Tag Archives: Sustainable business

Business, government and nature: an impossible triangle?

How can businesses be more sustainable? Not only we as students are asking this question, this is a challenge the Dutch government and businesses themselves are facing. Even if the motivation is there to create a more sustainable business, it still hard to implement this. Last December I was part of a working conference about sustainable business. This conference was organized by the Dutch government especially for industries, municipalities and other interested parties and specifically focused on Natural Capital (Natuurlijk Kapitaal).

Natural Capital explained by the IUNCS Director General

The concept: Natural Capital

Natural Capital makes the translation of Ecosystem Services towards businesses and other users of nature. Ecosystem services are natural services like provisioning of food and material, regulating systems like climate control, supporting services like water cycling and cultural services like the enjoyment of nature in general. The idea is that businesses and other users are aware of this natural capital and use it in a sustainable way. However it is still a very vague and complex concept. This working conference brings businesses, innovators and policy makers together to bring this concept of Natural Capital into practice.

Econosystem Services scheme:

The role of the government

What I found most striking during the conference was what the Dutch government saw as their responsibility to work toward a sustainable business and integrate Natural Capital. Although the government is responsible for making regulations, the government relies on the power of the free market concept. The government is trying to provide services to stimulate sustainable business and the use of Natural Capital, and tries to avoid rules to impose this principle. For example, on websites like www.helpdesknatuurlijkkapitaal.nl/ businesses can have free advice what Natural Capital means for them. But how industries implement these advice is up to them.

Green Deal

One of the biggest initiatives on how the Dutch government tries to stimulate sustainable businesses are Green Deals. Green deals try to work towards a circular economy by bringing different companies and interested together and tries to take away regulation barriers that hold these developments. A simple example of a Green Deal: when a fishing boat also catches plastic waste in their fishing nets they can collect it and bring it to a recycling company that can make new plastics out of it. This way the ocean stays cleaner and more plastic is being recycled. The Dutch government can help realizing this green initiative with the right regulations and bringing companies together.

Green Deals explained (in Dutch)

During the conference the Dutch Government was really reflection upon themselves. One of the discussions was also if “Different interpretations of laws and regulations are the biggest obstacle for companies to investment in nature and biodiversity”. Too many regulations can make it hard for a business to function and still be sustainable. On the special website www.ruimteinregels.nl the Dutch government try to create some order and give answers.

In the end was a very interesting day to see how businesses and governments try to work together to bring Natural Capital and sustainable development into practice. But we have release that it is a very complicated matter to stimulate and work together towards a more sustainable world.

For more information about the working conference in its result, take a look at:
http://www.werkconferentienatuurlijkkapitaal.nl/magazine-presentaties/

 

The industrial/science park as the centers of sustainability

Leiden Biosciencepark

 

Making the world more sustainable is a goal for us all, the all important question is; where do you start? For many governments and organisations it is very difficult to pick a starting point. Many initiatives focus solely on civilian and consumer society. While large companies are often lamented as being unsustainable and working against sustainability. Part of a broader approach to the problem of sustainability means including those companies and for a number of municipalities this means looking at the scale of the business park. With business parks often containing dozens or even hundreds of companies on a small spatial scale it makes sense considering their impact and also the enormous gains possible by working with a smaller number of actors.

As one of their ambitions the municipality of Leiden wants the Leiden Biosciencepark to become the most sustainable Biosciencepark in the Netherlands by 2030. A highly ambitious goal when taking into account that Leiden currently scores relatively low on many of the indications related to sustainability. The first step should be to ask what is already being done. 

The case of the Leiden Biociencepark. 

Sustainable Astellas
The new Astellas building is a sustainable example of new construction in Leiden

