Lecture 3 - Strategic corporate sustainability and the Unilever case Flashcards
(16 cards)
Mention the 4 points of going from PR work to business model innovation
- Declare intentions
- Address some issues
- Fully address material issues
- Transform business model
What does the strategic approach to corporate sustainability imply?
1) To better embed ESG activities into the organization as a whole
2) To improve these activities’ alignment with long-term corporate objectives
3) To move beyond pure philanthropy
Valente’s stage model:
Mention the 3 criteria for identification of the 5 stages and mention these as well
- Level of inclusiveness (of multiple systems)
- Level of interconnectedness
- Level of equity
- Denial
- Defensive
- Isolation
- Embedded
- Transformative
Which 2 perspective can you use to see which sustainability issues are aligned with your strategy?
- Inside-out
-How does a firm’s value chain affect or is affected by sustainability issues? - Outside-in
-How does a firm’s competitive context affect or is affected by sustainability issues?
What 4 aspects makes corporate sustainability strategic?
- Organizational embeddedness
- Future orientation
- Alignment with key resources
- Consideration of stakeholder expectations
(Inside-out) After identifying how a firm’s primary and support activities influences ESG issues, how can the company respond?
- Redesign an activity to mitigate harm
-Here strategic potential is often limited because it responds to a an existing problem - Transform an activity
(Inside-out) Mention the 5 primary activities and 4 support activities in the value chain analysis
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- Service
- Procurement (identifying suppliers and building relationships)
- Human resource management
- Technological management
- Infrastructure
(Outside-In) Porter’s model can be used to identify which ESG issues help firms become more competitive. What are the 4 factors here?
*Starts with conditions
- Factor/input conditions
-Identify ESG issues that help preserve or strengthen them. - Demand conditions
-ESG activities can be aligned or even reinforce these demand conditions - Supporting industries
-ESG practices aligned with a firm’s competitive context can secure the existence of competitiveness of the suppliers - Strategy context
- Firm’s ESG practices can shape rules and incentives that govern competition in an industry or country
Porter and Kramer. Mention the 3 ways in which shared value can be created. CSV approach.
- Reconceiving products and markets
- Redefining productivity in the value chain
- Enabling local cluster development
Mention 5 critique point of the CSV approach
1) Assumption that the CSV mindset should be applied to all corporate decisions
2) Remains unclear how well aligned CVS decisions and corporate strategy really are.
- What should firms do if shared value cannot be created?
3)The view outlines a win-win worldview and ignores potential tensions between the interests of the firm and the interests of society.
4) We cannot always wait for CSV opportunities to arise whenever we would like firms to address the ESG issues surrounding us all
5) While the economic side of CSV is easy to measure, the social and environmental impacts are more difficult to determine.
Define corporate and business strategy
Corporate = Where should we compete?
-Which markets to enter and which business to be in
Business = How should we compete in a given market?
-How to achieve a competitive advantage within the market.
Mention 2 ways a firm can gain an competitive edge and 2 ways to include ESG in corporate strategy reflections
- Being a cost leader in a specific market
- Differentiating their products
- Business unit’s ESG risks
- Business unit’s ESG opportunities
Corporate Sustainability Plans. Mention the 6 Design Principles
- Level of ambition
- Level of specificity
- Time horizon
- Scope
- Relevance
- Consistency
Mention the 2 perspectives from which an ESG issue’s materiality can be assessed
- ESG materiality - External view
-Because the firm has a significant impact on the issue. eg. pollution - Financial materiality - Internal view
-Because it has a high financial impact on the company
Mention the 4 types of external sustainability standards
- Certification
- Principle-based
- Process
- Reporting
