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Sustainability is one of the key issues in today’s society, as confirmed by the increasing attention of governments, media, academia and the industry. In the context of sustainable development, businesses that are often referred to as part of the problem can become part of the solution.

This book presents the state of the art of sustainability in corporations from a number of perspectives, which include: economy, finance, measurement and reporting, organizing for sustainability, green products, green buildings and IT. The individual chapters provide valuable insights for pursuing future research and define a proper research agenda for the years to come. Further, the relevance of the topics addressed makes the book essential reading for academics, practitioners, consultants and more generally, for all those interested in business evolution and sustainability. The book was written by prominent researchers from Italy, India, the USA and the UK.



Green Economy

In the actual context of climate change, world population growth and global economy adjustment, more sustainable production and consumption models have to be adopted to reduce the use of natural resources and greenhouse gas emissions and then to move towards low-carbon societies and green economy. In this way economic growth can be decoupled from the environment exploitation and degradation, in both developing and developed countries, as well as economic and social disparities can be mitigated.
The purpose of this contribution is to describe what green economy means and which are the economic, social and environmental principles sustaining it.
A definition of green economy is then provided based on the guidelines of some international institutions. The economic sectors that mainly characterize a green economy are outlined pointing out the main need of preserving and investing in the assets of key natural resources.
Some performance indicators are suggested to measure the progress towards such an economy model. Traditional measures, i.e. ecological footprint and human development index, are described. The new system of indicators proposed by OECD is also suggested to enhance the framework of analysis of two main components of green growth: human well-being and its sustainability over time.
Vito Albino

Industrial Sustainability

General Guidelines and Implications
Our vision is a future industrial system that delivers high value to its growing base of customers around the globe, while using, at most, a quarter of the current resources. The urgency for change is now feeding through from scientists into mainstream government, business and academic thinking. This chapter introduces sustainability in industrial systems starting from the wider context and putting in evidence the scale of challenge. This sustainable industrial system would be very different to today’s global industry – less homogenous with different business models and different relationships, creating different products and services – requiring new strategies, frameworks, and tools. In order to achieve this target a system design approach is required. Implications for sustainable manufacturing, supply chain design, sustainability performance measurement and management, and organizational change are provided. Open questions and discussion about tomorrow activities are derived, providing recommendations for educators, researchers, industrialists, and policy makers.
Flavio Tonelli, Steve Evans, Gian Carlo Cainarca

Carbon Emissions Management and the Financial Implications of Sustainability

The concentrations of greenhouse gases in the atmosphere have risen dramatically leading to the possibility of costly disruption from rapid climate change. This calls for greater attention and precautionary measures to be put in place, both globally and locally. Governments, business entities and consumers would be impacted by the extent to which such precautionary measures are incorporated in their decision making process.
Business entities need to consider issues such as trading in carbon allowances (or permits), investment in low- CO2 emission technologies, counting the costs of carbon regularity compliance and passing on the increased cost of carbon regulation to consumers through higher prices. Such considerations require information for informed decision making. This paper reports on a qualitative research study undertaken to consider the impact of the Kyoto protocol mechanisms on the changing information paradigms of cost and managerial accounting.
It is demonstrated that the information from strategic cost management systems will be particularly useful in this new carbon-economy, especially in evaluating the ‘whole-of-life’ costs of products and services in terms of carbon emissions. Similarly, the study discusses how strategic management accounting information would facilitate decisions on business policy, human resource management, marketing, supply chain management and finance strategies and the resultant evaluation of performance.
Under various carbon emissions trading schemes proposed around the world (including the United States), organizations will need to implement carbon management schemes to meet carbon ration targets, earn revenue and reduce costs. Emission Trading Schemes will impact the accounting profession significantly; however, discussions on how to report these transactions are in the very formative stages. So far the accounting literature has focused on the reporting of current carbon assets and liabilities in the balance sheet and the timing effects of carbon releases in the income statement. However, there has been little or no discussion as to how to value and report the underlying non-current assets (and liabilities) that produce or use carbon allowances on the balance sheet. This paper summarizes the ongoing dialogue in this area.
Janek Ratnatunga, Kashi R. Balachandran

Sustainability and Business at a Crossroads: The Idea of Positive Investments in Creating Shared Value

