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Edited by
Kenneth Amaeshi · Judy N. Muthuri · Chris Ogbechie

Incorporating
Sustainability
in Management
Education
An Interdisciplinary
Approach
Incorporating Sustainability in Management
Education
Kenneth Amaeshi • Judy N. Muthuri
Chris Ogbechie
Editors

Incorporating
Sustainability in
Management
Education
An Interdisciplinary Approach
Editors
Kenneth Amaeshi Judy N. Muthuri
University of Edinburgh Business School Nottingham University Business School
Edinburgh, UK Nottingham, UK

Chris Ogbechie
Lagos Business School
Lagos, Nigeria

ISBN 978-3-319-98124-6    ISBN 978-3-319-98125-3 (eBook)

https://doi.org/10.1007/978-3-319-98125-3

Library of Congress Control Number: 2018968418

© The Editor(s) (if applicable) and The Author(s) 2019

This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether
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The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
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The publisher, the authors and the editors are safe to assume that the advice and information in this book
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This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
 Contents

1 Introduction  1
Kenneth Amaeshi, Judy N. Muthuri, and Chris Ogbechie

2 Embedding Sustainability in the Entrepreneurship

Curriculum  9
Frances M. Amatucci

3 Sustainability Accounting and Education: Conflicts

and Possibilities 33
Rob Gray

4 Sustainability in Business Economics 55

Andrew J. Angus and Joseph G. Nellis

5 Thinking Globally, Teaching Sustainability: Embedding

Sustainability in International Business Studies and
Addressing Student Responses 83
George Ferns

v
vi Contents

6 Sustainability in Marketing105
Teresa Heath and Sally McKechnie

7 Sustainable Finance in Education133

Will Oulton

8 Sustainability in Supply and Value Chain Management167

Fred A. Yamoah

9 Sustainability, Management Education, and Professions:

A Practitioner Perspective195
Simon Graham

10 Three Faculty, Two Business Schools, One Goal215

David Roger Grayson, Ron Ainsbury, and Saulius Buivys

Index239
 Notes on Contributors

Ron Ainsbury was born in South Africa but has studied, worked, and lived
around the world including Asia and most recently Australia and New Zealand.
He has been a senior executive with a number of global companies including
Diageo where he initiated several responsible programmes. He was an associate
research professor at Rotterdam Business School when this work was under-
taken. He is now based in New Zealand from where he consults to businesses on
becoming more responsible.
Kenneth Amaeshi is Professor of Business & Sustainable Development, and
Director of the Sustainable Business Initiative, at the University of Edinburgh
Business School, UK. His research focuses on entrepreneurship and business
model innovation for sustainable development. His other interests include sus-
tainability, corporate responsibility, ethics, and governance. He is widely
published.
Frances M. Amatucci is an associate professor in the School of Business at
Slippery Rock University of Pennsylvania, USA. She has held adjunct positions
at a number of business schools and was Associate Professor of International and
Small and Medium-Sized Enterprises (SME) and Director of Graduate Business
Studies in the Faculty of Business at the University of New Brunswick/Saint
John, Canada. Amatucci is a strong advocate of field-based and experiential
learning in business education. She teaches courses related to strategic manage-
ment, sustainability, and entrepreneurship. Amatucci was the Chair of the
United Nations Global Compact’s Principles for Responsible Management

vii
viii Notes on Contributors

Education (PRME) initiative at Slippery Rock University and is a member of the

PRME Working Group on Gender Equality. She has been a participant in the
Business of Humanity® project at the University of Pittsburgh since 2009 and,
based on her field research in Russia funded by the project, she wrote the case
study Alcoa Russia. Her research interests include gender and diversity issues in
business, entrepreneurship finance, and sustainability entrepreneurship. She has
written articles in peer-reviewed academic journals such as Entrepreneurship
Theory and Practice, Venture Capital, Journal of Small Business Strategy, Journal of
Developmental Entrepreneurship, and the International Journal of Gender and
Entrepreneurship. She received an MBA and a PhD from the Katz Graduate
School of Business at the University of Pittsburgh and was employed for over 16
years in the health care sector.
Andrew J. Angus is Reader (Associate Professor) in Economics, specialising in
managerial economics, economic strategy, and environmental economics. He is
the full-time Cranfield MBA Director. Angus has worked for the UK Government
investigating potential mechanisms for lowering the economic burden of envi-
ronmental regulation. His other research has focused on investment trends in
clean technologies and the economic impacts of commodity price cycles and he
has written over 20 papers on these topics in internationally recognised aca-
demic journals.
Saulius Buivys has worked in the public sector in between spells in academia
first in Kaunas and now in Rotterdam Business School, Netherlands; NEOMA
Business School, France; Vilnius University Business School, Lithuania; and
ELISAVA Barcelona School of Design and Engineering, Spain. He holds a num-
ber of education co-ordination positions and teaches corporate responsibility
and sustainability and project management.
George Ferns is Lecturer in Management, Employment, and Organization at
Cardiff Business School, UK. His research broadly concerns how organisations
engage with issues surrounding the natural environment, focusing on topics
such as corporate responses to climate change, corporate social responsibility,
and environmental activism. His research has been published by the Journal of
Business Ethics and in Business & Society.
Simon Graham is a sustainability strategist with ten years of experience creating
award-winning sustainable innovation both as a practitioner and as a consultant.
Following postgraduate research in remote sensing and data mining for tropical
coastal and periglacial environments, Graham managed a range of innovative
projects in both the public and the private sectors. He was appointed to lead
 Notes on Contributors ix

commercial’s environmental and corporate responsibility endeavours in 2006,

creating a programme that was widely cited by Business in the Community and
the Energy Saving Trust for its combination of radical environmental perfor-
mance, high personnel engagement, and support for business growth. Since
2014, he has been Head of Innovation for De Courcy Alexander (DCA) working
with blue-chip clients on projects around the circular economy, low carbon
transport, emerging business models, energy efficient innovation, and ethical
supply chains. He is the recipient of over 20 national and international awards
for projects that have transformed business to become more sustainable.
Rob Gray was, until his retirement in 2015, Professor of Social and Environmental
Accounting at the University of St Andrews, UK. He is a qualified accountant and
the author/co-author of over 300 articles, chapters, monographs, and books—
mainly on social and environmental accounting, sustainability, social responsibil-
ity, and education. He founded CSEAR (the Centre for Social and Environmental
Accounting Research) in 1991 and for 21 years was its director. He has served on
the editorial boards of over 20 learned journals and has worked with a wide range
of international and local commercial and non-commercial organisations includ-
ing collaborations with the United Nations from time to time. In 2001 he was
elected the British Accounting Association Distinguished Academic Fellow. He
was awarded the Member of the Order of the British Empire in the Queen’s 2009
Birthday Honours List and was elected as a fellow of the Academy of Social Science
in 2012.
David Roger Grayson, CBE, is a British-European. From 2007 to 2017, he was
Director of the Doughty Centre for Corporate Responsibility and Professor of
Corporate Responsibility at Cranfield School of Management, UK. He is now an
independent commentator on sustainable business and Emeritus Professor of
Corporate Responsibility at Cranfield. He is the author of seven books on busi-
ness, society, and sustainability and a contributor of chapters to many more
books. His recent book All In: The Future of Business Leadership was published
in June 2018.
Teresa Heath is a member of faculty in the Nottingham University Business
School, University of Nottingham, UK. She has written articles in a number of
leading journals, including the Journal of Business Ethics, the European Journal of
Marketing, and the Journal of Marketing Management. Her publications and
teaching focus primarily on the fields of sustainability, ethics, critical ­marketing,
and consumption. She is a member of the editorial review board of the European
Journal of Marketing.
x Notes on Contributors

