Seminar in Business Ethics and

Social Responsibility

SMT 940

Abeer Youssef
1
 Overview
Socially responsible practices in organisations:
• Sustainability as an ethical strategic approach
• Examples of sustainability in different industries
• Elements of sustainability
• Economic sustainability
• Environmental sustainability
• Social sustainability

• Who cares about sustainability?

• Customers
• Future employee
• Society (the public) 2
• Successful examples on sustainability as a strategic
ethical approach

• Sustainable operations management

• Triple Bottom Line

• Sustainable supply chain management

• Differences between corporate social responsibility and

corporate sustainability
3
Socially responsible practices in organisations

4
 Socially responsible practices in
organisations

Sustainability as an ethical strategic approach

▪ Sustainable operations management

▪ Triple Bottom Line

▪ Sustainable supply chain management 5

 Sustainability as an ethical strategic
approach

• The ability to be maintained at a certain rate or level,

e.g., “the sustainability of economic growth”.

• Avoidance of the depletion of natural resources in order

to maintain an ecological balance, e.g., “the pursuit of
global environmental sustainability”.

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 Financial/Economicalvalue

sustainability Human & social

Environment/Ecological
value
value

• A business enterprise takes place around three kinds of value

that interact.

• A sustainable business will have three positive balances.

• A business must have positive balances in all three areas.

 Examples of sustainability in
different industries

• Reduce packaging • Invest in various alternative

• Use sustainable materials energy sources
• Invest in alternative energy

• Invest in renewable energy sources

• Sustaibale offices
Elements of sustainability

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 Economic sustainability
It means that:
• Organisations should help local suppliers stay in business and
innovate.
• Organisational activities should not put the local economy at
risk.
• Organisations should pay employees enough money to
stimulate economic growth and spending.
• The organisational compensation policy should help improve
local economy.
• The choice of materials should be economically a good
investment. Do not buy cheaper products that create issues in
other areas, for example, do you buy chemical products that
are low emission, or cheaper high-VOC products that put your
environmental compliance at risk? 10
 Environmental sustainability

• Renewable energy use and reduced energy

consumption (direct and indirect),
• Amount of material that is recycled,
• Reduced the amount of water withdrawn from local
water sources,
• Reduce total NOx, SOx, and GHG emissions.

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 Social sustainability
• Organisations should be a job-growth driver in
societies.
• Organisations and their employees should give back to
the community.
• The people you hire should be statistically better
situated within the community in terms of economic
stability and community health.
• Organisations should support local initiatives and grow
the overall sustainability of your community/region.
• Organisations should implement fair hiring standards.
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To sum it up: Sustainability is meeting
the needs of the present without
compromising the ability of future
generations to meet their needs.

• Economic sustainability: Operate in a

sustainable manner to consistently
produce an operational profit

• Environmental sustainability: Living

within the means of our natural
resources

• Social sustainability: Persistently

achieve a good social wellbeing
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 Remember

You can never have an impact on society if you have not

changed yourself (Nelson Mandela, 1918-2013)

All business operations should be Ethically, Socially, and

Sustainably correct.
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 Who cares about sustainability?

Customers Society (the public)

Future employee

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 Costumers
• 92% of consumers agree with the statement that it is important
for the U.S. food industry, both food manufacturers and
supermarkets, to be more proactive about addressing
environmental concerns (FMI-Harris Poll, 2007).

• 89% of consumers are interested in “eco-friendly” products

and 30% actively look for them (Information Resources, Inc.
2007)

• 43% of customers think that they will be extremely green in

the next five years while only 11% classify themselves as
extremely green now (Wal-Mart Live Better Index, 2007).
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• Sales of “green” cleaning products increased 52% in 2006
(Information Resources, Inc).

• Organic food sales were up 11% between 2001 to 2005

and up 22% in 2006 (Mintel Research/Organic Trade
Association).

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 The public
• People consider a company’s commitment to social issues when
deciding the following:
➢ Which companies they want to see doing business in their
communities, 86% (in 2007 vs. 58% in 2001)
➢ Where to work, 77% (vs. 48% in 2001)
➢ Which stocks or mutual funds to invest in, 66% (vs. 40% in
2001).

