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Summary readings - Business and Sustainability Challenges (GEO4-2601)

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A summary of the Business and Sustainability Challenge (BSC) readings required for BSC. Written during study year 2020/2021 Includes the readings: * Lecture 1: Aspects of sustainable supply chain management (SSCM): conceptual framework and empirical example - Göran Svensson (2007) * Lecture 1...

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Summary Business and Sustainability Challenges (GEO4-2601)

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1. Samenvatting - Summary readings - business and sustainability challenges (geo4-2601)
2. Samenvatting - Summary lectures business and sustainability challenges (geo4-2601)
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Business and Sustainability Challenges

Lecture 1: Aspects of sustainable supply chain management (SSCM): conceptual framework
and empirical example - Göran Svensson (2007)
Supply Chain Management (SCM): The centralized management of the flow of goods and services
and includes all processes that transform raw materials into final products.
The focus of SCM is on the different levels and the business operations within the channel from the
point of origin to the point of consumption.

Sustainable Supply Chain Management (SSCM): Requires a broadened approach of SCM. It should
emphasize economic, ecological and social aspects of business practices and theory. Involves the
inter-connection between components and interfaces across supply chains.

Second-order supply chain: The business activities prior to the point of origin (e.g. actors
and activities of renewable, non-renewable, and recycled resources) and those business activities
following the point of consumption (e.g. actors and activities of renewable, non-renewable and
recycling resources) are rarely acknowledged. See figure 1.

Example figure 2: Clothing industry
A1: Design and marketing departments, characteristics material, style etc. (point of origin)
B1: Where to manufacture it
C1: Manufactured clothes are distributed to a number of continental or regional wholesalers
D1: Merchandise is once again distributed in smaller quantities to retailers in the marketplace
E1: The consumers purchase and use the procured clothes (point of consumption)

Second-order supply chains can be the second-hand market and/or disposal of clothing, which are
usually not addressed in the literature.
A2: Give away clothing to charity organizations. The charity organizations could be seen as new
points of origin in second-order supply chains.
B2: Where to offer the second-hand clothing (e.g. Gikomba)
C2: A more structured and refined market (e.g. Adams market)
D2: This is a market where the wholesalers/retailers purchase their clothes from Gikomba, but they
now limit their assortment to style and special kinds of clothes, such as focusing on jeans,
dresses, shirts, blouses, gender or children for Nairobi consumers
E2: Another level is merchants buying clothes to be transported to other cities where the clothes will
again change owners to merchants travelling to the countryside and offering them to other
consumers

What may follow after the second-order supply chain of clothes is a third-order supply chain (An, Bn,
Cn etc.) which may be one dedicated to waste disposal or the clothes may also enter the second-
hand market again.

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,Lecture 1: Sustainable Development: Mapping Different Approaches - Bill Hopwood, Mary Mellor
and Geoff O’Brien (2005)
Sustainable development: A human-centred view of the inter-relations between environmental and
socio-economic issues.

Weak sustainability: Sees natural and manufactured capital as interchangeable with technology
able to fill human produced gaps in the natural world such as a lack of resources or damage to the
environment.

Strong sustainability: criticizes this, pointing out that humanmade capital cannot replace a multitude
of processes vital to human existence such as the ozone layer, photosynthesis or the water cycle.

The ideas of sustainable development in five principles based on equity:
 Futurity – inter-generational equity
 Social justice – intra-generational equity
 Trans frontier responsibility – geographical equity
 Procedural equity – people treated openly and fairly
 Interspecies equity – importance of biodiversity
These principles help give clarity to the ideas of sustainable development, link human equity to the
environment, challenge the more bland and meaningless interpretations and provide a useful basis
for evaluation of the different trends of sustainable development.

Mapping of views on sustainable development:

The socio-economic axis (y-axis) covers the level of importance given to human well-being and
equality and the environment axis (x-axis) covers the priority of the environment from low
environmental concern through techno centred to eco centred. The central shaded area of the map
indicates the range of views within the sustainable development debate; combining socio-economic
and environmental issues.

