Course: BUSS6171

Effective Period: 2021

Global Initiataives of Sustainability

in Development and Business

Session 02
 Learning Outcome

• Explain the International blueprints and Sector Specific Framework

• Explain why Sustainability in Business
• Identify Characteristic and Benefits of ESG Practices
• Explain the practice of Sustainability in Indonesia
Internasional Blueprint and Sector Specific
Framework
Managing Complexity

• Eco-system framework posit that business impact the environment in a fluid,

dynamic and interdependent way not linier which ignore any feedback effect
between subsequent action and its cause.
• “older organizations that cling to traditional management will not be able to
keep up” (Swenson, 2013). More forcefully, one presenter argued that “older
organizations that remain in denial of the need to change will become
extinct.”
Internasional Blueprint and Sector Specific
Framework
Managing Complexity

• Goals beyond Profit

- Business must be driven by goals beyond profit – Triple bottom Line
- Business must consider stakeholder rather than shareholder
• Structure
- Is hierarchical organization structure most appropriate?
- Structure needs to accommodate feedback flows and foster innovation e.g.
Google 20% of their employees to pursue creative side project
• Core Value
- Value driven company
Internasional Blueprint and Sector Specific
Framework
Managing Complexity

• Coordination
- Coordination to foster innovation for sustainability
• Communication
Complex systems involve many actors and their relationships are not always
perfectly clear. Further, how they interact in their environments is not always
clear. Managers would do well to study the flow of information between
individuals, teams, and networks
Why Sustainability in Business
Why Sustainability in Business

• Although there are many stakeholder groups that the firm needs to interact
with, the economic stakeholders of the firm seem to get more attention.
• Business strategies espousing the business case for sustainability positively
improve the same stakeholder group that almost all traditional businesses
serve—that is, shareholders.
• Moreover, by minimizing harm while increasing profitability, only one
stakeholder is impacted positively even as others are not harmed as much.
• “BP has lost more than $32 million a day in brand value. BP’s market value
had dropped from $184 billion to $96.5 billion, roughly 48% in a period of
two months. Developing a good environmental and social reputation can
contribute to a willingness among customers and investors to pay a price
premium, which directly affects the company’s bottom line.”
Why Sustainability in Business

• Although there are many stakeholder groups that the firm needs to interact
with, the economic stakeholders of the firm seem to get more attention.
• Business strategies espousing the business case for sustainability positively
improve the same stakeholder group that almost all traditional businesses
serve—that is, shareholders.
• Moreover, by minimizing harm while increasing profitability, only one
stakeholder is impacted positively even as others are not harmed as much.
• “BP has lost more than $32 million a day in brand value. BP’s market value
had dropped from $184 billion to $96.5 billion, roughly 48% in a period of
two months. Developing a good environmental and social reputation can
contribute to a willingness among customers and investors to pay a price
premium, which directly affects the company’s bottom line.”
Why Sustainability in Business

• Besides environment Business needs to emphasize the social dimension of

sustainability.
• PepsiCoreports significant improvements in the amount of water resources it
uses to produce its beverages and other food products: “During 2014, we
decreased absolute water use by approximately one billion liters and realized
approximately $17 million in cost savings.”
• Nevertheless, these companies do not seem to adopt similar initiatives to
minimize the negative social impact that their products might have—more
specifically, the impact that the high sugar content of their products has on
society, in terms of the link between the consumption of their products and
increase in obesity. Research shows that high rates of obesity .
• A Harvard University School of Public Health Study reports that “two out of three
adults and one out of three children in the United States are overweight or
obese, and the nation spends an estimated $190 billion a year treating obesity-
related health conditions.
Why Sustainability in Business

• Business needs to consider its impact to:

– Social: How it improves society e.g. TOMS 1 pairs of. Shoes donated for
each pairs sold
– Supplier: Fair Trade e.g. Fair trade coffee sources for Starbucks
– Employees
– Customers e.g. don’t buy this jacket promotion by Pentagonia
– Government
Why Sustainability in Business

• Business needs to consider its impact to:

– Social: How it improves society e.g. TOMS 1 pairs of. Shoes donated for
each pairs sold
– Supplier: Fair Trade e.g. Fair trade coffee sources for Starbucks
– Employees
– Customers e.g. don’t buy this jacket promotion by Pentagonia
– Government
Why Sustainability in Business

BENEFITS OF SUSTAINABILITY IN BUSINESS

• Protect Your Brand and Mitigate Risks

– Ending up on the front page because of a scandal is a CEO’s worst
nightmare. Not only do improper practices damage an organization’s
reputation and cost it customers, but dealing with a public relations
disaster can divert valuable human and financial resources from the core
business.
• Being Purpose-Driven Is a Competitive Advantage
– Sustainability doesn't detract from business goals, and infusing your
company with purpose can help attract a 
motivated, skilled workforce that drives financial success. In a 
Facebook Live discussion, Henderson noted a recent study showing that
89 percent of executives believe an organization with shared purpose will
have greater employee satisfaction. Additionally, 85 percent say they're
more likely to recommend a company with strong purpose to others.
Why Sustainability in Business

