MGMT 8420 SUSTAINABLE MANAGEMENT

SUBMITTED TO: GREG PIXNER

BY: YASHASVI VERMA

DATE: 12 DECEMBER 2021

QUESTION 2 Gross Domestic Product is the full form of GDP. The monetary value of the products and
services that are decided to sell in the market within a specified timeframe.

Simon Kuznets developed the concept of GDP for a meeting of the United States Congress in 1934. His
ideas were to encapsulate production by the government, individual people, and business organizations
as a single statistic. Even he had reservations about his conception. He objected to the fact that it
considered armaments and financialization to be positive output. Above all, he emphasized, GDP should
never be baffled with happiness (pulling, 2018, p. 2).

FLAWS IN GDP

 GDP doesn't really take into account revenue made by nefarious practices; informal businesses,
or the illegal trade, are hard to analyze for in GDP. The size of the illegal market varies across
countries, and having failed to account for this earning is one of GDP's flaws (Trouble with GDP,
2016).
 GDP has also failed to prevent destruction of the environment. GDP, despite environmental
harm, only quantifies the productive capacity. GDP, for example, only measures an airline's
income and does not account for the amount of CO2 emitted by the company (Trouble with
GDP, 2016).
 Patients visiting hospitals and paying for medications are also included in GDP. If the cost of
health care is rising, it means that the poor will be unable to afford it.
 GDP only includes goods that pass through official markets. It overlooks domestically produced
goods that can make a significant difference in developing countries' education and life span as
a nation's wealth.
 Natural hazards are considered as a financial side benefit by GDP, and the expenditure is
reflected as a cost of production. For example, if an earthquake causes a loss of billions of
dollars money spent on rebuilding earthquake-damaged buildings would be considered a
stimulus expenditure (Thoma, 2016).
 If the finance system expands at its current rate, an economic crisis may develop. The cost of
goods would rise as a result of this. Furthermore, GDP ignores factors like as healthcare, social
well-being, and educational attainment (Thoma, 2016).
 GDP primarily includes the quantity of finished products. Only quantitative and money terms are
considered, not stability. This indicates that everything that adds to GDP is on the increase, for
example, the restaurant's cuisine and quality has enhanced, but it will not be included in GDP
(Thoma, 2016).

Approaches to GDP that incorporate other elements when describing a nation's performance include: -

 Genuine Progress Indicator (GPI): The GPI takes into account the quality of one's life. It
calculates GDP income and production before deducting the expenses of negative things like
incurring losses, terrorism, and criminality, among other factors (Hawkes, 2021).
  Thriving Places Index (TPI): TPI was developed by a UK non-profit organization "Happy City."
The most important factors are sustainability, equality, and local conditions. TPI takes this into
account. It demonstrates how economic factors affect local communities (Hawkes, 2021).

 Better Life Index (BLI): Based on 11 issues specified by the Organization for Economic
cooperation Co-operation and Development, the BLI provides for an assessment of wellbeing
across 35 nations (OECD). Housing, employment, society, and schooling are among them, as are
the environment, civic involvement, and health. Gender differences can also be compared using
the index. The indicator incorporates 80 well-being variables that give a holistic view of
ecological, human, financial, and social status (Hawkes, 2021).

 The Human Success Index (HDI) was established by the United Nations on the basis that
economic growth does not necessarily guarantee good health. It examines income, health, and
education while focusing on capability and opportunity (Hawkes, 2021).

QUESTION 3

Causes of Unsustainability:

No one in the world believes in sustainability as a comprehensive scenario encompassing a variety of

economic concepts. Various forces are at odds with the natural cycles on which all humans rely to
survive. Every day, the rate of increase in the carbon impact accelerates, and it already includes the full
circumference of the globe. The biodiversity index would drop by more than half as a result of the
extinction of countless animal types and more than half of the world's forests. Furthermore, the
everyday production of dangerous gases such as greenhouse gases, as well as their combined impact,
has increased, with the consequent effects on climate change being detected on a constant schedule.
They are still arguing because of incorrect human behaviors after 25 years of a treaty signed by 170
countries for sustainability, and advisers are still contemplating adopting any essential required moves.
The government acknowledged the core of huge corporations' damaging behavior in cutting down trees
to grow their operations.

Why is it difficult to achieve sustainability?