Recently we have interviewed a member of the entrepreneurial association of the Leiden Biosciencepark. In this interview it became apparent that there have been a number of actions taken, either for cost saving or sustainability, that go towards the goals set by the municipality of Leiden. Rebuilding of a road to make for a more efficient commute would be one of the specific projects undertaken that combine sustainability and business sense. Some new buildings that have been constructed in the past couple years often have had sustainability in mind. Those new buildings have been certified by BREAAM, an organisation that gives out certificates and scores for buildings based on how sustainable they are. Such buildings are build with heat-cold storage making their heating bill both cheaper and less demanding on the enviroment. Combining business and sustainability without either side losing out. With the recent increase interest of the municipality of Leiden and of the general population many companies are considering and investing hefty sums of money into sustainability. There is a lot being done even before the municipal or other governments have implemented policy. There is another side to the story, as it turns out the entrepreneurial association has done a small assesment of what has and can be done in the field of sustainability. While the assesment has not been officialy published yet it does show that due to the cost or inconvenience a number of possible sustainable projects have been declined. There is one specific case when, in order to help biodiversity, the grass around and between the roads would not be mowed as often to create a habitat for plants, insects, and bees, while many on the biosciencepark were in favor there were other companies that prefered a clean cut look over additional biodiversity. Which shows that while progress is being made, the end is not yet in sight.

Lessons to be extracted.

We can see that companies are starting to become more susceptible to messages about sustainability and are willing to invest more to that end. This change towards sustainability is very slow and we feel that it is here that it might be beneficial for the government, whether local or national, to assist in order for the process to be sped up. Something that must be kept in mind by everyone is that a lot of sustainable projects are expensive investments and not all companies are able or willing to make such investments. Therefor awareness campaigns and government subsidies can bridge the gap. It would be risky to force the projects onto the companies as expecially smaller companies might be scared off, in turn endangering the economic viability of Leiden.

 

 

Sustainability is a Serious Business

WHY COMPANIES CAN AND SHOULD SOLVE BIG SUSTAINABLE PROBLEMS

Climate change is the biggest problem that needs to be tackled in the 21th century. It affects everyone and has a domino effect to create even more severe problems. To prevent all of these problems we need comprehensive and sustainable solutions. In my opinion, business is the key to develop and implement smart, innovative and up scaled solutions. Michael Porter gave an inspirational TED Talk about the reason why business can be good at solving social problems. He said that the power of business is to initiate bigger impacts, by up scaling the required solutions.

Chris McKnett gave another interesting perspective on sustainable business. He talked about the logics to invest in sustainable businesses. He claims that data shows a consistency between environmental leadership and good returns. Sustainability is no longer a matter of philanthropy, but it is an attractive and profitable business strategy

HOW COMPANIES MAKE THE TRANSITION TO A SUSTAINABLE ENTERPRISE

Managing the transition to a sustainable enterprise”, is an insightful book written by van Tulder et al. It describes a comprehensive theory on how companies make the transformation towards a sustainable business (Tulder et al, 2014). A four phases model is used to outline this sustainable development (Table 1). In order to reach a new phase companies need to overcome certain obstacles.

The first phase is Inactive, a classic case of business. The company is internally oriented and its intention is to avoid any liability. The appropriate meaning of CSR in this phase is Corporate Self Responsibility.

The second phase is Reactive, a defensive case of business. In this phase the company has a more reactive approach towards needs and expectations of external stakeholders and primarily to avoid liability as well. In this case CSR means Corporate Social Responsiveness.

The third phase is Active, a strategic case of business. When a company reached this phase it has an active internally oriented sense of responsibility towards sustainability. CSR means for them: Corporate Social Responsibility.

The final phase is Proactive, a societal case of Business, the responsiveness of a typical company from this phase is extrinsically motivated and it believes in taking shared responsibility for the sustainable issues. CSR for these company means Corporate Societal (or Sustainable) Responsibility.

In order to use the four phases model to its potential, the theory stresses that a company should determine at which phase they operate and weather or not all departments are aligned in the same phase. If departments are at different phases, obstacles could arise that hinders the company in their sustainable development.

Schermafbeelding 2016-01-13 om 21.04.37

SUSTAINABLE ROLE MODEL

unilever-logo

Unilever is a proactive multinational company which scores especially high in terms of sustainability on agriculture, fishing and water treatment. This company serves as a role model for the way sustainability is incorporated into the company’s strategy and how it is applied throughout the company. The video about Unilever’s sustainable living plan: making progress, driving change, shows Unilever’s vision to double the size of the business, while reducing their environmental footprint and increasing their positive social impact (Unilever, 2016). Unilever takes their responsibility and does well by doing good.

 

Bibliography:

Tulder, R. van, Tilburg, R. van, Francken, M., Da Rosa, A. (2014). Managing the transition to a sustainable enterprise. London: Routledge, pp.11-14.

