INTERNATIONAL CONFERENCE OF AIAER

onInternationalizing Higher Education

January 28-30, 2008

Sustainable Future of Mankind:„A Roadmap journey“

Mark Esposito, Ph.D.Affiliate Professor of Management & Behavior

Grenoble Graduate School of Business

mark.esposito@grenoble-em.com

Outline

Hypothetical analysis

StrategicQuestions

Sustainable Development

Strategiesand Tools

Global Trends

• Population increases

• Natural systems decline

• Questions raised by trends

• SD definitions• New

approaches needed

• Eco-efficiency• Industrial

ecology• Design for

environment• Natural Step• Stakeholder

engagement/ dialogue

• Key performance indicators

Sections can be used individually or in combination and tailored as appropriate to any educational program or company’s situation. However, please note that these sections are intended as a resource to supplement internal presentations, rather than as the sole basis for the creation of such presentations.

What is a classical definition of sustainable development?

Social/Society Economy

Environment

Governance issue

Traditional domain of political economy (ethics and economy/management)

Time dimension

Space dimension

development seeking to meet the needs of the present generation without compromising the ability of future generations to meet their own needs

Source: Bruntland report (1987)

interdependencies

GlobalIssues

LocalIssues

old rich millions

affluence

“global people”

resource surpluses

causes of climate change

technological knowledge

theory driven researchpoor, young billions

poverty

“local people”

resource shortages

impacts of climate change

traditional knowledge

action driven researchDig

ital a

nd c

apac

ity d

ivid

es

Reveal profound differences in problems and perspectives…

What we Know - State of the world environment warrants attention

1. Population (x billion people) 2.5 3.8 5.8 10.7 2. Megacities (>8 million) 2 9 25 200 3. Food (calories/capita) 1980 2450 2770 22004. Fisheries (Million ton/yr) 19 58 91 355. Water Use (km3/yr) 1300 2600 4200 75006. Rainforest (1950=100) 100 85 70 457. CO2 Emissions (billion ton/yr) 1.6 4.9 7.0 14.0

8. Ozone Layer (CFC’s in ppb) – 1.4 3.0 7.0

Source: World Resource Institute, 1996

1950 1972 1997 2050

The challenge of sustainable development arises from these two major converging trends.

Decline in resource availability and ecosystems

Impact = Population x Consumption x Technology

Diminishing margin for action

Sustainability

World population is increasing to unprecedented levels.

Massive flows of material and energy are used to meet the needs of this expanding population.

Source: USGS

1900 19601920 1940 1980 19950

500

1,000

1,500

2,000

2,500

3,000Millions of Metric Short Tons

Raw Materials Consumed in the US -More than all previous societies combined

Graph of population growth

These trends are leading to a decline in the health and capacity of natural systems worldwide.

Biologists: greatest extinction rate in 63 million years

Global 50% drop in freshwater available per person

13 out of 17 fisheries collapsed or endangered

Forest losses equal to area of UK/year, plus reduced diversity, acid rain etc.

30-80% topsoil losses significantly reduce diversity, absorptive capacity, and agricultural productivity

Carbon Emissions from Fossil Fuel and Cement

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990

Mil

lio

n M

etri

c T

on

s o

f C

arb

on

Central and South America

Africa

Far East

Centrally Planned Asia

Middle East

Centrally Planned Europe

Oceania

Western Europe

Germany

North America

Source: CDIAC

Atmospheric carbon dioxide (CO2) emissions are rising.

Surface temperatures have warmed over the past century.

WORLDWORLDRESOURCESRESOURCES

INSTITUTEINSTITUTE

At the same time, millions of people worldwide are struggling to meet their basic needs.

1.3 billion people live in absolute poverty, with incomes less than $1/day (World Bank)

841 million people in developing countries suffer from basic protein-energy malnutrition (UN Food and Agriculture Organization)

Nearly 1 billion people either cannot work or are employed in jobs where they cannot support their family (International Labor Organization)

11.7%

2.3%

1.9%

1.4%

Richest Fifth

Poorest Fifth

(UNDP, Human Development Report 1992)

82.7%

Distribution of Total World Income

This discussion is framed under the term Sustainable Development, which can be defined several ways.

Meeting the needs of the present without compromising the ability of future generations to meet their own needs

The simultaneous pursuit of a triple bottom line:

Economic prosperity Environmental quality Social equity

A better quality of life for everyone now and for generations to come

Companies evolve in how they manage

environmental and related issues.

Environmental Compliance

Risk Management

Sustainable Development

“End-of-pipe”

Limit impact of current activities

Pollution prevention;Management systems Redesign to eliminate impacts of activities

Strategic integration Change activities and design of industrial system

Given the scale and nature of environmental problems, we need new mental models and ways of thinking to solve them.

Problems cannot be solved within the mindset that created them.

Albert Einstein

Developing strategies to pursue sustainable development requires new approaches.

Compartmentalized thinking - focused on parts in isolation

Traditional Approach Sustainable Approach

Systems thinking - focused on interdependence of parts and optimizing whole system

Environment/social implications addressed by staff specialist after strategic decisions made

Environmental/social implications considered by decision-makers in designing strategy

Forecasting: where are we today- how do we improve 5%

Backcasting: what would sustainable world look like in 30 years – how do we get there?

