Chapter 2

Question 1

Sustainability

Answer 1

humanity meeting its current needs without over-burdening the natural environment and its resources

Question 2

Environment Sustainability

Answer 2

maintaining ecological integrity, preserving bio-diversity and maintaining balance of natural systems (natural resources are consumed by humans at a rate < than that at which they can be replenished)

Question 3

Social Sustainability

Answer 3

Minimum standard of basic necessities and human rights is affordable to all people

Question 4

Economic Sustainability

Answer 4

Having economic system that are accessible to everyone and that help spread and generate prosperity globally

Question 5

Gov, Corp, Investors and FI practice S

Answer 5

Gov: practice and encourage S by agreeing on international S goals, through UN (SDG)

Corp: practice S through S policies and strategies and by adhering to ESG norms

Investors and FI: practice S through ESG ranking for firms they will invest in

Question 6

Agenda 21

Answer 6

1992 Earth Summit, Rio - plan for global partnership on S development
- introduced by UNFCCC and adopted by 178 countries

2000 Millenium development goals (MDG), UN
-8 MDG to be accomplished by 2015
-helpful as benchmarks but fell short (too broad, and didn’t engage private sector)

2015 : 2030 agenda for S Development, UN
-builds on MDGS
-broad, all-encompassing, details
-17 SDGs, 169 targets (broad scope of SDGs has enabled a wide range of stakeholders to find strong agreement about at least one of the goals) : env goals; nature goals; social goals; economic goals

Question 7

Eco-system services

Answer 7

Businesses, govs and communities rely on eco-system services for profits, health, safety and stability

1. Supporting services
2. provisioning services
3. regulating services
4. cultural servicesS

Question 8

Supporting services

Answer 8

fundamental conditions that enable existence of all other services

ex: species habitat; genetic diversity; soil formation; nutrient cycling

Question 9

Provisioning services

Answer 9

generate resources for society that can be traded in markets

ex: fresh water; food; wood; fiber

Question 10

Regulating services

Answer 10

system that enables upkeep and management of natural sources

ex: water purification; flood regulation; climate regulation (mangrove forests help lessen impact of hurricanes)

Question 11

Cultural services

Answer 11

Non-material benefits and enjoyment humans derive from eco-system

ex: recreational (beach); educational; spiritual

Question 12

How to assess eco-system services

Answer 12

org and gov can assess risks and opportunities related to eco-system services by examining their impacts and dependencies

Question 13

Natural Capital

Answer 13

value of world’s natural assets (including geology and minerals) are biotic and Abiotic resources (non-living resources) [and can even include ff]

==> stock of abiotic and biotic assets

Eco-system services: (primarily biotic) flow of assets that derive from natural capital

ex:
-natural capital: forest
-eco-syst service: timber from forest

Question 14

Applying SDGs in private sector

Answer 14

SDGs have a benchmark against which companies and investors measure outcomes (firms are integrating SDGs in their operations - occurs through development of KPIs)

SDG alignment also enables FI to analyze corporate performance:
1. screens companies
2. analyzes entire investment portfolios
3. allows easy way to present outcomes and priorities to investors in a way that is cross-comparable between F firms

==> comes with risk of greenwashing (CSR has become widely known as creating many opportunities for greenwashing)

Question 15

Greenwashing

Answer 15

1. Decoupling
2. Attentional deflection

Question 16

Decoupling

Answer 16

When organization claims to fulfill stakeholder’s expectations for action on S, without actually making any changes in what they do in practice

ex: firms joining voluntary S initiatives establish by NGOs to gain credibility by association; making false claims and statements; promotion of empty green claims and policies when commitments are unable to be implemented

Question 17

Attention deflection

Answer 17

When org hide unsustainable practices from stakeholder attention, prepare selective and inaccurate disclosures, make incomplete comparisons with other products and services and use vague and irrelevant statements. Can also include the deployment of misleading texts/imagery and can undertake falsifications to gain accreditations

Question 18

Green Wishing

Answer 18

well-intended efforts to tackle S challenges, which:
1. may not make enough of a difference
2. encourage superficial changes when more structural ones are required

ex: buy electric vehicle when the grid used to power the car comes from coal fired power stations

Question 19

how to address green wishing

Answer 19

enhance consumer and company understanding of what actually will make a difference

potential risk: people and companies feel disempowered to overcome S challenges and become disengages

Question 20

Life cycle assessment

Answer 20

companies will conduct LCAs to S green substantiate marketing claims: an LCA should examine every stage of a product’s life cycle

1. Goal and scope definition
2. inventory analysis
3. impact assessment
4. Interpretation

Question 21

Goal and scope definition

Answer 21

-Why is LCA necessary
-who are results relevant to?
-identify product and its functions
-define product’s system boundary by identifying processes that contribute most to product’s env impact

Question 22

Inventory Analysis

Answer 22

gather data on inputs, outputs and E use of product

Question 23

Impact Assessment

Answer 23

characterize and categorize product impacts

Question 24

Interpretation

Answer 24

evaluate completeness of LCA and develop conclusions and recommendations

Question 25

Why are LCA’s useful?

Answer 25

help determine an organizations:
-water use
-land use
-E use
-C footprint

and can help orgs identify efficiency improvements, enhance supply chain purchase decisions and compare env impact of similar products within a company and with competitors

-full LCAs are both expensive and time consuming and are thus typically conducted for a few key products - more so focus on env impact and don’t incorporate social nor governance issues

• are a building block of developing a more circular economy (in which economy growth is de-linked from consumption of finite resources)

Question 26

Circular economy

Answer 26

• waste and pollution reduced and eliminated by design from products and economies
  -can advance SGs (SDG 12: ensure S consumption and production patterns)

Question 27

Principles for Responsible Investment (PRI)
World Business Council for S (WBCSD)

Answer 27

research on corporate social responsibility and share best practices (PRI does this but for investors)

reason why these initiatives and frameworks are impactful is because it helps STANDARDIZE how S related risks are:
1. accounted for
2. disclosed
3. reported

Question 28

SASB

Answer 28

S accounting standards board provides cross-comparable S metrics

Framework uses 5 main dimensions of S:
1. social capital
2. human capital
3. governance
4. business model
5. environmental

Question 29

Global Reporting Initiative (GRI)

Answer 29

provides global standards for S reporting