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Om,MayGodProtectusBoth(theTeacherandtheStudent),

MayGodNourishusBoth,
MayweWorkTogetherwithEnergyandVigour,
MayourStudybeEnlightening,notgivingrisetoHostility,
Om,Peace,Peace,Peace.

IntroductiontoSustainableDevelopment&
CorporateSustainability
TataL.RaghuRam,XLRI

1. Individualresearchonsustainability:

15%

Chooseasustainabilitytopic/issueofyourchoice.Critically
analyzetheissuethroughresearchandsubmitastateoftheart
articlewhichwillbenolongerthan4pages+references.You
shouldhavereadatleast10journalarticlesandreferences
shouldbecited.Submissionwillbeduewithin30daysof
commencementofthecourse(July15,2015).

2.Attendance:

10%

In addition to 10%, absence from class beyond 2 sessions


(with permission or otherwise), will attract 3 negative marks per
session. Missing 5 sessions or more will attract F grade. Leave
of absence should be notified to the course instructor. Requests
for attending a class with another section will not be
entertained.

3.Groupprojectandpresentation:
(15%forwriteup+10%forpresentation)

25%

From session 2 onwards, students in groups (5


students/group/roll number wise) will research and present
on a preassigned topic.
Submit a 4 page writeup on the state of the art. At least 10
research articles/reports should be read and citations need to
be provided along with the writeup. This requires that the
groups shall interact with me at least 7 days before their
presentation to finalize the contents.
Final presentation and writeup should be shared with me
and other students at least 24 hours before the class.

4.Quizzes:
10%
5.Endterm:
40%
Grading:Gradingnormasperstudentmanual.
No repeat quizzes will be conducted.
Zero tolerance towards plagiarism. All written
submissions and group projects/ppts shall pass
through antiplagiarism software. Plagiarism will
attract F grade.
Zero tolerance towards use of laptops, mobile
phones, sleeping in the class, reading some other
courses material, proxy attendance etc.
No student will be allowed into the class after
attendance is taken.

SustainableDevelopment AContext&Direction

AResourceintensiveeconomy
The20thcenturywasatimeofremarkable
progressforhumancivilization
Unparalleledwealthcreationandhumanwell
being

Theextractionofconstructionmaterialsgrew
byafactorof34
Oresandmineralsbyafactorof27
Fossilfuelsbyafactorof12
Biomassbyafactorof3.6
Dr.RaghuRamTata,XLRIJamshedpur

Dr.RaghuRamTata,XLRIJamshedpur

Exponentialgrowthofresourceextraction

CommodityPriceIndices

Consequences?

Expansion&benefitsofconsumptionarenot
equitablydistributed

Dr.RaghuRamTata,XLRIJamshedpur

Global wealth distribution


Millionsofpeopleworldwidearestrugglingtomeettheirbasicneeds.
Distribution of Total World Income
Richest
Fifth

Poorest
Fifth

Consequences?
Profoundenvironmental&socialimpacts
Overexploitationofresources
climatechange
Pollution
landusechanges
lossofbiodiversity

Dr.RaghuRamTata,XLRIJamshedpur

E
X
T
E
R
N
A
L
I
T
I
E
S

Dr.RaghuRamTata,XLRIJamshedpur

SustainableDevelopment

Developmentthatmeetstheneedsof
thepresentwithoutcompromisingthe
abilityoffuturegenerationstomeettheir
ownneeds Brundtland Committee1987
Amacroeconomicconcept
Anthropocentric
Inter&intragenerational
equity

Ambiguity

18

Abusinessapproachthatcreateslongtermshareholdervalue
byembracingopportunitiesandmanagingrisksderivingfrom
economic,environmentalandsocialdevelopments.
Corporatesustainabilityleadersachievelongtermshareholder
valuebygearingtheirstrategiesandmanagementtoharness
themarketspotentialforsustainabilityproducts
andserviceswhileatthesametimesuccessfullyreducingand
avoidingsustainabilitycostsandrisks
DowJonesCompany,1999

AmicroeconomicdefinitionthatcomplementstheBrundtlands
macroeconomicconcept

Growth&Development
HermanDalyillustratesthefundamentaldifferencebetween
growthanddevelopmentbythesedefinitions:
Growth the quantitative increase in size or throughput of
biophysical matter. Daly has argued economic growth is
based on the limitless transformation of natural capital into
manmade capital.
Development the qualitative improvement in economic
welfare from increased quality of goods and services as
defined by their ability to increase human wellbeing. This
infers promoting increased economic activity only insofar as
it does not exceed the capacity of the ecosystem to sustain
it.

Anorganismssurvivaldependsontwocriticalfunctionsfrom
itsenvironment:provisionofresourcesandabsorptionof
wastes.

