Basic Principles of Sustainable and Responsible Business and
Economics
Introduction
Session 1: Introduction
ERS = Ethics, Responsibility and Sustainability
Business ethics = multidisciplinary field with wide foundations. Moved
from defining what’s right/wrong (= normative ethics) to why right or
wrong decisions are taken (= descriptive ethics)
Responsibility in management is the consideration, integration and/or
balancing of economic, ecological and social policies and practices
within organizations. Goal is to achieve organizational goal + positive
impact on wider firm environment
Sustainability refers to future orientations regarding complex social,
environmental and economic challenges. Brundtland: “Meeting the
needs of the present without compromising the ability of future
generations to meet their own needs.
o 17 SDGs (=Sustainable Development Goals) serve as a
framework
New challenges for business
World is rapidly changing, it is not just about the bottom line (ESG,
NGO’s, ..)
Potential to unlock new opportunities -> business can drive a
positive change in the world
Future careers are likely going to be in that direction
History of sustainable development
There have always been people/scientist that predicted the end of the
world/chaos (Malthus: too many people on earth -> needed to go down)
Brundtland’s definition of sustainable development (SD) has 2 core
concepts
1. Needs: essential needs of the world’s poor, to which priority should be
given
a. Goes further than the basic needs, also about safety, social,
esteem, self-actualization and physiological needs
1
, 2. Limitations: imposed by the state of technology and social organization
on the environment’s ability to meet the present and future needs
3. Ability: is linked to the state of environment, technology and social
institutions that we leave for future generations.
Definition is also about equity -> SD is more than ecological, it is also about
distribution and poverty. Within current generation = INTRA-generational
equity and between generations: INTER-generational equity.
There is also a trade-off between the generations.
Non-renewable resources: everything we use now, can’t be used later
Renewable resources: e.g. Overfishing can lead to irreversible fish
stock collapse
Beyond Brundtland
1. 3Ps: People, Planet and Profit
2. 5Ps: People, Planet, Prosperity, Partnership, Peace
3. UN SDGs: 17 major targets, 169 sub targets = popular framework
a. SDG wedding cake model (Stockholm resilience center)
ERS World View
Session 2: Views on Sustainability and their assumptions
Different views on ERS have different assumptions
1. A disparate view
2
, a. Social and environmental systems are separate -> firms should
not engage in non-economic systems
b. Economic system is the largest and regulation = invisible hand of
the market => profit maximalization
c. Social and ecological costs are seen as externalities => price will
adapt for it
d. Negative consequences and those needs should be addressed
e. Archie Carrol’s Pyramid of CSR: all other responsibilities build up
on the economic one
2. Subsuming view
a. Social and environment contribute to economic system
i. Firms should engage in those systems to increase
economic performance
b. Shared value model: Companies should make a profit out of the
environmental and societal needs (Nestlé and CCEP case)
3
Economics
Introduction
Session 1: Introduction
ERS = Ethics, Responsibility and Sustainability
Business ethics = multidisciplinary field with wide foundations. Moved
from defining what’s right/wrong (= normative ethics) to why right or
wrong decisions are taken (= descriptive ethics)
Responsibility in management is the consideration, integration and/or
balancing of economic, ecological and social policies and practices
within organizations. Goal is to achieve organizational goal + positive
impact on wider firm environment
Sustainability refers to future orientations regarding complex social,
environmental and economic challenges. Brundtland: “Meeting the
needs of the present without compromising the ability of future
generations to meet their own needs.
o 17 SDGs (=Sustainable Development Goals) serve as a
framework
New challenges for business
World is rapidly changing, it is not just about the bottom line (ESG,
NGO’s, ..)
Potential to unlock new opportunities -> business can drive a
positive change in the world
Future careers are likely going to be in that direction
History of sustainable development
There have always been people/scientist that predicted the end of the
world/chaos (Malthus: too many people on earth -> needed to go down)
Brundtland’s definition of sustainable development (SD) has 2 core
concepts
1. Needs: essential needs of the world’s poor, to which priority should be
given
a. Goes further than the basic needs, also about safety, social,
esteem, self-actualization and physiological needs
1
, 2. Limitations: imposed by the state of technology and social organization
on the environment’s ability to meet the present and future needs
3. Ability: is linked to the state of environment, technology and social
institutions that we leave for future generations.
Definition is also about equity -> SD is more than ecological, it is also about
distribution and poverty. Within current generation = INTRA-generational
equity and between generations: INTER-generational equity.
There is also a trade-off between the generations.
Non-renewable resources: everything we use now, can’t be used later
Renewable resources: e.g. Overfishing can lead to irreversible fish
stock collapse
Beyond Brundtland
1. 3Ps: People, Planet and Profit
2. 5Ps: People, Planet, Prosperity, Partnership, Peace
3. UN SDGs: 17 major targets, 169 sub targets = popular framework
a. SDG wedding cake model (Stockholm resilience center)
ERS World View
Session 2: Views on Sustainability and their assumptions
Different views on ERS have different assumptions
1. A disparate view
2
, a. Social and environmental systems are separate -> firms should
not engage in non-economic systems
b. Economic system is the largest and regulation = invisible hand of
the market => profit maximalization
c. Social and ecological costs are seen as externalities => price will
adapt for it
d. Negative consequences and those needs should be addressed
e. Archie Carrol’s Pyramid of CSR: all other responsibilities build up
on the economic one
2. Subsuming view
a. Social and environment contribute to economic system
i. Firms should engage in those systems to increase
economic performance
b. Shared value model: Companies should make a profit out of the
environmental and societal needs (Nestlé and CCEP case)
3