"The Tragedy of the Commons is an economic theoretical framework for understanding how individuals
usually exploit natural resources for personal gain instead of for the good of a society or culture." This
concept can be demonstrated using environmental factors as illustrations. All across the world, fishing is
permitted in rivers, oceans, and seas. Overfishing has resulted as a result of fishermen's lack of concern
for species extinction or the impact on aquatic bodies.

Since environmental issues have resurfaced, as is the case with the common tragedy, sustainability looks
to be difficult. People assume that if they tidy up their waste prior to throwing it out, they would be
charged more. Because air and water cannot be regulated, the only option is to levy additional taxes and
regulations that make it easier or less expensive for a dumper to handle rubbish before disposal. The
most pressing issue with sustainability is population increase, which is a reality if the sole individual who
throws trash into the water cleans it within a few kilometers. Despite this, it is clogged with garbage and
impossible to clean without outside assistance.

On paper, the number of businesses moving toward sustainability is growing, but it is evident that they
have accomplished little in terms of both social and environmental impact. Human consumption habits
are changing, and demand for products and services is rapidly increasing. In order to meet demand,
companies are interfering with the environment in order to increase profits. In free-market
environmentalism, marketplaces are emphasized as an explanation to environmental challenges. Many
environmental concerns, according to proponents, can and have been tackled more efficiently by free
market economics than by the government for decades. Property rights, it is believed, can protect the
environment. The people who have been harmed can sue the polluters for compensation, resulting in
reduced environmental damage.

QUESTION 4

Climate change presents organizations with a combination of risks and opportunities. Changing climate
is a larger concern that impacts enterprises in a range of methods. In exchange, they are focusing
more in Research and development, innovative thinking, and the development of new products and
future technologies as a reaction. Climate change also introduces threats to businesses, like severe
weather events and a lack of resources. "Businesses that continue to treat climate change” purely as a
matter of CSR initiatives, instead of a business issue will face the most severe repercussions". Bigger
Companies such as Google and Microsoft are under intense pressure to succeed since they are liable in
terms of greenhouse gas emissions, so they must be sustainable. Up until recently, Businesses have
openly emitted carbon, but these organizations are subject to the public in the direction of a sustainable
transition organizations that emit carbon dioxide every year, and failure to meet the objectives may
result in the loss of stakeholders (Trager, 2021).

Climate change is also providing advantages for firms willing to invest in innovation, research, and
development. In my opinion, a small organization can also take advantage of growth benefits by having
installed rooftop solar panels and using solar power, resulting in a decrease in the use of electricity
produced by coal and oil. Amazon and Microsoft's investments in the wind and hybrid power are
examples of seizing possibilities (Trager, 2021).

Threats:

1. Tangible danger: The most significant hazard to enterprises is risk of physical harm. I'll use the case of
extreme climate conditions in the environment to demonstrate this. The world temperature is rising as a
result of greenhouse gas emissions, leading to limited water supply. Furthermore, water crisis has a
major effect on both manufacturing and agricultural production. For example, the 2011 earthquake in
Japan harmed a large number of businesses. Oki Electric is a manufacturer of ATM machines and
telecommunications equipment. The earthquake wrecked the Fukushima production facility, and all
materials were disrupted, causing operational procedures to be disrupted (Gambarelli, 2020).
2. Emissions of greenhouse gases: A second threat could be greenhouse gas emissions. This means that
organizations may face legal action as a result of harmful emissions produced by the combustion of
fossil fuels. Such court proceedings are a waste of time and money for corporations (Gambarelli, 2020).

Opportunities:

1. Novelty products: Weather changes compels businesses to be more creative with their offerings,
bringing in latest and inventive items and services. As a result, an organization's client base expands, and
sales will definitely climb (Trager, 2021).

2. Renewable energy sources: By reducing their dependency on fossil fuels, businesses can benefit from
a transition toward renewable energy. This has a minimal environmental influence and employing
sustainable energy equipment typically saves money on energy expenditures (Trager, 2021). For
instance, Amazon has made significant investments in renewable energy in Texas. This wind farm will
generate enough electricity to power 90,000 US homes each year.

QUESTION 5

The 3B’s of integrating sustainability in business operation are baseline, benchmarking and business
case. All of them are explained below: -

1)BASELINE
Baseline is the way of assessing "where you are currently." Here you'll set the benchmarks against which
you'll measure your progress. Process mapping is one tool that can be used, as well as data gathering
and checklists. Veriform, for example, calculated that each ton of co2 emission costs the corporation
$900 annually, and this became the metric (week6:sustainable operation- energy management, 2021).

