Basic principles of Sustainable and responsible
Economy and business
Introduction ................................................................................................................................. 1
ERS World View.......................................................................................................................... 10
Views on sustainability and their assumptions ................................................................................. 10
Climate Science ................................................................................................................................ 26
climate economics ............................................................................................................................ 41
Inequality ......................................................................................................................................... 66
Complexity in ERS....................................................................................................................... 76
Stakeholder theory ........................................................................................................................... 76
Systems thinking .............................................................................................................................. 85
Application: sustainable fashion....................................................................................................... 96
Future thinking for ERS ..............................................................................................................106
Future thinking ............................................................................................................................... 106
Application of future thinking: future of work ............................................................................... 131
Acting for ERS ............................................................................................................................148
Quantifying Environmental Impacts and Life Cycle Assessment (LCA) ........................................... 148
Making impact ................................................................................................................................ 162
Introduction
What is Ethics?
Ethics is the field of study concerned with determining what is right or wrong, good or bad, and how
individuals or groups should behave. It provides frameworks, principles, and reasoning tools that
guide moral judgement and decision-making.
Business Ethics
Business ethics is a multidisciplinary field with foundations in: moral philosophy, behavioural
psychology, organizational theory and business and economics.
Normative VS descriptive ethics
Historically, business ethics focused primarily on normative ethics: explaining and prescribing what
ought to be considered right or wrong in business behaviour.
Over time, the field expanded towards descriptive ethics, which examines: how moral decisions
are actually made, why individuals or organizations behave ethically or unethically and which
psychological, social, and structural factors influence moral behaviour.
Ethics therefore contributes theoretical insight, but it is not the main focus of this course.
P a g e 1 | 173
,What is Responsibility?
Responsibility in management, often referred to as responsible management, concerns the extent to
which organizations consider, integrate, and balance economic/financial, ecological, and social
policies and practices.
The aim is to meet organizational objectives, while simultaneously ensuring a positive impact on
the broader environment in which the organization operates.
Responsible management
= a central concept within ERS and a core focus of this course. This includes issues such as:
responsible leadership,
stakeholder engagement,
corporate social responsibility (CSR),
ethical supply chain management,
long-term value creation beyond short-term profit.
What is Sustainability?
Sustainability refers to a forward-looking approach to complex and “wicked” challenges across social,
environmental, and economic domains.
Wicked problems are problems that lack straightforward solutions, involve multiple actors, and
often require systemic and long-term thinking.
Sustainability is a key pillar of ERS and another major focus of this course.
Brundtland Definition
Sustainability is most commonly defined using the 1987 Brundtland Report: “Sustainable
development is development that meets the needs of the present without compromising the ability
of future generations to meet their own needs.”
Sustainability therefore addresses not only organizational concerns but also societal and
systemic levels, such as climate stability, social equity, and long-term economic resilience.
This definition emphasizes: human welfare, ecological balance and intergenerational justice.
The Sustainable Development Goals (SDGs)
The 17 SDGs, introduced by the United Nations, serve as a global framework for guiding sustainable
development efforts. Organizations increasingly use them to set goals, measure progress, and
structure sustainability initiatives.
Terminology in ERS
Within ERS, several terms are used interchangeably to refer to the three pillars of sustainability.
Economic – financial – profit
Social – society – people
Environmental – ecological – planet
P a g e 2 | 173
,Sustainability as a Business Opportunity
A recurring theme within ERS is that sustainability is not only a moral or regulatory obligation but can
also become a source of competitive advantage and innovation. Several real-world examples
illustrate this point.
Interview: CEO of Patagonia
Patagonia is widely recognized for its commitment to environmental protection and social
responsibility. Even in politically challenging periods, such as during the Trump administration, the
company maintained its sustainability agenda.
Patagonia consistently invests in sustainable materials and fair labour conditions.
It takes activist positions on issues such as land conservation and climate change.
Despite these commitments, the company remains financially successful.
This demonstrates that sustainability can align with strong business performance over many
years.
Plastic Pollution: The Role of Governments and Policy Coordination
This example illustrates how systemic sustainability challenges combine public policy, corporate
responsibility, and consumer behaviour.
Addressing plastic waste requires: international cooperation, coherent policy frameworks,
regulation and enforcement.
Fashion Industry Example
Even so, the fashion sector is developing emerging circular business models, such as repair services,
rental systems, and closed-loop recycling.
Many fashion companies profit from: unwanted or excess clothing, product returns and second-
hand or resale markets.
However: these practices often hide social and environmental issues, return logistics are
resource-intensive & overproduction and fast fashion remain structurally unsustainable.
Sports and Leisure Wear Companies
Some sports and outdoor clothing brands have invested in sustainable and socially responsible
practices for many years.
These companies are often cited as examples of how long-term sustainability integration can
coincide with strong and stable profitability.
They focus on: durable materials, fair labour conditions and reducing environmental impact.
Caroline Vercouteren – Meat-Free Delicatessen
A Belgian entrepreneur, Caroline Vercouteren, removed all meat products from her delicatessen.