• 87% say they want a company to support issues based on where

its business can have the most social and/or environmental
impacts.

• 80% of respondents listed health as the leading issue for

companies to address.
(Source: 2007 Cone Cause Evolution Survey) 18
 The future employees
A survey of 1,800 Gen X (people between the ages of 13 and 25) in
2006 found that:
• 61% agreed they are personally responsible for making a
difference in the world;

• 78% think companies have the same responsibility;

• 75% are more likely to pay attention to a company's messages if it

has a deep commitment to a cause;

• Nearly 90% stated they are “likely” or “very likely” to switch from
one brand to another based on a strong association with a good
cause.
Source: Cone and AMP Insights 19
 Successful examples on
sustainability as a strategic
ethical approach

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• Coco-Cola sustainability video

• Creating Sustainable healthcare environments

https://youtu.be/JcWAiZn7zBM

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 Patagonia Clothing

In 1993 Patagonia became the first

company to use post-consumer
recycled materials in their
products.

Patagonia Capilene fabric garments

contain 54% recycled polyester
content and are 100% recyclable
through Patagonia’s take-back
system.

www.patagonia.com
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 Stokke Tripp Trapp Chair

Peter Opsvik (for Stokke, 1972) designed the award-winning

Tripp Trapp chair to grow with the child, increasing the
effective lifetime of the chair.

www.stokke.com 23
 Dunlop Recycled Wellington Boots

Dunlop Wellington boots are made

from polyurethane, PVC, and
rubber.

Dunlop developed a line of recycled

boots.

Dunlop takes back used Wellingtons

from customers. Old boots are re-
ground and re-manufactured into
new boots.

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Herman Miller Setu Multipurpose Chair
Environmentally friendly and non-toxic materials
– 41% aluminum, 41% polypropylene, 18%
steel, by weight
Use of recycled materials
– 44% by weight - 23% post-consumer, 21%
post-industrial
Less material content
– 20 lbs lighter than most task chairs
Easy to disassemble
– 86% easily separable materials
Recyclable
– 92% by weight
Production line uses 100% green power
No air or water emissions released in production
Returnable and recyclable packaging 25
 Nike Considered Design

New products are designed using

environmentally preferred materials.
The materials analysis tool evolves to
reflect best practices and Nike’s
changing environmental values.
Nike’s goal is for all new products to
be developed using its Considered
Design standards.
– footwear by 2011
– clothing by 2015
– equipment by 2020

Materials Analysis Tool

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 Audi e-Tron

• Electric – 4 motors; 1
battery
• 313 horsepower
• All wheel drive
• 0 to 62 in 4.8 seconds
• Estimated range = 154
miles

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 Apple “ Green Computer”
• The casing is 100%
recyclable. It features
Apple's first mercury-
free, arsenic-free
display. The circuit
boards are PVC and
BFR free. The box will
also include about half
the packaging of the
current Macbook line.

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Daimler is currently road-testing its prototype
NECAR 5 (New Electric Car)

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Sustainable Operations
Management

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 Sustainable operations
“Sustainable operations is a field of research that models the
quantitative aspects of business administration, which in
addition to economic objectives aims equally at
sustainability in the environmental and/or social sense and
applies methods from Operations Research to solving these
models”(Florian Jaehn, 2016).

Sustainable operations can be defined as operations that

meet the present needs without compromising on the ability
to meet future needs. It aims equally at sustainable
operations in the economic, environmental and social sense.
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 Sustainable Operations Management
“Sustainable OM is
the set of skills and
leverages that allow
a company to
structure its business
processes to achieve
sustainable
performance”
(Cristina, 2012-
pp.149).

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• The business function responsible for planning,
coordinating, and controlling the resources needed to
produce a company’s products and services (under the
lens of sustainability).

• Focus on SUSTAINABILITY rather than any other

traditional criteria.

• For long-run success companies must place much

important on their sustainable operations.

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Triple Bottom Line (TBL)

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Corporate Social
Responsibility (CSR)

Triple bottom
line

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 Sustainability and Triple Bottom Line (TBL)
The triple bottom line is a business
concept that posits firms should commit to
measuring their social and environmental
impact—in addition to their financial
performance—rather than solely focusing
on generating profit, or the standard
“bottom line.” It can be broken down into
“three Ps”: profit, people, and the planet.