2) BENCHMARKING

Benchmarking is a method of determining where you and your competitors and management stand in
relation to one another. Businesses should continue to compare their company against leaders and
competitors using the same criteria as in the baseline (week6:sustainable operation- energy
management, 2021).

The influence of a corporation on shareholders may differ based on its industry. Corporations connect
with the most influential entities on a regular basis, keeping close links and constant feedback.
Interaction, on the other hand, can actually occur on a variety of scales and should be tailored to the
desires of both sides. Different degrees and modes of interaction help firms and investors, which can be
converted into much better sustainability solutions (How to Integrate Sustainability Into Your Business,
2016).

There are two methods for benchmarking: A) Process Benchmarking: Benchmarking usually entails
conducting research within the same field. B) Strategic Benchmarking - Efforts to undertake a strategic
benchmarking research are focused on a top firm that is not in the same industry. Veriform, for
example, was charging $18 per ton for Cap & Trade and indicates points to a major area for
improvement (week6:sustainable operation- energy management, 2021).
3)BUSINESS CASE

Business case requires to make a list of the things learned through investigation, the best practices that
can be put into action.

 Assess for fit: we cannot fit something which does not fit in a particular place or situation.
Therefore, the need to assess what fits and what not is important.
 Consider the feasibility: Strategies or plans must be Cost-effective. It's critical to use for the cost
benefit analysis (CBA) on sustainability (week6:sustainable operation- energy management,
2021).

In 2006, Veriform spent $46,000 in infrastructure upgrades to enhance energy efficiency. Their energy
costs dropped by 58 percent in the first year, and they recouped their expenditure in just six months.
Veriform found 100 energy-saving initiatives over the next 11 years, saving nearly $2 million in the
process. The company cut carbon emissions by 77%, from 262 to 60 tonnes annually (week6:sustainable
operation- energy management, 2021).

Some more real-life examples of companies integrating sustainable operations: -

PepsiCo: Since 2005, PepsiCo has published sustainability reports. They have developed strategic plans
for tomorrow. Fresh water, plastic-free packing, and sugar-free products are its key priorities.

Ford: Ford is a company that makes automobiles. Ford has expanded the use of renewable power in its
automobiles in recent years. The ultimate objective is to reduce vehicle footprints and pollutants as
much as possible. The implications of the supply chain on health and safety, as well as water, waste, and
energy conservation.

The following are common blunders that prohibit organisations from attaining an unified
sustainable strategy:
 Too many KPIs: There are too many Indicators, and there is too much ambiguity: Sustainability
efforts are difficult to quantify because they have such a significant impact on individuals; their
organisational consequences are murky. It also depends on how organisations put them into
practise. A variety of exit measuring systems are available to help firms analyse their sustainable
development, like their carbon impact, the Global Reporting Initiative, and so on (Marr, n.d.).
 Government policies: Businesses expect the government to help them achieve long-term
success. Markets, laws, and taxes are all instruments that the government can use to encourage
businesses to be environmentally conscious. However, these tools are frequently misused or
measured ineffectively (Marr, n.d.).
 Consumer awareness: Customers choose how much money and effort they want to invest.
Customers who aren't aware of the issue typically don't consider sustainability while buying
products. Businesses have an obligation to educate people about the seriousness of
sustainability (Marr, n.d.).
 A lack of employee motivation: Creating policies is easy; executing them is more challenging.
Managers cannot achieve sustainability solely through their own efforts. To achieve their
objectives, they will undoubtedly require the motivation of each and every employee. As a
result, employees must be engaged, but organizations that fail to do so will fail their ambitions
(Marr, n.d.).
QUESTION 7
The triple bottom line is made out of three pillars: plant, people, and profit. The triple bottom line is
linked to long-term operations in general. Energy management determines how energy production and
consumption are planned. In terms of the triple bottom line, the advantages of energy management are
given below.
People: First and foremost, this managerial style is useful in nature, as the majority of the commodities
are healthy as a consequence of this strategy's aid, and dangerous chronic diseases are not transferred.
The majority of the processes in this method emit fewer pollutants, lowering the risk of lung infection
and other serious illnesses. As a result of this legislation, individuals who focus solely on renewable
energy have a variety of new prospects (Kraaijenbrink, 2019).

Planet: The energy management approach benefits the entire world since it allows businesses to reduce
GHG emissions in their manufacturing facilities, culminating in sustainable power that can be used for a
longer period of time and reduce the atmosphere's impact of such gases (Kraaijenbrink, 2019).

