After Reading This Chapter

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CHAPTER 5:
After reading this chapter…
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Laasch, O. & Conaway, R. (2016). Responsible Business: The Textbook for Managem ent Learning, Com petence
and Innovation. Sheffield: Greenleaf Publishing.
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© 2015 Cengage Learning. All Rights Reserved. M ay not be copied, scanned, or duplicated, in whole or in part, except for use as perm itted in a license distributed with a certain
product or service or otherwise on a password-protected website for classroom use.
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¡ The Australian Nhunggabarra

§ “Law stories” constituting social, economic, and ecological rules
¡ Polynesian Maori people in New Zealand
§ Kaitiakitanga system of penalties and rewards
§ “Guardianship” realized through resource management system
§ Declaration of “Rahui” or untouchable, death sentence for
violators
¡ Easter Islands versus Tikopia
§ Overharvesting trees on the Easter Islands
▪ Consequences: Soil and sweet water loss, resource wars, reduction two
thirds reduction of population
§ Tikopia hits resource limits
▪ Consequences: Practices sustainable agriculture, take measures to
control human population, and species affecting the ecosystem (pigs).
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¡ Age of discovery and colonialism

§ North-south divide
§ “Outsourcing” of resource limitations
¡ First industrial revolution
§ Factories
§ Population explosion
¡ Second industrial revolution
§ Petroleum-based production
§ Dependence on fossil fuels
¡ Green revolution
§ Monoculture, chemical fertilizers, and pesticides
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¡ Warnings
§ Malthus versus Condorcet, Cree-Prophecy, The
Limits to Growth, Silent Spring
¡ Concepts
§ Ecology, external effects and social costs,
sustainable development
¡ Management tools
§ Life-cycle assessment, triple bottom line, cradle-
to-cradle
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¡ Conference on the Human Environment

(UNCHE), 1972
¡ Rio Earth Summit, 1992
¡ Kyoto Protocol, 1997
¡ World Business Council for Sustainable
Development (WBCSD), 1990
¡ Global Reporting Initiative (GRI), 1999
¡ Milennium Development Goals (MDG), 2005
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¡ Human Footprint
§ In 1975: 1 Earth (=sustainable)
§ In 2010: 1,5 Earths (=unsustainable)
¡ World population growth
§ In 2011: 7 Billion people
§ In 2050: 9 Billion people
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¡ Scenario 1: Society and environment win

¡ Scenario 2: Society wins and environment
loses
¡ Scenario 3: Society loses and environment
wins
¡ Scenario 4: Society and environment lose
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¡ Sustainable development is a development

that meets the needs of the present, without
compromising the needs of future
generations.
§ Intergenerational justice means that what we do
today must both meet our needs and not interfere
with the needs of coming generations
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¡ Social capital
§ is any qualitative value directly embodied in
human beings.
¡ Environmental capital
§ (often called natural capital) quantitatively
comprises the amount of both renewable and
nonrenewable natural resources.
¡ Economic capital
§ is expressed in monetary terms.
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WEAK SUSTAINABILITY STRONG SUSTAINABILITY
¡ Fragmentation ¡ Holism
¡ Substitution ¡ Complementation
¡ Status quo ¡ Change
¡ Masters ¡ Equals
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¡ Weak sustainability
§ is a conformist, conservative, and uncritical
approach to sustainable development.
¡ Strong sustainability
§ takes unconventional stances and approaches to
criticize, challenge, and change existing beliefs
and structures.
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¡ Process or outcome
¡ Intergenerational or intragenerational
¡ Short- or long-term thinking
¡ Well-having or well-being
¡ Development or growth
¡ Growth or de-growth
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v The Kuznets curve is named after the economist Simon