This decision provoked reactions such as calling her “the woman who ditched her parents-in-law,” but
it allowed her to establish a unique niche based on sustainability-oriented customer preferences.
Her business illustrates how bold sustainability choices can create new market opportunities.
Belgian Transportation Company – Electric Lorries
A Belgian transport company invested in electric trucks, which remain relatively rare in the European
transport sector.
The company acknowledges that electric freight transport is not always easy or immediately
cost-efficient. However, early investment has already provided strategic advantages, particularly
as demand for low-emission transport increases.
P a g e 3 | 173
, This demonstrates a shift where sustainability measures can contribute to stable, long-term
business models.
New challenges for businesses
A Rapidly Changing Business Landscape
Over the past decades, the role of companies in society has fundamentally shifted. Whereas business
used to be centred predominantly on financial performance, companies are now expected to deliver
value that is social, environmental, and ethical. This shift is driven by:
Growing societal expectations
Customers no longer value products solely based on price and quality. They increasingly care
about: sustainability of materials, ethical supply chains, fair labour conditions and
environmental performance of the company
Employees, especially younger generations, want to work for organisations with a mission,
ethical values, and a sustainability strategy. Talent retention depends on responsible behaviour.
Investors integrate ESG (Environmental, Social, Governance) factors. This means capital
increasingly flows towards companies that show sustainability performance.
NGOs and civil society groups raise awareness of irresponsible practices and demand
transparency—think of campaigns about textile labour or environmental violations.
Local and global communities expect companies to contribute positively, not only to avoid
harm.
Accelerating regulation
The international and European regulatory landscape is tightening fast.
CSRD (Corporate Sustainability Reporting Directive) will require thousands of European
companies to report on detailed sustainability indicators.
ESG frameworks guide risk management and financial reporting.
Climate legislation, biodiversity rules, and human rights due diligence laws are emerging across
the EU.
This means sustainability is no longer voluntary—it becomes a legal obligation.
Strategic and economic opportunities
Beyond compliance, sustainability creates competitive advantages:
Energy-efficient and circular production lowers long-term costs.
Sustainable branding attracts more customers.
Companies pioneering new technologies (e.g., electric trucks, renewable energy, circular
materials) position themselves ahead of competitors.
Green innovations open new markets.
Companies as drivers of global change
Businesses have economic power, technological capacity, and international reach. This means:
They can accelerate transitions (e.g., renewable energy adoption).
They can influence consumer behaviour.
They can inspire competing companies to follow (example: adoption of electric logistics
vehicles).
P a g e 4 | 173
Economy and business
Introduction ................................................................................................................................. 1
ERS World View.......................................................................................................................... 10
Views on sustainability and their assumptions ................................................................................. 10
Climate Science ................................................................................................................................ 26
climate economics ............................................................................................................................ 41
Inequality ......................................................................................................................................... 66
Complexity in ERS....................................................................................................................... 76
Stakeholder theory ........................................................................................................................... 76
Systems thinking .............................................................................................................................. 85
Application: sustainable fashion....................................................................................................... 96
Future thinking for ERS ..............................................................................................................106
Future thinking ............................................................................................................................... 106
Application of future thinking: future of work ............................................................................... 131
Acting for ERS ............................................................................................................................148
Quantifying Environmental Impacts and Life Cycle Assessment (LCA) ........................................... 148
Making impact ................................................................................................................................ 162
Introduction
What is Ethics?
Ethics is the field of study concerned with determining what is right or wrong, good or bad, and how
individuals or groups should behave. It provides frameworks, principles, and reasoning tools that
guide moral judgement and decision-making.
Business Ethics
Business ethics is a multidisciplinary field with foundations in: moral philosophy, behavioural
psychology, organizational theory and business and economics.
Normative VS descriptive ethics
Historically, business ethics focused primarily on normative ethics: explaining and prescribing what
ought to be considered right or wrong in business behaviour.
Over time, the field expanded towards descriptive ethics, which examines: how moral decisions
are actually made, why individuals or organizations behave ethically or unethically and which
psychological, social, and structural factors influence moral behaviour.
Ethics therefore contributes theoretical insight, but it is not the main focus of this course.
P a g e 1 | 173
,What is Responsibility?
Responsibility in management, often referred to as responsible management, concerns the extent to
which organizations consider, integrate, and balance economic/financial, ecological, and social
policies and practices.
The aim is to meet organizational objectives, while simultaneously ensuring a positive impact on
the broader environment in which the organization operates.
Responsible management
= a central concept within ERS and a core focus of this course. This includes issues such as:
responsible leadership,
stakeholder engagement,
corporate social responsibility (CSR),
ethical supply chain management,
long-term value creation beyond short-term profit.
What is Sustainability?
Sustainability refers to a forward-looking approach to complex and “wicked” challenges across social,
environmental, and economic domains.
Wicked problems are problems that lack straightforward solutions, involve multiple actors, and
often require systemic and long-term thinking.
Sustainability is a key pillar of ERS and another major focus of this course.