Unilever, (2016). Introducing our plan. Available at: https://www.unilever.com/sustainable-living/the-sustainable-living-plan/ [Accessed 13 Jan. 2016].

Sustainable Business, also important for the business itself

We all know about the problems of the earth’s boundaries: The population is growing and aging from 7 billion people today headed up to 9 billion people in 2050, We use and consume natural resources faster than ever before, Emissions – one of the main causes of climate change – keep increasing and the loss of biodiversity is bigger than ever before.[1] All these problems are clearly enviromental and social issues. But more important, they are economic issues. To become a sustainable economy – which means an “economy consisting of businesses that can survive shocks because they are intimately connected to healthy economic, social and environmental systems” [2] – people must understood that making progress towards a more sustainable society is not only needed for human well-being and enviroment but also for economy. To be more presicely: the business sector. Especially because our society is constantly focused on growth. But if we go on like this there is no place for a sustainable economy: an economy that can survive shocks and will be healthy in fifty years from now.
Why? And what economic theory explains this? That’s where this blog is about.

The economic theorie that explains the urgency for the economic sector to become sustainable, is also known as the phenomena decoupling. Decoupling means an absolute or relative reduction of enviromental pressure (that means resource use and damage is declining)  on global scale, while the economy is still growing ( GDP is rising). It is not an easy job to finish, namely the economy is dependent on these natural resources such as materials, water and land. Decoupling is nessecary to become a sustainable society and to become an sustainable economy .[3] This phenomena as described above is shown in the next figure.

Decoupling

 

But why is it so important for the economy and its businesses? Well the problem lies in resource availability. Resource extraction increased in the last 20th century by a factor of 8 (This number have not been so high ever before). [3]  A sustainable economy needs these resources to perform. This performance is an indicator for growth in the economic sector, and economic growth seems the most important thing in society ( if we have to believe the newspapers). So decoupling is not only essential for the environment, but also for the economy.Besides an economy can better perform when there is social and enviromental balance.

 

 

How do we want to achieve this decoupling?  Like Kristina Persson, Sweden’s “Minister for the Future” said that decoupling is not only possible – but a must for all countries to achieve. That’s why decoupling has to be stimulated by regulations – provided by governments. But more important, like Paul Hawken states in his book ‘The ecology of commerce’: ‘Businesses and industries are one of the major culprit on causing the demolition of the biosphere, but they are the only institution that is large enough, pervasive enough and powerful enough to lead human kind out of this mass. And I agree. We need these businesses to transit into sustainable businesses. Therefore more attention and stimulation is needed in this sector. This is the only sector that can turn the economy into a sustainable economy. Therefore sustainable business is also important for the business itself.

 

 

 

[1] Nordhaus W.D. , ‘A Review of the “Stern Review on the Economics of Climate Change” ’, Journal of Economic Literature Vol. 45, No. 3 (Sep., 2007), pp. 686-702

[2] Lexicon, ‘’sustainable business definition’, http://lexicon.ft.com/Term?term=business-sustainability : visit 14-1-2015

[3] UNEP, ‘Decoupling natural resource use and enviromental impacts from economic growth’, International resource panal 2012

Use the canals of Leiden in our favor

Oude Singel 56, the place where I live, I got a window with sight on the “Oude Singel”, one of the many canals in Leiden. I live there with seven other students and next to my house are several other student houses. In those houses live up to 32 students. The canal houses in the centre of Leiden are way too expensive for normal citizens and they are almost all inhabited by students. Of the 400 houses located on the Oude Vest and the Oude Singel, more than 350 of them are student houses. This was the circumstance when I got an idea in my mind which I will explain in this blog.

 

You will wonder why I’m talking about the city centre and about the canals, and you will wonder about the link between all the tags? The common factors of these students living in those house are that they do not own a car, they live next to or near canals, they create bulky waste as all other citizens do, and they move house a lot. But they cannot bring their stuff by car to the second hand shop or the recycling centre. When I’m studying and looking trough my nice window.  I can sometimes see a boat cleaning the canals, and in the canal cleaning boat[1] I see a lot of applicants or bicycles or sometimes even furniture.