In this chapter, I engage with two leading and complementary contemporary theories of economic and business sustainability – the macroeconomic concept of sustainability as an intergenerational equity of transferring wealth from present to future generations, and the microeconomic approach of Creating Shared Value that offers new ways of connecting business strategy, economic growth and social prosperity. In both theories, I explore the idea of positive investments and their innovative distributive strategies that pursue sustainable long-term growth and offer solutions to existing and future economic, societal and environmental risks. These approaches re-envision the way we can think of and measure sustainable development at national and corporate levels, prompting governments, local communities, investors, citizens, and businesses to find novel forms of participation and collaboration in global and interconnected markets.
Mariela M. Vargova

Integrating Sustainability in Capital Budgeting Decisions

This chapter discusses how to integrate sustainability and environmental impacts into capital budgeting decision-making by including: life-cycle-assessment (LCA), life-cycle costing (LCC), eco-efficiency (EE) and full-cost accounting (FCA) appraisal techniques. This comprehensive investment analysis – from “cradle to grave”- provides a template by which hidden environmental costs and benefits can be identified, analyzed and priced thus resulting in a better prediction of cash flows. The model also integrates environmental risks into the risk-rate component of the cost of capital by developing a sustainability risk-rate and sustainability-cost NPV that captures the sustainability exposure of each capital project alternative.
Marinilka Barros Kimbro

A Study of Consumer Attitudes and Behaviour Towards Sustainability in Bradford, UK: An Economical and Environmentally Sustainable Opportunity

