I need some on reliable to follow all the steps bellow - Term paper info sheet attached -Use the readings attached as reference -proper apa format -make sure to include the social, financila, and ec

Reading #3:

introduction to KEY ISSUES and ideas IN CSER

Corporate Social and Environmental Responsibility (LEAD 3030)

Whereas the previous reading looked at key sustainability issues facing humankind in general, this reading introduces some of the key concepts and issues related more specifically firms. Please submit your preparedness response to UMLearn one hour prior to class, Thurs, September 23.

Need for significant change. A lot of information is available about the major problems facing humankind going forward, including rising rates of climate change (and the dire consequences associated with continued use of fossil fuels), pollution (and its effect on health of humankind and the planet), and systemic racism and economic inequality (and its devastating effect on overall well-being for both the relatively poor and the relatively rich). While such problems merit deeper understanding, the time has come to stop responding to problems by doing further studies or by implementing minor tweaks (e.g., putting a ban on plastic straws).1 Rather, we need to develop and implement radical solutions. As Greta Thunberg famously notes: “Our house is on fire.”2

Question #1. Are you convinced that significant and even radical change is necessary? Or do you think people who call for radical changes are naïve alarmists? Do you think technology will come to the rescue? Do issues related to social and environmental responsibility influence your everyday decisions? If yes, describe how. If not, why not?

The need for radical change in businesses. The need for significant change is not only evident at the individual or household level, but it may be especially true for the world’s business organizations. For example, even if every household were to recycle 100% of all the goods that enter inside, this would still solve only 5% of our pollution problem (e.g., over 75% of USA’s waste is industrial3). Thus, sustainability is needed in firms that produce the goods we consume, who mine, transport and transport the raw materials that become our iPhones and cars and soda pop cans. In other words, although installing LED light bulbs in our homes may be a bright idea, we must pay much greater attention to how businesses produce the goods we consume. For example, even impressive high tech solutions like electric automobiles fall short, reducing by only 33% the Global Warming Potential vs conventional automobiles (but electric cars’ Human Toxicity Potential is 75% greater).4

Question #2. Do you think it is important for businesses to take more responsibility for social and environmental issues? Or is that the job of government? Or the job of consumers, who need to start to using their purchasing dollars to “vote” for responsible businesses?

What does “sustainability” refer to? There are a variety of ways that sustainability has been defined, but to keep things somewhat simple, for the purposes of this course we will use the term “sustainability” in a holistic way. The course will focus on the “big three” dimensions often associated with sustainability: ecological, social, and economic (but we will also consider other dimensions of well-being, such as psychological, spiritual, and physical). The emphasis will be on organizations that are sustainable across all three dimensions. Thus, firms who maximize profits but are not ecologically or socially sustainable, these are not sustainable firms.

Question #3. What do you think of when you hear the word “sustainability”? Is it mostly about ecological sustainability, or social sustainability, or about economic sustainability (e.g., as in achieving a sustainable competitive advantage)? Do you think it is reasonable to use the term in a holistic sense that encompasses all three dimensions? Can organizations be sustainable along all three dimensions, or does an increase in one kind mean a decrease in another?

Sustainability goes beyond maximizing profits. As used here, sustainability refers to the responsibilities of business that go beyond maximizing shareholder wealth. This idea is both timely and of great interest to many people (both within business and beyond). For example, one-third of investors willingly forgo maximization of financial returns in order to enhance social and ecological returns.5 Two-thirds of consumers are willing to pay extra for products that are more sustainable6 (i.e., but they are wary of greenwashing).

However, rather than recognize that the market is willing to compromise financial well-being in order to support social and ecological sustainability, many champions of corporate social and environmental responsibility argue that sustainability actually enhances financial profits (e.g., the Triple Bottom Line approach). They believe that if they can demonstrate that there are financial gains associated with Corporate Social Responsibility, then businesses are more likely to adopt such practices. While this may be true,7 basing one’s argument for sustainability by linking it to improved profits is problematic for at least two reasons: 1) it suggests that the current problems can be resolved within the profit-maximization paradigm (when that paradigm may actually be an important cause of many of the problems); and 2) it implicitly suggests that firms need not (and often should not) implement sustainable practices that do not improve profits.

Question #4. What are the pros and cons of defining the term sustainability as referring to the responsibilities of business that go beyond maximizing shareholder wealth? Should promoting sustainable practices be linked to profit-maximization, despite the (possible) dangers of this?