 

If the canals were not cleaned it would look like[2]:

As shown canals and waste have a strange link with each other. But what about using the canals in our advantage? Instead of taking out the bulky waste after it is damaged by the water and thus hard to repair. Give the citizens of the city centre a service for their bulky waste. Use a pram, see media 3. A pram can be electric and is easy navigable through the canals of Leiden. Citizens within the canals, most of the time without a car, can place there bulky waste and applicants next to the canal on a specific day for each canal another day for a time period, for instance, each second monday of the month.  The pram can then deliver the bulky waste to the recycling centre as shown in media 4.

Praam

Map leiden

 

This plan is in my opinion realisable, quite a lot people work for the different cruise companies in Leiden. However, those employees only can work there during the summer months, because the other months there is not enough demand for city cruises. Besides that, there is near to zero traffic on the canals out summer season so the prams can easy collect all the bulky waste.

 

To conclude, if this plan is realized the second hand shop “het warenhuis”[5] can expand one of the proposals of “Quickscan Duurzaamheid gemeente Leiden”[6] due to more applicants delivered. No traffic jams created by trucks collecting bulky waste, more jobs for shippers. A a low threshold service delivered to the inhabitants of the city centre. Which all lead to more recycling, more sustainable bulky waste collection and makes Leiden a nicer place to live!

Sustainable business to survive

We take, we make, we use and we waste. We live in a mainly fossil fuel based economy. We threaten biodiversity and we contribute to climate change. In short, our current society is not sustainable. This while our world population is growing, world wealth is going up, demand is increasing and resources are becoming scarce. But planet Earth is not infinite. We are exceeding planetary limits. At the moment, humanity is using the equivalent of 1.6 planets to provide the resources we use and to absorb our waste[1]. This means that it will take the Earth one year and six months now to regenerate what we use in a year. Even worse, if everyone would consume as much as the average US citizen does, 4 Earths would be needed[2]. We are destroying our valuable unreplaceable planet.

It should be clear that things have to change in the way we think about products, technologies, processes and business if we want to have a livable planet for our next generations. To make this change, sustainable business is essential. Sustainable business is a way of business where the effectiveness of a company is combined with the protection of the environment and where social and economic issues are addressed. People, Planet and Profit, also known as the triple P’s, are central. The products and business processes are such that there will be no negative environmental impact as a consequence of their existence[3].

Unfortunately, the current belief for many companies is that the more environmental-friendly they become, the more it will ruin their ability to compete with other companies. They believe that sustainable business will only cost money, time and effort and will not result in financial benefits. This is not true. Sustainable business does make financial sense. In contrast with the general thought, sustainable business reduces costs. Savings will come from finding efficient ways to reduce resources usage and waste production. It will also increase the competitiveness of a company. A consumer research carried out by the Natural Marketing Institute (NMI) concluded that a company which is known to be respectful to its environment and society makes consumers 58% more likely to buy their products and services. A good reputation will positively influence the speed with which a company enters or develops within the market. Thereby, sustainable business will increase employee retention and recruitment because people want to work for companies which are mindful to the environment and society.

If sustainable business is indeed so beneficial, why haven’t we already made the change? The answer is barriers. The biggest one is financial short-termism. Business focusses on how to obtain the greatest economic growth today while sustainability is a long-term investment. Another important one is inappropriate regulations. At the moment, there is insufficient regulation which will stimulate change and encourage sustainable business.

But we don’t want to say sorry to our future generation as Prince EA does in his video below. Together, we can and should make the change to a sustainable planet. A change of necessity. A change where we need sustainable business to survive…


[1] http://www.footprintnetwork.org/ar/index.php/GFN/page/world_footprint/ (10-01-2016 14:19)
[2] http://www.bbc.com/news/magazine-33133712 (10-01-2016 12:12)
[3] http://www.theevergreengroup.com/sustainable-business.htm (10-01-2016 20:30)

Our Area Study Blog

In January 2016, students from the course “Area study: Sustainable Leiden 2030?” will be working in groups to assess the Duurzaamheidsagenda 2016-2020 – an ambitious document full of initiatives that will turn Leiden into a sustainable city by 2030. This course is part of the Minor Sustainable Development, provided by the Institute of Environmental Sciences (CML) at Leiden University.

Duurzaamagenda_2

As part of the course, the students will contribute to this blog and write about their findings around the initiatives for each of the themes (biodiversity, climate adaptation, energy, mobility, sustainable business and waste), or other relevant observations and findings throughout the course.