Sustainability Classroom Quiz _ Answers (DRAFT)
1. Define sustainability from a business perspective and list the benefits to the organisation.
Over the past few decades, increases in environmental awareness andconcern about climate change have caused a fundamental shift in the waycompanies do business. Large organisations have realised that their impacton the environment have social and monetary consequences. As a result,more and more companies are implementing sustainability principlesand practices to deliver business returns and make a positive social andenvironmental impact. The widely accepted definition of sustainable development is:
‘Development seeking to meet the needs of the present generation withoutcompromising the ability of future generations to meet their own needs.’
The World Commission on Environment and Development, Our Common Future, 1987.
2. Of the following four groups which are affected by an organisations commitment to sustainability?-Shareholders, Employees, Clients and/ or the Community
All are affected. They are all interlinked through community. Shareholders, Employees and Clients gain through company performance and success which inturn flows through to the local and global community linked by the major financial sectors Household, Business, Financial, Government and Overseas.
- Describe how one of these groups in question 2 is affected.
If the company’s image is lowered because of its actions relating to the environment it is not just considering the profit and loss but how the business contributes to the greater economic environment and possible future penalties shareholders may presume lower growth and dividends and divest holdings.Employees may see issues with regard to OHS that are detrimental to health.Client may not wish to be associated with organisations with the above issues.The community may object to poor sustainable policy or procedures and involve Government and/or protest tying up valuable company resources.
- Discuss two areas within the functional aspects of the organisation which can impact on sustainable KPI’s.
There are many different strategies for incorporating sustainability into abusiness and not all will apply to every industry or sector. Some strategiesinclude:
➣Carbon trading.
➣Ecological footprinting.
➣Lifecycle analysis.
➣Product stewardship.
➣Supply chain management.
➣Sustainability covenants and compact.
➣Green office programs.
➣Triple bottom line reporting.
Implementing change begins with understanding the environmental causeand effect of a business’s everyday actions so as to determine the bestsustainability strategy.
These are all measureable
- Of the above select one from question 4 and describe how it can impact on sustainability.
Sustainability practices benefit businesses in the following ways:
Financial
➣Cost savings.
➣Increased efficiency and competitiveness.
➣Reduced waste treatment costs.
➣Less expenditure on raw materials, energy and water.
➣Reduced environmental liability.
➣New market opportunities for ‘green ‘goods and services.
Environmental
➣Reduced environmental impacts.
➣Reduced pollution and waste.
➣Reduced use of natural resources.
➣Reduced use of toxic chemicals.
Social
➣Better worker Occupational Health and Safety.
➣Better public image.
➣Better relations with the community.
➣Better relations with regulators.
Companies can incorporate sustainability into their business by:
➣Reducing their carbon footprint.
➣Using Triple Bottom Line accounting.
➣Creating a ‘green office’.
➣Using resources that are renewable, recyclable and reusable.
➣Involving employees and the community.
➣Following relevant guidelines and government legislation
Example (Rest as per text)
Triple Bottom Line Accounting
Incorporating sustainability into a business means expanding the traditionalframework for measuring an organisation’s success. Whereas traditionalfinancial models are based primarily on profit, Triple Bottom Line is aset of ideas that balances profit with positive social conditions and thepreservation of the environment. The term Triple Bottom Line was coined byJohn Elkington in 1998 and is also known as TBL or 3BL. It stands for:
People
This term refers to the interests of employees, customers, suppliers,shareholders and the local community. For instance, a business can supportand interact with the local community via apprenticeships, sponsorship ordonations.
Planet
This term refers to the direct and indirect impacts a business has on theenvironment. This includes factors such as: waste disposal, land use, theimpact on flora and fauna, resource and material usage, recycling, carbonoffsets, reuse of materials, and the amount and type of energy consumed. ATBL business will strive to minimise its environmental impact.
Profit
This term balances commercial viability with the principles of People andPlanet. It is not limited to the traditional definition of profit (revenue minuscosts) but takes a broader view of how the business contributes to thegreater economic environment. For example, a TBL business might includein its annual report information about money invested in research anddevelopment or money invested in establishing a parental leave programfor staff.
As the above examples demonstrate, TBL accounting can be used to help makedecisions or to measure success in a business. Its three-pronged approach isthought to improve the longevity and sustainability of a business.Although only a recent development in the business world, TBL accountingcan reap many benefits for a business. It can create niche markets, brandingopportunities and have positive repercussions for communities and theenvironment. Furthermore, businesses that embrace the principles of TBL areperhaps more sustainable because rather than being founded on a singleaim (profit), they take a three-pronged approach (People, Planet, and Profit).