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Summary of the SUET Essential Readings Block Week 1

Session 1: Data-driven context setting, sustainability grand challenges, moral and ethical
standards, introduction to the ESG framework, sustainability reporting and standards
(compliance and regulations).

Essential readings/videos for class discussion

Reading 1:

● Porter, T., & Derry, R. (2012). Sustainability and business in a complex world.
Business and Society Review, 117(1), 33-53. [S1-ER-1 of 2]

Summary: Sustainability and Business in a Complex World:

The article by Terry Porter and Robbin Derry explores the intersection of
sustainability and complexity theory, proposing a new framework called
"sustainability thinking." As businesses navigate a rapidly changing and increasingly
complex world, traditional management approaches are proving inadequate. The
authors advocate for the adoption of complexity theory to better address the
multifaceted challenges of sustainability.

1. Introduction: The Growing Need for Sustainability

In the 21st century, sustainability has become a critical concern for organizations
worldwide. Issues such as resource depletion, social inequities, and environmental
degradation are driving businesses to rethink their strategies. Stakeholders,
including consumers, communities, and governments, are pushing for more
sustainable practices. However, these challenges are compounded by a world that is
becoming more complex and interconnected.

The traditional, reductionist approach to management, which breaks down problems

into isolated parts, is no longer sufficient. The article argues that this approach fails
to capture the dynamic and interconnected nature of today's challenges. Instead,
there is a need for frameworks that recognize the non-linear, unpredictable, and
systemic nature of real-world problems.

2. Complexity Theory and Complex Adaptive Systems (CAS)

The article introduces complexity theory as an alternative framework that better
reflects the reality of contemporary business environments. Unlike traditional models
that assume stability and linearity, complexity theory views organizations as dynamic
systems made up of interconnected agents that continuously interact and evolve.
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Complex Adaptive Systems (CAS) are networks of autonomous agents, each driven
by local goals but interconnected in ways that influence the system as a whole.
These systems are characterized by:
● Non-linearity: Outcomes are not directly proportional to inputs, and small
changes can have significant impacts (the "butterfly effect").
● Self-organization: Agents within the system spontaneously organize and
adapt to changes without central control.
● Coevolution: The system evolves through continuous feedback loops, where
agents and their environment mutually influence each other.

The authors argue that applying CAS principles to business can help organizations
become more resilient and adaptive, enabling them to thrive in complex, rapidly
changing environments.

3. Sustainability Thinking: Integrating Complexity into Business Strategy

The concept of "sustainability thinking" builds on complexity theory to address
sustainability challenges. The authors emphasize that sustainability is not a static
goal but an ongoing process that requires continuous adaptation. This approach
expands the traditional focus on economic outcomes to include social,
environmental, and cultural dimensions.

Key principles of sustainability thinking include:

● Interconnectedness: Recognizing the impact of business activities on a wide
range of stakeholders, including future generations and ecosystems.
● Long-term perspective: Considering the implications of current business
practices on future generations, rather than focusing solely on short-term
gains.
● Multiple performance metrics: Balancing economic performance with social,
environmental, and cultural outcomes to achieve sustainable growth.

The authors illustrate these principles through case studies, including Toyota's
restructuring strategy and Nike's Innovation Kitchen. These examples demonstrate
how organizations can integrate sustainability thinking into their core operations,
fostering innovation and resilience.

4. Case Studies: Real-world Applications of Sustainability Thinking

● Toyota's Strategic Restructuring: In response to the global economic

recession, Toyota restructured its operations to focus on emerging markets
and sustainability initiatives. The company reduced its hierarchical control and
empowered local teams to drive innovation. This shift towards a more
decentralized, networked approach reflects CAS principles, where local
adaptability and bottom-up innovation are prioritized.
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● Nike’s Innovation Kitchen: Nike transformed its R&D strategy to focus on

sustainable product design. By fostering cross-functional collaboration and
encouraging self-organization, Nike was able to innovate in areas such as
waste reduction and closed-loop systems. The company also engaged in
collaborative initiatives like the GreenXchange, where corporations share
intellectual property to address sustainability challenges collectively.
● DeepCwind Consortium: The University of Maine’s project on offshore wind
energy exemplifies a complex system involving multiple stakeholders. By
leveraging the principles of coevolution and self-organization, the project
seeks to develop sustainable wind power solutions while generating economic
benefits for the region.

5. Implications for Management and Research

The article concludes with recommendations for managers and researchers. For
businesses, adopting sustainability thinking involves embracing complexity, fostering
decentralized innovation, and recognizing the interconnectedness of their activities
with broader social and environmental systems. For researchers, there is a need to
develop new methodologies that capture the dynamic and systemic nature of
sustainability challenges.

The authors highlight that sustainability thinking is particularly suited for contexts
where traditional planning approaches have failed, such as environments
characterized by rapid change, resource scarcity, and high stakeholder diversity.

This summary captures the core arguments and examples from the article,
highlighting how complexity theory can transform the way businesses approach
sustainability.
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Reading 2:

● Witold Henisz, Tim Koller, and Robin Nuttall “Five ways that ESG creates
value”. McKinsey Quarterly, November 2019, 1-12. [S1-ER-2 of 2]

Summary:

​ The article titled "Five Ways That ESG Creates Value" by Witold Henisz, Tim Koller,

and Robin Nuttall explores how a strong ESG (Environmental, Social, and

Governance) proposition can significantly drive value creation for businesses. Below

is a comprehensive summary of the key points discussed in the article:

​ Introduction to ESG and Its Growing Importance

​ The article emphasizes that every business, irrespective of its size or sector, is

deeply intertwined with ESG issues. Companies that excel in these areas not only

gain social credibility but also enjoy financial benefits, as evidenced by the rising

trend of ESG-focused investments, which have reached over $30 trillion globally. The

rise of such investments is driven by an increasing focus on corporate responsibility

from consumers, governments, and investors who recognize that sustainable

practices correlate with long-term financial success.

​ Understanding ESG Components

1. Environmental (E): Covers energy consumption, waste management,
resource use, and impact on climate change.
2. Social (S): Deals with labor relations, community engagement, diversity, and
company reputation.
3. Governance (G): Encompasses internal practices, controls, compliance, and
transparency.
​ These elements are interconnected, influencing each other and ultimately

contributing to a company's overall performance.