In this chapter we explore the current understanding of “sustainability” and its impact on residents of a major British City-Bradford by asking general members of community as consumers. During the 1840s Bradford was the wool capital of the world, which characterized the economic prowess of the city through it becoming a solid manufacturing and engineering powerhouse during the Victorian era. This growth can be hugely linked to the Industrial revolution and the development of communication routes during the late eighteenth century. Bradford is a large post-industrial city, the fifth largest metropolitan district in the United Kingdom and the fourth largest in England. Bradford is situated in the north of England and is the second largest conurbation in the sub-region of West Yorkshire covering approximately 400 km2 in size and has an approximate population of 512,600 (Invest in Bradford 2012). Sixty-four percent of the population is constituted of working age residents’ between the ages of 16–64, older people aged above 65 contribute 13.4 % of the population and children aged between 0 and 15 constitute 22.6 % of the population. Bradford, a multicultural city and comprises the towns of Shipley, Ilkley, Keighley, Haworth and Bingley. The majority of people live in the urban centres of Bradford, Shipley and Baildon with the rest of the population residing in towns in rural areas. Across the wards in Bradford there is a huge variation in the levels of educational attainment, health and income levels. In order to determine the attitude and behaviour of Bradford consumers towards sustainability the following objectives need to be fulfilled:
Explore the awareness of sustainability of consumers in the local population.
To investigate attitudes of sustainability of consumers in the local population.
To investigate sustainable actions of consumers in the local population.
To explore the implications of current attitudes and behaviours on the future
To make recommendations for improving communications and awareness relating to sustainability.
With consumers being the focal point of the business world, we will look to understand the meaning and effectiveness of sustainability from the consumer viewpoint. A majority of businesses operate on the key driving force being profit, but with increasing global criticism businesses have been forced to re-assess their operations and so will need to align their strategies, products and processes in accordance to the expectations of the consumer so as to evaluate weather corporate strategies and offerings are in tune with current consumer expectations allowing us to make recommendations for the future. In doing so we will be able to argue that a higher level of education enables a greater understanding and embracing of sustainability and that the level of social class also influences the effectiveness of sustainability. A more pro-active and long-term stance needs to be taken by companies towards sustainability a view that is equally supported by IGD (2011), which will filter through to consumers as good practice in tandem to the influence of consumer preferences, a view that is equally supported (Edwards 2005) whom suggests that current practices of sustainability have only arisen as a result of declining ecosystems, economic disparity and a finite pool of natural resources.
Through consumers joining together as a community they can embrace the power of shared knowledge through community values and collective action in order to support sustainability efforts, as Hussain (2012) points out that the real benefits of sustainability will only be harnessed through the collective action of all individuals within an organization or society.
Bell and Morse (1999, p. 10) provided a general definition of sustainability as …maximizing the net benefits of economic development, subject to maintaining the services and quality of natural resources over time. Sustainability determines the going-concern of business operations and existence of society in the future. A real world economic conundrum of infinite wants and finite resources, has led to a greedy globalised world typical of over-consumption as individuals seek to maximise their marginal private benefit with little or no regard to the marginal social costs of consuming negative externality producing goods and services, such as the air pollution created through the use of automobiles. At current rates, behaviour such as polluting water streams and mass de-forestation is resulting in disturbances in the eco-system, and the demand for commodities such as oil lead us to contemplate upon our dependence on this resource, without which at this time the world and business operations would come to a standstill. Thomas Jefferson states “Every generation needs a new revolution.” In connection with the quote made by Thomas Jefferson in Edwards (2005) has stipulated that the current sustainability revolution provides an economically viable solution to healthy ecosystems through creating a better equitable social framework and altering consumption patterns. This ultimately means it is imperative that the commercial world with its sustainability efforts is in tune with the perceptions and demands of the consumer world. In 2010, according to the DECC (2011) UK emissions of the Kyoto protocol basket of six greenhouse gases rose to 582.4 million tonnes, indicating a 2.8 % increase from 566.3 million tonnes in 2009. The major contributors to these emissions are critically consumers from different primary sources and activities such as businesses, transportation and residential houses.
By analysing Fig. 1 we can assume that consumers influence corporate behaviour at each stage of the supply chain, thus businesses need also address ethical issues, such as looking at corporate social responsibility towards all stakeholders especially the environment and general public rather than the shareholders being the primary concern. We can also determine that through there being effective communications and consumers acting as a community, that a sustainability cycle can only be created and maintained if innovation is sought in the value chain of a product or service and if all of the six aspects; suppliers, firms, rewards, communications, publicity and public policies together promote sustainability. The resultant benefits of this would be increased consumer sustainability awareness and positive perceptions and attitudes, however if consumers do not act as a community then they risk to prolong and increase the ever existent ecological risks that are highlighted in red such as; pollution, rising sea levels and melting of polar ice caps, global warning, burning of fossil fuels and natural resources depletion and greenhouse gases and ozone depletion.
This research will allow an increased understanding of consumers’ attitudes, behaviours and actions towards sustainability so that any sustainability initiatives are precisely engineered by companies to maximum effect because the consumer is the focal point of any business venture. Secondly, by having access to the local market population spread across Bradford, it will provide us with in valuable insights and ideas to create even more sustainable business practices. Thirdly the research will allow us to assess whether business practices are in tune with consumer attitudes and behaviours. Fourthly, it will encourage innovation to flourish from the root level through inspiring individuals to think outside the box and fifthly, it will allow us to determine suitable suggestions for the future through identifying the drawbacks of current sustainability initiatives. In retrospect from a company perspective, this research aims to clarify whether sustainability practices are being communicated effectively and acknowledged by consumers as being genuinely beneficial or just used as a marketing tool for window dressing purposes.
From a literature perspective there is currently no concrete research for evaluating consumer attitudes and behaviour towards sustainability, therefore there is no way of determining the effectiveness of current sustainable initiatives employed by companies, thus allowing us to contemplate as to whether enough is being done or not from either a social or commercial front.
Zahid Hussain, Jasdeep Singh

Setting Managing Sustainability Goals

A growing number of companies are using sustainability goals as a means of signaling their commitment to become sustainability leaders, and to compete for superior positioning versus their rivals. But companies’ practices for selecting and managing sustainability goals vary widely and there is little understanding of the best practices for using sustainability goals to foster excellent sustainability performance. The research presented in this chapter draws on a survey of senior sustainability executives, interviews with such executives and a review of public statements by companies to identify trends in sustainability goal setting as well as what we believe are emerging best practices. We find that best practices include setting goals for the medium term, with targets representing material issues, overseen by senior executives whose compensation is tied in part to sustainability performance.
David Schatsky

Environmental Management Systems: Enabling Tools Towards Sustainability?

