A revelation atop the Himalayas
Conservation comes
after breakfast
Which of the following items will take
the shortest time to degrade in a landfill:
Aluminum can
Styrofoam cup
Cigarette butt
Disposable diaper
Which of the following items will take
the shortest time to degrade in a
landfill:
Aluminum can
Styrofoam cup
Cigarette butt
Disposable diaper
Tasty mushrooms from dirty diapers
Sources of GHGs emission
Electricity
8%
11%
33%
Transportation
Industry
20%
28%
Commercial &
Residential
Agriculture
Overall…
~Approximately 40% GHGs relate to
subsistence activities
~60% of GHGs can safely be attributed to
business related activities
Business and environmental sustainability
Business activities
Environmental concerns
Why should business care for the
society/environment?
•
•
•
•
Moral obligation
The iron law of responsibility
Social contract/legitimacy
It pays off
Who other than business firms?
•
•
•
•
Customers
Watchdogs/NGOs
Industry associations
Governments
Business firms
Wide array of sustainability
oriented actions
Sourcing
Manufacturing
Selling
Sourcing stage- raw material choice
Concrete vs. wood/ wood vs. FSC certified wood
Aluminum can
 100 years
Styrofoam cup
Immortal
Cigarette butt
10-12 years
Disposable diaper
75 years
Manufacturing stage- energy/waste
management
Selling stage- Green logistics and
retailing
Sustainability vertigo
Sustainability impasse
Why that impasse!
Restraint/regulation
Radical Innovation
Thomas Malthus
Restraint
Regulation
Robert Solow
Radical innovation
Deregulation
Restraint is intuitive, why not side with
that?
A Solovian belief …
“…the world can, in effect, get along without
natural resources, so exhaustion is just an
event, not a catastrophe.”
Three categories within the restraint
paradigm
Conscious consumerism
Conscious business practices
Intervening mechanisms
Three categories within the restraint
paradigm
Conscious consumerism
[Refuse/ Reduce/ Reuse/
Recycle/ Upcycle]
Conscious business practices
Intervening mechanisms
Three categories within the restraint
paradigm
Conscious consumerism
Refuse/ Reduce/ Reuse/
Recycle/ Upcycle
Conscious business practices
[Workplace austerity, business model changes]
Intervening mechanisms
Three categories within the restraint
paradigm
Conscious consumerism
Refuse/ Reduce/ Reuse/ Recycle/ Upcycle
Conscious business practices
Workplace austerity, business model changes
Intervening mechanisms
[Regulations, standards]
Two categories within the innovation
paradigm
Remedy oriented
“Eco-effectiveness” oriented
Two categories within the innovation
paradigm
Remedy oriented
[Un-do the harm]
“Eco-effectiveness” oriented
Two categories within the innovation
paradigm
Remedy oriented
“Eco-effectiveness” oriented
[Zero waste, cradle to cradle design, bio
mimicry, circular industrial system]
Interaction between paradigms
When innovation fosters restraint
A shower that forces you
to leave when you’ve
wasted too much water
Interaction between paradigms
When restraint fosters innovation
Corporate fuel efficiency
(CAFÉ ) standards
Restrainers’/regulators’ verdict
• Innovation is terrific but not the panacea
• Solovians are delusional in their denial of the
earth’s carrying capacity
• Solovians risk lulling the public—and
businesses-- into failing to reduce, reuse, and
recycle as much as is required
Innovators’/deregulators’ verdict
• Focus on restraint can delay our collision with
the earth’s carrying capacity but not allow us
to innovate our way over it
• Malthusians are dreary and depressive: resist
possibilities contained in innovation
Making innovation work
• Abundance of risk capital
• Policy against “problematic” practice
• Reducing the time between technology
breakthroughs and mass commercialization
• Moore’s law for clean tech
• Unintended consequences (Jevon’s paradox)
Making restraint work
• Consistent, conscious, collective actions
• Social pressure on individual and companies
• Economic incentives?