​ The Five Ways ESG Creates Value

​ The article identifies five key channels through which ESG initiatives drive business

value:

1. Top-Line Growth
● Companies with strong ESG practices can access new markets and
expand existing ones more easily by gaining trust from governments,
consumers, and other stakeholders.
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● For instance, companies with a good track record of sustainability are

more likely to win government contracts and community support, as
demonstrated in infrastructure projects in Long Beach, California.
● Consumer preferences are also shifting, with many willing to pay a
premium for green products. Brands like Unilever have leveraged this
by developing sustainable products like Sunlight, which performed
exceptionally well in water-scarce markets.
2. Cost Reduction
● Effective ESG strategies can lead to significant cost savings,
particularly by reducing energy and resource consumption. For
example, 3M’s pollution prevention initiatives saved the company $2.2
billion by minimizing waste.
● Resource efficiency not only lowers operational expenses but also
enhances profitability. Companies that proactively manage their
environmental impact often outperform their peers.
3. Reduced Regulatory and Legal Interventions
● By adhering to ESG principles, companies can minimize regulatory
risks and avoid fines. Strong ESG performance can also earn
companies government support and reduce the likelihood of adverse
actions.
● The value at stake is particularly high in heavily regulated industries
like pharmaceuticals, banking, and energy, where compliance with
ESG standards can safeguard up to 60% of profits from regulatory
risks.
4. Increased Employee Productivity
● A strong ESG proposition helps attract and retain talent, leading to
higher employee satisfaction and productivity. Employees are
increasingly drawn to companies with a clear sense of purpose.
● Studies have shown that companies with high employee satisfaction,
such as those on Fortune's "100 Best Companies to Work For" list,
often achieve better stock performance compared to their peers.
5. Optimization of Investments and Assets
● Investing in sustainable projects, such as renewable energy or waste
reduction technologies, can yield higher returns over the long term. It
also helps avoid stranded assets that may become liabilities due to
changing regulations or market conditions.
● Companies like FedEx have shifted to hybrid and electric vehicles,
significantly reducing fuel consumption and operational costs.
​ Practical Considerations for Implementing ESG
Initiatives
​ The article concludes by emphasizing the importance of aligning ESG strategies with
a company’s core business objectives. Leaders should focus on measurable
outcomes to ensure that ESG investments translate into real value creation. It
highlights the need for specific, prioritized initiatives to avoid the pitfalls of pursuing
too many, potentially conflicting, ESG projects.
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​ Conclusion: The Strategic Value of ESG

​ The article argues that ESG should not be viewed as a cost but rather as an
investment that can enhance a company’s resilience and long-term profitability. By
integrating ESG into their core strategy, businesses can not only fulfill their ethical
responsibilities but also achieve sustainable financial growth. The research clearly
demonstrates that companies with strong ESG propositions tend to outperform those
that do not, both in terms of financial returns and risk management.
​ Key Takeaway
​ Investing in ESG initiatives is no longer a choice but a necessity for companies
aiming to thrive in the modern business landscape. Businesses that proactively
embrace ESG stand to gain not only in terms of financial performance but also in
reputation, regulatory compliance, and employee satisfaction.
​ This article serves as a guide for business leaders to systematically think about and
act on ESG opportunities, ensuring that they maximize both social impact and
shareholder value in the long run.
​ ________________________________________________________________
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Session 2: Concept of Sustainable Development Goals, Concept of net zero, frameworks,

methodologies and definitions. SDGs and triple bottom line.

Essential readings/videos for class discussion and MCQs

Reading 1:

Article: Doherty, R., Kampel, C., Koivuniemi, A., Pérez, L., & Rehm, W. (2023). The triple
play: Growth, profit, and sustainability. McKinsey & Company. [S2-ER-1 of 1]

​ Summary of the Article: The Triple Play: Growth, Profit, and Sustainability
​ The article "The Triple Play: Growth, Profit, and Sustainability" by McKinsey discusses
how companies can achieve long-term success by integrating financial growth,
profitability, and Environmental, Social, and Governance (ESG) priorities. The article
challenges the conventional belief that pursuing sustainability comes at the cost of
financial performance. Instead, it presents evidence that companies can excel in
growth and profitability while also advancing ESG goals, resulting in superior
shareholder returns.
​ Key Insights and Findings
1. The Triple Play Concept:
● The article highlights that achieving consistent and profitable growth has been
challenging since the 2008 global financial crisis. It emphasizes the
importance of explicitly choosing a growth mindset in strategy and execution.
● Companies that integrate ESG priorities into their core strategies can
outperform competitors. The analysis shows that organizations that excel in
growth, profitability, and ESG simultaneously—referred to as "triple
outperformers"—achieved 2% higher annual Total Shareholder Returns (TSR)
compared to those only excelling financially and 7% higher than companies
with no strong focus on ESG.
2. Research Methodology:
● The research analyzed 2,269 public companies between 2017 and 2021,
examining excess revenue growth, economic profit, TSR, and ESG rating
improvements using data from S&P Capital IQ and S&P Global ESG scores.
● Companies were classified as outperformers or laggards based on their
financial and ESG performance. A subset of 296 companies was identified as
"triple outperformers" who outpaced their peers in all three areas.
3. Financial Performance and ESG:
● The data revealed that companies focusing on both profitability and ESG
deliver better returns than those prioritizing only financial metrics. However,
excelling in ESG alone does not compensate for poor financial performance.
● Triple outperformers were twice as likely to achieve more than 10% annual
revenue growth compared to their peers. They had a median revenue growth
rate of 11% and outperformed on TSR by an additional 2.5 percentage points.
4. Principles of Triple Outperformance: The article identifies five key strategies
that successful companies employ to achieve growth, profit, and
sustainability:
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● Integrating ESG into Core Strategy: Companies that embed ESG into their
core strategies, rather than treating it as a side initiative, are more likely to
achieve sustainable growth. For instance, a metals and mining company
pivoted to green technologies like aluminum and carbon-capture solutions,
which not only drove revenue but also enhanced ESG performance.
● Innovating ESG Offerings: Leading companies innovate in both products and
processes to capture new market opportunities driven by sustainability
demands. For example, a European logistics company developed new services
like carbon reporting and sustainable fuel solutions, resulting in higher growth
rates and excess TSR.
● Using Mergers and Acquisitions (M&A): Strategic M&A focused on
sustainability can accelerate entry into profitable growth areas. A cosmetics
company leveraged acquisitions to build a portfolio focused on sustainability,
which led to significant improvements in ESG ratings and shareholder returns.
● Transparent Reporting and Communication: Clear and transparent
communication of ESG initiatives and their impact is crucial to gaining investor
trust. This includes setting measurable goals and demonstrating progress
through robust reporting mechanisms. An example is a software company
that developed a public dashboard to track its ESG progress alongside
financial performance.
● Embedding ESG in Organizational DNA: To ensure alignment, companies
should incorporate ESG priorities into their organizational processes, from
decision-making to employee incentives. A global shipping company achieved
significant growth by linking ESG targets with employee compensation and
customer partnerships.
5. Challenges and Future Outlook:
● The analysis notes that while ESG can drive value, it is not a universal solution.
Companies must continue to focus on solid financial fundamentals alongside
ESG improvements.
● The article acknowledges that while some industries, like chemicals and
mining, have seen positive returns from ESG investments, others like high tech
and retail have yet to fully capitalize on these benefits.
● The future will likely see rising expectations around ESG performance,
necessitating that companies take proactive steps to differentiate themselves
● through continuous improvement.
​ Conclusion
​ The article concludes that the best-performing companies actively choose to grow by
integrating ESG into their strategies and operations. The ability to combine growth,
profitability, and sustainability can drive long-term value creation and differentiate
companies in an increasingly competitive market. However, the key takeaway is that
financial performance remains critical, and ESG efforts must ultimately translate into
shareholder returns to be rewarded by the markets.
​ By adopting the "triple play" strategy, companies can do well while doing good,
turning sustainability into a competitive advantage rather than a trade-off.
​
​ _____________________________________________________________
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Session 3: Redefining Corporate Purpose – ‘Profit with purpose’ or ‘purpose with profit’,
stakeholder value, and sustainable value creation