Sally McKechnie is Associate Professor of Marketing at Nottingham University

Business School, UK, where she teaches on postgraduate and undergraduate
programmes and supervises PhD students. Her research expertise is in the areas
of consumer behaviour, marketing communications, and services marketing.
She has written articles in a number of leading international journals, including
Psychology & Marketing, Journal of Travel Research, Journal of Business Research,
European Journal of Marketing, and Journal of Marketing Management.
Judy N. Muthuri is Associate Professor of Corporate Social Responsibility and
the Chair of the Social and Environmental Group at the Nottingham University
Business School (NUBS), UK. She has accumulated extensive teaching and pro-
gramme development expertise in her role as the Director of the MSc in
Sustainability and MSc in Corporate Social Responsibility programmes run by
the International Centre for Corporate Social Responsibility at NUBS. Her
research interests are in business and development, corporate responsibility and
sustainability, food poverty, and corporate social innovation. She is widely
published.
Joseph G. Nellis is Professor of Global Economy specialising in global eco-
nomic developments, business environmental analysis, and strategic thinking.
He is Deputy Director and the longest serving member of Cranfield School of
Management’s Executive Board. From 1 January 2014 until 31 January 2015,
he served as Director of the School and was Pro-Vice-Chancellor of the
University from 2005 to 2008. He also holds visiting professorial appointments
at various universities in Germany, Belgium, Austria, the Netherlands, Hungary,
the USA, and Ghana. Nellis has written 19 research and subject-based books
and over 200 academic and practitioner journal articles. His research encom-
passes analysis of business developments in a changing world in terms of the
macroeconomy, the role of government, the impact of technology, and societal
and demographic trends. He is a frequent contributor to a wide range of national
and international conferences and is a consultant to a number of international
companies in the areas of strategy and business environmental analysis, strategy
formulation, and management development. He has also acted as a consultant
to several central government departments and public sector organisations.
Chris Ogbechie is Professor of Strategic Management at the Lagos Business
School (LBS), Pan-Atlantic University, Nigeria. There, Sir Chris, as he is fondly
called, leads sessions on strategy and corporate governance and is also the Head
of the Strategy group. He is also a visiting professor at the Strathmore Business
School, Nairobi, Kenya, where he teaches the same. He has a PhD in Business
 Notes on Contributors xi

Administration from Brunel Business School, UK, with vast experience in mar-
keting, strategy, and corporate governance. He has several publications in finan-
cial services, marketing, strategic planning, and corporate social responsibility
and sustainability. He has also presented papers on corporate governance and
sustainability at various national and international conferences. He is also the
founding Director of the School’s Sustainability Centre. His research interests
are in strategy in turbulent environments, strategic leadership, board effective-
ness, and corporate sustainability. Ogbechie has been involved with several start-
ups and a fervent advocate of sustainability practices in business.
Will Oulton is the Global Head, Responsible Investment at First State
Investments (FSI), UK, and is responsible for defining and delivering FSI’s
responsible investment and stewardship strategy globally. In this role, he is
tasked with advancing FSI’s understanding of how Environmental, Social and
Governance (ESG) factors impact long-­ term investment value. He is also
responsible for developing FSI’s thought leadership programmes and managing
the Responsible Investment governance structure for the business.
Previous to this, he was the Head of Responsible Investment for Mercer
Investments across Europe, the Middle East, and Africa, advising institutional
asset owners on environmental, social, and corporate governance matters. He
has more than 15 years of experience working in sustainable and responsible
investment. Before joining Mercer, Oulton was the Director of Responsible
Investment at FTSE Group, where he led the development of FTSE’s global
sustainability services.
In December 2015, he was appointed President of the European Sustainable
Investment Forum (Eurosif ). He is also a Trustee Director of the Commonwealth
Bank of Australia (CBA) (UK) Pension Scheme, a fellow of the Royal Society of
Arts, an honorary associate professor at Nottingham University Business School’s
International Centre for Corporate Social Responsibility, expert panel member
of the Prince’s Accounting for Sustainability programme, and sits on a number
of investment industry advisory boards and committees.
Fred A. Yamoah is a Senior Lecturer at the Department of Management,
Birkbeck, University of London, UK. He has considerable teaching and research
experience in higher education. Yamoah’s multi-disciplinary approach to research-
ing sustainability, supply and value chain management and marketing, informs
his teaching on subjects related with responsible business management education.
His academic career is driven by a personal passion that teaching and researching
sustainability and its related fields can help deliver sustainable interdependence of
xii Notes on Contributors

business and society. Yamoah has also developed an original individual and col-
laborative research agenda with an output that demonstrates his ability to publish
in internationally ranked, peer-reviewed journals. He is an experienced under-
graduate and postgraduate research degree supervisor and examiner. He has been
involved with various research projects with the UK and international stakehold-
ers in developing countries. He is an experienced curriculum development and
enrichment expert. He is a fellow of the Higher Education Academy, UK, and a
contributing author of Developing Skills for Business Leadership. He also serves as
the sustainability co-editor for the Annual Review of Social Partnership.
 List of Figures

Fig. 4.1 The concept of optimal pollution 59

Fig. 4.2 The environmental reference level (Adapted from Hodge 1989) 62
Fig. 4.3 A marginal abatement cost curve 65
Fig. 4.4 A marginal abatement cost curve 66
Fig. 4.5 Simulation—marginal abatement cost curve 67
Fig. 4.6 Emerging opportunities, trends, and risks 71
Fig. 10.1 The seven steps 218
Fig. 10.2 The Jigsaw Target 222

xiii
 List of Tables

Table 2.1 Sample business plan including sustainability issues 13

Table 2.2 2016 UN SDGs and School of Business (BSBA) core
curriculum22
Table 4.1 Example of marginal abatement cost data 64
Table 4.2 Best available techniques 68
Table 10.1 The seven steps 219
Table 10.2 Bain versus Jigsaw Target 235
Table 10.3 Students’ suggested modification of Denier & Complier
Stages236

xv
 1
Introduction
Kenneth Amaeshi, Judy N. Muthuri,
and Chris Ogbechie

Sustainability has become a new mantra, a philosophy of sorts. It does,

however, mean different things to different people. If one takes the liter-
ary meaning of the word, it could simply suggest longevity or the ability
to continue in existence irrespective of counteracting pressures. Another
word often used in this regard is resilience. While longevity and resilience
are integral to sustainability, they tend to, somewhat, present a narrow
and limited view of sustainability.
The broad view of sustainability goes beyond resilience and longevity
and emphasises the need to balance environmental, social, and economic
considerations in decision-making. It has a direct link with the quest for
K. Amaeshi (*)
University of Edinburgh Business School, Edinburgh, UK
e-mail: Kenneth.Amaeshi@ed.ac.uk
J. N. Muthuri
Nottingham University Business School, Nottingham, UK
e-mail: judy.muthuri@nottingham.ac.uk
C. Ogbechie
Lagos Business School, Lagos, Nigeria
e-mail: cogbechie@lbs.edu.ng

© The Author(s) 2019 1

K. Amaeshi et al. (eds.), Incorporating Sustainability in Management Education,
https://doi.org/10.1007/978-3-319-98125-3_1
2 K. Amaeshi et al.

sustainable development—that is, a development that will not inhibit

future generations in their quest for development (WCED 1987). It rec-
ognises the nested interdependency amongst the economy, society, and
environment. In other words, the success of the economy is dependent
on the viability of society, and the success of society requires the viability
of the environment. As such, without the environment, there will be no
society, and without society, there will be no economy. The three are
interwoven. Hence, the threat of climate change, whilst an environmen-
tal phenomenon, has both social and economic consequences.
Sustainability, therefore, strives to ensure the integrity of this nested
interdependency, which is very much at the heart of the United Nations
(UN) 2015 sustainable development goals (SDGs). The SDGs are
amongst the greatest pursuits of our time. Given the focus of the SDGs
on inter-generational equity, the pursuit of sustainable development is,
arguably, a normative project, which entails collective responsibility and
action from different actors—for example, governments, non-­
governmental organisations (NGOs), multinational institutions, the aca-
demia, and the business community. The SDGs are also fundamental to
the contemporary corporate sustainability movement, which emphasises
the need to balance environmental, social, and economic considerations
in decision-making. This balance has been understood and expressed in
many ways including but not limited to environmental sustainability, eco-
nomic sustainability, and social sustainability. This is a growing agenda the
academia has been called to effectively contribute to.
Business Schools and professional managers, as producers and dissemi-
nators of management knowledge, are now being challenged to incorpo-
rate this broad view of sustainability into their curricula. The business
and management schools (BAMs), in particular, have broad reach and
impact on the three pillars of sustainability through their streams of activ-
ities—that is, research, teaching, and engagement. Through teaching, for
instance, they influence current and future generations of managers and
leaders. In this regard, business schools are increasingly seen as a major
player in moving sustainable agenda forward while also empowering
individuals and organisations to put in place sustainable solutions. This
they do by linking together theory and practice of responsible manage-
ment into their programmes. In addition, there have been initiatives (e.g.
 Introduction 3