The business of business is not business. There is a popular (mis)understanding that the purpose of business is to make money. We forget that this primary focus on financial well-being is relatively recent. For example, former University of Manitoba business student and CEO of RJR Nabisco, F. Ross Johnson—who in the 1980s “helped make the phrase ‘increasing shareholder value’ more than a buzzword”—notes that maximizing owners’ financial capture was not considered to be the primary purpose of business when he started out in the 1950s, nor can it be the primary purpose going forward (see Google Ngram below, which shows how: “profit maximization” is a socially-constructed phrase that started to be used in the 1940s; “shareholder value” started to be used in the 1980s thanks to people like Johnson; and “value creation” and “triple bottom line” started in the 1990s). Johnson tells today’s business students that they will be evaluated based on things like “environmental stewardship:” “You’ll be expected to do good while doing well.”8

From a sustainability perspective, the purpose of business is to (sustainably) provide goods and services. Sure, businesses need to be financially viable in order to produce goods and services, but it seems foolish to think that maximizing profits is the purpose of business (businesses need profits to survive just as people need to breathe air to survive, but it seems silly to think that the purpose of living is to breathe). A sustainability perspective focuses on the kinds of goods and services being provided, on how they are created and distributed, and in particular on their benefits (and harms) for society and the planet. In particular, organizations should provide goods that are truly good, and services that truly serve society.

Question #5. Do you think that the primary purpose of business is to make money, or is it to provide goods and services? What are the implications of your view(s)? What is generally taught in Asper about this? What if businesses prioritized maximizing socio-ecological well-being, while making “enough” profit (vs maximizing profit)? Finally, do you agree that, if profit-maximization remains the primary goal of business, business will be unable to truly address the most-pressing sustainability issues facing humankind?

The need for a “big picture” understanding. A holistic term like sustainability defies piecemeal understanding. In other words, in order to understand deeply what sustainability means for business, one must understand how business fits with larger systems and problems in ecology (e.g., the carbon cycle), sociology (e.g., meaning of community) and economics (e.g., varieties of capitalism). It requires understanding how sustainability at an organizational level is related to the larger issues facing humankind, such as economic inequality, climate change, and the growing power of multinational corporations. Such a holistic view demands understanding basic ecosystems and fundamentals about human nature and the social order.

Question #6. Do you agree that it is important for business students to learn about eco-systems and basic fundamentals of human nature? Or is it tough enough for business students to learn about accounting and finance and marketing, and we should leave it to others to learn about the ‘big picture’? What are the dangers if the titans of industry, or even everyday managers, are not trained to think about these larger ‘big picture’ issues?

The embedded nature of business. There are at least two ways to see the relationship between organizations and the larger ecological environment. The first way is to see businesses as separate from their environments. From this view the “environment” refers to everything that lies outside of a business organization’s boundaries, from which businesses purchase “inputs” (e.g., raw materials, labor) and where they dispose their “outputs” (e.g., goods are purchased by customers, waste material is brought to land-fills). The second way, associated with sustainable organizing, is to see businesses as embedded within, and subservient to, their environments. This embedded view is consistent with the observation that in order to exist humankind requires ecosystems of the world. If human activity causes the destruction of the ozone layer and creates situations where the planet can no longer support human life, then the planet will carry on without humankind.9

Unfortunately, contemporary business theory typically fails to recognizes the embeddedness of how humans produce goods and services. For example, key concepts taught in business schools are ideas like profits, money, share value, market share, revenues, and achieving competitive advantage. These concepts are abstract and have little connection to the “real” ecological world that business activity is embedded in: they do not account for the work of bumble bees, nor the value of bio-dynamically healthy soil, nor the flourishing of the human spirit. Over a century ago Max Weber argued that capitalism has captured society in a materialistic-individualistic ‘iron cage’:

“Specialists without spirit, sensualists without heart:

this nullity imagines that it has attained a level of civilization never before achieved.”10

To illustrate what happens when there is an over-reliance on abstract concepts like money and markets, consider the observation that over the past decades about 40% of the total profits in the USA have been generated in the financial industry. While very few people would argue that people should stop using money, something does not seem quite right when almost half of society’s financial gain goes to people who use money to make money. These people do not make anything “real:” they do not grow apples nor do they build furniture nor do they help restore health to the sick.

Question #7. Does it seem odd to you that business models and theories are based on abstract ideas (like money) that seem to have very little to do with ecosystems and fundamental questions of the meaning of social life? The current mainstream abstract concepts may have had some merit when there were fewer than a billion humans on the planet who were not burning fossil fuels at the present rate etc. but are they appropriate for today when we are already living beyond the carrying capacity of the planet?

Measures of sustainability. GDP is a dominant measure of how well an economy and a society are performing, even though the economists who developed the idea of GDP argued that it should not be used this way (a better measure is the Genuine Progress Indicator, see footnote next page) . In the same way, instead of measures like share price, what if firms were rated according to their11:

Ecological footprint: the number of hectares of natural resources associated with an organization or to produce and use its products. For example, insofar as Winnipeg is similar to Vancouver, most of your ecological footprint comes from the food you eat (51%), second-most is from your transportation (e.g., energy required for cars and planes), and third-most is for buildings you inhabit (16%, e.g., heating costs).12

Income inequality: the ratio of the highest-paid 20% versus the lowest-paid 20% of the people involved in producing an organization’s goods or service (these figures could include the incomes of workers who supply “outsourced” inputs).

