1/19/22

Welcome to

Sustainability & Business (SuB)

PGP 25: Term III

Prof. Venkataraman S
Indian Institute of Management Kozhikode
Office: Block 3/Room # 9

Sustainability & Business (SuB) : Key Course Themes

• Sustainability: Basics
• The Imperatives
• Foundational issues, concepts & philosophies
• Complexities
• Sustainability & Business / Corporate Sustainability (CS)
• Imperatives, Issues, Debates
• Challenges in execution
• CS and Corporate Social Responsibility (CSR) – Evolution
• Reporting on CS and related aspects/ CSR Law in India
• Operationalizing Sustainability
• How do corporates go about creating a CS plan?
• Materiality
• Business case/ Integrative aspects
• Practitioner perspectives

1
 1/19/22

Course Evaluation

• Class Participation : 15%

• Group Assignment : 30%
• (Include Individual Component)

• Quizzes/Continuous Eval. : 20%

• End Term Examination : 35%

Group Assignment: Analysis of current CS practices in any industry

• Pick an industry
• Pick 6 (or 5 firms) within the industry
• Global + Indian /Emerging
• One to each group member
• Access/Download & Read CS reports for at least 3 years
for each firm
• Compare & Contrast practices
• Synthesize
• Sense-make
• Analyse/Wonder/Speculate – Trends, Choices, Quality,
Quantum
• Deliverables
• Group Presentation : 10%
• Group Report – 2 pager – Summary Insights (prose) : 10%
• Individual Report – on chosen firms (prose) : 10%

2
 1/19/22

What is the Sustainability Issue?

Sustainability : A Few Definitions

• Meeting the needs of the present without
compromising the ability of future generations
to meet their own needs (WCED 1987)
• Improving the quality of human life while living
within the carrying capacity of supporting
ecosystems (IUCN 1991)
• Economic growth that provides fairness and
opportunity for all the world's people, not just
the privileged few, without further destroying
the world's finite natural resources and carrying
capacity (Pronk and Haq 1992).

3
 1/19/22

(Un) Sustainability :
The contours and magnitude
of the problem

Human Development:
Is it Sustainable?

4
 1/19/22

Human Development is
Unsustainable

https://www.youtube.com/watch?v=hY9HEvE31Iw&t=32s

Hiware Bazar

10

5
 1/19/22

Cases

• Vittel – Nestle

• Makaibari Tea

• New York Catskills Watershed Management

11

Whose Sustainability?

12

6
 1/19/22

Ecological Sustainability: Key Questions & Issues

Stage 1. In deciding
• What is to be sustained? That is, what relative ranking is to
be given to, say, current resource productivity, productive
potential, or genetic diversity?
• What attributes, or combinations of attributes, of a
particular system are to be maintained non-decreasing:
average productivity, stability, resilience, or adaptability?
• Over what time scale is this sustenance desired?
• Who is to benefit? If a trade-off is necessary between
current and future consumption and well-being, or
between the well-being of one community and that of
another, who is to decide and how?
• Should it be economic value of any resource flow or stock
that is maintained non-decreasing, or should it be the
physical quantity of that flow?

13

Ecological Sustainability: Key Questions & Issues

Stage 2. In understanding,

• Why is there environmental unsustainability,

however defined, in the world today?

• How would one achieve or move toward

whatever notion of an environmentally
sustainable society that is decided on in Stage 1?

14

7
 1/19/22

Ecological Sustainability: Related Key Questions

• Are current practices for transforming natural
resources into flows of economic goods and services
sustainable according to the indicated definition?
• If not, in what respects and by what margins is sustainability
violated?
• Can the larger flows of goods and services required to
shrink the gap between rich and poor, or the still
larger flows required to meet the needs of a doubled
or tripled population, be delivered sustainably by
expanding current practices or by using improved
practices that are already known?
• .. Or would sustaining larger flows require improvements
over the best practices now known?

15

Sustainability: The 3 Pillars

• Ecology
• Society
• Economy

16

8
 1/19/22

17

Global Wealth Inequality

https://www.youtube.com/watch?v=uWSxzjyMNpU&t=31s

18

9
 1/19/22

.. Which Implies??

We need a different World-view

19

Successfully Sustainable Human Societies

• As attuned as possible to their local and regional
environments / geo-ecological support systems
• Lifestyles must be adapted to the ecosystems in
which societies live and which support them
• Cultures, practices, economic systems, and
governing policies each adjusted to fit their area
• Not a single dominant culture or way of living
spread across the globe
• A world of multiple, diverse societies
• Numbers also adjusted to what regional geo-
ecological support systems can sustain.

