protect the natural
environment from
degradation?
• Why should business be
concerned with, and value,
the natural world?

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Environmentalism:It’sHistory
» Environmental issues have been a concern only
in recent times.
» Environmentalism flourished in the latter half of
the twentieth century, with such issues as air
and water pollution, and the protection of
endangered species becoming public policy
concerns only in the 1970s.
» Certainly, only a few business gave the natural
environment much thought at all prior to this
time.
» But environmental degradation has been a part
of human history forever.
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Environmentalism:It’sHistory
» Yet, the Industrial Revolution of the 18th and 19th
centuries brought with it the ability to degrade
the natural environment to a greater extent and
at a faster rate than ever before.
» By the start of the 21st century, the Earth was
experiencing the greatest period of species
extinction since the end of the dinosaurs 65
million years ago.
» Humans are also threatened by global climate
change.
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» The way we have done business over the last
two centuries has brought us up against the
biophysical limits of the earth’s capacity to
support human life, and has already crossed
those limits in the case of countless other
forms of life.
SIMPLY PUT,
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The major ethical question is:
WHAT RESPONSIBILITIES DO
BUSINESSES AND MARKETS
HAVE REGARDING THE NATURAL
ENVIRONMENT?

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SustainabilityastheNEWPARADIGM
» At the start of the 21st century, a new model of
business is emerging, perhaps first initiated in
Europe and followed by North America and Asia.
» Sustainable business and sustainable economic
development seek to create new ways of doing
business in which business success is
measured in terms of economic, ethical, and
environmental sustainability, often called the
Triple Bottom Line Approach
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SustainabilityastheNEWPARADIGM
» Environmental responsibilities are seen as a
fundamental part of basic business practice.
» Sustainable business ventures may find that
environmental considerations offer creative and
entrepreneurial businesses enormous
opportunities.
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Questions to ponder:
• Why should we act in ways that
protect the natural environment
from degradation?
• Why should business be
concerned with, and value, the
natural world?
THREAT TO LIFE

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THREAT TO LIFE
• Environmental issues have the
potential to adversely affect the entire
globe and change human life forever.
• Global climate change, species
extinction, soil erosion and
desertification, and nuclear wastes will
threaten human life into the indefinite
future.

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Business’EnvironmentalResponsibility
» An overwhelming voice does exist about the
different reasons for protecting the natural
environment.
» What controversy remains has more to do with
the best means for achieving this goal.
» The debate is focused on whether efficient
markets or government regulation is the most
appropriate means for meeting the
environmental responsibilities of business.
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Business’EnvironmentalResponsibility
» EFFICIENT MARKETS
• If the best approach to environmental concerns is
to trust them to efficient markets, then the
responsible business manager simply ought to
seek profits and allow the market to allocate
resources efficiently.
» GOVERNMENT REGULATION
• If government regulation is a more adequate
approach, then business ought to develop a
compliance structure in order to insure that it
conforms to those regulatory requirements.
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Business’EnvironmentalResponsibility
» EFFICIENT MARKETS
• Defenders of the market approach contend that
environmental problems are economic problem that
deserve economic solutions.
• Because, environmental problems involve the
allocation and distribution of limited resources.
Therefore, environmental challenge can be
addressed through efficient markets.
• Some would argue that there is an optimal level of
pollution that would best serve society’s interest,
• And this optimal level is best attained by leaving it
to a competitive market. 13

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Business’EnvironmentalResponsibility
» GOVERNMENT REGULATION
• A broad consensus emerged that unregulated markets are
an inadequate approach to environmental challenges. And
instead, government regulations were seen as better way
to respond to environmental problems.
• In 1970s, laws were enacted to effectively shift the burden
to those who would cause harm to the environment. The
government established regulatory standards to ensure air
and water quality and species preservation.
• BUSINESS WAS FREE TO PURSUE ITS OWN GOALS
AS LONG AS IT COMPLIED WITH THE SIDE
CONSTRAINTS ESTABLISHED BY THIS MINIMUM
STANDARDS 14

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Business’EnvironmentalResponsibility
» SUSTAINABILITY APPROACH
• In 1980s, a new model for environmentally responsible
business began to take shape, one that combines financial
opportunities with environmental and ethical
responsibilities.
• The concept of sustainable development and sustainable
business practice, suggest a radically new vision for
integrating financial and environmental goals.
• The three goals, economic, environmental, and ethical
sustainability, are often refereed to as the “THREE
PILLARS OF SUSTAINABILITY”
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Sustainable development is
development that meets the
needs of the present without
compromising the ability of
future generations to meet
their own needs.

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BusinessOpportunitiesinaSustainableEconomy
» The Natural Step uses an image of a funnel, with two converging lines, to help business
understand these opportunities.
» The resources necessary to sustain life are on a downward slope.
» While there is disagreement about the angle of the slope, there is widespread consensus that
available resources are in decline.
» The second line represent aggregate worldwide demand, accounting for both population growth
and the increasing demand of consumerist lifestyles.
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BusinessOpportunitiesinaSustainableEconomy
» The Natural Step then challenges business to “backcast” a path towards sustainability.
» We are all familiar with forecasting, in which we examine present data to predict the future.
“Backcasting” examines what the future will be when we emerge through the funnel.
» Knowing what the future must be, creative businesses then look backwards to the present and
determine what must be done in order for them to arrive at that future.
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WhybeSustainable?
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1. Sustainability is a prudent long-term strategy
• Business will need to adopt sustainable practices in order
to insure long-term survival.
• Firms that fail to adopt to the converging lines of
decreasing availability of resources and increasing demand
risk their own survival.
2. Significant cost saving can be achieved through
sustainable practices
• Business stands to save significant costs in moves towards
eco-efficiency.
• Savings on energy use and materials will reduce not only
environmental wastes, but spending wastes as well.
• Minimizing wastes make sense on financial grounds a well
as environmental grounds

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WhybeSustainable?
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3. Competitive advantages exist for sustainable businesses
• Firms that are ahead of the sustainability curve will have an
advantage serving environmentally-conscious consumers,
as well as enjoying a competitive advantage attracting
workers who will take pride and satisfaction in working for
progressive firms.
4. Sustainability is a good risk management strategy
• Avoiding future government regulation
• Will set the standards of best-practices in the field.
• Avoiding legal liability for unsustainability products
• Consumer demand and consumer boycotts of
unsustainable firms are also a risk to be avoided.

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PrinciplesforSustainableBusiness
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1. Firms can evolve toward a sustainable
business model by not allowing resources to
enter into the economic cycle from the
biosphere at rates faster than which they are
replenished.
2. Ideally, waste should be eliminated or, at a
minimum, not produced at a rate faster than
which the biosphere can absorb them.
3. Finally, the energy to power the economic
system should be renewable.

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Reference used: Business Ethics: Decision Making
Personal Integrity & Social Responsibility by McGraw-
Hill/Irwin
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