Essential readings for class discussion and MCQs

Reading 1:

Article: Porter, M. E., & Kramer, M. R. “Creating Shared Value”. Harvard Business Review,
2011. [S3-ER-1 of 2]

Summary:
The article, "Creating Shared Value" by Michael E. Porter and Mark R. Kramer,
published in the Harvard Business Review, explores a new approach to capitalism
that aligns corporate success with societal progress. This concept, termed "Shared
Value," redefines the purpose of a corporation beyond profit maximization,
emphasizing that addressing societal needs can also drive economic growth and
innovation.

Key Concepts of Shared Value

The article argues that capitalism is currently viewed as a significant cause of social,
environmental, and economic challenges, resulting in eroded public trust and
restrictive policies. Companies are often seen as prospering at the expense of
society, leading to a vicious cycle where societal well-being and business success
are misaligned. Porter and Kramer propose that this outdated approach to capitalism
can be transformed by focusing on creating shared value, where companies
generate economic value in ways that also produce societal benefits.

The principle of shared value emphasizes that societal needs define markets, and
addressing social challenges can enhance corporate productivity. Unlike corporate
social responsibility (CSR), which is often seen as a peripheral activity focused on
reputation, shared value is integral to a company’s profitability and competitive
positioning. It is not about redistributing existing value but expanding the overall pool
of economic and social value.

Three Ways to Create Shared Value

The authors identify three main strategies through which companies can generate
shared value:
1. Reconceiving Products and Markets: Companies can innovate by developing
products that address social needs. For example, health, nutrition, and
environmental sustainability are areas where new products can create both
economic and social value. Businesses like GE and Nestlé have successfully
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aligned product innovation with societal needs, such as through eco-friendly

technologies or nutritional advancements.
2. Redefining Productivity in the Value Chain: Companies can enhance their
productivity by addressing social and environmental impacts. By optimizing
resource use, improving working conditions, and reducing waste, firms can
lower costs while benefiting society. For instance, Wal-Mart saved $200
million by optimizing its supply chain to reduce carbon emissions and waste,
demonstrating how environmental initiatives can improve efficiency.
3. Enabling Local Cluster Development: Businesses can invest in the
communities where they operate to strengthen the infrastructure and
ecosystems that support their value chains. By supporting local suppliers,
training employees, and collaborating with governments, companies can
enhance regional economic development. This approach not only benefits the
community but also boosts the company’s own productivity and market
presence.

Implications for Businesses and Society

The shared value framework suggests that companies need to shift from a focus on
short-term profits to long-term strategies that align with societal needs. This
approach can unlock new markets, drive innovation, and create sustainable
competitive advantages. For example, Nestlé's efforts in sourcing coffee sustainably
have improved both farmer incomes and product quality, demonstrating how shared
value can lead to mutual benefits.

Governments and NGOs also have a critical role in fostering shared value. By setting
regulations that promote societal and environmental benefits, rather than imposing
rigid compliance, they can incentivize companies to innovate in ways that benefit
both business and society. Porter and Kramer argue that the right kind of regulation
can enhance competitiveness and productivity while addressing societal issues.

Moving Beyond Corporate Social Responsibility

The authors make a clear distinction between CSR and shared value. CSR focuses
on reputation and is often driven by external pressures, whereas shared value is
about integrating social improvements into the core business strategy. The shift from
CSR to shared value involves a deeper understanding of societal issues and how
they intersect with business operations. For instance, improving employee health not
only reduces absenteeism but also boosts productivity, as demonstrated by Johnson
& Johnson’s wellness programs that saved the company $250 million in healthcare
costs.
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The Future of Capitalism

Porter and Kramer conclude that embracing shared value can lead to the next wave
of innovation and economic growth. It redefines capitalism by demonstrating that
societal progress and business success can be mutually reinforcing. This approach
helps rebuild trust in businesses and allows companies to thrive in an increasingly
complex and interconnected world.

By adopting shared value principles, companies can transform their relationship with
society, drive sustainable economic growth, and regain legitimacy in the eyes of the
public. This shift in perspective is not only necessary for addressing today’s pressing
social challenges but also for sustaining long-term business success.