the Grey Principles) and the United Nations Principles for Responsible
Management Education (UN-PRME) to promote this agenda. In addi-
tion, business education accreditation bodies driving the agenda include
EFMD Quality Improvement System (EQUIS), The Association of
MBAs (AMBA), and The Association to Advance Collegiate Schools of
Business (AACSB), who have started making stringent demands on busi-
ness schools to reflect sustainability thinking in their curricula.
Since the inception of the UN-PRME in 2007, there has been increased
debate as to how to integrate and adapt sustainability into the manage-
ment education to meet the needs of the twenty-first-century business
climate. While there is a seeming consensus by the globally focused man-
agement education institutions that sustainability needs to be well
ingrained into their management educational curricula, the relevant
question is no longer why but how. In spite of the current effort and
elegant push on business schools to incorporate sustainability into their
operations, some business schools still take for granted how it should be
done.
Many BAMs take an insular approach to sustainability in the area of
teaching, research, and structure. Shareholder value maximisation and, to
a larger extent, meeting the needs of all material stakeholders are projected
as the centrepiece of the siloed curriculum, with ethics and societal issues
not mainstreamed. In most BAMs, for instance, there is often little sup-
port for faculty members to make the transition to a sustainability informed
curriculum. This has often resulted to subtle resistance from some faculty
members, while others are frustrated and intimidated by the need to incor-
porate sustainability into their courses and teaching programmes. We (i.e.
the editors) face these pressures in our various schools and in practice.
However, this traditional approach to management is gradually changing.
A growing number of BAMs in the last decade are beginning to respond to
the call that management education plays an important role in moving the
sustainability agenda forward, and preparing future managers, practitio-
ners, and leaders to meet the challenges of sustainability.
From our experience, higher education institutions (HEIs) are willing
to support their faculty members to make the transition to sustainability
informed curricula. Unfortunately, there are very few resources available
to support the HEIs. In addition, some business schools and m ­ anagement
4 K. Amaeshi et al.

scholars still find it difficult to embed sustainability in their teaching

activities. This book is keen to fill this gap. It is intentionally not heavy
on theory and academic jargons. The idea is to make it as simple as pos-
sible. The chapters provide some examples of, and guides on, how sus-
tainability can be integrated into management education—especially in
the MBA modules, as a flagship BAMs programme.
Chapter 2 provides the ample explanation of how sustainability can be
embedded into entrepreneurship curriculum with a case study of how it
was done in a public university in the United States. Frances M. Amatucci
based her argument on the need for a paradigm shift in delivering entre-
preneurship education submitting that the recent UN-SDGs offer a plat-
form for exploring and exploiting sustainable entrepreneurial
opportunities. Since entrepreneurs employ innovation and creativity in
their business models, there is a symbiotic relationship between entrepre-
neurship and sustainability that can hardly be separated in the twenty-­
first century.
Rob Gray in Chap. 3 focuses on sustainability accounting and educa-
tion: conflicts and possibilities. Accounting education has a long history of
resisting ideas and innovations, which may fundamentally challenge
taken-for-granted assumptions. However, these concerns were especially
acute when issues such as ethics, social responsibility, social accounting,
and now sustainability are being introduced into its curriculum.
Sustainability challenges everything about modernity, at least in princi-
ple. The chapter shows how the integration process has been challenging
as it appears to sit uncomfortably with the accounting conventions and
mores. The chapter concludes that integrating sustainability into account-
ing education will require aggressive and high degrees of disruption, cog-
nitive dissonance, and breaking out of norms. The underlying theme of
the chapter, therefore, is that if the educators and students are not feeling
importuned and fundamentally challenged, then we are not properly
looking at sustainability in accounting.
In Chap. 4, Andrew J. Angus and Joseph G. Nellis explore the embed-
ding of sustainability into business economics. Mainstream economic
thinking of sustainability has fused into the field of environmental eco-
nomics, a sub-discipline of microeconomics. They however propose the
need to move beyond this parochial outlook of sustainability. Using the
 Introduction 5

two competing views of sustainability (i.e. weak and strong sustainabil-

ity), they suggest that sustainability thinking should be infused into busi-
ness economics education through microeconomics and macroeconomics
teaching, rather than being a distinct topic in microeconomics modules.
While microeconomics syllabus should view sustainability from firm’s
perspectives as a means of improving competitiveness and profitability,
rather than from the lens of government intervention, the macroeco-
nomic syllabus should focus on how to measure economic growth
adjusted for environmental net gain or in a way that is closely linked to
human welfare. The chapter also highlights the need to emphasise
sustainability-­related concepts such as green economy, circular economy,
and steady-state economy in business economics modules.
George Ferns, in Chap. 5, examines the embedding of sustainability
into international business (IB) studies. Globalisation, he argues, has
changed the world and greatly impacts the business and management
education. Thus, to overcome the difficulty, Ferns reflects on two aspects
of his experience in integrating sustainability into IB. First, he identifies
the limitations in course content in their present structure and discusses
how to re-orientate IB towards meaningful inclusion of sustainability.
Second, he uses four common students’ types by categories to highlight
the specific challenges that arise when students are confronted with sus-
tainability issues. The chapter proposes some strategies that may be uti-
lised to effectively rev up sustainability agenda within business and
management studies.
Chapter 6 looks at embedding sustainability into marketing. Teresa
Heath and Sally McKechnie in this chapter contextualise marketing edu-
cation for sustainability within the changing higher education landscape,
which has been shaped by increasing demands from international and
national stakeholders to develop sustainability literacy amongst students.
They share their experiences of embedding sustainability within a new
marketing course by focusing predominantly on environmental and
green issues. The chapter discusses some pedagogical matters and prac-
tices in this area. Drawing on a review of literature on marketing and the
environment and on examples from practice, the chapter suggests ways to
engage students with sustainability issues from the outset and to facilitate
6 K. Amaeshi et al.

their learning. It also reflects on some of the challenges of this endeavour

and ways to overcome them.
Chapter 7 describes the integration of sustainability into finance edu-
cation. Will Oulton, concerned with barrage of questions on his recom-
mendation for someone wanting to move into a career in sustainability
and specifically sustainable finance, motivated him to explore the history
of sustainable investment and finance. Notwithstanding the laudable
effort of several initiatives geared towards embracing sustainability, it is
yet to be mainstreamed appropriately into the financial industry. Despite
the huge awareness, implementation still lacks depth across many finan-
cial institutions. Oulton submits that it is in this aspect that business
schools and other higher education can play a leading and huge role to
address some of the current gaps.
In Chap. 8, Fred A. Yamoah explores sustainability in supply and value
chain management. The chapter argues that supply and value chain man-
agement has long been closely related to sustainability because of its
direct impact on sustainable development. Yamoah, however, agrees that
increased integration of sustainability into supply and value chain man-
agement could transform the discipline. He further highlights the chal-
lenges encountered in integrating sustainability in the United Kingdom.
In Chap. 9, Simon Graham examines sustainability, management edu-
cation, and professions from a practitioner perspective. He re-echoes the
fact that the business world is changing radically and so the skills needed
by people who lead the corporations are also changing. Businesses are
seen as positive agents of social, environmental, and economic change
and as such, the skills and experiences of practitioners and business lead-
ers must reflect the changing realities. Based on research and years of
cumulative experience, it is clear that the business world needs to foster
sustainable leadership. The chapter suggests that BAMs can help in this
regard through the 6 (six) Cs—Curriculum, Context, Communication,
Collaboration, Connection, and Challenge.
Chapter 10 presents a practical inter-university collaboration on teach-
ing sustainability, which is a rare innovation. The chapter examines how
three faculty across two European business schools (i.e. Cranfield School
of Management, United Kingdom, and Rotterdam Business School,
Netherlands) have collaborated over a decade with the single goal of
 Introduction 7

improving the effectiveness and impact of the teaching of corporate

responsibility and sustainability amongst graduate management students
(MBAs and other management Masters). The chapter suggests the inte-
grating model as a potential tool to aid the teaching of business responsi-
bility and sustainability in other business schools both with pre- and
post-work experience post graduate students and to form the basis of
future research on embedding the principles of responsible business.
In all, the chapters have remained as practical as possible. The essence
is to foster a knowledge sharing space and a support mechanism for fac-
ulty members of BAMs who want to rethink their teaching through the
sustainability lens. Sustainability is a journey. It can only continue to
evolve. The evolution, in itself, will present new challenges and difficul-
ties. However, with the right mindset and orientation, adapting to and
overcoming the challenges will be much easier than the absence of those.
We hope that fellow academics and other management educators will
find this book very useful.

Reference
World Commission on Environment and Development (WCED). 1987. Our
Common Future, Report of the World Commission on Environment and
Development. Oxford and New York: Oxford University Press.
 2
Embedding Sustainability
in the Entrepreneurship Curriculum
Frances M. Amatucci

Introduction
In this chapter the intersection of sustainability and entrepreneurship is
explored. There are ample opportunities to introduce sustainability con-
cepts into entrepreneurship education since they employ innovation and
creativity in both product and business model applications. The chapter
describes these opportunities and why sustainability and entrepreneur-
ship are integrally related. The sustainability revolution requires a para-
digmatic shift in the way entrepreneurship education is delivered both in
content and in process (Amatucci et al. 2013). A new look at the tradi-
tional business plan with sustainability principles included is developed.
A case study of sustainability and entrepreneurship as it has evolved in a
public university in the United States is provided as an example.

F. M. Amatucci (*)
Slippery Rock University of Pennsylvania, Slippery Rock, PA, USA
e-mail: frances.amatucci@sru.edu

© The Author(s) 2019 9

K. Amaeshi et al. (eds.), Incorporating Sustainability in Management Education,
https://doi.org/10.1007/978-3-319-98125-3_2
10 F. M. Amatucci

Sustainability in Entrepreneurship Education

Sustainability entrepreneurship has evolved from its earlier forms as eco-
preneurship (Ivanko and Kivirist 2008; Schaper 2005; Bennett 1991)
and ‘green’ entrepreneurship (Schaper 2005; Berle 1991). Moreover, it is
separate from but related to social entrepreneurship (Short et al. 2009;
Tilley and Young 2009). Sustainability and entrepreneurship intersect in
many ways, the most important of which is the innovation—the creation
of new products, processes, business models, and technologies. Innovation
is at the heart of entrepreneurship and sustainability-related innovation is
evident in the proliferation of green chemistry, clean energy technologies,
organic food, biomimicry, green buildings, and biomaterials, to name a
few (Larson 2011, 2012). The sustainability revolution of the twenty-first
century has taken hold and is integrally linked to the entrepreneurship
revolution of the twentieth century.
Several scholars have proposed a ‘call to action’ in entrepreneurship
education to recognize a paradigmatic shift in the way entrepreneurship
is taught (Amatucci et al. 2013; Nadim and Singh 2011). Parhankangas
et al. (2015) review the similarities and differences between corporate
social responsibility (CSR) and sustainability and conclude that the CSR
model is more appropriate for large, established firms, while the sustain-
ability model is better suited for entrepreneurial ventures. Determining
factors included the opportunities for new ventures to develop new busi-
ness models, engage in disruptive innovation, and focus on niche mar-
kets. Kuckertz and Wagner (2010) conducted research that suggests that
individuals who embrace sustainability have stronger entrepreneurial
intentions.
Nearly 10,000 companies from 161 countries commit to the ten prin-
ciples of the United Nations Global Compact related to human rights,
anti-corruption, labor, and environment. Over 600 business schools have
committed to the six principles developed by the Principles for Responsible
Management Education (PRME) initiative. Evidence strongly suggests
the need for issues related to sustainability be embedded in business
school curricula. So how has entrepreneurship education evolved to
address this need? Have we, as educators, kept up with the sea change
caused by sustainability?
 Embedding Sustainability in the Entrepreneurship Curriculum 11

There is good news and there is bad news. There is a proliferation

worldwide of sustainability-related centers within business schools, many
of them associated with entrepreneurship for the purpose of education
and outreach. Likewise, many business schools are developing sustainable
entrepreneurship courses. A search or inquiry on any of the related list
servers will yield numerous responses from colleagues who are eager to
share their course syllabi. There is no shortage of information if one seeks
it. Moreover, major professional associations involving entrepreneurship,
that is, the Academy of Management, the International Council of Small
Business and Entrepreneurship, and the US Association of Small Business
and Entrepreneurship, chose sustainability for annual conference themes
providing opportunities for faculty to participate in teaching seminars,
workshops, research presentations, and so on that are useful for tenure
and promotion.
The bad news is that we still have much progress to make to create that
paradigmatic shift so sustainability is embedded and not stand alone
(Laszlo and Zhexembayeva 2011). Most entrepreneurship textbooks still
do not incorporate sustainability into the entrepreneurial process of
opportunity recognition, industry/market analysis, business modeling,
financial reporting, and so on. Templates for business models or business
plans typically do not include cues to consider sustainability issues at the
time of start-up, with some exceptions (Spinelli and Adams 2016). In
the 1990s scholars coined the term ‘born global’ for new ventures that
engage in international growth from the start (Cavusgil and Knight
2009; Oviatt and McDougall 1995). Prior to that, entrepreneurial start-
ups were considered primarily for domestic growth, while multinational
corporations employed global markets. Today no one questions the ‘born
global’ phenomenon.
Entrepreneurship education needs to progress in the same way. From
the beginning many entrepreneurs embrace values related to clean,
organic, natural, local, or recyclable. Jeffrey Hollander, founder of Seventh
Generation, recognized a market opportunity to create laundry products
that were all natural and without harsh chemicals. There is a long list of
successful corporations developed by sustainability entrepreneurs who
created companies that embrace these values from the start. If sustain-
ability issues are not embedded in entrepreneurship education, they are
12 F. M. Amatucci

considered to be optional add-ons that ‘maybe’ are important. If they are

embedded in the models, they are given greater visibility and greater
importance.
Sustainability has a justifiable ‘place at the table’ in entrepreneurship
education. But not all entrepreneurship education occurs in universities.
Small business counselors need to be given the information they need to
inform entrepreneurs and small business owners that practices regarding
‘reduce, re-use, recycle’ are not the right thing to do but they will also
result in cost savings. Yet, many business counselors are not prepared
themselves to provide such information. There is an increasing number of
organizations that provide information for start-ups regarding water and
energy use, recycling, and waste disposal.

A New Look at an Old Friend: The Business Plan

An example of a typical business plan template that is modified to address

sustainability issues at each part is provided in Table 2.1 (Amatucci and
McKinney 2014). Within the business plan, the entrepreneur has several
opportunities to include sustainability. In the Company Overview, typi-
cally included in the beginning of the plan, the owner has the opportu-
nity to indicate where sustainability fits into the overall mission and
philosophy of the firm. Describing the role of sustainability in business
operations, the community impact, employee policies, and products and
services reinforces that the philosophy has meaning for the firm.
If the business strategy involves the product(s) to be ‘green’, the section
on Product Description is where this discussion occurs. If the product
itself is not ‘green’, there is also an opportunity to discuss its impact on
the environment, reduction of waste in packaging, disposition plans if
electronic waste is involved, and other product-related sustainability
issues.
The Market Analysis section of the business plan includes the industry
overview, market research, and customer and competitor analysis. This
section provides several opportunities for highlighting and examining the
viewpoints of the industry, in general, toward sustainability. It also pres-
ents opportunities where the firm can differentiate itself from ­competitors,
Table 2.1 Sample business plan including sustainability issues
Business plan
section Traditional overview of contents Sustainability
Executive  • Is NOT an introduction Summarize the role that sustainability plays in
summary  • A mini-business plan in one or two pages your business
 • Typically written last
Company  • Brief Company Introduction Describe the role of sustainability (people,
overview  • Mission statement: Concise statement of target planet, profit) in your business mission/
audience, contribution product makes to philosophy, business operations, products/
customer, uniqueness services and community relationships.
 • Location, size, history Employees and community as key external
 • Market and products (Differentiate from stakeholders.
others) Impact of company operations on the
 • Overview of company capabilities environment.
Description of  • What makes your product or service unique? Discuss sustainability or ‘green’ aspects of your
product/service What is your secret Sauce? What ‘pain’ do you product or service.
solve?
 • How is it used?
 • Has any test marketing been done?
 • Is there potential for growth?
 • Do you own any patents, trademarks,
copyrights?
 • Product safety
Market analysis:  • Overview sets the stage for more specific data  • What are legislation and policies driving
industry  • Industry definition and description the industry toward sustainability?
overview – Major players within the industry  • Where is industry regarding sustainability?
Embedding Sustainability in the Entrepreneurship Curriculum

– Factors driving dynamics

– New products and developments
 • Historical and future trends
13

(continued)
Table 2.1 (continued)
14

Business plan
section Traditional overview of contents Sustainability
Market analysis:  • Market definition  • Market segments for specific product/service.
specific market – Primary market  • Demand for both product lines (green and
research – Secondary markets traditional)?
 • Market size and trends  • What sustainability certifications are
– Current total revenues desirable to obtain (product, firm, staff)
F. M. Amatucci

 • Predicted annual growth rate

Market analysis: Customer Characteristics  • In which green segment do customers fall?
customers  • Who are they?  • Why do they buy ‘green’?
 • Why do they buy?  • How is their need satisfied by the product/
 • How is their need satisfied by the product/ service?
service?  • How is this need currently filled?
 • How is this need currently filled?  • What are the alternatives?
 • What are the alternatives?
 • Who makes the decision to buy?
 • How frequently do they purchase?
 • What is size of market?
Market analysis:  • Direct Competitors  • Why is my business better?—Sustainability is
competitors – Who are they? important in this differentiation
– Size and product breadth  • ‘Green’ should be a category in the
– Revenues and profitability comparison of all facets with competitors
– Strengths and weaknesses
– Market shares
 • Indirect Competitors
 • Why is my business better?
(continued)
Table 2.1 (continued)
Business plan
section Traditional overview of contents
Marketing Product, Promotion, Price, Place
strategy  • Product marketplace advantages (warrantees,
service policies, incentives, etc.)
 • How will I tell my customers about my product
or service? (advertising, promotions, social
media, publicity)
 • What should I charge for my product? (Price)
 • How will I get my product to my customers?
(Distribution)
Operations planManufacturing/Production Plan
 • Objectives
 • Facilities (Physical Plant)
 • Staffing
 • Subcontractors
 • Quality Control
 • Budget/Operating Expense
 • Concerns for employee health and safety
Management and  • Describe the key players of your management
organization team, board of directors, advisors, as well as
any major investors.
 • Discuss how your team completes the
‘management trinity’: production, marketing,
and financial expertise.
 • Discuss what are the holes in the team and
how do you plan to fill them
Sustainability
Sustainable practices can be an advantage in all
of ‘4 Ps’:
 • Product: Sustainable attributes can be a
distinguishable competitive advantage
 • Promotion: Message that product is Green
attracts customers
 • Price: Often can charge more
 • Distribution: ‘Local’ and/or efficiency/
sustainable fuels in transportation can be a
favorable message and reduce costs
 • ‘Cradle to cradle’ approach (McDonough and
Braungart, 2002)
 • Sustainability initiatives for Facilities,
Processes, Quality Control and Operating
expenses. Tax and utility incentives to
increase Return on Investment (ROI) of
‘green’ investments. Include green
certifications for staff.
 • Hire a team that embraces sustainability
principles
 • Employee reward and compensation that is
fair and shows salary equity
 • Gender equality
Embedding Sustainability in the Entrepreneurship Curriculum
 • A diverse workforce
 • Safe working conditions
 • Develop a culture that supports sustainability
15
 • Sustainability oriented certifications for staff
(continued)
Table 2.1 (continued)
16

Business plan
section Traditional overview of contents
Financials  • Sources and uses of financial capital
 • 3 years of historical and projected income
statements, cash flow, balance sheets and
assumptions
 • Projected breakeven analysis
Sustainability
 • Triple bottom line principles can be built into
the financial plan: monetary profit,
environmental impact, and community
impact.
 • Discuss ROI of sustainability initiatives
F. M. Amatucci

 • 3 years of tax returns

 • Personal financial statement
Social/  • There is increasing interest in this component
 • Historically used when predicting job creation
environmental and retention of a business plan.
impacts  • Job creation (When pursuing public
 • Also used to describe community relations and
environmental stewardship financing, there are often requirements per
increment of funding)
 • Sustainability efforts
 • Environmental impacts
 • Community relationships and impacts
 • Triple Bottom Line (people, planet,
profitability)
 • Stakeholder engagement
Appendices Show supporting documentation to your business Include copies of certifications, publicity
plan in the appendices/exhibits: received resulting from sustainability efforts,
 • Sales to date (customer list) contracts/orders, efforts underway for further
 • Pending orders/contracts greening of the business.
 • Loan/funding commitments
 • Legal Agreements
 • Other
Source: Amatucci and McKinney (2014); McKinney, M. (2013); Amatucci and Grimm (2011)
Another random document with
no related content on Scribd:
 Austria-Hungary, Belgium, Bulgaria, China, Denmark, France,
Germany, Great Britain, Greece, Italy, Japan, Luxembourg,
Mexico, Montenegro, the Netherlands, Persia, Portugal,
Roumania, Russia, Servia, Siam, Spain, Sweden and Norway,
Switzerland, Turkey, and the United States of America,
appointed representatives who met at The Hague, on the 18th of
May, 1899, and organized the Conference by electing M. de
Staal, Russian Ambassador, to preside. The United States was
represented by the Honorable Andrew D. White, Ambassador to
Berlin, the Honorable Seth Low, President of Columbia
University, the Honorable Stanford Newel, Envoy Extraordinary,
&c., to The Hague, Captain Alfred T. Mahan, U. S. N., Captain.
William Crozier, U. S. A., and the Honorable Frederick W.
Holls, of New York. The representatives of Great Britain were
Sir Julian Pauncefote, Ambassador to the United States, Sir
Henry Howard, Envoy Extraordinary, &c., to The Hague,
Vice-Admiral Sir John A. Fisher, Major-General Sir J. C.
Ardagh, and Lieutenant-Colonel C. à Court.

{354}

"The Conference at The Hague was a Parliament of Man

representing, however imperfectly, the whole human race. The
only independent ones not represented at the Huis ten Bosch
were the South American republics, the Emperor of Morocco, the
King of Abyssinia, and the Grand Lama of Tibet. That the South
American republics were not represented is not the fault of
the Russian Emperor. Mexico received and accepted an
invitation. Brazil received, but rejected, the invitation to
be present, and so did one other South American republic. The
original Russian idea was to assemble representatives from
every independent government in the world; nor did they even
confine themselves to the secular governments. They were very
anxious that the Pope should also be directly represented in
this supreme assembly. Even with the Pope and South America
left out, the Congress represented more of the world and its
inhabitants than any similar assembly that has ever been
gathered together for the work of international legislation.
That circumstance in itself is sufficient to give distinction
to the Conference at The Hague, which, it is expected, will be
the forerunner of a series of conferences, each of which will
aim at being more and more universally representative. On the
eve of the twentieth century the human race has begun to
federate itself. That is the supreme significance of the
assembly which has just spent two months in the capital of
Holland."

