Cambridge Module 2

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The first place to start is on the supply side, and the need for products and services that are cleaner, healthier, better priced and more convenient

The second challenge is to create demand. But when companies and organisations run sustainability campaigns, they always tend to focus on these far-off problems and forget about the role of sustainable behaviour in our everyday lives.

The third issue is to make the most of shortcuts from behavioural economics to influence consumers.Exploiting these social norms and rules is one shortcut to influencing consumer behaviour. This approach can support the shaping of supply and the creation of demand for new products and services. In most cases, the solution can be found in adjusting people’s choice architecture and in providing so-called ‘nudges’ for these products and services. (eg. opt out donor card)

S Bus. Model: triple bottom line (Planet, people, profit)

Not just customers, but many stakeholders (systems view)

E Bus. Model:  Closing the loop, efficiency, Recycle, renewables

Social Bus. Model: leasing instead of selling, stewardship, encouraging sufficiency

• Material suitability (segregation, not compromised etc.)
• Value chain network (all aspects in value chains and avoid "downcycling") beyond scope of one single org, although not zero sum game (often winners and losers)
• Progressive leadership

• Social influence (~peer pressure, brand ambassador)
• Break bad habits (especially effective during life changes...) and build new ones with prompts
• Individual self (benefit)
• Feelings and cognitions (beware of too much fear or guilt)
• Tangible consequences (not abstract future ones)

• Efficiency (more/same with less resources)
  • Durability
  • Longevity 
  • Dematerialisation
• Effectivess (add value)
• Substitution
• Mitigation (prevention)

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Cradle-to-cradle

• Waste = Food (like in nature)
• Use solar income
• Celebrate diversity

Circular economy

• reusing waste (mit aufbereitung)

The natural step (???)

• The Cambridge value mapping tool: The Cambridge value mapping tool is based on the approach to identify “value uncaptured” in the form of value missed, destroyed, surplus and absence. The tool provides a deeper understanding of value and how to implement economic, social and environmental benefits for a business.
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Life cycle thinking: Adopting a long-term perspective and considering the full life cycle from the outset. Life cycle thinking was developed to challenge the more common approach to design in practice, which is to prioritise reducing upfront manufacturing or construction costs (especially when the target market is price sensitive). Prioritising consumer preference for low cost products is often done even if it causes increased costs and environmental impacts during use (for example, due to poor energy efficiency) or at the end of its useful life (due to non-recyclable materials used to produce the product, for example).

• Impact Assessment techniques (EIA, SIA, Health Impact Assessment, SA, etc.)
• Analytical techniques
  • Cost benefit analysis 
  • Multi-criteria analysis
  • Risk assessment
  • LCA (cradle to grave, ISO 14040+4 can be expensive therefore Streamlined LCAs)
  • E P&L
  • Material Flow Analysis
• Futures thinking techniques

• sourcing (raw material)
• (design) my addition
• production
• distribution
• consumption
• end of life

To attain the required level of sustainability needed on a planet-wide scale, large and rapid improvements are needed; this can only be done through disruptive and radical innovation 

Disruptive innovations are generally introduced by a new entrant rather than an incumbent company. This phenomenon is called “innovator’s dilemma” because introducing a new innovation could potentially destroy the existing market 

• Frugal (West learning from India, etc.)
• Open innovation (crowdfunding, open source)
• Social Innovation...

While it is impossible to anticipate all potential barriers, according to the BCG 2019 Global Innovation Survey, the top barriers relate to:

• Development times that are too long;

• Selecting the right ideas;

• Risk-averse culture;

• Lack of coordination;

• Not enough great ideas; and

• Marketing innovations.

Context:

• External
  • Ecol, econ, polit, cult, community
• Internal
  • Sector, industry, org reach & culture, governance, leadership role

Individual characteristics

• Traits
  • caring, morally driven, systemic, enquiring, self-aware, couragious
• Styles
  • inclusive, vision, creative, ...
• Skills

• mge complexity, communicate vision, exerc. judgement, challenge & innovate, LT

• Knowledge
  • global challenges/dilemma, interdisciplinary connection, ...