This summary provides a comprehensive overview of the article and highlights its
relevance to your sustainability and ethics class.
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Reading 2:

Case: Weiss, S., & Bollier, D. (2013). Merck & Company, Inc.: Having the Vision to Succeed.
In International business case studies for the multicultural marketplace (pp. 309-314).
Routledge. [S3-ER-2 of 2]

​ Summary of "Merck & Company, Inc.: Having the Vision to Succeed"

​ The case study, "Merck & Company, Inc.: Having the Vision to Succeed," focuses on
the ethical and strategic challenges faced by Merck & Co., a leading pharmaceutical
company, during the late 1970s. The central theme revolves around the company's
decision-making process concerning the development of a drug to combat river
blindness (onchocerciasis), a devastating parasitic disease affecting millions in
impoverished regions of Africa, Latin America, and the Middle East.
​ Background on River Blindness
​ River blindness, scientifically known as onchocerciasis, is caused by the parasitic
worm Onchocerca volvulus, transmitted to humans through bites by black flies that
thrive near fast-flowing rivers. The adult worms create nodules in the skin, releasing
millions of microscopic larvae (microfilariae) into the body. These larvae cause
severe itching, skin infections, and, over time, blindness. By the late 1970s, the
World Health Organization (WHO) estimated that 18 million people were infected,
with approximately 340,000 already blind. The disease had devastating social and
economic consequences, as entire communities abandoned fertile lands near rivers
to escape the black flies.
​ Merck’s Corporate Philosophy
​ Merck & Co., a leader in the pharmaceutical industry, had a long-standing reputation
for focusing on alleviating human suffering rather than solely pursuing profits. This
philosophy was rooted in the words of George W. Merck, the founder’s son, who
emphasized that medicine should prioritize people over profits. By the late 1970s, the
company was facing challenges due to the impending expiration of patents on its
leading products, leading Merck to invest heavily in research and development to
sustain future growth.
​ Discovery of Ivermectin
​ The turning point came in 1978 when Dr. William Campbell, a senior parasitologist at
Merck, proposed the potential use of ivermectin—a drug initially developed for
animals—as a treatment for river blindness in humans. Ivermectin, derived from soil
samples in Japan, had already shown exceptional efficacy against a wide range of
parasites in livestock, prompting its development as a veterinary drug under the
brand name Ivomec.
​ Campbell observed that ivermectin was effective against parasites in horses that
were similar to those causing river blindness in humans. However, transforming
ivermectin into a safe, effective drug for human use posed significant challenges.
While preliminary tests indicated its potential, the company faced a dilemma:
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investing millions in developing a drug for a market that could not afford to pay for it.
The people suffering from river blindness were among the poorest, with limited or no
access to healthcare.
​ Ethical and Strategic Dilemmas
​ Dr. P. Roy Vagelos, the head of Merck’s research labs at the time, was at the center
of the decision-making process. The ethical dilemma was stark: Should Merck invest
in the development of a drug for a disease that primarily afflicted the poor, knowing
that it would not generate financial returns? The development of new drugs typically
took 12 years and required investments of up to $200 million. While the incremental
cost of developing a human formulation of ivermectin would be lower due to prior
investments in the veterinary drug, the company would still incur substantial costs
without a clear path to profitability.
​ There were also risks associated with the drug’s cross-species application. Potential
adverse effects in humans could not only harm the patients but also tarnish the
reputation of the veterinary drug. Concerns about misuse and black-market diversion
added further complexity to the decision.
​ Weighing the Options
​ The case highlights the rigorous process Merck used to evaluate potential research
projects. Each project was assessed based on safety, efficacy, market potential, and
other factors. However, river blindness presented a unique challenge as there was no
immediate financial incentive. At the time, there were no government or international
incentives to encourage the development of drugs for neglected diseases affecting
impoverished populations.
​
​ Ultimately, the decision came down to whether Merck would adhere to its founding
principles of prioritizing human health or focus solely on financial returns. Vagelos
had to consider not only the company's profitability but also the morale and values of
the researchers who were dedicated to alleviating human suffering.
​ Conclusion
​ The case of Merck's decision on ivermectin illustrates the complex interplay between
ethics, corporate philosophy, and business strategy. It challenges companies to
reflect on their role in society and whether they can align profitability with social
responsibility. Merck’s decision to pursue the development of ivermectin, despite the
lack of financial incentives, would go on to be celebrated as a landmark in corporate
social responsibility, showcasing how a vision focused on human well-being can lead
to long-term positive outcomes.
​
​ The case serves as an important lesson in ethical decision-making, particularly for
businesses aiming to balance their financial goals with their responsibility to society.
​ __________________________________________________________________
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Session 4: Exploring key ethical principles, frameworks, and business ethics, along with
individual and organisational factors influencing sustainable behaviour, including moral
philosophies, values, and ethical culture.

Essential readings for class discussions and MCQs

Reading 1:

Article: Jonathan Haidt book:

https://www.amazon.com/Righteous-Mind-Divided-Politics-Religion/dp/0307455777, chapter
7 only. Wikipedia [S4-ER-1 of 3]

Summary

​ The chapter titled “The Moral Foundations of Politics” from Jonathan Haidt's book,

The Righteous Mind: Why Good People Are Divided by Politics and Religion. This

chapter delves into the theory of moral foundations and explores how different moral

values shape the political ideologies of liberals and conservatives.

​ Key Themes and Ideas

​
​ 1. Challenging Homo Economicus:
​ Haidt begins by challenging the traditional view held by social scientists that humans

are primarily self-interested, driven by maximizing personal benefits. This "Homo

economicus" model sees individuals as rational actors, making decisions based

purely on self-interest. Haidt refutes this by demonstrating that humans possess a

range of moral intuitions beyond self-interest, which guide their behavior.

​ 2. The Concept of Innateness:

​ Haidt introduces a modern understanding of "innateness," explaining that while

human brains are not hardwired with specific behaviors, they are "prewired" with

certain moral foundations that are then shaped by experience. He uses the analogy

of the brain being like a first draft written by our genes, which is then revised

throughout life based on cultural and personal experiences.

​ 3. The Five Moral Foundations:

​ Haidt outlines five moral foundations that he argues are innate to humans but are

shaped by culture:
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● Care/Harm: This foundation evolved from the need to care for vulnerable
offspring. It drives our compassion and desire to protect others from harm.
● Fairness/Cheating: Rooted in reciprocal altruism, this foundation focuses on
justice, fairness, and the punishment of cheaters. It underpins concepts of
social justice on the left and proportionality (rewarding merit) on the right.
● Loyalty/Betrayal: Originating from the need for cohesive groups, this
foundation emphasizes loyalty to one’s group, team, or nation. It often drives
nationalistic and tribal behavior.
● Authority/Subversion: This foundation is related to respect for tradition and
legitimate authority. It evolved to maintain social hierarchies and order, which
are crucial for group survival.
● Sanctity/Degradation: Initially linked to avoiding pathogens, this foundation
extends to moral concerns about purity, both physically and symbolically. It
can be seen in the emphasis on religious sanctity or purity in political and
cultural contexts.
​ 4. Political Implications of Moral Foundations:
​ Haidt argues that these moral foundations are not evenly distributed across the

political spectrum:

● Liberals tend to prioritize the Care and Fairness foundations, focusing on

issues like social justice, equality, and protecting the vulnerable.
● Conservatives, on the other hand, draw from all five foundations. They value
Care and Fairness but also emphasize Loyalty, Authority, and Sanctity, which
often leads them to prioritize tradition, social order, and national unity.
​ 5. Moral Matrices and Political Division:
​ Haidt uses the concept of “moral matrices” to explain why liberals and conservatives

often misunderstand each other. Each group operates within its own moral

framework, which makes it difficult to empathize with the values of the other side. For

example, liberals may see conservatives as heartless or authoritarian, while

conservatives may view liberals as unpatriotic or morally relativistic.

