Business for a Sustainable Future

What are the models, standards, and trends for sustainability in business?

Businesses have a huge environmental impact but are also the drivers of many sustainable innovations. Leveraging markets and businesses to forge a more sustainable world can help us to both achieve important sustainability goals, and also support livelihoods and communities. Doing so requires an understanding of how businesses impact natural systems at both global and local scales, as well as how these impacts are considered within different sustainability and economic frameworks. This lesson includes an introduction to the topics and frameworks that define sustainability within the business world. You’ll learn fundamental concepts within environmental economics as they pertain to the private sector as well as the prominent frameworks used to address environmental concerns.

By completing this lesson, you will:  

• Map and analyze the impacts that businesses have on large and small scale social-ecological systems. 
• Practice applying some of the major economic and business frameworks for sustainability.  In doing this, you’ll explore the nuances of how they overlap, what they mean in practice, and how they will shape the businesses of the future. 
• Analyze existing businesses and take a position on whether they’re going far enough in their sustainability efforts, and identify high-leverage opportunities to increase their positive impact. 

Pre-Reading

We’ll start by using Ecosystem Services as a way to understand business’ relationship to the environment.  The Millennium Ecosystem Assessment’s Ecosystems and Human Well-Being report offers a great primer (skim p. 2-18, read p. 27-29). 

Climate Change and Business: What Every MBA Needs to Know sets the stakes for businesses by outlining some of the risks and opportunities they face due to climate change.  In a world that is changing rapidly, businesses are waking up to the realization that not taking action is not an option: whether they want to or not, they must adapt in the face of increasing uncertainty and risk.

A Doughnut for the Anthropocene: humanity’s compass in the 21st century introduces Kate Raworth’s doughnut economic model. This alternative to classic models of economics is growing in popularity and is being employed in urban design, academia, by policy makers, and businesses.

There are many frameworks for businesses to track their impact on the environment and improve the sustainability of their operations; we’ll cover a few in class:

• Corporate Social Responsibility (CSR) and Environmental, Social, and Corporate Governance (ESG) are two of the classic models: read What is CSR? and ESG breakdown to get an introduction to each of them.  What’s the difference between CSR and ESG? explains why ESG has been overtaking CSR as a standard for business responsibility.

These videos introduce three of the newer business sustainability frameworks that are inspiring leaders these days: Triple Bottom Line, Regenerative Capitalism, and Circular Economy.

You can also download this lesson as a PDF or Microsoft Word document: