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Summary lectures Business and Sustainability Challenges (GEO4-2601)
Summary of the lectures on Business and Sustainability Challenges (GEO4-2601)
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Summary lectures Business Sustainability ChallengesLecture 1: Introduction
Mapping of views on sustainable development:
Status quo: Sustainable development can be achieved within the present structures.
Adjustments can be made without any fundamental changes to society.
Reform: We have trust in the system, but we need some reform to increase the
speed/effectiveness.
Transformation: We are not going to obtain our sustainability challenges if we don’t change
anything. We need to work on the foundations of society.
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: Humanmade capital cannot replace a multitude of processes vital to human
existence such as the ozone layer, photosynthesis or the water cycle.
Corporate Social Responsibility (CSR): A process whereby companies integrate social, environmental
and ethical issues into their business operations and strategy in close interaction with their
stakeholders.
CSR programmes and initiatives:
Code of Conduct
Human rights policy
Environmental policy
Climate change policies
SDG principles and policies
Three pillars of sustainability, which act as interdependent and have positive feedbacks:
People, profit, and planet
Lecture 2:
Public procurement: The purchase by governments and state-owned enterprises of goods, services
and works.
Innovation procurement: The development of innovative solutions through the procurement of
research and development services
Why will innovation procurement be used?
1
, To support demand-side innovation. This is more market-pull driven, understand what the
demand is or should be. Government thinks on longer timescale than suppliers.
To help procurers achieve goals:
o Primary goal (should be done anyway): Service improvement, cost reduction
o Secondary goal: Innovation, sustainability
Types of innovation procurement:
Public Procurement of Innovative Solutions (PPI): Take existing products/services which are
on the market and adapt/modify them to meet user needs. E.g. development of new
ventilator because of Covid-19
Pre-Commercial Procurement (PCP): Purchasing phased R&D services from multiple suppliers
in parallel competition. So, you procure the R&D services, which are not existing yet.
Innovation Partnership: Purchasing from one supplier of R&D services and the final product.
Size of the innovative step:
Incremental innovations: To integrate, customize, or adapt existing solutions to meet user
needs (e.g. through PPI)
Radical innovations: Products or services with characteristics that surpass those currently on
the market (e.g. through PCP or innovation partnership)
Product innovation life cycle: PCP PPI
2
, Technology Readiness Levels (TRLs):
Types of procurement with respect to the environment:
Green Public Procurement (GPP): Purchasing which reduces environmental impacts across
product or service life cycles.
Circular procurement: Helps close energy and material loops within supply chains while
minimizing/avoiding negative environmental impacts and waste across the entire life-cycle.
Public procurement for eco-innovation: Innovation for environmental benefits
What the Contracting Authority Needs to Decide:
What do end-users need?
Is there a solution already on the market?
o If not, how much R&D is required?
o Is there blocking Intellectual property (IP)?
What standards are available?
How could we reduce costs?
Would investment be profitable?
Are suppliers interested?
How to design the tender specifications?
Knowledge Asymmetries: When one side knows more than the other(s) about something which
affects them.
How to overcome knowledge asymmetries?
Knowledge sourcing by the procurer reduces information asymmetry with suppliers
A business case can reduce buyer risks and increase supplier incentives by identifying the
innovation need and suppliers’ ability to meet this
Develop in the planning phase, use to write tender and evaluate post-procurement
3 Types of Contracting Authorities:
User-focused direct procurers: Focused on the local needs, purchase stuff for authority
themselves. Mostly do this with other people (cooperative), not very often and mostly a
small organisation, municipal.
Collaborative innovative procurers (PPI): Larger organizations which do PPI. Do this with
other people, use a lot of information sources. Large companies on national level.
Supplier-focused pre-commercial procurers (PCP): Doing procurement for someone else.
(catalytic procurement). Consult suppliers, outsource services, regional level.
3
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