In reality, sustainability should signify

that an organisation practices the triple
bottom line strategy. This is the concept of
aligning non-financial aspects within
business practices for the maximum benefit
of people, the planet, and profit
(prosperity). 36
• TBL is a transformation/accounting framework/tool to
help businesses and organisations move toward a
regenerative and more sustainable future.

• The triple bottom line method of tracking sustainability

has transformed the way businesses and organisations
measure performance.

• TBL offers tools that help an organisation measure,

benchmark, set goals, and eventually evolve toward more
sustainable systems and models.

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38
The social bottom line- People

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 The environmental bottom line-
Planet
• “Planet” refers to sustainable environmental practices. A
TBL endeavours to benefit the natural order as much as
possible or at the least do no harm and curtail
environmental impact.

• A TBL endeavour reduces its ecological footprint by

carefully managing its consumption of energy and non-
renewable and reducing manufacturing waste as well as
rendering waste less toxic before disposing of it in a safe
and legal manner.

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• TBL conducts a life cycle assessment of products in
manufacturing businesses to determine what the true
environmental cost is from the growth and harvesting of
raw materials to manufacture to distribution to eventual
disposal by the end user.

• Companies, work according to TBL standards, do not

produce harmful or destructive products, such as
weapons, toxic chemicals or batteries containing
dangerous heavy metals.

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 The economic bottom line- Profit
• “Profit” is the economic value created by the organisation
after deducting the cost of all inputs, including the cost of
the capital tied up.

• It therefore differs from traditional accounting definitions

of profit. In the original concept, within a sustainability
framework, the “profit” aspect needs to be seen as the real
economic benefit enjoyed by the host society. It is the real
economic impact the organisation has on its economic
environment.
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• This is often confused to be limited to the internal profit
made by a company or organisation, which nevertheless
remains an essential starting point for the computation.

• Therefore, an original TBL approach cannot be

interpreted as simply traditional corporate accounting
profit plus social and environmental impacts unless the
“profits” of other entities are included as a social benefits.

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 Trade-Offs Decisions
• Costs/profits versus positive contribution to society.
• Costs/profits versus positive contribution to environment.
• Costs/profits versus contribution to economic growth (GDP).

❑ As a business owner- What are your obligations toward

sustainability?
❑ As a customer- What are your obligations toward
sustainability?
❑ As a service provider- What are your obligations toward
sustainability?

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Sustainable Supply Chain
Management

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What is a supply chain?

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What is supply chain management?

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Supply chain management is managing supply and demand,
sourcing raw materials and parts, manufacturing and
assembly, warehousing and inventory tracking, order entry
and order management, distribution across all channels, and
delivery to the customer (The Supply Chain Council).

49
 What is sustainable supply chain management?

Sustainable supply chain management requires that sustainability

criteria be met while maintaining competitiveness through meeting
customer needs (Seuring and Müller, 2008).
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Applying/managing a sustainable supply chain could be through:

➢ Procurement: Most companies start sustainability programs by

looking at energy and water procurement, and by procuring
sustainable materials to use in their products.

➢ Operations: Look for operational processes or steps across the

supply chain that could be more efficient and reduce resource
usage.

➢ Retirement: Avoid excess waste and obsolete items by designing

products for upcycling and reuse.

➢ Data and communication: Measure the effectiveness of initiatives

in the first three areas, and strengthen any related efforts, by
communicating them to customers, supply chain partners and
other stakeholders.
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 Benefits of sustainable supply chain
• Reduce cost and wastes
• Manage risks
• Create distinguishing (sellable) reputation
• Reinforce shareholder value
• Customer loyalty
• Brand and reputation
• Competitiveness and profitability
• Cost savings
• Creativity and innovation
• Continuity 52
 Examples of sustainable supply chain
management

Toyota
Carbon emissions are top of mind when it comes to
environmental sustainability, so car manufacturers are
often a big part of the discussion. Toyota has been making
strides throughout its operations – according to the CPD,
all of the car giant’s plants across Europe, along with a
handful in South America, now use 100% renewable
electricity.

