Reference no: EM133589989

What drives sustainability oriented innovation?

Sustainable supply chain management

. characterize sustainable supply chain management.
. discuss the relevance of sustainable supply chain management for sustainability
management.
. illustrate challenges of sustainable supply chain management.
. explain supplier management for risks and performance as a rather reactive strategy.
. explain the steps of commitment, evaluation, control, and development in this strategy.
. explain supply chain management for sustainable products as a rather proactive strategy.
. explain the idea of decommoditization along with its opportunities and challenges.
. discuss how regulation can be a driver for sustainable supply chain management.

Task C3-1

Palm oil is a very versatile ingredient which increases the shelf-life of many products. The colorless and odorless oil is used for a variety of products, ranging from food to toiletries or even animal feed. However, palm oil production is a major driver for deforestation in Africa and Southeast Asia and therefore responsible for greenhouse gas emissions and biodiversity losses. Furthermore, accusations of child labor and exploitation of workers on the palm oil farms are being raised every now and then. Against this background, the Roundtable on Sustainable Palm Oil (RSPO), a not-for-profit organization founded by NGOs, palm oil processors, palm oil producers, and other actors, aims at fostering a sustainable production of palm oil by means of a certification system. Nevertheless, the RSPO is not undisputed.
Do some research: What do critics of the RSPO say? What are the arguments of its advocates (in industry but also from the NGO sector)?
How has the RSPO evolved over time?
Are there any alternative products (i.e., substitutes), and how do they compare with regard to different sustainability aspects?
Imagine you are the chairperson of the RSPO and you really want your organization to have a positive impact on sustainability-what would you do to promote sustainability standards and get large parts of the industry on board? What makes your job difficult?

Sustainability Accounting

Learning Goals

After reading this chapter you will be able to .
. explain the relations between sustainability management control, sustainability accounting, and sustainability reporting.
. explain the different elements of life cycle sustainability assessment (LCSA) and their areas of application.
. describe the general approach and different steps of an environmental life cycle analysis (ELCA) and subsequently .
. explain the differences of conducting an ELCA compared to life cycle costing (LCC) and social life cycle assessment (SLCA).
. differentiate scope 1, 2, and 3 emissions and explain the relevance of this differentiation.
. critically analyze different types of carbon emissions reduction targets.
. explain the potential and limitations of carbon offsetting and criteria for high-quality schemes.

Task C6-1

Identify potential functional units for ELCAs of products from different industries: clothing,
agriculture, automotive, construction, financial services.
Come up with some ideas and discuss the difficulties you encounter!

Task C6-2

Compare the idea of ELCA (and SLCA, after reading the respective sub-chapter) with that of LCC.
In how far can an LCC (and not only ELCA and SLCA) be a relevant tool in sustainability management?
How can an LCC help a company to become more sustainable?

Task C6-3

Take a look at the sustainability report of a utility company, a consumer goods company, and a company from the financial service industry and determine the scopes of greenhouse gas emissions that these companies report.
Do you see any differences in what is reported by the companies?
Also, compare the amounts of CO2e of the different scopes reported and explain the differences
with respect to the different industries the companies belong to.

Task C6-4

Do some Internet research and identify carbon emission targets by different companies. Do the companies set absolute or relative targets, or both?
Are any of these approaches better, and if so: why and under which circumstances?
Also compare carbon emission targets across different industries and among companies that
belong to the same industry.
What do you see, and what do you think ?

Task C6-5

Identify different providers for offsetting and compensation projects on the Internet. What do they do to offset greenhouse gas emissions?
What information can you get from the different providers on the aforementioned five criteria for high-quality carbon offsetting schemes?
Which one would you prefer for offsetting your own greenhouse gas emission and why?

C.7. Sustainability management control

Learning Goals

After reading this chapter you will be able to .
. differentiate various types of codes of conduct and critically reflect on their usefulness and
applicability.
. illustrate the content of the UN Global Compact and ISO 26000 as examples for codes of conduct.
. explain the general approach of management systems and management system standards.
. illustrate the content and procedures of ISO 14001, EMAS, and SA8000 as examples of
management system standards.
. explain the sometimes subtle differences between-and potential hybrid forms of-codes of
conduct, management systems, and management system standards.
. critically reflect on audits and certification processes.
. explain different types of sustainability balanced scorecards.
. outline the development of a sustainability balanced scorecard.