​ 6. Examples and Case Studies:

​ Throughout the chapter, Haidt uses various examples to illustrate how these moral

foundations manifest in real-world scenarios, such as bumper stickers, political

movements, and historical events. He highlights how moral intuitions are activated by

different triggers, which political parties and interest groups leverage to mobilize

support.
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​ Conclusion
​ Haidt concludes by suggesting that understanding the diversity of moral foundations
can foster greater empathy and reduce the polarization between the left and right. He
emphasizes that while liberals may focus narrowly on Care and Fairness,
conservatives draw on a broader range of moral intuitions, giving them more ways to
connect with a wider audience.
​
​ Teaching Implications
​ For your sustainability and ethics class, this chapter can provide a framework for
discussing how moral values influence not only political ideologies but also ethical
decision-making in business and society. It encourages students to think critically
about their own moral intuitions and how these shape their views on sustainability,
ethics, and social responsibility.

__________________________________________________________________
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Reading 2:

Summary: https://en.wikipedia.org/wiki/Moral_foundations_theory [S4-ER-2 of 3]

Overview of Moral Foundations Theory:

Moral Foundations Theory (MFT), primarily developed by Jonathan Haidt, Craig Joseph, and
Jesse Graham, seeks to explain the variation in human moral reasoning based on a set of
innate, evolutionary foundations. The theory argues that morality is not a single dimension
but consists of multiple, independent foundations that shape people's ethical views and
social judgments.

Core Moral Foundations:

The theory initially identified five key moral foundations, later expanded to include a sixth:

1. Care/Harm: This foundation focuses on empathy, kindness, and protection from

suffering. It emphasizes the importance of caring for others and avoiding harm.
2. Fairness/Cheating: Rooted in notions of justice and equality, this foundation
involves concerns about fair treatment, reciprocity, and proportionality.
3. Loyalty/Betrayal: This foundation prioritizes loyalty to one's group, family, or nation,
encouraging a strong sense of in-group solidarity and patriotism.
4. Authority/Subversion: It emphasizes respect for tradition, leadership, and social
order, valuing the structures that uphold societal stability.
5. Sanctity/Degradation: Related to ideas of purity and sanctity, this foundation
concerns itself with avoiding contamination, both physical and moral, and reverence
for sacred traditions.
6. Liberty/Oppression: The most recently added foundation, it focuses on the
resistance to domination and the desire for individual autonomy.

The Role of Moral Foundations in Cultural and Political Contexts:

● MFT was developed to understand cultural differences in moral reasoning. Haidt’s

fieldwork in places like Brazil, India, and the United States demonstrated that morality
varies significantly based on cultural, social class, and age differences.
● The theory has since been applied to analyze political ideologies. For instance,
liberals are found to emphasize Care and Fairness, while conservatives tend to value
all six foundations more evenly, particularly Loyalty, Authority, and Sanctity. This
explains why political groups often misunderstand each other, as their moral priorities
differ fundamentally.

Applications and Extensions of MFT:

● Political Ideology: MFT has been widely used to explain ideological divides,
particularly in the context of contemporary political issues like same-sex marriage,
abortion, and vaccination.
● Cross-Cultural Research: Recent studies, including those involving the updated
Moral Foundations Questionnaire (MFQ-2), have demonstrated how moral
 18

foundations vary across different cultures, with variations influenced by factors such
as individualism vs. collectivism and religious beliefs.
● Psychological and Neurological Correlates: Research has also shown that
people's sensitivity to different moral foundations is linked to differences in brain
activation, indicating that moral judgments may be processed differently by liberals
and conservatives.

Criticisms and Competing Theories:

● Critics have argued that MFT might overstate the distinctiveness of its moral
foundations or that these foundations might be reducible to a concern for harm
avoidance.
● Alternative theories, such as Dyadic Morality and Moral Motives Theory, suggest that
moral reasoning may be less modular and more context-dependent than MFT
proposes.

Educational Use:

For your class on "Sustainability and Ethics," MFT provides a framework to analyze ethical
decision-making in business contexts, helping students understand how moral foundations
influence corporate social responsibility, stakeholder engagement, and sustainability
practices. By appreciating the diversity of moral intuitions, students can better navigate
ethical dilemmas and conflicts in business settings, especially in cross-cultural and diverse
organizational environments.

This summary should serve as a foundational overview for your teaching session,
emphasizing how MFT can be applied to ethical reasoning in business and sustainability.
 19

Reading 3:

Article: Ethical breakdowns by Bazermann.

https://harrt.ucla.edu/wp-content/uploads/2015/12/Ethical-Breakdowns-HBR.pdf [S4-ER-3 of
3]

Summary: Ethical Breakdowns by Max H. Bazerman and Ann E. Tenbrunsel

This article delves into why ethical lapses frequently occur in organizations despite leaders'
best intentions to uphold ethical standards. The authors argue that unethical behavior is
often not due to outright malice but rather to cognitive biases, flawed incentive systems, and
organizational pressures that subtly lead people astray.

