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Sustainable Business Practices Lecture Notes
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Lecture Notes for Sustainable Business Practices course
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Lecture 1The role of modeling in the sustainability transition
● Start with business as usual
● Then there’s a need f or change/vision (move f rom linear to circular economies)
● Dif f erent pathways to make the vision real
● When the transitions are on going, experiments are used
What is the need for change?
There are multiple drivers:
● Climate change
● Depletion of resources
● Unf air treatment of indigenous people
● Inequality between people
Change is emerging
Within a f ew weeks in May, change f or a sustainable society is emerging.
● Globalization (?): Question marks are put af ter globalization (residents of Venice protests against
cruises in lagoon)
● Fair taxes/equality: multinationals need to pay at least 50% of their prof its to taxes
● Greening of oil concerns: people buy shares in oil companies and ask questions about company’s
targets to be sustainable, when they don’t work in line with concerns, they go to court to revise
their targets
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, ● Great Green Wall Initiative (Africa): Countries hit greatly by def orestation through global warming;
def orestation is important in these countries f or local communities to pick back up lif e again and
avoids migration into Europe
● Youth for climate: put topics on the agenda that go much f urther than c hanging linear economy to
circular; they question the level of sustainability in the entire system
● The Pandora Papers: celebrities who put their money into low tax countries/make use of of fshore
accounts to avoid paying taxes in own countries; journalists & NGOs are discussing these themes
and bringing evidence to the larger audience to create change in legislation
● Circular economy: in business this is high on the agenda to stop the linear approach in the
economy, reuse materials in a circular way
There are many initiatives that are happening that require a lot of ref lection
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,Sustainable business model toolbox
Main drivers for an unsustainable society
● Overconsumption
● Capitalism
● Laziness
Our today’s challenge
● Our addiction to production (capitalism) increases consumption per capita
● Increasing world population will reach 10 billion
○ Demographic transition: countries labeled underdeveloped have high birth & death rates
○ When countries or nations start to develop, death rates drop with better health & nutrition
○ If death rate drops but birth rate is still high, then consumption is still high
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, ○ If birth rate drops, the need and cost f or education is high
Ecological f ootprint
● Since 1970 we exceeded carrying capacity of the earth
● Since 1972, Club of Rome ordered report of Limits to growth
● If we continue business as usual, we’ll need 2 planet earths to be sustainable by 2030
How was this situation created?
● In a half year economy, you talk about utilities (everyone pursues to f ulf ill their needs with goods
and services) and disutilities (tools to make our utilities, go to work, depleting resources) (Herman
Daley)
○ As long as the marginal utility (adding 1 utility extra) is larger than the marginal disutility,
economic growth still happens
○ When both are on top of each other, economic growth …
○ Economic limit: you owns so much growth that adding more goods to what you own
doesn’t gove you anymore utility
○ Ecological catastrophe limit: by continuous growth above the carrying capacity, some
tipping points are crossed and then we come in a less viable situation
● This Utility/Disutility model would work if we considered all economic things in account:
○ Tax on co2 emission
○ External costs of congestion, people killed by accidents
● But they are usually not taken into account when talking about economic growth
● The point when it makes no sense to produce f urther goods, this point is closer to the ecological
catastrophe limit than is organized in our economy
Def inition of sustainability
● Sustainable development: development that meets the needs of the present without
compromising f uture generations to meet their f uture needs
UN’s def initions:
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