Leadership Action

• Internal (decisions, strategy, incentives, accountability, learning & inn.
• External (partnership, S services and products, S awareness, Transparency

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Universal problem = local pollution of a lake can happen everywhere, but costs/impact felt locally and solved locally

Global problem = global impacts (pandemic) which can only be solved through international collaboration.

Direct Control

• Leadership for S
• Employment and operational practices
• Business Model and strategy
• Stakeholder engagement
• Brand & reputation
• Organisational culture

Wider System

• Government policy and regulation
• International agreements and institutions
• Role of business in society

Shared

• Design, technology and innovation
• value chains
• changing consumer behaviour
• Collaboration and partnerships

A fundamental challenge in addressing environmental and social issues is the responsible management of shared resource systems, where the self-interested actions of one individual, organisation or country can be in direct conflict with the long-term interests of a larger group or society. This is called “tragedy of the commons.

Examples: Tragedy of the commons

1. Over-exploitation of fishing stocks: Quotas on fishing are important to ensure the sustainability of fish stocks, and, as such, are in the long-term interest of the commercial fishing industry as a whole. However, the short-term interests of each individual trawler is to maximise catch.  

1. Climate change: One company or country’s investments to minimise its greenhouse gas (GHG) emissions may have a positive global effect, but these benefits are shared equally with countries or companies that do not minimise GHG emissions. 

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• Dec. 2019, EC presented European Green Deal, = make EU's economy sustainable. All sectors. Roadmap to climate neutrality by 2050 by implementation of European Climate Law. Also Final Circular Economy Package
• Carbon Neutrality Coalition by 2050 (17 countries) in line with Paris Agreement
• Cllimate Ambition Allliance, led by Chile and UK for net-zero targes by 2050 (countries, cities, companies and investors)
• 2018 Renewable energy targets adopted by 169 countreis
• Carbon Emission Cap  of China's 14th Year Plan for 2021-25 (cap and trade programme ... not too successful yet)
• India's Goal of having 40% non-fossil fuel by 2030

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1. “Soft law” negotiations: These are non-binding or voluntary agreements that assist in framing sustainable development.

2. Treaty-based legal negotiations: Treaties are legally-binding agreements between nations that are party to the convention (where the treaty is negotiated) and that ratify the treaty (Lawrence, 2014). eg. Montreal protocol

1. Mandatory (i.e. law) no discretion
   1. Market-based instruments (MBIs)
   2. Non-MBI, so-called Command and Control Insturments CACs
2. Voluntary, (discretion ) change behaviour and accountability through transparency and pressure of market. 

A “combination approach” can enable a more systematic approach, but alignment of these approaches is important to prevent inconsistency, mixed-messages, duplication and excessive bureaucracy.

----> trade offs for winners-losers, ST vs LT

ETS = European Emissions Trading Scheme emerged from failed implementation of carbon tax. Based on cap (max. level of pollution acceptable) and distributing tradeable emissions permits. 

How are ETS created: initial allocation or auction

How work: Co's need to cover each unit of pollution they produce. 

Problem: Oversupply of certificates due to reduced coal use in many countries. Reforms in 2017 which addressed oversupply (aka back-loading)-. Prices around €24 

1. EU with 2 billion t of CO2
2. Korea 0.5 billion
3. California 0.5 billion (also other states under the regional greenhouse gas initiative)
4. Quebec 0.5 billion
5. china with pilot projet covering 1 billion

1. Sectoral coverage (eg. industry or energy generation)

2. Types of targets (absolute caps (EU and USA), Chinese use intensity relative metrics

3. Allocation

• Auctioning at beginning (only few)
• Grandfathering (allocation based on past emissions)
• For free (china)

EU: 40%

California/Quebec: 80%

RGGI (various states ins USA): 18%

China: >30%(power generation) and 50% (local carbon markets)

South Korea: 70%