Kuznets, who revolutionized the understanding of
relationship between economic development and wealth
inequalities.
Ø the effect of an aspired future economic development
of poor countries and sustainability.
Ø evaluates the impact economic development has on
the two crucial components of sustainable
development, environmental degradation and the
degree to which wealth is equally distributed between
the rich and the poor.
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¡ Recommended strategies
1. Economically underdeveloped and developing countries
(categories 1 and 2)
Ø should harness the learning of already economically
developed and sustainably developing countries.
Ø the policy goal must be to achieve economic growth
and welfare while keeping inequality and pollution
inside the sustainability threshold.
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¡ Recommended strategies
2. Economically developed and sustainably developing
countries (categories 3 and 4) must follow the primary goal
of increasing equality and bringing their industries´ and
citizens´ environmental impact within the planetary
resource limits.
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¡ A footprint
§ sums up one or several types of environmental,
social, or economic impacts for one predefined
entity.
¡ Exemplary footprints
§ Water footprint of a product
§ Triple bottom line of a company
§ Global footprint of humanity
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¡ A situation in which resource usage exceeds

the global resource reproduction rate is
unsustainable.
¡ When both correspond exactly, the situation
is neutrally sustainable.
¡ When fewer resources are used up than are
reproduced, the situation is termed
restorative or restoratively sustainable.
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¡ Sustainability management
§ is the process of managing a business and every
single one of its activities in a way that makes it
reach a neutral or positive triple bottom line.
¡ Central terms
§ Sustainable business
§ Triple bottom line
§ Impacts
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¡ The triple bottom line

§ is the social, environmental, and economic performance
of an organization or single activities. It is calculated by
summing up all impacts.
¡ An impact
§ is a negative or positive value created through business
activity. Impacts may be categorized as social,
environmental, or economic.
¡ A sustainable business
§ is one that has reached a neutral or even positive triple
bottom line and sustains social, environmental, and
economic capital in the long run.
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¡ Below-average unsustainable business

§ exerts a net negative triple bottom line impact on economy, society, and environment
that is below the impacts of peer businesses.
¡ Average unsustainable business
§ exerts a net negative triple bottom line impact on economy, society, and environment
that corresponds to the impact of a majority of its industry peers.
¡ Sustainable business
§ exerts a small net negative triple bottom line impact that does not exceed the planetary
system’s restorative capacity.
¡ Neutral impact business
§ exerts a net neutral triple bottom line impact on economy, society, and environment.
¡ Restorative business
§ exerts a net positive triple bottom line impact, which means it replenishes at least one
type of capital while not depleting any of the others.
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¡ The life-cycle assessment (LCA) is the process of

mapping social, environmental, and economic
impacts along the stages of production, use, and
end-of-useful life of a product.
§ ELCA
§ LCC
§ SLCA
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¡ Balance (optimize)
§ triple bottom line impacts to move toward
sustainability.
¡ Eliminate
§ waste in whatever form.
¡ Scale
§ your sustainability management practices to have
a larger impact.
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I. Sustainable development is a development that meets the needs of

present generations without compromising the needs of future
generations.
II. Sectorial sustainability is a necessary precondition to reaching
sustainable development. The three sectorial sustainability goals are
sustainable business, sustainable living, and sustainable governance.
III. Three types of capital have to be sustained and balanced in order to
reach sustainable development: social, environmental, and economic
capital. Those three capitals comprise the elements measured by the
triple bottom line.
IV. The triple bottom line sums up all social, environmental, and economic
impacts of an activity.
V. An unsustainable business is one with a negative triple bottom line; a
sustainable business is one with a neutral one; and a restorative
business has a positive triple bottom line.
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VI. Sustainability management is the process of managing a business and

every one of its activities in a way that reaches a neutral or positive
triple bottom line.
VII. The sustainability management process is based on the tool of
product life-cycle impact management and can be subdivided into two
main activities: impact accounting and impact management.
VIII. Product life-cycle impact management administers all social,
environmental, and economic impacts of a product through the stages
of production, use, and end-of-useful product life.
IX. The stages of life-cycle impact management are (1) goal and scope
definition, (2) life-cycle inventory, (3) life-cycle impact assessment, and
(4) life-cycle interpretation.
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3/14/21

After reading this chapter…

¡ The Australian Nhunggabarra

¡ Age of discovery and colonialism

¡ Conference on the Human Environment

¡ Scenario 1: Society and environment win

¡ Sustainable development is a development

WEAK SUSTAINABILITY STRONG SUSTAINABILITY

v The Kuznets curve is named after the economist Simon

¡ A situation in which resource usage exceeds

¡ The triple bottom line

¡ Below-average unsustainable business

¡ The life-cycle assessment (LCA) is the process of

I. Sustainable development is a development that meets the needs of

VI. Sustainability management is the process of managing a business and

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