20

10
 1/19/22

Change the Rules

• https://www.youtube.com/watch?v=ACke28f3swE

21

So…
Why is the Onus on
Business?

22

11
 1/19/22

Milton Friedman

“The Business of Business is Business”

“There is one and only one social

responsibility of business—to use its
resources and engage in activities designed
to increase its profits so long as it stays
within the rules of the game, which is to say,
engages in open and free competition
without deception or fraud.”

23

So, Why is the onus on Business?

• Business & Industry responsible for much of the
problem
• Unbridled growth and the manner of growth…
• Industrial revolution and progressive advancements
• Human progress at the cost of humanity, flora and fauna
• Rampant exploitation of natural resources
• Resources depleted at a rate greater than at which they replenish
• Resultant increase in natural calamities
• …driving a frenzy of increasing consumerism over
the last 4-5 decades
• Exponentially inequitable wealth distribution also
driven by business..hand-in-glove with politics
• Greed and unethical practices
• Financial crisis of 2007/2008

24

12
 1/19/22

So, Why is the onus on Business?

vOf the 100 largest economic entities in the world, 51
are corporations; 49 are countries.
vThe Top 200 corporations' combined sales are bigger
than the combined GDP of all countries minus the
biggest 10.
vThe Top 200s' combined sales are 18 times the size
of the combined annual income of the 1.2 billion
people living in "severe" poverty.
vWhile the sales of the Top 200 are the equivalent of
27.5 percent of world economic activity, they employ
only 0.78 percent of the world's workforce.

25

So, Why is the onus on Business?

• Business is also best placed to tackle the problem
• Addressing the source of the problem
• “We cannot solve our problems with the same ways of
thinking that produced them” (Albert Einstein)
• Superior access to resources
• Financial and Material
• Managerial
• Networks
• Speed
• Tackling this is in business’ enlightened self-interest
• Therefore… , Responsible Business, CS/ CSR

26

13
 1/19/22

Differing Perspectives re: “Sustainability”

Bansal, 2002

27

We need a change in mindset…

One of the largest barriers to sustainable
development is its failure to be
institutionalized in the minds of key
stakeholders

Only when sustainable development is

valued and accepted as the norm by
organizational stakeholders will organizations
subscribe to its principles
Bansal, 2002

28

14
 1/19/22

“Capitalism is under siege …

The purpose of a business must be redefined
around creating shared value …
How to reinvent capitalism—and
unleash a wave of innovation and growth”

Michael Porter and Daniel Kramer, HBR, Jan-Feb 2011

29

Base-of-the-Pyramid

The business can contribute to social

development even if governed by
business objectives

Developmental initiatives from the

business entities will be sustainable and
scalable only if they make business sense

30

15
 1/19/22

So what does
Corporate Sustainability/ CSR
mean in practice?

31

Next Big Trends

&
Implications for Business

32

16
 1/19/22

Next Big Trends

33

Next Big Trends

Source: SustAinability, 2019

34

17
 1/19/22

Implications for Business

Source: SustAinability, 2019

35

Implications for Business

Source: SustAinability, 2019

36

18
 1/19/22

Implications for Business

Source: SustAinability, 2019

37

Implications for Business

Source: SustAinability, 2019

38

19
 1/19/22

Case: ABB-Hydro

39

ABB - Hydro

1. How did ABB’s sustainability strategy evolve?

2. What are the sustainability-related trade-offs
in dam projects?
3. Would the NT2 dam and the International
Rivers letter pose a reputation risk for ABB? Why
or Why not?
4. As Roscoe, what would you do as of April
2010? Would you change ABB’s sustainability
criteria and objectives, and if so, how?