W. T. Stead,
The Conference at The Hague
(Forum, September, 1899).

To systematize and facilitate the discussions of the

Conference, three Commissions or Committees were appointed,
between which the several subjects suggested in the Russian
circular of January 11 (as given above), and agreed to by the
several governments, were distributed. The 1st, 2d, 3d and 4th
propositions of the programme were referred to the First
Commission, the 5th, 6th and 7th to the Second, the 8th
(concerning mediation and arbitration) to the Third. This was
done on the 23d of May, after which the general Conference was
held only at intervals, to receive and consider reports from
the several Commissions, of agreements reached or
disagreements ascertained. This went on until the 29th of
July, when the several Conventions, Declarations, and
Recommendations agreed upon for submission to the governments
represented were summarized in the following "Final Act,"
signed by all:

"In a series of meetings, between the 18th May and the 29th
July, 1899, in which the constant desire of the Delegates
above mentioned has been to realize, in the fullest manner
possible, the generous views of the august Initiator of the
Conference and the intentions of their Governments, the
Conference has agreed, for submission for signature by the
Plenipotentiaries, on the text of the Conventions and
Declarations enumerated below and annexed to the present Act:

"I. Convention for the pacific settlement of international

conflicts.

"II. Convention regarding the laws and customs of war by land.

"III. Convention for the adaptation to maritime warfare of the

principles of the Geneva Convention of the 22nd August, 1864.

"IV. Three Declarations:

1. To prohibit the launching of projectiles and explosives

from balloons or by other similar new methods,

2. To prohibit the use of projectiles, the only object of

which is the diffusion of asphyxiating or deleterious
gases.

3. To prohibit the use of bullets which expand or flatten

easily in the human body, such as bullets with a hard
envelope, of which the envelope does not entirely cover the
core, or is pierced with incisions.

"These Conventions and Declarations shall form so many

separate Acts. These Acts shall be dated this day, and may be
signed up to the 31st December, 1899, by the Plenipotentiaries
of the Powers represented at the International Peace
Conference at The Hague.

"Guided by the same sentiments, the Conference has adopted

unanimously the following Resolution:—'The Conference is of
opinion that the restriction of military budgets, which are at
present a heavy burden on the world, is extremely desirable
for the increase of the material and moral welfare of
mankind.'
"It has, besides, formulated the following wishes:

"1. The Conference, taking into consideration the preliminary

steps taken by the Swiss Federal Government for the revision
of the Geneva Convention, expresses the wish that steps may be
shortly taken for the assembly of a Special Conference having
for its object the revision of that Convention. This wish was
voted unanimously.

"2. The Conference expresses the wish that the questions of

the rights and duties of neutrals may be inserted in the
programme of a Conference in the near future.

"3. The Conference expresses the wish that the questions with
regard to rifles and naval guns, as considered by it, may be
studied by the Governments with the object of coming to an
agreement respecting the employment of new types and calibres.

"4. The Conference expresses the wish that the Governments,

taking into consideration the proposals made at the
Conference, may examine the possibility of an agreement as to
the limitation of armed forces by land and sea, and of war
budgets.

"5. The Conference expresses the wish that the proposal, which
contemplates the declaration of the inviolability of private
property in naval warfare, may be referred to a subsequent
Conference for consideration.

"6. The Conference expresses the wish that the proposal to

settle the question of the bombardment of ports, towns, and
villages by a naval force may be referred to a subsequent
Conference for consideration.

"The last five wishes were voted unanimously, saving some

abstentions.
 "In faith of which, the Plenipotentiaries have signed the
present Act, and have affixed their seals thereto. Done at The
Hague, 29th July, 1899, in one copy only, which shall be
deposited in the Ministry for Foreign Affairs, and of which
copies, duly certified, shall be delivered to all the Powers
represented at the Conference."

Great Britain, Parliamentary Publications

(Papers by Command: Miscellaneous,
Number 1, 1899, pages 3-4, 8 and 288-9).

{355}

The accompanying Conventions and Declarations were in no case

unanimously signed, several delegations, in each case,
claiming time for the governments they represented to consider
certain questions involved. The most important of the proposed
Conventions, namely, that "For the Pacific Settlement of
International Disputes," was signed at The Hague by the
delegates from Belgium, Denmark, Spain, the United States of
America, Mexico, France, Greece, Montenegro, the Netherlands,
Persia, Portugal, Roumania, Russia, Siam, Sweden and Norway,
and Bulgaria; but not by Austria-Hungary, Germany, Italy,
Japan, Great Britain, Luxembourg, Switzerland, Servia, Turkey,
or China. Ultimately, however, the great Treaty of Arbitration
was signed by everyone of the Powers represented. The
signature of the delegates of the United States was given
under reserve of a declaration which will be found in the
following excerpt from the general report of the American
Commission. The full text of each of the Conventions is given
below.

"The entire plan for the tribunal and its use is voluntary, so
far as sovereign States are concerned. The only seeming
exceptions to this rule are contained in Article 1, which
provides that the Signatory Powers agree to employ their
efforts for securing the pacific regulation of international
differences; and Article 27, which says that the Signatory
Powers consider it to be a duty, in the case where an acute
conflict threatens to break out between two or more of them,
to remind those latter that the permanent court is open to
them. The obligation thus imposed is not legal or diplomatic
in its nature. These articles merely express a general moral
duty for the performance of which each State is accountable
only to itself. In order, however, to make assurance doubly
sure and to leave no doubt whatever of the meaning of the
Convention, as affecting the United States of America, the
Commission made the following declaration in the full session
of the Conference, held July 25:—

The Delegation of the United States of America, in signing the

Convention regulating the peaceful adjustment of international
differences, as proposed by the International Peace
Conference, make the following declaration:—Nothing contained
in this Convention shall be so construed as to require the
United States of America to depart from its traditional policy
of not intruding upon, interfering with, or entangling itself
in the political questions or policy or internal
administration of any foreign State; nor shall anything
contained in the said Convention be construed to imply a
relinquishment by the United States of America of its
traditional attitude toward purely American questions.' Under
the reserve of this declaration the United States delegates
signed the Arbitration Convention itself. Article 8 of the
Convention, providing for a special form of Mediation, was
proposed individually by Mr. Holls of the United States
Commission. … It is hoped that in particular crises, when the
other means provided by the Convention for keeping or
restoring peace have failed, it may prove to have real and
practical value. It is certain that, by the Continental States
of Europe, it has been exceedingly well received."

General Report of the American Commission.

"Objection has been made to [the International Court of
Arbitration] on the ground that submission to it is purely
voluntary and that no executive authority has been provided to
carry out its decrees. The answer to all such objections is
simply that the power of enlightened public opinion is relied
upon to be amply sufficient for the purpose of insuring
obedience to every just mandate of this Court. In the case of
the United States of America the judgments of the Court,
according to the decisions now in force, will have a
peculiarly binding force. An agreement to submit a case to the
Court cannot be made by the United States, except by way of a
treaty, which, when ratified by the Senate, becomes the
supreme law of the land. In the case of La Ninfa, Whitelaw v.
The United States (75 Fed. Rep., 513), it was decided by the
United States Circuit Court of Appeals in California that by
virtue of the treaty the judgment of the Court of Arbitration
provided for by the terms of the treaty has all the force of a
federal statute, and it is itself the supreme law of the land,
binding upon every individual citizen of the United States,
including all federal and State authorities. For us, at least,
the International Court of Arbitration at The Hague will, if
this view prevails, in reality be the highest possible
tribunal, with an authority binding even on our own United
States Supreme Court.

