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Summary lectures Business and Sustainability Challenges (GEO4-2601)

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Summary of the lectures on Business and Sustainability Challenges (GEO4-2601)

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  • 7 oktober 2021
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Summary lectures Business Sustainability Challenges

Lecture 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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