40

20
 1/19/22

Equator Principles
• Launched: 2003. Now 116 FIs, 37 Countries
• Applicable to financing projects above a certain
threshold
Principle 1: Review and Categorisation
Principle 2: Environmental and Social Assessment
Principle 3: Applicable Environmental and Social Standards
Principle 4: Environmental and Social Management System and
Equator Principles Action Plan
Principle 5: Stakeholder Engagement
Principle 6: Grievance Mechanism
Principle 7: Independent Review
Principle 8: Covenants
Principle 9: Independent Monitoring and Reporting
Principle 10: Reporting and Transparency
https://equator-principles.com/about-the-equator-principles/

41

Stakeholder Configurations & Strategic Actions

Friedman & Miles, 2002

42

21
 1/19/22

R-D-A-P Scale : A Stakeholder Response Framework

Clarkson, 1995

43

22
 1/31/22

Welcome to

Sustainability & Business (SuB)

PGP 25: Term III

Prof. Venkataraman S
Indian Institute of Management Kozhikode
Office: Block 3/Room # 9

1
 1/31/22

Barry Callebaut
• Should the board follow Jacob’s lead
and back his push for real action on
sustainability? Why/ Why not?
• What would real action on sustainability
look like?

What can be/ can lead to Real Action on Sustainability?

2
 1/31/22

For the Next Session…

• Read up and get familiar:
• Global Reporting Initiative (GRI)
• United Nations Global Compact (UNGC)
• Two Concepts: Corporate Social Responsibility and
Corporate Sustainability
• Compare and Contrast
• Reflect
• CSR Law in India and implications
• Critique – What are the positives? What could be the issues?

Corporate commitment to sustainable development is rooted on a belief that

the key to long-term viability is the locus of sound environmental stewardship,
social responsibility and business success - The Triple Bottom Line

Corporate Sustainability Principle: It’s about achieving a balance among the

three
Ecology Social
Economy Responsibility

+$ %
€
Sustainable Development

3
 1/31/22

Triple-Bottom Line

Hart, 1997

4
 1/31/22

Hart,
1997

Hart, 1997

10

5
 1/31/22

Framework Linking Sustainability Strategy to Shareholder Value

Companies that perform well in all 4 quadrants maximize shareholder value over time

Stuart Hart & Mark Milstein. 2003. Creating Sustainable Value. Academy of Mgmt Executive, 17:2.

11

Let’s pause a bit ...

12

6
 1/31/22

This Course : Intended Learning

• What is Sustainability? What are the core
issues ?
• Where does business fit in with this idea?
• What should we understand by Corporate
Sustainability/ Corporate Social Responsibility
• What/How are various businesses – around the
world- engaging with this agenda?
• What can we/I do about this going forward?
• As a corporate executive/ entrepreneur
• As a community member/ citizen
• As an individual
• How can I contribute to a better world?

13

Sustainability & Business: At the Core

• The Context: Unprecedented and humungous scale of ecological
degradation and social inequity/inequality
• The Drivers: Unbridled growth, consumerism, exploitation and
greed
• The Dire Need:
• A different world-view
• Change the rules: Inspire/nurture an alternative narrative
• Business :
• Prime culprit (though not the lone one)
• Prime resources and capabilities to make a difference/ the potential to
influence
• Needs to pursue sustainability in enlightened self-interest
• What should/can be done:
• Redefine Business Purpose around creating shared value …. reinvent
capitalism
• A paradigm shift

14

7
 1/31/22

Emerging Paradigm of Strategic Management:

Shareholder Value Maximization Sustainable Development

Ethical/
Humane

Sustainable
Economic Environmental
Development

Social

Calls for a paradigm - shift

‘Exploration - Exploitation’ à ‘Conservation - Restoration -Rejuvenation’
‘Compliance’ à ‘Beyond Compliance – Setting Standards’
‘Maximizing’ à ‘Balancing – Optimizing’

15

Hans Solar

16

8
 1/31/22

Hans Solar – Green Supply Chain

• Do you think Han Solar’s green strategy will increase
shareholder returns? List some other possible impacts of
sustainability efforts.
• What is the carbon footprint of the manufacturing
process?
• What is the carbon footprint of each distribution
network?
• Are there any other activities or processes that need to be
considered for the carbon footprint of photovoltaic
panels?
• What is the best network alternative to supply
photovoltaic panels to California?
• What should Han Solar do in the short and medium term?
Do they need to open a position for a sustainability
executive?
17

Manufacturing GHG Calc : For One shipment

• Total GHGs emissions of the manufacturing
process =
• Total Energy Reqmt. (642.58 MJ/panel) x [277.78
kWh/MJ] x Electricity factor per country
[g/CO2eq/kWh]
• 1 shipment= 1000 panels x 12.5 kg /panel = 12500 kg