Three broad views on the nature of the changes necessary in society’s political and economic
structures and human–environment relationships to achieve sustainable development:
 Status quo: it can be achieved within the present structures. Supporters of the status quo
recognize the need for change but see neither the environment nor society. Adjustments can
be made without any fundamental changes to society. The supporters of this view are most

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, likely to work within the corridors of power talking with decision makers in government and
business.
 Reform: fundamental reform is necessary but without a full rupture with the existing
arrangements. People accept that there are big problems, being critical of current policies of
most businesses and governments and trends within society, but do not consider that a
collapse in ecological or social systems is likely or that fundamental change is necessary. This
group covers a range of people, some in government and public agencies, but it is largely
dominated by academics and mainstream NGO experts.
 Transformation: that as the roots of the problems are the very economic and power
structures of society a radical transformation is needed. Argue that a transformation of
society and/or human relations with the environment is necessary to avoid a mounting crisis
and even a possible future collapse.
o Transformation without Sustainable Development: When the primary concern is the
environment and they don’t look at the socio-economic issues
o Transformation and sustainable development: Those who adopt a transformative
approach that embraces both social and environmental questions, environment and
society are interconnected

Lecture 1: Mapping Corporate Responsibility and Sustainable Supply Chains: An Exploratory
Perspective - Valentina Carbone, Valerie Moatti and Vincenzo Esposito Vinzi (2012)
Corporate Responsibility (CR): Concerned with the sustainability of an organisation over the long
term. Add value to an organisation's activities by ensuring they have a positive impact on society, the
environment and the economy.

Different dimensions of Corporate Responsibility and Sustainable Supply Chain Management:
 To achieve superior CR performance, you need environmental initiatives
 The environmental and social dimensions are independent
 Environmental strategies/policies are having a closer alignment to global CR rating then with
social strategies/behaviours
 In order to be successful, the implementation of CR practices needs to be extended to supply
chain activities on both the social and environmental dimensions

The Influence of Country and Industry on Corporate Responsibility and Sustainable Supply Chain
Performance:
 Market-based countries (MBCs, including GB, CA, US, AU) lag behind Continental European
economies (CEEs, including AT, FR, NL, BE, CH, DE, NO, IE) in terms of both environmental
and social aspects. This can be explained through higher individualism as a characteristic of
these countries’ cultures
 CEEs and social democratic economies (SDE, with FI, SE, DK) display the best global and
environmental performance. This could be linked to the significant role of governmental
institutions and related regulations
 Mediterranean economies (MEs, including IT, PT, GR, ES) show quite poor environmental
performance, which is slightly counterbalanced by higher concern for social issues. This can
be explained by the lower GDP per inhabitant.
 Poorer and low-wage countries are expected to have lower social standards and lower
environmental as well as labour-related regulations than more developed economies
 The best performing sectors on the environmental dimension are those that have undergone
extensive stakeholder pressure, whether non-market-based (mainly regulation) because of
their high polluting impact (the auto industry, pharmaceuticals) or market-based (consumer
goods, packaging) from their customers

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,  The best performing industries on the social dimension are labour-intensive sectors (textiles,
retail and consumer goods), which have been criticised for unethical actions, who are now
reacting to stakeholder pressure. And it also concerns ‘virtual economy’ industries
(telecommunications, services), which should focus on the social side to improve their overall
CR because their specific features impact less strongly and visibly on the environment
 The sustainable supply chain has a key role in overall CR performance, there is a strong
correlation between corporate and supply chain-level decisions for both the social and the
environmental dimensions

Lecture 1: The Circular Economy – A new sustainability paradigm? - Geissdoerfer, Martin; Savaget,
Paulo; Bocken, Nancy M.P.; Hultink, Erik Jan (2017)
Sustainability: The balanced integration of economic performance, social inclusiveness, and
environmental resilience, to the benefit of current and future generations.

The sources of tensions were condensed by the environmentalists Ehrlich and Commoner in their
equation, I = P x A x T
I: Environmental impact
P: Population
A: Affluence, which represent consumption
T: technologies

Three pillars of sustainability, which act as interdependent and have positive feedbacks:
 People, profit, and planet

Definition sustainability in this article: the balanced and systemic integration of intra and
intergenerational economic, social, and environmental performance.

Circular Economy: A regenerative system in which resource input and waste, emission, and energy
leakage are minimised by slowing, closing, and narrowing material and energy loops. This can be
achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and
recycling.

Similarities Circular Economy and Sustainability concepts:
 Both concepts are essentially global in their nature, sharing concerns with the current state
of technology, industrial production, and consumption, which might not only jeopardise
future generations, but also present sources of unexplored competitive advantage.
 They stress the importance of better integrating environmental and social aspects with
economic progress, and set system-level changes at their very core.

Similarities between Sustainability and the Circular Economy
 Intra and intergenerational commitments
 More agency for the multiple and coexisting pathways of development
 Global models
 Integrating non-economic aspects into development
 System change/design and innovation at the core
 Multi-/interdisciplinary research field, to better integrate non-economic aspects into
development
 Describe potential cost, risk, diversification, value co-creation opportunities
 Cooperation of different stakeholders necessary
 Regulation and incentives as core implementation tools
 Central role of private business, due to resources and capabilities
 Business model innovation as a key for industry transformation

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