Customers-sustainability
interface
Panwar – Kozak
Wood 465
Heard about Starbuck’s “race together” campaign?
• Brand misalignment
• Authenticity
• Reaction
Why customers in this conversation?
Let us learn something from FSC story (Buyer be
fair Youtube)
What is the “take away”
Environment left to market forces: if customers want,
they can pay a premium price for environmentally
benign products
What does (or may) that mean?
• Tied to regulate/restraint- innovate/de-regulate dilemma
( and shhh…… it seems that they just voted against regulation)
• Should environment be left to consumers choice?
(Also consider this: …. https://vimeo.com/10324258 --Your
brain on climate change: why the threat produces apathy, not
action)
• Why should cost of environmental performance be passed on
to consumers– reward/punishment dilemma?
• Will they pay?
Do customers care for corporate sustainability?
YES!
Are customers willing to pay for sustainability actions?
Conclusion of a meta-analysis
wood products with low base prices capture some price
premiums
(Cai & Aguilar 2013)
实现森林可持续发展
(Toward achieving sustainability in the forest
sector)
潘瓦尔 – 科扎克
(Panwar – Kozak )
Wood 465 (木材465)
About the title of the chapter
Words, words, words….
A typology of sustainability oriented initiatives
(i) Private governance networks
(ii) Transnational regulatory policies
(iii)Transnational voluntary market based policies
(iv)State level (national) regulatory policies
(v) State-level voluntary policies
Private governance networks
(i) FSC
(ii) PEFC
(iii) FFD
Transnational regulatory policies
(i) CITES
(ii) ITTA
(iii) UNCBD
Transnational voluntary market based policies
•
•
•
•
International green purchasing network (IGPN)
Equator Principles
WB forestry financing
Forest carbon and conservation policies– (e.g.,
REDD+)
• Global forest and trade network (GFTN)
State-level regulatory policies
• Lacey act
• European Union Timber Regulation
• How about BC’s Wood First Act?
State-level voluntary policies (market based)
• Green procurement programs
Bi-preferred
Eco- buy Australia
Or innovation is the answer?
Stopping illegal logging: DNA Barcoding
of tropical woods
Initiatives on the manufacturing side
• Environmental management systems (EMS)
• Industry codes of conduct
• Environmental product declarations (EPDs)
Or are there some fundamental shifts to be made?
• Decentralization
• Fostering sharing economy
Sharing economy
Panwar –Kozak
Wood 465
Sharing
An informal co-operative arrangement
A niche market
An emerging economic system
“A system within which broad segments of the population
can collaboratively make use of under-utilized inventory via
fee-based sharing”
“Developing value from untapped potential residing in
goods that are not entirely exploited by their owners”
For book-worms
“What’s Mine Is Yours: The Rise of Collaborative
Consumption”
(Botsman & Rogers)
Drivers and enablers of sharing economy
• Financial incentive
• Concerns for sustainability (or perhaps a post hoc
justification)
• Evolution from Web 1.0 to Web 2.0
• Changes societal views of sharing (doesn’t equate with
intimacy)
How is it a fundamental shift?
• Consumption centric economy: you are what you
own
• Sharing economy: you are what you can access
A semantic landscape of sharing economy
Collaborative consumption
Market mesh
Commercial sharing systems
Co-production
Co-creation
Prosumption/prosumers
Access-based consumption
Consumer participation
Online volunteering
Examples abound…
• Collaborative web content (Wikipedia, YouTube, Twitter, Flickr,
fb,)
• Zipcar, Airbnb, Freecycle, Uber
• $335 billion by 2025
• P2PL/P2PI (e.g., Prosper and LendingClub)
(Goldman Sachs is seriously considering to invest in p2p platform
Aztec Money)
Why give a damn…
sharing economy is going to represent a serious
threat to established industries, due to fewer purchases
and consequent distress in conventional markets
So… learn to adapt to sharing economy!