Net externalities: a firm’s external socio-ecological benefits and costs (i.e., those not listed in the firm’s financial statements). For example, firms could report two kinds of profits: 1) Conventional profit (i.e., the difference between a firm’s financial expenses and its financial revenues, without taking into account its negative socio-ecological externalities; for example it does not account for the $5 trillion in negative ecological externalities caused by the world’s 1,200 largest corporations, a sum greater than their total conventional profits)’ vs 2) Genuine profit (i.e., the difference between a firm’s financial expenses and its financial revenues after accounting for its socio-ecological externalities).

What if such performance measures were listed on stock tickers alongside each firm’s share price?

Question #8. How many of measures of sustainability do you think the average business student or the average manager has heard about? How about the average consumer or the average investor? Do you know any beyond what you found in this reading? Which is your favorite measure? Would you like such measures to be more prominent? Why? Why do you think they aren’t more prominent? What could you do to make them more prominent? 13

1 Recall from the previous reading that, even if the leading companies met their aspirational goals for greenhouse gas emissions, that would meet only 25% of their responsibility vis a vis that Paris Accord (Makower et al., 2020).

2 Thunberg. G (2020, Sept 19). Our house is on fire. World Economic Forum. https://www.youtube.com/watch?v=U72xkMz6Pxk

3 Leonard, Annie (2013). Moving from individual change to societal change. Chapter 23 in State of the World 2013: Is Sustainability Still Possible?, Worldwatch Institute, pp. 244-52.

4 Tagliaferri, C., Evangelisti, S., Acconcia, F., Domenech, T., Ekins, P., Barletta, D., & Lettieri, P. (2016). Life cycle assessment of future electric and hybrid vehicles: A cradle-to-grave systems engineering approach. Chemical Engineering Research and Design, 112: 298-309.

5 Morgan Stanley (2019). Interest and adoption of sustainable investing continue to grow. Found Oct 9 at https://www.morganstanley.com/ideas/sustainable-investing-growing-interest-and-adoption.html.

6 Nielsen (2015, Oct 12). Consumer goods’ brands that demonstrate commitment to sustainability outperform those that don’t. Nielsen, https://www.nielsen.com/eu/en/press-releases/2015/consumer-goods-brands-that-demonstrate-commitment-to-sustainability-outperform/ (accessed October 9, 2019).

7 Note that the empirical research generally suggest that CSR and profits have a positive relationship, though not always.

8 Cited in Bell, G.G., & Dyck, B. (2012). Conventional resource-based theory and its radical alternative: A less materialist-individualist approach to strategy. Journal of Business Ethics, 99(1): 121-130.

9 This paragraph draws from Marcus, J., Kurucz, E.C., & Colbert, B.A. (2010). Conceptions of the business-society-nature interface: implications for management scholarship. Business & Society, 49(3), 402-438.

10 Page 182 in Weber, M. (1958; orig. 1904–1905). The Protestant Ethic and the Spirit of Capitalism. (Translated by T. Parsons.) New York, NY: Scribner’s.

11 The app GoodGuide begins to show some of the ‘hidden costs’ of business: http://www.goodguide.com

12 Thus the simplest way to reduce your overall ecological footprint by about 25% is to stop eating meat (which is more helpful than no longer using gasoline). See Moore, J. & Reese, W.E. (2013). Getting to one-planet living, Chapter 4 in State of the World 2013: Is Sustainability Still Possible?, Worldwatch Institute, pp 39-50.

13 The Genuine Progress Indicator (GPI) supplements GDP data with factors like the following: Income distribution: GPI decreases with income inequality, increases with income equality; Crime: Unlike GDP, which grows with costs of crime (e.g., legal costs, property damage, healthcare all contribute to GDP), GPI subtracts these costs; Resource depletion: Unlike GDP, which ignores externalities like the depletion and degradation of the ecological environment, GPI treats these as costs; Pollution: Unlike GDP, which often double-counts pollution (first for the costs incurred in creating the pollution, and second for the costs of cleaning up pollution), GPI is reduced by the amount of damage to human and ecological health; Long-term environmental damage: GPI “assigns a cost to carbon emissions to account for the catastrophic economic, environmental, and social effects of global warming;” Income distribution: GPI decreases with income inequality, increases with income equality; Leisure time: GPI goes up with increases in leisure time, and down with decreases From Redefining Progress, http://rprogress.org/sustainability_indicators/genuine_progress_indicator.htm