"Article 27 aims, in a measure, to supply the deficiency of

the provision for obligatory arbitration, in that it declares
it to be the duty of all Signatory Powers to remind anyone or
more of themselves, in case of a threatened dispute, that the
permanent Court of Arbitration is open to them. What
particular effect this particular article will have must be
left to the future. Without modification or reservation the
article, when ratified by the United States, would have
constituted a complete abandonment of the time-honored Monroe
Doctrine. Accordingly the representatives of the United States
declined to sign the treaty, except under a reservation or
 declaration, which was solemnly accepted by the Peace
Conference, thus materially modifying the jurisdiction of the
Court [see above]. … By this declaration the Monroe Doctrine
was not only self-guarded, but it was stated and vindicated
more emphatically than ever before in our history, and the
people of this country are, therefore, in a position to
cordially support the International Court of Arbitration,
without the fear that the Court itself, or the fact of its
establishment, may ever be used against this country, or to
the embarrassment of its diplomacy and traditional policy. …

"The effect of the establishment of the Court upon European

diplomacy is necessarily surrounded by great uncertainty. In
a recent review of the work of the Peace Conference I ventured
to use this language: 'It is most encouraging and of the
highest importance that upon the whole Continent the
governments are apparently in advance of public opinion upon
the entire subject of the Peace Conference. The reason is not
far to seek. No man who is fit for the position can to-day
hold a place involving the direction of his country's
international policy without feeling an almost intolerable
pressure of responsibility. To him every remote chance of a
lightening of his burden comes as a promise of blessed relief.
It is a historical fact that none of the obstacles to success
which the Peace Conference had to overcome originated in the
mind of any sovereign or of any high minister of State. In
every case they were raised by underlings without
responsibility and anxious to show superior wisdom by finding
fault. So long as this favorable governmental attitude
continues there is every reason for encouragement.'

{356}

'Continental public opinion, especially in questions of

foreign policy, seems more pliable than ever before, and is as
clay in the hands of a potter, so far as alliances and
sympathies are concerned, when following a popular monarch or
 foreign minister.' I have since been assured by the highest
officials of at least two great European Powers, that this
statement meets with their unqualified approval. The sneers of
irresponsible journals and politicians cannot and will not
affect the deliberate purposes of a high-minded and serious
minister of State."

F. W. Holls,
The International Court of Arbitration at The Hague;
a paper read before the New York State Bar Association,
January 15, 1901.

PEACE CONFERENCE:
Convention for the Pacific Settlement of
International Disputes.

TITLE I.
On the Maintenance of the General Peace.

ARTICLE I.
With a view to obviating as far as possible, recourse to
force in the relations between States, the Signatory Powers
agree to use their best efforts to insure the pacific
settlement of international differences.

TITLE II.
On Good Offices and Mediation.

ARTICLE II.
In case of serious disagreement or conflict, before an
appeal to arms, the Signatory Powers agree to have
recourse, as far as circumstances allow, to the good
offices or mediation of one or more friendly Powers.

ARTICLE III.
Independently of this recourse, the Signatory Powers
recommend that one or more Powers, strangers to the
dispute, should, on their own initiative, and as far as
circumstances may allow, offer their good offices or
mediation to the States at variance. Powers, strangers to
the dispute, have the right to offer good offices or
mediation, even during the course of hostilities. The
exercise of this right can never be regarded by one or the
other of the parties in conflict as an unfriendly act.

ARTICLE IV.
The part of the mediator consists in reconciling the
opposing claims and appeasing the feelings of resentment
which may have arisen between the States at variance.

ARTICLE V.
The functions of the mediator are at an end when once it is
declared, either by one of the parties to the dispute, or
by the mediator himself, that the means of reconciliation
proposed by him are not accepted.

ARTICLE VI.
Good offices and mediation, either at the request of the
parties at variance, or on the initiative of Powers
strangers to the dispute, have exclusively the character of
advice and never have binding force.

ARTICLE VII.
The acceptance of mediation can not, unless there be an
agreement to the contrary, have the effect of interrupting,
delaying, or hindering mobilization or other measures of
preparation for war. If mediation occurs after the
commencement of hostilities it causes no interruption to
the military operations in progress, unless there be an
agreement to the contrary.

ARTICLE VIII.
The Signatory Powers are agreed in recommending the
application, when circumstances allow, for special
 mediation in the following form:—In case of a serious
difference endangering the peace, the States at variance
choose respectively a Power, to whom they intrust the
mission of entering into direct communication with the
Power chosen on the other side, with the object of
preventing the rupture of pacific relations. For the period
of this mandate, the term of which, unless otherwise
stipulated, cannot exceed thirty days, the States in
conflict cease from all direct communication on the subject
of the dispute, which is regarded as referred exclusively
to the mediating Powers, who must use their best efforts to
settle it. In case of a definite rupture of pacific
relations, these Powers are charged with the joint task of
taking advantage of any opportunity to restore peace.

TITLE III.
On International Commissions of Inquiry.

ARTICLE IX.
In differences of an international nature involving neither
honour nor vital interests, and arising from a difference
of opinion on points of fact, the Signatory Powers
recommend that the parties, who have not been able to come
to an agreement by means of diplomacy, should as far as
circumstances allow, institute an International Commission
of Inquiry, to facilitate a solution of these differences
by elucidating the facts by means of an impartial and
conscientious investigation.

ARTICLE X.
The International Commissions of Inquiry are constituted by
special agreement between the parties in conflict. The
Convention for an inquiry defines the facts to be examined and
the extent of the Commissioners' powers. It settles the
procedure. On the inquiry both sides must be heard. The form
and the periods to be observed, if not stated in the inquiry
Convention, are decided by the Commission itself.
 ARTICLE XI.
The International Commissions of Inquiry are formed, unless
otherwise stipulated, in the manner fixed by Article XXXII
of the present Convention.

ARTICLE XII.
The powers in dispute engage to supply the International
Commission of Inquiry, as fully as they may think possible,
with all means and facilities necessary to enable it to be
completely acquainted with and to accurately understand the
facts in question.

ARTICLE XIII.
The International Commission of Inquiry communicates its
Report to the conflicting Powers, signed by all the members
of the Commission.

ARTICLE XIV.
The Report of the International Commission of Inquiry is
limited to a statement of facts, and has in no way the
character of an Arbitral Award. It leaves the conflicting
Powers entire freedom as to the effect to be given to this
statement.

TITLE IV.
On International Arbitration.

CHAPTER I.
On the System of Arbitration.

ARTICLE XV.
International arbitration has for its object the settlement
of differences between States by judges of their own
choice, and on the basis of respect for law.

ARTICLE XVI.
 In questions of a legal nature, and especially in the
interpretation or application of International Conventions,
arbitration is recognized by the Signatory Powers as the
most effective, and at the same time the most equitable,
means of settling disputes which diplomacy has failed to
settle.

ARTICLE XVII.
The Arbitration Convention is concluded for questions
already existing or for questions which may arise
eventually. It may embrace any dispute or only disputes of
a certain category.

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ARTICLE XVIII.
The Arbitration Convention implies the engagement to submit
loyally to the Award.

ARTICLE XIX.
Independently of general or private Treaties expressly
stipulating recourse to arbitration as obligatory on the
Signatory Powers, these Powers reserve to themselves the
right of concluding, either before the ratification of the
present Act or later, new Agreements, general or private,
with a view to extending obligatory arbitration to all
cases which they may consider it possible to submit to it.

CHAPTER II.
On the Permanent Court of Arbitration.

ARTICLE XX.
With the object of facilitating an immediate recourse to
arbitration for international differences, which it has not
been possible to settle by diplomacy, the Signatory Powers
undertake to organize a permanent Court of Arbitration,
accessible at all times and operating, unless otherwise
stipulated by the parties, in accordance with the Rules of
Procedure inserted in the present Convention.

ARTICLE XXI.
The Permanent Court shall be competent for all arbitration
cases, unless the parties agree to institute a special
Tribunal.

ARTICLE XXII.
An International Bureau, established at The Hague, serves
as record office for the Court. This Bureau is the channel
for communications relative to the meetings of the Court.
It has the custody of the archives and conducts all the
administrative business. The Signatory Powers undertake to
communicate to the International Bureau at The Hague a duly
certified copy of any conditions of arbitration arrived at
between them, and of any award concerning them delivered by
special Tribunals. They undertake also to communicate to
the Bureau the Laws, Regulations, and documents eventually
showing the execution of the awards given by the Court.

ARTICLE XXIII.
Within the three months following its ratification of the
present Act, each Signatory Power shall select four persons
at the most, of known competency in questions of
international law, of the highest moral reputation, and
disposed to accept the duties of Arbitrators. The persons
thus selected shall be inscribed, as members of the Court,
in a list which shall be notified by the Bureau to all the
Signatory Powers. Any alteration in the list of Arbitrators
is brought by the Bureau to the knowledge of the Signatory
Powers. Two or more Powers may agree on the selection in
common of one or more Members. The same person can be
selected by different Powers. The Members of the Court are
appointed for a term of six years. Their appointments can
be renewed. In case of the death or retirement of a member
of the Court, his place shall be filled in accordance with
the method of his appointment.