Key Themes and Concepts

1. Ethical Fading:
○ This is the process by which the ethical dimensions of a decision are
overlooked, often due to framing it purely as a business issue. A classic
example is the Ford Pinto case, where executives, using a cost-benefit
analysis, prioritized profits over safety, leading to fatal accidents. They failed
to recognize the ethical implications because they treated the issue as a
financial decision rather than a moral one.
2. Ill-Conceived Goals:
○ Goals and incentives designed to drive performance can inadvertently
promote unethical behavior if not carefully constructed. For instance, in the
1990s, Sears set aggressive sales targets for its auto repair staff, resulting in
mechanics overcharging customers or conducting unnecessary repairs to
meet the quotas. The pressure to meet specific targets led to unethical
practices, highlighting the need for managers to anticipate unintended
consequences when setting goals.
3. Motivated Blindness:
○ This occurs when individuals overlook unethical behavior because it benefits
them or aligns with their interests. A notable example is the role of credit
rating agencies during the 2008 financial crisis. These agencies, paid by the
very companies they rated, failed to see—or ignored—the risks associated
with mortgage-backed securities, contributing to the economic collapse.
4. Indirect Blindness:
○ Organizations often outsource ethically questionable activities to third parties,
thus distancing themselves from the unethical actions and the associated
accountability. The case of Merck selling two cancer drugs to Ovation, which
then drastically increased prices, illustrates how companies may use
intermediaries to conduct actions they wish to avoid being directly associated
with.
5. The Slippery Slope:
○ Minor ethical infractions, if unchecked, can escalate over time, leading to
more significant violations. The article discusses how auditors might approve
increasingly questionable financial statements if the discrepancies build up
gradually, rather than abruptly. This "boiling frog" scenario illustrates how
 20

small ethical lapses can accumulate into significant ethical breaches if not
addressed promptly.
6. Overvaluing Outcomes:
○ There is a tendency to judge the ethicality of decisions based on outcomes
rather than the decision-making process itself. For example, a researcher
who fabricates data but achieves a positive outcome is often judged less
harshly than one whose data falsification leads to negative consequences.
This bias toward results can encourage unethical decision-making if it
appears to deliver favorable outcomes.

Managerial Implications and Solutions

● Awareness of Cognitive Biases:

○ Organizations need to train managers and employees to recognize the
cognitive biases that can lead to unethical decisions. Simply implementing
compliance programs or surveillance systems is not enough; leaders must
understand the psychological underpinnings that drive unethical behavior.
● Ethical Decision-Making Frameworks:
○ Leaders should encourage their teams to consider the ethical implications of
their decisions actively. This includes questioning how incentives might
inadvertently promote unethical behavior or how conflicts of interest could
cloud judgment.
● Addressing Indirect and Motivated Blindness:
○ Managers must take ownership of the ethical implications of their decisions,
especially when outsourcing or delegating tasks. They should remain vigilant
about the potential for conflicts of interest and ensure that accountability
remains clear.
● Preventing the Slippery Slope:
○ Organizations should monitor even minor ethical lapses and address them
immediately to prevent gradual ethical erosion. This proactive approach helps
maintain ethical standards and prevents minor issues from escalating into
major crises.

Conclusion

Bazerman and Tenbrunsel emphasize that many organizations fail in their ethical
responsibilities not due to lack of intention but due to cognitive biases and poorly designed
systems. The challenge for leaders is to remain vigilant, recognize their blind spots, and
ensure that ethical considerations are integrated into every level of decision-making. Only by
doing so can organizations foster a culture that genuinely prioritizes ethics over short-term
gains.
 21

Session 5: The philosophical underpinnings of sustainability - the tragedy of commons

arguments, moral and social legitimacy, conscious capitalism, stakeholder theory, and the pragmatic,
balanced perspective

Essential readings for class discussions and MCQs

Reading 1: Case: Coca-Cola Bottling in Rajasthan, India: Tragedy of the Commons (W93C91)
[S5-ER-1 of 2]

Summary of the Case: Coca-Cola Bottling in Rajasthan, India - Tragedy

of the Commons

Introduction to the Case The case revolves around Coca-Cola's water usage practices in
Kaladera, a village in Rajasthan, India, through the lens of the "Tragedy of the Commons."
This concept, introduced by Garrett Hardin, highlights how individual users, acting
independently in their self-interest, can deplete shared resources, ultimately harming the
entire community. The case examines whether Coca-Cola's operations in a water-scarce
area align with its stated commitments to corporate social responsibility (CSR) and
sustainable water management.

Background Coca-Cola has faced accusations globally for depleting groundwater,

particularly in water-scarce regions like India. This case focuses on Coca-Cola's bottling
plant in Kaladera, Rajasthan, established in 1999. Activists and local communities have
accused the company of excessive groundwater extraction, which, coupled with declining
rainfall, has significantly lowered the water table in the area.

Water Crisis in Rajasthan Rajasthan faces an acute water crisis, with groundwater being
the primary source of water in this arid region. The Central Ground Water Board designated
Kaladera as "overexploited" as early as 1998. Groundwater levels have drastically dropped
in Kaladera, from about 9 meters to 36 meters over two decades. The TERI (The Energy
and Resources Institute) report indicated that the extraction rate far exceeds the natural
recharge rate, contributing to severe water scarcity.

Coca-Cola's Water Usage Coca-Cola's plant in Kaladera initially extracted around 200,000
cubic meters of groundwater annually, which has since been reduced to about 100,000 cubic
meters. Despite the reduction, the company remains one of the largest water users in the
area. The plant's water consumption peaks during the summer months when water scarcity
is at its worst. The company's water usage ratio (liters of water used per liter of beverage
produced) has improved over the years but still raises concerns about sustainability in a
water-stressed region.

Impact on Local Communities The over-extraction of groundwater has adversely impacted

the agricultural community in Kaladera. Farmers have had to dig deeper wells, incurring
higher costs for irrigation. The reduced availability of water has also affected crop yields and
livestock productivity. Women, in particular, bear the brunt of the water crisis, spending more
time fetching water, leading to social conflicts over access to limited water sources.

Regulatory Challenges India's legal framework on groundwater usage is lax, with no clear
restrictions on the amount of water that can be extracted by landowners. Rajasthan's State
 22

Water Policy, drafted in 1999, has not been effectively implemented. As a result, industries,
including Coca-Cola, have continued to extract groundwater without sufficient regulation or
oversight.

Coca-Cola's CSR and Response to Criticism Coca-Cola claims that its operations are
aligned with its CSR goals, emphasizing water stewardship. The company has implemented
rainwater harvesting (RWH) systems, claiming that they recharge 15 times the volume of
water extracted. However, independent assessments, including the TERI report, have found
that many of these RWH structures are poorly maintained and ineffective. There is also
skepticism about Coca-Cola’s claim of recharging the aquifers, as the company relies on
theoretical calculations rather than empirical measurements.

The TERI Report Recommendations The TERI report suggested several options for
Coca-Cola, including:

1. Transporting water from less stressed aquifers.

2. Storing water during less stressful seasons.
3. Relocating the plant to a water-surplus area.
4. Shutting down the facility.

Coca-Cola, however, rejected these recommendations, arguing that its current practices
were already sustainable.

Analysis and Conclusion The case presents a classic example of the "Tragedy of the
Commons," where Coca-Cola’s pursuit of business interests conflicts with the sustainable
use of shared resources. While the company insists on its commitment to CSR, its actions in
Kaladera suggest otherwise. The lack of transparency, ineffective rainwater harvesting, and
continued extraction of groundwater in a severely water-scarce region raise critical ethical
and sustainability concerns.

For businesses operating in resource-constrained environments, this case highlights the

need to go beyond mere compliance and actively contribute to sustainable community
practices. It underscores the importance of regulatory frameworks to ensure equitable
resource use, especially in regions facing environmental stress.

Key Takeaways for Students of Sustainability and Ethics

1. Understanding the concept of the Tragedy of the Commons and its application to
real-world business practices.
2. Evaluating the effectiveness of CSR initiatives, especially in resource-intensive
industries.
3. Analyzing the ethical implications of corporate actions in the context of local
community welfare.
4. Assessing the role of regulatory frameworks in balancing industrial growth with
environmental sustainability.

This case study serves as a critical example for discussions on corporate ethics,
sustainability, and responsible business practices in regions with scarce natural resources.
 23

Reading 2:

Article: Robert G. Eccles & Svetlana Klimenko. “The Investor Revolution: Shareholders are getting
serious about sustainability.” Harvard Business Review. (May–June 2019). [S5-ER-2 of 2]

Summary of "The Investor Revolution" for Teaching Purposes

The article "The Investor Revolution" by Robert G. Eccles and Svetlana Klimenko explores
the growing importance of Environmental, Social, and Governance (ESG) criteria in
investment strategies. It underscores how institutional investors, especially large asset
managers like BlackRock, Vanguard, and State Street, are increasingly integrating
sustainability into their investment decisions, shifting away from traditional short-term
profit-maximization models.

The Evolution of Investor Attitudes Toward ESG

For decades, sustainability was often seen as a secondary concern, with many corporations
believing that shareholders prioritized immediate financial returns over long-term
sustainability goals. However, the perception that ESG issues are non-material to financial
performance is becoming outdated. According to the authors, extensive interviews with 70
senior executives from 43 major investment firms revealed that ESG considerations are now
a top priority. Investors have recognized that systemic risks such as climate change cannot
be diversified away, especially for firms managing trillions in assets. As a result, they are
compelled to ensure that companies in their portfolios are addressing sustainability concerns
to protect long-term returns.

Key Drivers Behind the Shift to ESG Investing

The article identifies several forces propelling the shift towards ESG integration:

1. Scale of Investment Firms: The largest asset managers control a significant portion
of the global financial markets, making it impossible for them to hedge against
systemic risks like climate change. These firms are too large to allow the planet to
fail, given their intergenerational responsibilities, particularly pension funds.
2. Financial Returns: Contrary to the belief that sustainable investing compromises
returns, research suggests that companies focusing on material ESG issues
outperform their peers. For instance, a Harvard Business School study highlighted
that firms managing ESG risks effectively saw improved financial performance over
the long term.
3. Demand from Asset Owners: Pension funds, sovereign wealth funds, and
high-net-worth individuals are increasingly demanding sustainable investment
strategies. They not only seek financial returns but also desire positive social and
environmental impact.
4. Evolving Fiduciary Duty: Traditionally, fiduciary duty was interpreted as focusing
exclusively on financial returns. However, recent legal and regulatory changes are
encouraging or even requiring consideration of ESG factors as part of fiduciary
responsibility, especially in regions like the UK, Canada, and Sweden.
 24

5. Millennial Influence: As millennials become a larger portion of the workforce, their

focus on sustainability is pushing companies and investors to prioritize ESG issues.
6. Rise in Shareholder Activism: Investors are engaging more actively with
companies on ESG issues, leveraging proxy resolutions and direct engagements to
influence corporate behavior. For example, activist funds like JANA Partners and
ValueAct Capital have used their influence to drive sustainability changes within
corporations like Apple and AES.

Challenges and Recommendations for Companies

Despite the momentum behind ESG investing, significant barriers remain, particularly
regarding the quality and consistency of ESG data. Many companies’ sustainability reports
are geared toward NGOs rather than investors, resulting in fragmented and unreliable data.
To address these challenges, the article offers five actionable strategies for corporations:

1. Articulate a Clear Corporate Purpose: Companies should publish a statement of

purpose that aligns with both profitability and societal contributions. This signals to
investors a commitment to long-term value creation.
2. Enhance Engagement with Shareholders: Companies need to improve their
communication with investors by providing integrated reports that cover both financial
and ESG performance, focusing on materiality.
3. Increase Middle Management Involvement: To ensure the effective integration of
ESG into business operations, middle managers must be engaged and incentivized
to prioritize sustainability alongside financial goals.
4. Invest in Internal Systems for ESG Data: Firms should develop robust IT systems
to collect and report ESG data with the same rigor as financial data. This includes
collaborating with software vendors and audit firms to standardize ESG metrics.
5. Focus on Impact Measurement: As investors seek to understand the societal
impact of their investments, companies should align their strategies with frameworks
like the UN Sustainable Development Goals (SDGs) to measure their externalities
effectively.

Conclusion

The article concludes that the integration of ESG considerations into investment
decision-making is not a temporary trend but a fundamental shift in the way capital markets
operate. As ESG factors become critical to assessing long-term value, companies that fail to
align with this new reality risk losing the support of institutional investors who are
increasingly prioritizing sustainability.

This summary covers the main insights from the article and can be utilized to facilitate
classroom discussions on sustainability and ethics, emphasizing the evolving role of
investors in driving corporate responsibility.
 25

Session 6: Emerging Consumer Attitudes and Behaviour towards Sustainable

Consumption - Business Implications

Essential readings for class discussions and MCQs

Reading 1:

Case: Speeding Ahead to a Better Place [S6-ER-1 of 2]

Summary of "Speeding Ahead to a Better Place" for Teaching (2 Pages)

Background and Vision of Better Place

The case revolves around Shai Agassi, a former SAP executive, who left his lucrative career
to address one of the world's pressing challenges—our dependence on oil. In 2006, at the
World Economic Forum, Agassi conceived the idea of an electric vehicle (EV) ecosystem
powered by renewable energy to reduce greenhouse gas emissions and eliminate reliance
on fossil fuels. Agassi's vision was to create a world where transportation could be powered
sustainably, primarily by developing an integrated network that supports electric vehicles.