1.
2.
3.
4.
5.
6.
Sell the use, not the product
Support your customers in their attempts to resell
Take advantage of unused resources and capacities
Provide repair and maintenance services
Align with collaborative consumption to target new customers
Find new business models based on the sharing economy
Sell the use, not the product
• Hilti Group (Liechtenstein)
products, systems and services to the global construction industry
sales losses to competitors’ inexpensive small tools in 1990s
sought to learn from its customers how the company could improve its
offerings
Hilti learned (i) that workers sometimes saw small tools as basically
disposable, (ii) that cheap battery-powered tools — while seemingly efficient
at first glance —overload constructions worksites
Hilti’s response
• commoditization of tools represented a threat to
current sales, it also opened up an opportunity to
compete by providing customers with convenience
and a service known as “tool fleet management”
• Customers can lease tools for no upfront capital
investment and a fixed monthly rate within a defined
usage time
• Not just flexibility and efficiency, but also an allinclusive repair service
Zipcar triggered adaptation in auto industry
• Daimler AG- Europcar joint venture Car2go
• BMW’s Drivenow
• Peugeot’s Mu
Support your customers in their attempts to resell
• Ikea launched an online platform in Sweden allowing
customers to resell their used Ikea goods– open to
members of their loyalty program, Ikea Family
• Patagonia established the Common Threads Partnership
with eBay. The partnership aimed to make it easy for
anyone to buy and sell used Patagonia products
• Brand aligned de-marketing
Take advantage of unused resources and capacities
• share existing assets and capacities
• Maschinenring
- association in the industries of agriculture and forestry
- began with the basic sharing of machines, but now
facilitates collaborative use of machinery, and even
personnel renting
- Collaborative strategies- leveraging each other’s
competencies (think Strategy as Ecology)
LiquidSpace (the “Airbnb of work spaces”)
• Collaborative consumption to the world of office space
• Tailors workspaces and meeting rooms to the particular
needs of renters
• Connects corporations that have unused office space with
those who are temporarily in need of it
• Enablers : the pressure of businesses to control real estate
costs, mobile and social technology, and employees who
like working from home
• Lq app relies on a “how I work” profile
Provide repair and maintenance services
• FedEx built up a large body of knowledge in the area
of repairing electronic devices that its employees use
in the process of making deliveries.
• FedEx TechConnect-- specializes in repairing
electronic devices
• Coming back to the idea “what business are you in”
• You just cut lumber or are you in construction
business?
Best Buy’s Geek Squad
• BB bought in 2002
• For both old and new purchases
A recommended reading
“Sustainability through servicizing” by Sandra
Rothenbeg (2007). SMR.
Align with collaborative consumption to target new
customers
What all could it mean?
Find new business models based on the sharing economy
• Kuhleasing.ch (a cow-leasing website)
• Illustrates how conventional industries can establish
new business models by moving away from
traditional revenue
Confronted with decreasing milk prices and the abolition of a cheese export
union in 1999 Swiss farmers faced the challenge of selling large amounts of
cheese to survive
Acting from necessity, a Swiss farmer started leasing his cows to customers
instead of solely selling the cheese
- Lessees pay a fee to sponsor a cow for a season. The arrangement includes a
photo of the cow and a certificate, plus the option to visit the farm to help
out as a volunteer or to watch the daily farm work
- The leasing cost does not include the cost of the final cheese product, but it
guarantees a special price for a minimum purchase of 30 kgs of cheese from
that cow
- The farm also offers additional leasing options that are available as gifts,
such as short-term packages
- According to one farmer, all 150 of his cows are leased to customers around
the world — in countries including Japan, South Africa and the United
States
The Wine Foundry, a company that enables amateur and
professional winemakers to make their own wine without
owning a vineyard, by providing tools and assistance for wine
production.
-The Wine Foundry is a one-stop shop for custom wine
production.
-The company offers a full range of services, from fruit
sourcing to label design.