Source
Provideresources:
Water
Cleanair
Nutrients

Environment

Organism

Sink
Absorbwastes
andbyproducts

Thesameprincipleappliesatlargerscales,e.g.,toacompany,industry,or
economy.

Hownatureworks?

Natureworksincycles

No
Waste

Thereisnowaste whatis
unusedbyonespecies
becomesnutrientsforthe
next
Thesunsenergydrivesthe
process:
Greencelledplantsusing
photosynthesiscreate
netconcentrationand
structure

Industrial systems function primarily in a linear fashion

Take

Make

Take natural capital,


valuable material, and
process it into unusable
waste

Waste

Only 6% of
material flow
ends up in
products

Source: Hawken, Lovins, Natural Capitalism

Thisindustrialsystem,operatingonaneverlargerscale,is
embeddedinandaffectingnaturescycle.

Sustainability driven business risk &


opportunities

CorporateResponsibility?
Oftheworlds100largesteconomicentities,44are
corporations.Inthetop150,theproportionrisesto
59%.
The44companiesgeneratedrevenuesofUS$6.4
trillion@11%ofglobalGDP.
Largerthanthecombinedeconomiesof155
countries
Together,theyemployedover13.5millionpeople,
@0.4%oftheworldseconomicallyactive
population.
(2009)
Dr.RaghuRamTata,XLRIJamshedpur

The Corporate Response


Presentbusiness
modelsareparadoxical
&untenable
SD fashionabletotalk
about
CSRisasmokescreen
LookingtotheEast&
walkingtotheWest
Walkingthetalk
requiresaParadigm
shift&building
compellingbusiness
caseforSD

WithpowercomesRESPONSIBILITY

Compellingbusinesscaseforsustainability?
Orgoingbeyond,transcendingintoSustainabilityasthepurposeofbusiness?

Our vision is to be the global


steel industry benchmark for
value creation and corporate
citizenship
-TATA STEEL

We work to create a better future every day


We will inspire people to take small everyday actions
that can add up to a big difference for the world.
We will develop new ways of doing business with the
aim of doubling the size of our company while
reducing our environmental impact - HUL

To enhance the wealth generating


capability of the enterprise in a
globalizing environment, delivering
superior and sustainable stakeholder
value - ITC

To emerge from the position of domestic leader


to leading global player in the energy sector by
adopting best practices from mine to market
with due care to environmental and social
sustenance CIL

XLRIsVision
Apassionforacademicexcellence
Uncompromisinghumanvalues
Asensitivesocialconscience
Anabidingcommitmenttoimprovingthequalityofthelifein
organizationsandsociety
Integrity
XLRIJamshedpurwasthefirstIndianBSchool toendorseUNGCsPRiME
FatherAruppe CentreforEcology&Sustainability(FACES)
CentreforRuralDevelopment
Socialentrepreneurshipfund
XLRIiscommittedtoachievecarbonneutralstatusinfiveyearswitha
capitalcommitmentofRs.75lakhs.

MiltonFriedmansargument
TheNobelPrizewinningeconomistMilton
Friedmanargues:
Fewtrendscouldsothoroughlyundermine
theveryfoundationsofourfreesocietyasthe
acceptancebycorporateofficialsofasocial
responsibilityotherthantomakeasmuch
moneyfortheirstockholdersaspossible
1962

Stakeholdertheory
Thebottomlineorprofitisnottheonlyconcernforthe
company.Stakeholdertheoryintegratesresourcebased
views,marketbasedviews,politicalviews,andsocietal
views(Freeman,1986).

R.EdwardFreemanisanAmericanphilosopher

CreatingSharedvalue
MichaelE.PorterandMarkR.Kramer
Societalneeds,notjustconventionaleconomicneeds,
definemarkets,andsocialharmscancreateinternalcosts
forfirms.
Companiescancreateeconomicvaluebycreatingsocietal
value.
byreconceivingproductsandmarkets
redefiningproductivityinthevaluechain
buildingsupportiveindustryclustersatthecompanyslocations

SHAREDVALUECREATION Porter&Kramer,2011

Mutualismisthewaytwo
organismsofdifferent
speciesexistinarelationship
inwhicheachindividualbenefits
fromtheactivityoftheother.
Stakeholders:WinWinoutcomes

Pleasemeetthemeanestshrewdeststrategistontheplanet

Costreduction,Riskavoidance,Revenuegeneration,Innovation,ethical
business

+SocialConsent+

TheartandscienceofManagement
hastocatchupwithsustainability

Companies evolved in how they manage SD issues


Porter&Kramer
Sustainable
Development

Freeman
Risk Management

Friedman

Environmental
Compliance

End-of-pipe
Limit impact of current
activities

Pollution prevention;
Management systems
Redesign to eliminate impacts
of activities

Strategic integration
Change activities and design
of industrial system

Kondratiev cycles

Economicgrowthcomesinwavesofprosperitydrivenbynewtechnology&structural
economicchanges