Brundtland Definition
Sustainability is most commonly defined using the 1987 Brundtland Report: “Sustainable
development is development that meets the needs of the present without compromising the ability
of future generations to meet their own needs.”
Sustainability therefore addresses not only organizational concerns but also societal and
systemic levels, such as climate stability, social equity, and long-term economic resilience.
This definition emphasizes: human welfare, ecological balance and intergenerational justice.
The Sustainable Development Goals (SDGs)
The 17 SDGs, introduced by the United Nations, serve as a global framework for guiding sustainable
development efforts. Organizations increasingly use them to set goals, measure progress, and
structure sustainability initiatives.
Terminology in ERS
Within ERS, several terms are used interchangeably to refer to the three pillars of sustainability.
Economic – financial – profit
Social – society – people
Environmental – ecological – planet
P a g e 2 | 173
,Sustainability as a Business Opportunity
A recurring theme within ERS is that sustainability is not only a moral or regulatory obligation but can
also become a source of competitive advantage and innovation. Several real-world examples
illustrate this point.
Interview: CEO of Patagonia
Patagonia is widely recognized for its commitment to environmental protection and social
responsibility. Even in politically challenging periods, such as during the Trump administration, the
company maintained its sustainability agenda.
Patagonia consistently invests in sustainable materials and fair labour conditions.
It takes activist positions on issues such as land conservation and climate change.
Despite these commitments, the company remains financially successful.
This demonstrates that sustainability can align with strong business performance over many
years.
Plastic Pollution: The Role of Governments and Policy Coordination
This example illustrates how systemic sustainability challenges combine public policy, corporate
responsibility, and consumer behaviour.
Addressing plastic waste requires: international cooperation, coherent policy frameworks,
regulation and enforcement.
Fashion Industry Example
Even so, the fashion sector is developing emerging circular business models, such as repair services,
rental systems, and closed-loop recycling.
Many fashion companies profit from: unwanted or excess clothing, product returns and second-
hand or resale markets.
However: these practices often hide social and environmental issues, return logistics are
resource-intensive & overproduction and fast fashion remain structurally unsustainable.
Sports and Leisure Wear Companies
Some sports and outdoor clothing brands have invested in sustainable and socially responsible
practices for many years.
These companies are often cited as examples of how long-term sustainability integration can
coincide with strong and stable profitability.
They focus on: durable materials, fair labour conditions and reducing environmental impact.
Caroline Vercouteren – Meat-Free Delicatessen
A Belgian entrepreneur, Caroline Vercouteren, removed all meat products from her delicatessen.
This decision provoked reactions such as calling her “the woman who ditched her parents-in-law,” but
it allowed her to establish a unique niche based on sustainability-oriented customer preferences.
Her business illustrates how bold sustainability choices can create new market opportunities.
Belgian Transportation Company – Electric Lorries
A Belgian transport company invested in electric trucks, which remain relatively rare in the European
transport sector.
The company acknowledges that electric freight transport is not always easy or immediately
cost-efficient. However, early investment has already provided strategic advantages, particularly
as demand for low-emission transport increases.
P a g e 3 | 173
, This demonstrates a shift where sustainability measures can contribute to stable, long-term
business models.
New challenges for businesses
A Rapidly Changing Business Landscape
Over the past decades, the role of companies in society has fundamentally shifted. Whereas business
used to be centred predominantly on financial performance, companies are now expected to deliver
value that is social, environmental, and ethical. This shift is driven by:
Growing societal expectations
Customers no longer value products solely based on price and quality. They increasingly care
about: sustainability of materials, ethical supply chains, fair labour conditions and
environmental performance of the company
Employees, especially younger generations, want to work for organisations with a mission,
ethical values, and a sustainability strategy. Talent retention depends on responsible behaviour.
Investors integrate ESG (Environmental, Social, Governance) factors. This means capital
increasingly flows towards companies that show sustainability performance.
NGOs and civil society groups raise awareness of irresponsible practices and demand
transparency—think of campaigns about textile labour or environmental violations.
Local and global communities expect companies to contribute positively, not only to avoid
harm.
Accelerating regulation
The international and European regulatory landscape is tightening fast.
CSRD (Corporate Sustainability Reporting Directive) will require thousands of European
companies to report on detailed sustainability indicators.
ESG frameworks guide risk management and financial reporting.
Climate legislation, biodiversity rules, and human rights due diligence laws are emerging across
the EU.
This means sustainability is no longer voluntary—it becomes a legal obligation.
Strategic and economic opportunities
Beyond compliance, sustainability creates competitive advantages:
Energy-efficient and circular production lowers long-term costs.
Sustainable branding attracts more customers.
Companies pioneering new technologies (e.g., electric trucks, renewable energy, circular
materials) position themselves ahead of competitors.
Green innovations open new markets.
Companies as drivers of global change
Businesses have economic power, technological capacity, and international reach. This means:
They can accelerate transitions (e.g., renewable energy adoption).
They can influence consumer behaviour.
They can inspire competing companies to follow (example: adoption of electric logistics
vehicles).
P a g e 4 | 173