BENEFITS OF SUSTAINABILITY IN BUSINESS

• There's a Growing Market for Sustainable Goods

– A 2019 study found that 73 percent of global consumers are willing
to change their consumption habits to lessen their negative impact
on the environment, and sustainable product sales have grown by
nearly 20 percent since 2014. Millennials in particular are more 
willing to pay more for products that contain sustainable ingredients
or products that have social responsibility claims.
Why Sustainability in Business

BENEFITS OF SUSTAINABILITY IN BUSINESS

• Cooperative Action Can Drive Change

– As an individual, it can feel overwhelming, isolating, or simply
impossible to effect change in a meaningful way. That’s not the case
when the most innovative, successful, and powerful companies are
collaborating to solve some of the world’s most pressing problems.
While governments struggle to address public goods problems,
purpose-driven companies working together to address these issues
have experienced great success.
 Case 1 Panera Bread

Panera Bread Originally named St. Louis Bread (which is still the case in St.
Louis), Panera Bread was purchased in 1993 by Au Bon Pain, a Boston-based
company founded by Ron Shaich. Beginning in 1999, Panera Bread began
expanding across the United States, achieving approximately eighteen hundred
stores in forty states and a market capitalization of $4.6 billion as of February
2014. As a fast-casual restaurant, Panera Bread was a pioneer in the fast-food
industry for providing customers with healthy food options, ranking first in
Zagat’s 2009 rankings for the “Best Healthy Option” and “Best Salads”
categories.30 In 2010, Panera became one of the first national US restaurant
chains to post calorie information for each of its options at every location.31
Despite his company’s rapid growth and expansion, Shaich realized that not
everyone could necessarily afford the healthy meals that Panera sold. This
problem was further exacerbated by the financial crisis in 2007–2008. In 2009,
Shaich began brainstorming how Panera could develop a nonprofit called Panera
Cares to assist with the growing lack of affordability for healthy food options.
While Panera could dedicate a significant portion of its revenues to supply food
for those less fortunate, Shaich was convinced his efforts would go a lot further if
he could somehow engage stakeholders and particularly customers. If you were
Shaich, what would you propose to the board of Panera?
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
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Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
Indonesia Sustainability Roadmap
POJK 51/2017
• Peraturan Otoritas Jasa Keuangan (POJK) Nomor 51/POJK.03/2017
tentang Penerapan Keuangan Berkelanjutan bagi Lembaga Jasa
Keuangan, Emiten, dan Perusahaan Publik, yang dilanjutkan dengan
diluncurkannya Pedoman Teknis Penerapan Keuangan Berkelanjutan
bagi Sektor Perbankan oleh OJK di bulan Nopember 2018.
• Dengan adanya POJK di atas dan pedoman teknis untuk sektor
perbankan, bank-bank di Indonesia mulai diminta untuk
mengikutsertakan pertimbangan efektifitas manajemen risiko sosial
dan lingkungan dalam proyek yang mereka dukung pendanaannya:
sejauh apa proyek tersebut berkontribusi untuk bisnis yang lebih
hijau (greener), ramah iklim (climate friendly), dan mengikutkan sertakan
elemen sosial (socially inclusive).
POJK 51/2017
• LJK, Emiten, dan Perusahaan Publik wajib menerapkan Keuangan
Berkelanjutan dalam kegiatan usaha LJK, Emiten, dan Perusahaan
Publik.
– prinsip investasi bertanggung jawab;
– prinsip strategi dan praktik bisnis berkelanjutan
– prinsip pengelolaan risiko sosial dan Lingkungan Hidup;
– prinsip tata kelola;
– prinsip komunikasi yang informatif
– prinsip ; inklusif;
– prinsip pengembangan sektor unggulan prioritas;
– prinsip koordinasi dan kolaborasi.
References
Textbook:
Francisco Szekely and Zahir Dosa, Beyond The Triple Bottom Line, 2017, 1 st
ed, MIT Press, ISBN 7980262035966

Others:
• https://www.unicef.org/indonesia/media/1626/file/Roadmap%20of%20
SDGs.pdf
• Indonesian’s Financial Authority Service Regulation – POJK 51/2017
• Jiazhe Sun, Shunan Wub,and Kaizhong Yang, “An ecosystemic
framework for business Sustainability” in Business Horizons (2018) 61,
59—72.
• https://online.hbs.edu/blog/post/business-sustainability-strategies
Assignment 2
• Based on the respective selected sustainability report, form a group of 2
– 3 students and act as a team of consultant to formulate concise yet
compelling sustainability principles. Imagine that these principles must
be submitted to an advertisement agency that will create an
advertisement or branding strategy for this company.
Thank You