Company’s position is the way Stakeholder engagement to understand diverse points of view to find better solution

Redesigning our industrial system to be sustainable requires a shared framework to understand how nature works.

What are the root causes of why our industrial systems create environmental degradation?

Where might these environmental trends create a barrier or problem for our business in the future?

Understanding these issues can contribute to creating a strategy that avoids these problems

and finds the growth opportunity.

An organism’s survival depends on two critical functions from its

environment: provision of resources and absorption of wastes.

Organism Organism

SourceSink

Provide resources:• Water • Clean air• Nutrients

Absorb wastes and by products

The same principle applies at larger scales, e.g., to an company,

industry, or economy.

EnvironmentEnvironment

To maintain the integrity of these valuable services, we need to understand how nature works.

No Waste

• Nature works in cycles

• There is no waste - what is unused by one species becomes nutrients for the next

• The sun’s energy drives the process:

Green celled plants using photosynthesis create net concentration and structure

In contrast, our industrial system functions primarily in

a linear fashion.

Take Make Waste

Only 6% of material flow in ends up in products

Source: Hawken, Lovins, Natural Capitalism

Take “natural capital,” structured valuable material, and process it into unusable waste

This industrial system, operating on an ever larger scale, is embedded in and affecting nature’s cycle.

The impact of our expanding industrial system on the

environment affects both sources and sinks.

Sources

Key resource bases are being exploited at rates faster than their ability to regenerate.

Sinks

The available land area where nature can break down and recycle wastes is shrinking.

The quantity and types of wastes created by industrial societies cannot be fully absorbed and recycled by nature.Forests

FisheriesTopsoilGroundwaterFreshwater

CO2

NOxSynthetic compounds (CFC’s, DDT)

Urban developmentDeforestationDesertification

Economy Economy

EnvironmentEnvironment

These impacts can create unexpected barriers for business.

3M decided to phase out production of Scotchguard (2% of annual sales) after finding trace amounts in blood samples of people and wildlife worldwide, even in countries where the product was never sold or manufactured. ($1 million charge against earnings in 2000)

An activist group has convinced 250 major companies to commit to phasing out all purchases of old growth forest products.

At BHP’s large copper mine in Papa New Guinea, mine tailings have drained into a river for 15 years. This has led to class action legal claims and public scrutiny.

Shell faced NGO outrage and consumer boycotts of its gas stations over its decision to dispose the Brent Spar oil platform at sea.

Where is our company potentially vulnerable when considering these impacts?

SourcesSinks

Are we dependent on a threatened or sensitive natural resource?

What “sinks” are we dependent on that may reach capacity, for example:• Global atmosphere?• Local air quality?• Human/wildlife capacity to absorb toxic substances?

Economy Economy

EnvironmentEnvironment

How can our company find the opportunity for business growth by reacting proactively to these impacts?

• How can we help customers who may be facing a “sink” or waste limit, e.g., using waste as alternative fuels?

• How can we use more closed-loop production processes to save energy, water, or materials?

• How can we collaborate with other industrial partners to operate our industrial system in a cyclic way?

• How can we increase productive land area and improve biodiversity?

• How can we be strategic about using emission trading schemes to gain business advantage?

Other barriers for business can arise when people feel their needs are not met or they are being treated

unfairly. Testimonial: http://www.wbcsd.org/web/stream/sl/procter/pur.html

Global human rights groups and labor organizations are focusing increased attention on corporate practices.

The Internet can be used to quickly disseminate information about corporate practices worldwide.

Shell was the subject of condemnation and boycotts by NGOs associated with its operations in Nigeria. It was viewed as having complicit involvement in the violations of human rights by state security forces and the lack of economic benefits of oil production for local communities.

Redesigning our industrial system to be sustainable also requires consideration of business’ role in meeting human and societal needs.

How does our company contribute to the health of the communities it operates in?

What are the social responsibilities of our business and how effectively are we fulfilling these?

How can our business find opportunity in serving markets where basic human needs are not met?

How can our company differentiate itself in how it treats it workers to attract and retain talented employees?

The Sustainability “Stool”

Education for Sustainable

Development

Environmental

Principles

Social

Principl

es

EconomicPrinciples

STUDENT

ATTITUDE SK

ILLS

KNOWLEDGE

BUILDING CAPACITY for A SUSTAINABLE DEVELOPMENT

8

ATTITUDE:

• Sustainability

• Cooperative

SKILLS

• Integral approach

• Application oriented

• Systemic

• Communicative

KNOWLEDGE

• Technology

• Culture ( Behavior, Need-orientation)

• Structure (Institutions, Economy etc)

BUILDING CAPACITY for A SUSTAINABLE DEVELOPMENT

2000 UN Millenium Summit

Halve Extreme Poverty

UniversalPrimary

Education

Empowerment ofWomen/ gender

equality

Reduce <5mortality

by 2/3

Reduce maternalmortality

by 3/4

Reverse spread of diseases, esp. HIV/AIDS, Malaria

EnsureEnvironmentalSustainability

Form a Global

DevelopmentPartnership

for aid, trade, debt relief

Millennium

Development Goalsby 2015

Background/ History cont’d…

http://tinyurl.com/v9c2e

References

Video references

http://www.wbcsd.org

http://www.sustainabletravelinternational.org/