ST 520 Responsible Management Session 7 CSR and the Environment Don Minday
"The economy is utterly dependent on the environment, and it is utter stupidity that we keep fouling up the source of our wealth"- Ray Anderson, CEO of Interface 2
Agenda • Approaches to the environment • Our problem with the environment • World's 3 economies • Environmental issues • Environmental issues for companies • Carbon footprint • Break • GSK presentations
Challenge Develop a global economy that the planet is capable of sustaining indefinitely.
Trends Businesses unaware of their negative impact Yesterday Today Reduce to zero impact Make a positive impact Tomorrow
Our problem with the environment • Western philosophy • Self-contained moral identities (Kant, Mill) • Consequences: • Self / firm distinct from the natural environment • "Atomic individualism": isolated ego, self-gratification • Some think environmental concern: • Is a luxury • Is for "tree huggers" • Alternative approaches to the above?
Common good approach • The common good- the supreme good of the society. • A concept traditionally confined to philosophy, theology, and economics, more than management • Means of existence • Access to drinkable water • Basic alimentation • Energy • Habitat • Health • Co-existence between peoples • Freedom of information • Cultural diversity • Civil and political rights
Common goodMeans of existence issues Environmental threats • Climate change, protecting the biosphere • Greenhouse gases, ozone layer depletion • Pollution: air, water, noise, land • Access to water • Land use and pollution (chemicals, toxics, heavy metals, nuclear wastes) • Resource depletion • Shrinking agricultural lands • Oceans and fisheries Biodiversity • Deforestation • Energy • The end of oil • Renewable energies: wind, solar, water, biomass,… Social issues • Poverty: the north-south divide • Economic development in emerging countries • Overpopulation • Inequality – growing in western countries "The Future We Want" - Improving the urban environment from "Force for Good" 11
Worlds in collision Survival economy Market economy Nature's economy
Market Economy • Developed nations and emerging economies • A billion people live in developed countries • Developed countries consume 75% of the world energy and resources • Impact of ecological footprint • Economic growth = urbanization
Survival Economy • Traditional and rural parts of developing countries (3 bn. people) • Breakdown of ecosystems due to infrastructure development and intensive agriculture • High fertility rate • Short term survival pressures vs. long-term damages • Contaminated water: 8 millions deaths / year • Rural urban demographic shift megatropolises
Nature’s Economy • Natural systems and resources that support the market and the survival economy • Non-renewable resources : technological innovations creates substitutes (chemical fibers…) • Reduction of renewable resources (soils, forests, water…)
Provider Survival Countries Producer Emerging Economies Producer Emerging Countries Consumer Developed Countries
Environmental burden EB = P x A x T • Environmental Burden (EB) is created by human activity in function of 3 factors: • P:Population • A:Affluence (consumption) • T:Technology • Technology is the only one factor on which we can stabilize or reduce thanks to its business dimension • Others are societal issues = no control
Pollution Prevention Product Stewardship Clean Technology Easing the burden More at end of presentation
Evidence for rapid climate change (NASA) • Rise in sea water level • Rise in global air temperature • Rise in ocean temperatures • Shrinking ice sheets • Declining arctic ice shelf • Diminishing glaciers • Extreme weather: hurricanes, temperature,… • Ocean acidification
Sharp increase in atmospheric CO2 since industrial revolution Data from NASA website
If the world were 3° warmer video • European heat wave of August 2003 • 14,000 deaths in France alone over a 3- week period
Resource Depletion Depleted Rare Earth Mine in Australia Deforestation in the Amazon Rain Forest Elephants killed for tusks Soil erosion
Biodiversity mini-case • Conservationists-logging company conflict in Canada • The near extinct spotted owl lived in trees that were being cut down.
Controversy • Rights: owls' vs. loggers. • Preserve jobs or species? • Source: Time Magazine, June 1990
Land pollution • Toxic chemicals: herbicides, benzene, other carcinogens. • Solid wastes: residential, industrial, agricultural. • 220,000 industrial waste dumps in the U.S. • 24,000 uncontrolled hazardous sites. • Waste management: a promising future! • Nuclear wastes (plutonium,…) • Remain hazardous for at least 100,000 years. • European debate about place of disposal • Nuclear energy French choice – Areva's energy diversification
Waste – land pollution Wasted food, electronic waste, landfills
Bio-engineered food - GMOs • "Genetically modified organisms refer to plants and animals with an altered genetic make-up. GMOs are generally altered or manipulated by a non-natural means in order to incorporate genes from another organism. • Usually genetic engineering (GE) is done to achieve a trait not normally held by an organism, such as longer shelf life, disease resistance or different colors or flavors." Source: www.about.com • European – US differences regarding safety and legislation • Video: GMOs – the world'sgreatestscam
"Beyond Petroleum?" Deepwater Horizon Oil Spill 2010 Former BP CEO Tony Hayward before a U.S. Senate commission hearing on June 17, 2010 to defend BP's actions in its attempt to stop the oil leak in the Gulf of Mexico after the destruction of the Deep Water Horizon platform Where did the company go wrong?
Water pollution • Oil spills (BP, 2010) • Salt from mines and oil wells • Metal cleaning acids • Inorganic pollutants - mercury, cadmium • Radioactive waste in oceans. • Water tables - nitrates in Brittany • Access to clean water - a major future challenge
Chineseelectric carsPollution or solution? • The implications of hundreds of million new vehicles over the next 30 years? • Recent government initiatives in favor of the environment • BYD's solution for an electric car • China'srenewableenergy plan 38
Challenge of urbanization More people live in cities than in rural areas • Pressure on environmental resources, but • Opportunities for environmentally sustainable service delivery to large numbers of people
Renewable energies • Solar • Wind • Water (hydroelectricity, tidewater) • Biofuel: liquid biofuel, solid biomass, biogas
Biogasplant 80 km north of Rennes Pigmanurecan light up yourday 5 mn. video in French
Biomimicry: 9 Laws of Nature Janine Benyus • Nature runs on sunlight • Nature uses only the energy it needs • Nature fits form to function • Nature recycles everything • Nature rewards cooperation • Nature banks on diversity • Nature demands local expertise • Nature curbs excess from within • Nature taps the power of limits.
TerracycleTrenton, New Jersey Vision: Transform waste into useful products Tom Szaky, founder and CEO of Terracyle, "built on garbage, run by a kid, loved by investors" Videos That's a bunch of garbage Entrepreneurial convictions How it's done Biomimicry in action 50