Country Carbon footprint of Manufacturing

g/CO2 eq.
China 14,06,54,747
Germany 6,22,95,059
Mexico - average 9,19,25,374
Mexico – NW grid 5,31,91,770
Norway 10,70,975
USA - average 10,22,78,135

18

9
 1/31/22

Route Impact
1 shipment= 1000 panels x 12.5 kg /panel = 12500 kg
• For each Route type:
GHG factor for a mode of transport[mg-CO2 eq./km.kg] x
Distance[km] x
Cargo_wt[kg] x
1000 {Conversion_factor [g/1000 mg] }

Eg: MX – CH: 334 x 200 x 12500 /1000

19

Network Analysis

Network Analysis Carbon footprint

g/CO2 eq.
CH to CA (air) 16,02,00,000
CH to CA (ship) 16,80,250
CH to MEX (air) + MEX to CA (truck) 16,30,37,500
CH to MEX (ship) + MEX to CA (truck) 25,53,750
GE to NJ (air) + NJ to CA (rail) 32,78,750
GE to CA (air) 11,34,75,000
GE to NJ (air) + NJ to CA (truck) 1,65,22,500

20

10
 1/31/22

Key Takeaways: Points to Ponder

• System Boundaries
• Low hanging fruit? (But not getting stuck there!)
• Lead time considerations – How relevant?
• Network decisions
• Cost
• Environmental impact
• What’s the company’s (renewed) strategy ?
• Reducing environmental impact is not enough
• Improvements should be communicated to target customers
• Highlight unique brand aspects to differentiate from
competitors, where possible
• Operations efficiency and brand recognition aligned to
business strategy, so that all incentives point to the same goal
• Other angles: Report ahead of competition, Employee connect

21

Patagonia

What’s this case about?

22

11
 2/5/22

Innovation ~ Sustainability
Innovation

Innovation ~ Sustainability Innovation

• Innovation: “the generation, acceptance, and
implementation of new ideas, processes,
products, or services.” (Thompson, ASQ, 1965)
• “fresh thinking/ new ways – of creating value/
competitive advantage”
• Sustainability Innovation:
• …. that positively impact all stakeholder-groups, in
the short and long term

1
 2/5/22

Point to Ponder

• How can we conceptualize different levels

of sustainability innovation?

Conceptualizing Innovation -1

2
 2/5/22

Conceptualizing Innovation -1

Radical
Ambercycle developing
enzymes to break down
PET, so that it can be used
more efficiently
Incremental
Aquafina’s decision to
decrease the amount of
plastic in its water bottles
by 50%
Transformational
Newlight Technologies -
“AirCarbon” technology -
Captures greenhouse
gasses and combines them
with oxygen to create a
carbon-negative plastic
Game Changing
Terracycle - Creating a new
supply chain in the
fertilizer industry through
harvesting worm poop and
packaging it in bottles it
collects

Patagonia
• What’s noteworthy about Patagonia’s
sustainability journey?
• Why did Patagonia switch to organic cotton,
despite the costs?
• What was so innovative about the Common
Threads and Worn Wear initiatives?
• Sustainability Innovation
• How effective was the "Don't Buy This Jacket"
campaign? Was this a sustainability innovation?
• What’s the problem now? What’s the challenge
here?
6

3
 2/5/22

Conceptualizing Innovation -2

Conceptualizing Innovation -2

Transformational
Patagonia – Common
Threads Initiative

Patagonia –
“Don’t Buy This Jacket” Game Changing
Campaign Patagonia – Switch to
Organic Cotton

4
 2/5/22

Patagonia
• What’s noteworthy about Patagonia’s
sustainability journey?
• Why did Patagonia switch to organic cotton,
despite the costs?
• What was so innovative about the Common
Threads and Worn Wear initiatives?
• Sustainability Innovation
• How effective was the "Don't Buy This Jacket"
campaign? Was this a sustainability innovation?
• What’s the problem now? What’s the challenge
here?
9

Points to Ponder
• Sustainability measure being accompanied by higher
revenues/ profitability/ a business case – a real good thing
• However… it may be dangerous to argue for the business
case for sustainability – not such a good thing!
• Managers force themselves to first develop a business model
before developing the sustainability agenda
• In such cases, sustainability best practices are not always
achieved - often mediocre or satisficing, at best
• What can we do instead? Maybe:
• Develop a strong sustainability agenda and promote a
sustainability innovation before seeking profitability
• Business models will naturally emerge or leaders will find ways
of developing them

