| Why Must We Reimagine Capitalism? | What’s wrong with modern capitalism?
Short-term profit focus.
Environmental and social harm.
Inequality and depletion of resources.
Why is sustainability crucial for business?
Long-term competitiveness and success depend on sustainable practices. |
| Business Case for Sustainability – Key Question | How can businesses improve competitiveness and success through voluntary environmental and social responsibility?
The debate: Does sustainability make good business sense? (vs. Ethical case for sustainability). |
| : Defining Sustainable Business Practices | (Whelan & Fink)
Sustainable practices:
At minimum do no harm.
At best create value for stakeholders.
Improve ESG performance (Environmental, Social, and Governance).
Address material impact in operations, supply chain, or customers. |
| Historical Origins of the Business Case | 1930s-40s:
Early discussions on business & societal impact.
Notable works: The Function of the Executive (1938), Social Control of Business (1939).
1950s – “Modern Era”:
Howard R. Bowen (1953): Social Responsibilities of the Businessman.
Idea: Businesses impact more than just profits.
Keith Davis: “Some responsible decisions benefit the firm in the long run.” → Enlightened Self-Interest.
1970s:
Committee for Economic Development (CED): Businesses exist by public consent and must serve societal needs.
1980s-90s:
Growth of business ethics, stakeholder theory, CSR.
Connection between corporate responsibility & financial performance.
2000s-Present:
Businesses embrace sustainability & ESG. |
| Core Arguments for the Business Case (Whelan & Fink) | 1.Competitive advantage through stakeholder engagement.
2.Improved risk management.
3.Fostering innovation.
4.Enhancing financial performance.
5.Building customer loyalty.
6.Attracting and engaging employees. |
| Competitive Advantage Through Stakeholder Engagement | From shareholders to stakeholders.
Engaging stakeholders helps businesses:
Adapt to economic, social, and environmental changes.
Improve cooperation & reduce conflicts (e.g., activist pressure, boycotts).
Enhance regulatory compliance. |
| Risk Management & Sustainability | Global supply chains are vulnerable to:
Climate disasters (e.g., floods, wildfires).
Social conflicts (e.g., labor exploitation, pandemics, wars).
Investing in sustainability = supply chain resilience. |
| Fostering Innovation Through Sustainability | Sustainability drives new product innovation.
Examples:
Induction cooktops vs. gas stoves (meeting new standards).
Cold-water detergents (reducing energy use).
Electric vehicles (EVs) (appealing to eco-conscious consumers). |
| Financial Performance & Eco-Efficiency | Sustainability reduces costs & increases efficiency.
Eco-efficiency = more value with less environmental impact.
Strategies:
Reduce energy, water, material use.
Minimize waste & pollution.
Increase product life & recyclability. |
| Customer Loyalty & ESG Expectations | Consumers demand sustainable products.
McKinsey Survey (2020):
60% of US consumers would pay more for sustainable packaging.
Brands with ESG claims show faster growth. |
| Attracting & Engaging Employees | Sustainability boosts employee morale & productivity.
Helps with:
Recruitment & retention.
Company culture & efficiency.
Reducing absenteeism. |
| Creating Shared Value (CSV) – Porter & Kramer | Response to capitalism’s legitimacy crisis.
Problem: Business ignores societal well-being, resource depletion, and economic distress.
Solution: "Businesses should create economic value while addressing societal needs."
Key shift:
Old view: Business vs. society = conflict.
New view: Social needs define markets.
Competitiveness & community well-being are interconnected. |
| How is Shared Value Created? | Reconceiving products & markets:
Selling socially/environmentally beneficial products (e.g., sustainable goods for lower-income consumers).
Redefining productivity in the value chain:
Eco-efficiency = lower costs (e.g., energy savings).
Building supportive industry clusters:
Stronger supply chains = stronger businesses. |
