Class Sustainability

Class Structure
• Corporate Sustainability
• How to Measure Sustainability
• Global Sustainability
• Measurement & Statistics
• Discussion
Let’s First Define Some Terms
Adapted from presentation made by Dr. Mark W. McElroy, Jed Davis, Center for Sustainable Innovation
• Sustainability - The study of human impacts on vital

capitals as needed for human well-being

• Vital Capitals - Key resources required for human
well-being: natural, human, social, and material

• Vital Capitals - Key resources required for human
well-being: natural, human, social, and material
• Triple Bottom Line - Organizing principle for
managing sustainability impacts on:
– The environment
– Society
– The economy
• Transparency - Visible to inspection from the outside,

openness

openness
• Stakeholders - Groups with an interest in the
performance of an organization

openness
• Stakeholders - Groups with an interest in the
performance of an organization
• Metrics - A measure of performance
• Sustainability Measurement and Reporting - The

process of calling attention to an organization’s triple
bottom line performance
– Transparency
– Responsiveness to stakeholders
– Regulatory compliance
– Reputation
– Risk management
Why Disclose Your Sustainability?
• A business imperative!
• This implies, the organization has to inform:
– Positive impacts on society and the environment
– Steps to improve sustainability performance
• This implies, the organization has to inform :
– Your positive impacts on society and the environment
– Steps to improve your sustainability performance
• Demonstrating active commitment to transparency
• Calls attention to:
– Your positive impacts on society and the environment
– Steps to improve your sustainability performance
• Active commitment to transparency
• Strengthen Reputation and reduce the risk
What Sustainability Is Not!
• Eco-efficiency - Incremental improvements in energy

and material use
– Less unsustainable, not sustainable
– Unsustainability in slow motion
What Sustainability Is Not!
• Eco-efficiency - Incremental improvements in energy

and material use
– Less unsustainable, not sustainable
– Unsustainability in slow motion
• Green - Sexier way of saying “eco-efficient”
– Non-toxic, organic, biodegradable, etc.
– “Green products” versus manufacturing processes – not the
same things
Context is Key!
• Understand actual social and environmental

conditions
Context is Key!

conditions
• Context sets standards of performance
Context is Key!

conditions
• Measure the impact of corporate actions on “Vital
capitals” and in turn on human well-being
Context is Key!
• Actual social and environmental conditions

• Measure the impact of corporate actions on “Vital
capitals” and in turn on human well-being
• So, we can summarize that managing for
sustainability requires context!
Let’s Review
• Concept of vital capitals should underlie

sustainability program in its entirety
– It’s not sustainability management if capitals missing!
• Is the basis of Triple Bottom Line (TBL) reporting
• …and of GRI, the leading sustainability standard in
the world
How To Measure Sustainability
• Global Reporting Initiative (GRI):

– The Global Reporting Initiative (GRI) is a network-based
organization that has pioneered the development of the
world’s most widely used sustainability reporting framework
– It explicitly advocates for the inclusion of context in
Corporate reporting

– It explicitly advocates for the inclusion of context in
Corporate reporting
– This framework sets out the principles and indicators that
organizations can use to measure and report their economic,
environmental, and social performance.
• However, GRI only advocates context, but the

framework doesn’t include the bottom line on
performance

performance
• The reports only talk about topline efforts of
organizations on the environmental, societal and
economic fronts

performance
• The reports only talk about topline efforts of
organizations on the environmental, societal and
economic fronts
• Any report which doesn’t include both top line and
bottom line would not give a complete picture
• Ecological Footprint Method

– Is rarely used in business
– Narrowly focused
• Always think in terms of three bottom lines:

– Environmental (impacts on vital capitals)
– Social (impacts on vital capitals)
– Economic (impacts on vital capitals)
• Always express impacts in context:

– Environmental conditions in the world
– Social conditions in the world
– Economic conditions in the world
• Set standards, then measure against them

– Impacts on vital capitals
– Human well-being
– Sustainability = meeting your standards
Enter Sustainability Quotients
Normative Impacts
On Vital Capital
Measure Actual Impacts
Actual Impacts
On Vital Capital
Normative Impacts
On Vital Capital
Compute Sustainability Performance
Actual Impacts
On Vital Capital
Sustainability
=
Performance
Normative Impacts
On Vital Capital
Global Focus
• On a global level, ‘Sustainability’ is the most

discussed and debated issue, discussed in terms of
‘Climate Change’
• Major concentration is on control of Greenhouse
Gases emissions
Common But Differentiated
Responsibilities
• The Rio Declaration states:
“In view of the different contributions to global
environmental degradation, States have common but
differentiated responsibilities.
The developed countries acknowledge the responsibility that

they bear in the international pursuit of sustainable
development in view of the pressures their societies place
on the global environment and of the technologies and
financial resources they command.”
Common But Differentiated
Responsibilities
• The principle is based on two fundamental elements:
- Common responsibility of States for the protection of the

environment, or parts of it, at the national, regional and
global levels
- The need to take into account the different circumstances,

particularly each State’s contribution to the evolution of a
particular problem and its ability to prevent, reduce and
control the threat
Measurement
• Greenhouse gas emission is measured in Million Metric Tons of
Carbon Equivalent (MMTCE) as per UNFCCC (United Nations
Framework Conference on Climate Change)
• Conflicting models of measurement in place between developing
Vs developed nations
– Total & Per capita Greenhouse gas emission Vs Greenhouse Gas
Intensity
• Developed nations argue for Greenhouse Gas intensity to be
considered, whereas developing nations with huge dependence
on fossil fuel for development argue for total/per capita
greenhouse gas emission rates to be considered
Top Greenhouse
Gas Emitters
(Per Capita)
Top Greenhouse
Gas Emitters
(Total)
Top Greenhouse
Gas Emitters
(Intensity)
Any Questions?

Class Sustainability

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Class Structure

• Sustainability - The study of human impacts on vital

• Sustainability - The study of human impacts on vital

• Sustainability - The study of human impacts on vital

• Transparency - Visible to inspection from the outside,

• Transparency - Visible to inspection from the outside,

• Transparency - Visible to inspection from the outside,

• Sustainability Measurement and Reporting - The

• Eco-efficiency - Incremental improvements in energy

• Eco-efficiency - Incremental improvements in energy

• Understand actual social and environmental

• Understand actual social and environmental

• Understand actual social and environmental

• Actual social and environmental conditions

• Concept of vital capitals should underlie

• Global Reporting Initiative (GRI):

• Global Reporting Initiative (GRI):

• However, GRI only advocates context, but the

• However, GRI only advocates context, but the

• However, GRI only advocates context, but the

• Ecological Footprint Method

• Always think in terms of three bottom lines:

• Always express impacts in context:

• Set standards, then measure against them

• On a global level, ‘Sustainability’ is the most

The developed countries acknowledge the responsibility that

- Common responsibility of States for the protection of the

- The need to take into account the different circumstances,

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