10

5
 2/5/22

Points to Ponder
• Important not to curb creativity and sustainability
potential by always focusing on profitability or
worse, short-term profitability
• Sustainability innovation vs. traditional
innovation
• Patagonia
• It would not have been initially obvious that the
company would successfully be able to convert to a
much more expensive supply of cotton.. Or…
• … encourage consumers to keep their clothes longer
and repair them, rather than buying new Patagonia
(or other) products

11

CS: An evolving ~ iterative agenda

• Many firms – business as usual/ lip service
• Some firms may establish a sustainability agenda to
improve impact on their stakeholder systems.
• A few of these companies will really act upon these
agendas.
• Fewer still will continue to iterate upon them.
• Sustainability is an ever-evolving journey!
• How do “we” push our comfort boundaries, to make it
ever-evolving?
• Can we be bold enough to prioritize sustainability
objectives over profitability?
• Will new business models naturally evolve?
• Should a firm wait for consumers to push?
• Can a firm include a challenge to consumerism in its
sustainability strategy and still remain profitable?

12

6
 2/5/22

Comparing & Contrasting

Corporate Sustainability (CS)

&
Corporate Social Responsibility (CSR)

13

Contrasting CS & CSR

• Corporate Sustainability
• Focus on Balancing Resource Usage Over Time
• Inter-generational & Intra-generational
• Corporate Social Responsibility
• Balancing Current Stakeholder Interests
• Grounded in Ethics, Morality & Norms

Bansal & DesJardine, 2015

14

7
 2/5/22

Clarifying

What is an appropriate approach to

Corporate Sustainability (CS) ?

15

What Corporate Sustainability.…Is

• Corporate Sustainability (CS)
• It is not so much about contributing to society and
ecology from the profits firms generate;
• ..as it is about caring/contributing to society and the
ecology in the process of generating profits;
• a huge distinction between the two
• It is striving for a business model that is at once:
• Ecologically sustainable (Planet)
• Socially Responsible (People)
• Economically sustainable (Profits) … and
• Humanistic

16

8
 2/5/22

What Corporate Sustainability ... Is Not !

• CS is not (just) corporate philanthropy
• Eg: Hospitals, Schools etc
• Eg: Contribution to disaster relief
• Eg: Supporting culture, sports and arts
• ….
• CS is not just “greening” of the business
• Pollution control
• LEED certified buildings
• Energy saving schemes
• ….
• ..all these are important, but visionary CS goes beyond
this
• Strategic CS seeks to INTEGRATE sustainability strategies
within business strategies … rather than seeing them in
silos

17

A Strategic approach to CS
• Recognizes that CS is contextual…
• A mining company is not the same as an automaker or a
bank or a software firm
• Different
• Value chain
• Carbon & social footprint
• Natural potential for ecological and social impact
• Yet, every company can/should have a CS strategy
• … and therefore sees CS strategies as necessarily
differing from business to business
• Recognizes that:
• CS (often) can be a business opportunity
• CS can create competitive advantage
• CS is an imperative for the sustainability (survival or
longevity) of the business itself
• CS is integral to business

18

9
 2/5/22

CSR Law in India

19

The Mondragon Co-ops.

20

10
 2/5/22

The Mondragon Co-ops (TMC)

• Should TMC supply additional funds to
Fagor?
• How should TMC’s decision impact its
broader strategy?

21

Should TMC supply additional funds to Fagor?

• From a financial standpoint, , possibly No
• From a social mission standpoint, the solution is “complicated”
• Questions/Issues to ponder:
• What would Arizmendi do if he were faced with this problem?
• Providing Fagor with more money would help it fight off its debt. But will it
help Fagor truly recover? Is the issue more chronic?
• Other cooperatives have been struggling in the recession and have been
supplying funds to Fagor
• They will therefore likely run the risk of running into financial trouble as well.
• In the past, employees from Fagor would be spread around to other
cooperatives within the Mondragon group. Now, Fagor is so large that this is
not easy
• Will €180 million or a significantly smaller amount be better spent helping
transfer Fagor’s workforce to other cooperatives within Mondragon or to
external companies?

TMC should therefore invest its resources in helping its members (in Fagor) find
secure livelihoods and let Fagor file for bankruptcy. Not doing so would hurt the
other cooperatives and therefore the members within them, not to mention
the members of Fagor, who would receive significantly less support if Fagor
were unable to weather the storm.