ARTICLE XXIV.
When the Signatory Powers desire to have recourse to the
Permanent Court for the settlement of a difference that has
arisen between them, the Arbitrators called upon to form the
competent Tribunal to decide this difference, must be
chosen from the general list of members of the Court.
Failing the direct agreement of the parties on the
composition of the Arbitration Tribunal, the following
course shall be pursued:—Each party appoints two
Arbitrators, and these together choose an Umpire. If the
votes are equal, the choice of the Umpire is intrusted to a
third Power, selected by the parties by common accord. If
an agreement is not arrived at on this subject, each party
selects a different Power, and the choice of the Umpire is
made in concert by the Powers thus selected. The Tribunal
being thus composed, the parties notify to the Bureau their
determination to have recourse to the Court and the names
of the Arbitrators. The Tribunal of Arbitration assembles
on the date fixed by the parties. The Members of the Court,
in the discharge of their duties and out of their own
country, enjoy diplomatic privileges and immunities.

ARTICLE XXV.
The Tribunal of Arbitration has its ordinary seat at The
Hague. Except in cases of necessity, the place of session
can only be altered by the Tribunal with the assent of the
parties.

ARTICLE XXVI.
The International Bureau at The Hague is authorized to
place its premises and its staff at the disposal of the
Signatory Powers for the operations of any special Board of
Arbitration. The jurisdiction of the Permanent Court, may,
within the conditions laid down in the Regulations, be
extended to disputes between non-Signatory Powers, or
between Signatory Powers and non-Signatory Powers, if the
parties are agreed on recourse to this Tribunal.

ARTICLE XXVII.
The Signatory Powers consider it their duty, if a serious
dispute threatens to break out between two or more of them,
to remind these latter that the Permanent Court is open to
them. Consequently, they declare that the fact of reminding
the conflicting parties of the provisions of the present
Convention, and the advice given to them, in the highest
interests of peace, to have recourse to the Permanent
Court, can only be regarded as friendly actions.

ARTICLE XXVIII.
A Permanent Administrative Council, composed of the
Diplomatic Representatives of the Signatory Powers
accredited to The Hague and of the Netherland Minister for
Foreign Affairs, who will act as President, shall be
instituted in this town as soon as possible after the
ratification of the present Act by at least nine Powers.
This Council will be charged with the establishment and
organization of the International Bureau, which will be
under its direction and control. It will notify to the
Powers the constitution of the Court and will provide for
its installation. It will settle its Rules of Procedure and
all other necessary Regulations. It will decide all
questions of administration which may arise with regard to
the operations of the Court. It will have entire control
over the appointment, suspension or dismissal of the
officials and employés of the Bureau. It will fix the
payments and salaries, and control the general expenditure.
At meetings duly summoned the presence of five members is
sufficient to render valid the discussions of the Council.
The decisions are taken by a majority of votes. The Council
communicates to the Signatory Powers without delay the
Regulations adopted by it. It furnishes them with an annual
Report on the labours of the Court, the working of the
 administration, and the expenses.

ARTICLE XXIX.
The expenses of the Bureau shall be borne by the Signatory
Powers in the proportion fixed for the International Bureau
of the Universal Postal Union.

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CHAPTER III.
On Arbitral Procedure.

ARTICLE XXX.
With a view to encourage the development of arbitration,
the Signatory Powers have agreed on the following Rules
which shall be applicable to arbitral procedure, unless
other Rules have been agreed on by the parties.

ARTICLE XXXI.
The Powers who have recourse to arbitration sign a special
Act ("Compromis"), in which the subject of the difference
is clearly defined, as well as the extent of the
Arbitrators' powers. This Act implies the undertaking of
the parties to submit loyally to the award.

ARTICLE XXXII.
The duties of Arbitrator may be conferred on one Arbitrator
alone or on several Arbitrators selected by the parties as
they please, or chosen by them from the members of the
Permanent Court of Arbitration established by the present
Act. Failing the constitution of the Tribunal by direct
agreement between the parties, the following course shall
be pursued: Each party appoints two Arbitrators, and these
latter together choose an Umpire. In case of equal voting,
the choice of the Umpire is intrusted to a third Power,
selected by the parties by common accord. If no agreement
is arrived at on this subject, each party selects a
different Power, and the choice of the Umpire is made in
concert by the Powers thus selected.

ARTICLE XXXIII.
When a Sovereign or the Chief of a State is chosen as
Arbitrator, the arbitral procedure is settled by him.

ARTICLE XXXIV.
The Umpire is by right President of the Tribunal. When the
Tribunal does not include an Umpire, it appoints its own
President.

ARTICLE XXXV.
In case of the death, retirement, or disability from any
cause of one of the Arbitrators, his place shall be filled
in accordance with the method of his appointment.

ARTICLE XXXVI.
The Tribunal's place of session is selected by the parties.
Failing this selection the Tribunal sits at The Hague. The
place thus fixed cannot, except in case of necessity, be
changed by the Tribunal without the assent of the parties.

ARTICLE XXXVII.
The parties have the right to appoint delegates or special
agents to attend the Tribunal, for the purpose of serving
as intermediaries between them and the Tribunal. They are
further authorized to retain, for the defense of their
rights and interests before the Tribunal, counselor
advocates appointed by them for this purpose.

ARTICLE XXXVIII.
The Tribunal decides on the choice of languages to be used
by itself, and to be authorized for use before it.

ARTICLE XXXIX.
As a general rule the arbitral procedure comprises two
distinct phases; preliminary examination and discussion.
Preliminary examination consists in the communication by
the respective agents to the members of the Tribunal and to
the opposite party of all printed or written Acts and of
all documents containing the arguments invoked in the case.
This communication shall be made in the form and within the
periods fixed by the Tribunal in accordance with Article
XLIX. Discussion consists in the oral development before
the Tribunal of the arguments of the parties.

ARTICLE XL.
Every document produced by one party must be communicated
to the other party.

ARTICLE XLI.
The discussions are under the direction of the President.
They are only public if it be so decided by the Tribunal,
with the assent of the parties. They are recorded in the
"procès-verbaux" drawn up by the Secretaries appointed by
the President. These "procès-verbaux" lone have an
authentic character.

ARTICLE XLII.
When the preliminary examination is concluded, the Tribunal
has the light to refuse discussion of all fresh Acts or
documents which one party may desire to submit to it
without the consent of the other party.

ARTICLE XLIII.
The Tribunal is free to take into consideration fresh Acts
or documents to which its attention may be drawn by the
agents or counsel of the parties. In this case, the
Tribunal has the right to require the production of these
Acts or documents, but is obliged to make them known to the
opposite party.

ARTICLE XLIV.
The Tribunal can, besides, require from the agents of the
parties the production of all Acts, and can demand all
necessary explanations. In case of refusal, the Tribunal
takes note of it.

ARTICLE XLV.
The agents and counsel of the parties are authorized to
present orally to the Tribunal all the arguments they may
think expedient in defence of their case.

ARTICLE XLVI.
They have the right to raise objections and points. The
decisions of the Tribunal on those points are final, and
cannot form the subject of any subsequent discussion.

ARTICLE XLVII.
The members of the Tribunal have the right to put questions
to the agents and counsel of the parties, and to demand
explanations from them on doubtful points. Neither the
questions put nor the remarks made by members of the
Tribunal during the discussions can be regarded as an
expression of opinion by the Tribunal in general, or by its
members in particular.

ARTICLE XLVIII.
The Tribunal is authorized to declare its competence in
interpreting the "Compromis" as well as the other Treaties
which may be invoked in the case, and in applying the
principles of international law.

ARTICLE XLIX.
The Tribunal has the right to issue Rules of Procedure for
the conduct of the case, to decide the forms and periods
within which each party must conclude its arguments, and to
arrange all the formalities required for dealing with the
evidence.