Task C7-1

Throughout this book, we discuss various sustainability-related management tools, and there are many more standards, codes, labels, etc., available to choose from. Some examples are listed below. Without going into details of the nature and content of the examples below: Find out who stands behind the respective tool (i.e., who created and currently manages it) and whether their focus is thematic or sectoral or superordinate. You can refer to other parts of this book or, if the respective instrument is not explicitly mentioned, carry out some Internet searches.
Eco-Management and Audit Scheme (EMAS), Ethical Trading Initiative, Forest Stewardship Council (FSC), Global Sullivan Principles, ISO 14001, ISO 26000, Marine Stewardship Council (MSC), OECD Guidelines for Multinational Enterprises, SA8000, UN Global Compact

Task C7-3

How could the rules of the UN Global Compact be changed so that critics would be satisfied? Do
you see any drawbacks of such changes?

Task C7-4

How would you characterize the UN Global Compact, ISO 26000, and the Enron code of conduct according to the following dimensions (where possible, conduct some Internet research if necessary): issuer of the code, nature of the content (principle-based codes and rule-based codes), comprehensiveness of the content, target audience, degree of voluntariness (and for whom)?

Task C7-5

What do you think are the main areas of application for SA8000? For which types of companies is SA8000 suitable and for which types is it not? For example, in which geographical regions or industries does it make sense to have a facility certified? Does it make more sense to have a facility certified in Canada versus in Vietnam? And is it more helpful in the financial service industry than in the textile industry or vice versa? What other factors could be relevant (e.g., position in the supply chain or size of the facility) and why?

Task C7-6

Discuss the potential barriers and benefits of SA8000. When or why might they be relevant? How could the benefits be reaped and the barriers be overcome? How could other stakeholders facilitate the distribution of SA8000 and its requirements? When looking at the barriers and benefits, why do you think SA8000 is far less widely used than ISO 14001 and EMAS?

Task C7-7

The CEO of a company that does not yet have a strong sustainability agenda sees the need for integrating sustainability further into her organization. Some internal stakeholders, especially some of the other members of the board of directors, are skeptical about sustainability management and fear that extended sustainability activities will only drive costs. The CEO wants to implement sustainability aspects into the balanced scorecard to bring the topic forward. She asked you for your advice on how to proceed. What are the benefits and drawbacks of the different sustainability balanced scorecard designs for the company? Which design would you eventually suggest and why? Would your suggestion be different if the company was an industry leader in sustainability?

Task C7-8

Follow the step-by-step approach introduced above. (1) Identify a business unit for a company (or think of a fictitious company) in an industry for which you have some solid knowledge. What is the general strategy and vision/mission of this business unit? Based on this starting point: Develop the outline of a sustainability balanced scorecard. You may choose from any of the architectures discussed above. (2) Identify the sustainability exposure separately for strategically relevant environmental aspects and social aspects. For environmental aspects, refer to the list of emissions (to air, water, and soil) including radiation, waste and waste heat, material and energy input, noise and vibrations, and direct interventions on nature and landscape. For social aspects, identify stakeholder groups and the social claims and issues brought up by them. (3) Determine the strategic relevance of the identified sustainability aspects by identifying lagging indicators for strategic core issues and leading indicators for performance drivers.

Sustainability Reporting

Learning Goals

After reading this chapter you will be able to .
. differentiate various forms of sustainability reporting.
. explain different types of materiality.
. explain the different elements and principles of the GRI standards for sustainability reporting.
. explain the relevance of and procedures for climate-related disclosure according to the CDP.
. explain the idea of integrated reporting as well as its potential benefits and drawbacks.
. discuss the relevance as well as different types of assurance in sustainability reporting.

Task C8-1

Compare the sustainability reports from two companies from the same industry by referring to
the GRI principles.
What do you think they have done well, and where do you see room for improvements?
Do you, as a report user, feel well informed about the two companies' sustainability performance
and activities or would you require additional (or maybe less) information?
If necessary, consult the GRI 1 standard (freely available via the website of the GRI) for more information on the principles.

Task C8-2

Read the assurance statements of two recent sustainability reports. Do you see any differences in the assurance process or in the tasks conducted by the auditing company? What can you learn from these statements and what not? For example, what did the assurers do to come to their verdict, and is there anything else that could be done to improve confidence in the disclosed information and in the assurance process? What information from the sustainability reports was subject to assurance? Do you find a limited or a reasonable assurance statement?