22

11
 2/5/22

How should TMC’s decision impact its broader strategy?

• Many of the founding principles in the Mondragon coops are no
longer in effect as a result of the scale many coops have reached
• In the mid-1960s, leaders agreed it would be prudent to limit the size of
cooperatives to 500 employees
• Fagor grew to nearly 11,000 people after acquiring Brandt
• The wage differential, which had been pegged at 1:3 increased to 1:11 by
2002
• The gap can be assumed to be much larger now
• Rather than spin off new coops when scaling to achieve
economies yet minimize risk, Fagor and other cooperatives
continued to grow.
• While it is too late to fix Fagor’s problems, Mondragon can at least
help other coops adjust their growth strategies or restructure to
mitigate risk.
• As such, TMC could:
• Possibly enforce the development of feasible downsizing strategies by its
coops.
• This would help highlight risks that larger coops in the group face, such as
Eroski (a chain of supermarkets) or Laboral Kutxa (a network of banks).

23

What Happened
• TMC did not finance Fagor’s debt and embarked upon a strategy it
coined “multi-localization”
• The general council voted unanimously not to finance Fagor’s debt
• Instead of €180 million, Fagor needed closer to an additional €300 million but
would still be in a dire situation.
• Rather than risking the financial security of the other tens of thousands of
members in the group, TMC determined it would be more prudent to shift its
efforts into relocating Fagor’s workforce.
• Consequently, Fagor filed for bankruptcy after being unable to find an
alternative backer for its debt.
• Larger coops within the group also began restructuring, largely owing
to the costly lesson of Fagor.
• Eroski, the supermarket chain, and TMC’s largest cooperative with
about 40,000 employees, began focusing on their core areas and
selling various parts of their business that they consider a distraction.
• TMC’s broader multi-localization strategy is still being implemented.
• The primary focus is to replicate the Mondragon experience elsewhere as
opposed to “internationalize” it

24

12
 2/5/22

Fiji Water and CSR

25

Fiji Water
• What is greenwashing and how can it be identified?
• Do you think FIJI Water is engaged in greenwashing?
What could the company do to gain environmental
credibility?
• Are the Fiji government's concerns about the "negative"
contribution of the FIJI Water to the local economy
justified?
• What else should/can the company do to improve its
CSR performance and its relations with the Govt/
Community?
• Critique - compare and contrast Fiji water's approach
and that of Patagonia

26

13
 2/5/22

Greenwashing or Not: Checking FIJI Water’s Claims

• In Nov 2007, FIJI Water announced an aggressive sustainable
growth program that included a commitment to become carbon
negative beginning 2008. Have they achieved this publicly stated
goal?
• Has FIJI Water purchased any permanent and verifiable carbon offsets?
• Has it taken any action to convert its plant to renewable energy, such as
wind to power its factory in Fiji, and biofuel to replace traditional diesel used
in transportation and other applications?
• Has an independent carbon auditor (e.g. ICF International) reviewed and
verified the company’s carbon footprint and reported it to consumers?
• Has FIJI Water lived up to its claim to publicly report its progress against its
targets on an annual basis? (It had promised transparency of its carbon
negative commitment and to annually report on its progress against the
announced targets)
• What actions has it undertaken to implement a major program to
permanently protect the Sovi Basin, Fiji’s most important land ecosystem,
from logging? Has FIJI Water allocated funds to a Sovi Basin trust fund? If so,
when did FIJI Water allocate the funds and how much money has been given
to the fund?

27

Greenwashing or Not: Checking FIJI Water’s Claims

• Is a firm making misleading environmental claims?
• Are the claims substantiated with accurate independent
data from a reliable institution that has assessed the firm’s
performance?
• E.g: What evidence has FIJI Water produced to substantiate its
marketing slogan that “every drop is green”?
• Has the company made claims which may lead consumers
to think that FIJI Water has already put in place measures
that have made its products carbon negative?
• Has FIJI Water made false environmental claims to
differentiate its products from those of its competitors?
• Have the marketing activities of FIJI Water caused any
confusion in the marketplace about the environmental
footprint of its products?
• Is its slogan “every drop is green” a vague and non-specific
greenwashing type of claim that is too general to be of any
use to consumers when trying to make an informed
decision?