The implementation of Environmental Management Systems (EMS) has exponentially increased in the last decades, caused by heterogeneous pressures to companies. Coherently, the principles of Sustainability have largely been adopted by many businesses, in order to meet the present needs without compromising the ability of future generations to meet their own needs.
The two systems and frameworks, EMS on one side and Sustainability on the other, seem to be somehow related to each other, since they more or less affect the environmental, social and economical aspects related to businesses.
This chapter investigates on the bridge, if it really exists, between the two systems through a triple methodological approach: a quantitative literature review, a qualitative literature analysis and a case study.
The results allow the authors to support the evidences that the EMSs are enabling tools toward sustainability, especially for the environmental and social pillars.
Luca Cagnazzo, Emanuele Raggi, Paolo Carbone

The Green Option Matrix to Characterize Green Products and Practices

Applications to the Upholstered Furniture and the Footwear Industries
Hybrid cars, recycled products, photovoltaic cells, bioplastics: why so different products can be called ‘green’? Which practices companies willing to develop green products should implement? How companies can easily and effectively communicate to stakeholders the environmental features of their green products?
This paper tries to answer these questions, by developing a Green Option Matrix (GOM), which characterizes green products and practices along different dimensions. This matrix is then used to analyze the different features of green products as well as related green practices developed by a sample of companies belonging to two manufacturing industries, namely upholstered furniture and footwear. Green products and practices developed by each company in the sample are positioned in the matrix and results are presented and discussed for each industrial sector. The proposed matrix can be used by companies as a market tool to analyze competitors’ green products and practices and as a communication tool to effectively communicate to stakeholders the specific green features of their products and practices.
Rosa Maria Dangelico, Pierpaolo Pontrandolfo

Sustainability Measurement and Reporting: Impacts on Finance, Stakeholders Communication and Internal Measurement Practices

This chapter, based on the comprehension of relevant literature and evidences from business practices, highlights the impacts of sustainability on three areas related to traditional measurement and reporting practices:
Finance and investments;
Stakeholders communication and engagement;
Internal measurement and management systems.
The impact above mentioned appears relevant, and implications are therefore discussed.
Paolo Taticchi

Sustainable Use of IT

This research adopts a critical perspective that challenges mainstream thinking that organisational awareness and sustainable IT strategies can effectively contribute to producing green IT operations. The main concern in reviewing the literature and selecting a framework to guide the analysis is to examine options available for green IT, organisational performance and strategy formulation, how they are challenged by regulatory and legislative compliance and to seek out the achievements by adopting them.
The move to a low carbon society will fundamentally change the way that organisations operate in the future. Sustainability will continue to be an essential business driver for the majority of organisations. The introduction of new government legislation targeting environmental sustainability will increasingly impact organisational performance.
Zahid Hussain, Mohammed Addris Bostan

The Green Building Revolution: Advancing Sustainability at Exponential Speed

There is no singular definition of Sustainability and the word is starting to become a commonly used term with a diverse scope from environmental to social issues. The author believes that sustainability or sustain means to maintain or continue, survival, maintenance, continuity, not losing ground or going backwards. The author typed in “Definition of Sustainability” in Google and received almost two million hits. The Environmental Protection Agency/EPA (2012) provided the following definition of sustainability:
Jeffrey S. Seigel

Existing Buildings’ Energy Upgrade: An Economical and Environmentally Sustainable Opportunity

Given the huge amount of energy consumption imputable to existing buildings, and the relatively slow buildings’ substitution in both urban and suburban areas all over the world, building energy upgrade, starting from retrofitting procedures, becomes a significant way for optimizing the global potential of energy conservation.
The purpose of this contribution is to describe what building energy integrated upgrade could represent in terms of energetic, economical, financial and environmental impact, especially if it involves integrated optimized strategies.
Starting from a global assessment of retrofitting practice and its typical operations, we analyze the specific role of these interventions within the global market. We describe the growing attention to this practice considering both the energy main drivers and the typical barriers. Particular attention has been paid to the operations and management practice for building’s performance upgrade. In fact it represents a low-cost profitable strategy for improving building energy performance and indoor comfort conditions, ant it could be even more interesting in this global crisis scenario.
Finally a representative case study is described in terms of economic and energetic impact of the upgrading procedures. The Skanska New York City office at Empire State Building prototype points out how the integrated approach could be the protagonist for achieving health, productivity and economic benefits.
This contribution looks at how a global approach concerning building energy upgrade could improve existing buildings’ sustainability.
Anna Laura Pisello, Franco Cotana
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