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Mars
The environmental impacts of palm oil have been a big-
ticket news item over the past few years, and candy bar
manufacturers have felt the heat. Mars seems to have taken
the message to heart and spent the last several years making
changes to its supply chain as a result. It has reported
reducing the number of mills to make it easier to hold its
partners accountable, and saved contracts for suppliers with
strong environmental practices. It is also monitoring
deforestation with satellite tracking and is working with
non-profit fair labour organisation Verité to improve human
rights for workers along the chain.

Watch the video.

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HP
Timber production has also been closely scrutinised
recently, and computer giant HP – which is a major producer
of printer paper – has made big strides according to the
CPD. Since 2009, HP has increased the percentage of its
paper approved by the forest certification system Forest
Stewardship Council (FCS) from 3% to %100 last year.

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 Differences between corporate social
responsibility and corporate sustainability
Both CSR and corporate sustainability focus on helping
companies run in a way that is ethically profitable and to
positively impact those around them.

These two concepts are closely related. After all,

corporate sustainability is part of corporate social
responsibility.

However, there are some key differences between them as

follows:
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Vision
• CSR often looks backward and reflects on what a
company has done to contribute to society. CSR is
looking past performance.

• Corporate sustainability looks forward and develops a

sustainable strategy for the future by looking at improving
the present performance.

Target
• The targets of CSR initiatives are often opinion formers
(e.g., media, politicians, and pressure groups).

• Corporate sustainability looks at the whole value chain

(i.e., everyone from end-consumers to stakeholders). 57
Motivation
• The motivation and driving force behind CSR initiatives
is usually to protect a company’s reputation.

• For corporate sustainability, the drive has more to do

with creating new opportunities for emerging markets,
saving more resources, and reducing costs. Sustainability
is more concerned how efficient the current systems and
processes are in organisations, which would lead to
implement improvements across the operations to reduce
risks and cut costs.

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 Recap
Socially responsible practices in organisations

1- Sustainability as an ethical strategic approach:

• Avoidance of the depletion of natural resources in order to
maintain an ecological balance, e.g., “the pursuit of global
environmental sustainability”.

• A sustainable business will have three positive balances,

economic, environmental, and social.

• Examples of sustainability in different industries.

59
• Elements of sustainability
➢ Economic sustainability: Operate in a sustainable
manner to consistently produce an operational profit.
➢ Environmental sustainability: Living within the means
of our natural resources.
➢ Social sustainability: Persistently achieve a good
social wellbeing.

• Who cares about sustainability?

• Customers
• Future employees
• Society (the public)

• Successful examples on sustainability as a strategic ethical

approach 60
2- Sustainable operations management:
- Sustainable operations can be defined as operations that meet the present
needs without compromising on the ability to meet future needs. It aims
equally at sustainable operations in the economic, environmental and
social sense.

- Sustainable OM is the set of skills and leverages that allow a company

to structure its business processes to achieve sustainable performance.”

3- Triple Bottom Line:

- A business concept that posits firms should commit to measuring their
social and environmental impact—in addition to their financial
performance.
- It can be broken down into “three Ps”: profit, people, and the planet.
- TBL offers tools that help an organisation measure, benchmark, set
goals, and eventually evolve toward more sustainable systems and
models.
61
4- Sustainable supply chain management
• Supply chain management is managing supply and demand,
sourcing raw materials and parts, manufacturing and assembly,
warehousing and inventory tracking, order entry and order
management, distribution across all channels, and delivery to
the customer.

• Applying/managing a sustainable supply chain could be

through: Procurement, operations, retirement, and data and
communication.

• Benefits of sustainable supply chain.

• Examples of sustainable supply chain management: Toyota,

HP, and Mars.
62
Differences between corporate social responsibility and corporate
sustainability:
• Vision: CSR often looks backward and reflects on what a
company has done to contribute to society. But corporate
sustainability looks forward and develops a sustainable
strategy for the future.

• Target: CSR initiatives are often opinion formers. However,

corporate sustainability looks at the whole value chain.

• Motivation: The motivation behind CSR initiatives is usually a

company’s reputation. For corporate sustainability, the drive
has more to do with creating new opportunities for emerging
markets, saving more resources, and reducing costs.
Sustainability is more concerned with efficiency.
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Thank you

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