Profits: As every nation strives for long-term growth, they open doors for sectors that will eventually
adopt this energy management method. Because this energy is so inexpensive, the production costs are
passed on to the bottom line and other expenses. If new enterprises enter the renewable energy
market, their initial investment will pay for itself in a few years. Profits can be made using this strategy
(cataldi, 2021).

Profits: As each country aims for long-term growth, sectors that will ultimately embrace this optimal
power flow gain access. The manufacturing expenses are passed on to the bottom line and other bills
because this power is so cheap. If new businesses enter the sustainable power sector, their initial outlay
will quickly pay for itself. This method can help you make money (cataldi, 2021).

Businesses can promote and implement their energy management strategy through a variety of
tactics.
When different natural resources are utilized, the effects of energy production are examined. The
United Nations has taken a variety of steps to offset the detrimental tendencies pursued by large
corporations and governments.
These two methods can be used to aid in energy regulation and comprehension:

Baseline: This is the stage in which the company determines where it stands in terms of sustainability.
The data can be collected in a variety of ways, and positions can be pinched. In addition, by combining
various strategies, efficiently controlling energy usage has resulted in the creation of a framework that
may assist in the collection of data on a regular and annual basis.

Benchmark: The firm will employ baseline measurements to have access to precise information about
its competitors. With strategic benchmarking, a corporation can assess any major organization's
commitments within the same company using the process benchmarking method. It actively manages
the real-time force that opens up new problems.

The business could employ the following reporting/guiding organization to help with the disclosure
and integration:

The Sustainability Accounting Standards Board (SASB) brings together organizations and investors to
discuss sustainability's financial implications. SASB Guidelines help companies all over the globe
discover, monitor, and present economically significant sustainability information to shareholders. SASB
Rules are industry-specific and are intended to help shareholders make informed decisions while also
being cost-effective for businesses. They are created through a scientific proof and market-driven
approach (CDP, 2020).

Framework for the Global Reporting Initiative: This technology establishes a standard rules for
enterprises to transmit their statistics, whether they are large or little. They'll have to report on
sustainability in a consistent and trustworthy manner, resulting in well-organized, open, and
unambiguous accountability. These kinds of criteria can also help firms understand more about their
customers' demands and effectively communicate their opinions. Apart from organisations, the criteria
are enough for a variety of investors, strategists, and politicians (CDP, 2020).

QUESTION 8

Natural Capitalism is described as the world's economy's dependence on energy resources and
ecological processes.

Natural capitalism is a new economic model that enables companies to maximise the benefits of such
possibilities. The move to natural capitalism requires four major changes in business processes, all of
which are intertwined":

INCREASE THE PRODUCTIVITY OF NATURAL RESOURCES DRASTICALLY

Thanks to major breakthroughs in both industrial innovation and engineering, foresighted businesses
are researching options to improve natural resources — energy, minerals, water, and forests — stretch
five, ten, even 100 times further than they do now. Natural capitalist may put the money in capital
expenses, wealth creation, and time to good use by putting the other three measures into place (Amory
B. Lovins, 2007).

CHANGE TO BIOLOGICALLY INSPIRED PRODUCTION MODELS AND MATERIALS

Instead of merely waste minimization, natural capitalism seeks to eradicate it totally.
Every byproduct would either be ineffectually given to the environment as a nutrition, such as manure,
or is used as a raw material in an another production line (Amory B. Lovins, 2007).

Production activities that mirror nature's innocuous chemistry avoid the need of exhaustible resources,
increase production efficiency by orders of magnitude, and produce stunningly basic things that surpass
everything man-made (Amory B. Lovins, 2007).

"SERVICE AND FLOW" AS A BUSINESS MODEL

The purchase of products is the foundation of the conventional production business strategy. Instead of
selling light bulbs, the new model places value on a continuous flow of services, such as lighting. This
aligns the objectives of vendors and consumers in ways that boost productiveness (Amory B. Lovins,
2007).

REIMBURSE YOUR NATURAL CAPITAL INVESTMENT

Because capital spawns’ additional capital, a company that deteriorates its own equity puts its long-term
existence in jeopardy.
Burden on corporations to recover, preserve, and strengthen existing capital are expanding as needs of
people increase, the expense of failed habitats grow, and buyer’s awareness of environmental issues
grows. All of these constraints, thankfully, lead to business opportunity. (Amory B. Lovins, 2007) es.

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