28

14
 2/5/22

FIJI Water: Improving CSR: Possible Measures

• Provide more information on its website on the progress it is making in achieving its
environmental targets and its community development goals.
• Release information in a transparent manner about the amounts of money it has
given to specific CSR activities such as to the Sovi Basin Trust Fund.
• Meet with representatives of the main NGO conservation groups in Fiji to discuss
effective approaches to promote the conservation of Fiji’s tropical rainforests and
work in partnership with effective NGOs.
• Hold consultations with the government and other key stakeholders to discuss more
effective measures to increase the percentage of plastic drink bottles that are
recycled. A refundable deposit scheme might be appropriate in countries where it
has not been implemented yet.
• Establish a partnership / fund that aims to implement activities to increase the
percentage of local Fiji citizens that have access to clean water in their homes and
villages.
• Consultatively support policies, plans, strategies to reduce carbon footprint of road
transport industry - eg. influence through Govt policies that promote use of biofuels.
• Spend less on extensive PR campaigns, similar to the 2008 campaign that used
newspaper, radio and television advertising to inform the public of its CSR activities,
and allocate the savings to the actual implementation of CSR activities.
• Release information on progress it is making at its bottling plant on the conversion to
renewable energy.

29

Greenwashing

30

15
 2/5/22

Seven Sins of Greenwashing

• Sin of the Hidden Trade-off: Committed by suggesting a product is “green” based on
an unreasonably narrow set of attributes without attention to other important
environmental issues. E.g. Paper
• Sin of No Proof: Committed by an environmental claim that cannot be substantiated
by easily accessible supporting information or by a reliable third-party certification.
• Sin of Vagueness: committed by every claim that is so poorly defined or broad that
its real meaning is likely to be misunderstood by the consumer. E.g. “All-Natural”,
“Naturally Grown”
• Sin of Irrelevance: committed by making an environmental claim that may be
truthful but is unimportant or unhelpful for consumers seeking environmentally
preferable products. E.g: “CFC-free”
• Sin of Lesser of Two Evils: committed by claims that may be true within the product
category, but that risk distracting the consumer from the greater environmental
impacts of the category as a whole. E.g. Organic cigarettes, fuel-efficient SUVs.
• Sin of Fibbing: the least frequent sin, is committed by making environmental claims
that are simply false. E.g.- Energy Star certified/regd
• Sin of Worshiping False Labels: committed by a product that, through either words
or images, gives the impression of third-party endorsement where no such
endorsement actually exists; basically, fake labels
Source: UL.Com (Formerly TerraChoice), 2010

31

Understanding and Categorizing Greenwashing

Source: Delmas & Burbano, 2011

32

16
 2/5/22

Greenwashing Drivers

Source: Delm as & Burbano, 2011

33

17
 2/15/22

Welcome to
Sustainability & Business (SuB)
PGP 25: Term III

Prof. Venkataraman S
Indian Institute of Management Kozhikode

Greenwashing

1
 2/15/22

Understanding and Categorizing Greenwashing

Source: Delmas & Burbano, 2011

Greenwashing Drivers

Source: Delm as & Burbano, 2011

2
 2/15/22

CSR Reality
Vs.
CSR Perception

3
 2/15/22

Reality Vs. Perception: Some Drivers

• Motivation to Interpret Messages
• Product-quality issues take precedence for the vast
majority of customers
• Ability to Interpret Messages
• Nature of Stakeholder
• Employees, Public , Investors etc.
• Category Biases
• Brand Biases

CSR: Bolted On Vs. Built In

4
 2/15/22

Corporate Sustainability
Reporting

Bases and Frameworks

• Millennium Developments Goals (2015)
• Sustainable Development Goals (2016)
• UN Global Compact (2004)
• Equator Principles (2003)
• Global Reporting Initiative (1999-2000)
• World Business Council for Sustainable
Development (WBCSD)

10

5
 2/15/22

Some Handles to Understand/Analyse CS Reporting

• How many? Quantity (For Sector or Country Level)

• How much? Content/Coverage of Issues
• How good? Quality & Reliability
• How? Methods
• Mode of media
• Reporting standards – global/ national etc.
• Integrated/ Standalone
• Why? Motivations/Drivers

11

Challenges with Reporting

• Data Quality
• Requires significant/ humungous effort
• Not purely an internal exercise
• Issues in integrating supply chain partners’ data
• Sensitivity
• Not all large enough
• Not all Ready & Capable
• Time and Cost

Are firms willing to go the distance?

12

6
 2/15/22

Unilever – Lifebuoy

13