Concept and Business Model

Better Place's approach was innovative: instead of merely manufacturing electric cars, the
company aimed to establish a complete ecosystem to support EV adoption. This included
charging infrastructure, battery-swapping stations, and partnerships with automakers. The
core elements of the business model were:

1. Electric Cars and Batteries: Partnering with Renault-Nissan, Better Place focused
on battery-powered vehicles where the batteries could be swapped out in under five
minutes at designated stations. This system addressed the limited range of EVs and
avoided long recharging times.
2. Infrastructure and Charging Network: Better Place planned to install thousands of
charging spots and battery-swapping stations. The infrastructure would be managed
through a centralized Operations Center (OC), optimizing the network's efficiency
and user experience.
3. Subscription-Based Model: Instead of selling cars with batteries, Better Place
adopted a model similar to the cell phone industry. Consumers would subscribe to a
service, paying monthly fees for access to vehicles and unlimited battery swaps,
thereby reducing the upfront cost of EVs.
4. Renewable Energy Integration: Agassi was committed to using renewable sources
like wind and solar power. The EV batteries would not only power cars but also store
excess renewable energy, effectively balancing supply and demand.

Strategic Partnerships and Early Implementation

Better Place chose Israel and Denmark as initial markets due to their supportive policies and
compact geographies. In Israel, the government provided tax incentives, and the country’s
relatively short driving distances made it ideal for the initial rollout. In Denmark, the
 26

partnership with DONG Energy aimed to leverage wind energy, addressing the challenge of
intermittent renewable supply by using EV batteries as storage units.

Agassi’s strategy also included securing substantial investments, starting with $200 million
from investors like Idan Ofer and Morgan Stanley. These funds were critical for the
large-scale infrastructure investments required to build charging stations and
battery-swapping facilities.

Challenges and Strategic Decisions

Despite the innovative concept, Better Place faced several challenges:

1. High Infrastructure Costs: The significant upfront investment needed for charging
stations and battery-swapping facilities posed a risk. Each charging spot cost around
$200-$300, while a battery-swapping station could range from $300,000 to $500,000.
2. Consumer Adoption: Convincing consumers to adopt EVs involved overcoming
concerns about range anxiety, reliability, and cost. Better Place had to navigate
varying consumer expectations, with some prioritizing environmental impact while
others focused on cost savings.
3. Technological Uncertainties: Battery technology was evolving, and there were
concerns about the longevity, safety, and scalability of lithium-ion batteries. Better
Place had to be adaptable in integrating new battery advancements and
accommodating different standards.
4. Competition from Alternative Technologies: Better Place was entering a market
where automakers and startups were exploring hybrids, plug-in hybrids, and
hydrogen fuel cells. Agassi dismissed hybrids as an interim solution, advocating for
fully electric vehicles as the end game.

Sustainability and Ethical Considerations

The Better Place model aligns with principles of sustainability and ethical business practices
by focusing on reducing environmental impact, promoting renewable energy, and
challenging the status quo of fossil fuel dependence. The case exemplifies how businesses
can be agents of change, leveraging technology and innovation to address global
challenges.

However, it also raises questions about the feasibility of large-scale infrastructure projects
and the potential societal implications of a rapid shift in technology. For instance, what are
the social costs of displacing traditional automotive industries? Can a company balance
profitability with a mission-driven agenda?
 27

Conclusion and Teaching Implications

For MBA students studying sustainability and ethics, this case offers valuable lessons on
strategic decision-making, innovation in business models, and the ethical responsibilities of
entrepreneurs. Agassi's journey highlights the tension between idealism and pragmatism in
bringing disruptive technologies to market. It also prompts discussions on the role of
businesses in driving societal change, especially in sectors like energy and transportation
that have far-reaching environmental implications.

In teaching this case, emphasize the balance between vision and execution, the need for
strategic partnerships, and the importance of aligning business models with societal values.
Encourage students to think critically about how businesses can leverage technology to
create a sustainable future while managing the inherent risks of innovation.
 28

Reading 2:

Article: Katherine White, David J. Hardisty, and Rishad Habib. The Elusive Green
Consumer. Harvard Business Review, (July-August 2019) [S6-ER-2 of 2]

Summary of "The Elusive Green Consumer" for Classroom Teaching

Introduction: Despite growing awareness and positive attitudes toward sustainable

products, a significant gap remains between consumers' intentions and their actual
purchasing behaviors. Research indicates that while consumers express interest in
eco-friendly brands, this enthusiasm does not consistently translate into sales. This
intention-action gap is a major challenge for companies aiming to promote sustainability, as
consumer behavior plays a crucial role in reducing the environmental impact.

Key Challenges:

1. Intention-Action Gap: While 65% of consumers express a desire to support

sustainable brands, only 26% actually do so in practice. This gap is problematic for
achieving corporate and environmental goals since much of a product’s ecological
impact occurs during consumer use.
2. Negative Perceptions: Sustainable products are often seen as inferior in quality,
less aesthetically pleasing, or more expensive than conventional alternatives.
Additionally, political and social biases can influence consumer receptiveness to
sustainability messaging.

Behavioral Science Insights for Bridging the Gap: The authors propose five strategies
based on behavioral science to influence consumer behavior and align it with their stated
preferences for sustainability.

1. Leverage Social Influence:

○ Social Norms: People are more likely to adopt behaviors that they perceive
as common within their social circles. For example, in Calgary, Canada,
emphasizing that neighbors were engaging in “grasscycling” led to a
significant increase in adoption.
○ Visibility and Public Commitment: Encouraging consumers to make their
sustainable behaviors public (e.g., displaying window stickers or wearing
pins) can boost commitment. Competition among groups, such as friendly city
or campus challenges, can further enhance participation.
2. Shape Good Habits:
○ Default Options: Making sustainable choices the default can significantly
increase adoption. For instance, when green energy was set as the default in
Germany, 94% of consumers chose it.
○ Prompts and Feedback: Simple reminders and feedback (like showing
energy usage comparisons with neighbors) can motivate positive changes.
Real-time feedback, as seen with the Toyota Prius’ fuel efficiency displays,
can encourage ongoing sustainable actions.
○ Life Transitions: Major life events, such as moving to a new house or
starting a new job, present an opportunity to disrupt old habits and establish
new, more sustainable ones.
 29

3. Leverage the Domino Effect:

○ Positive Spillover: When consumers adopt one sustainable habit, they are
likely to take on more. For instance, IKEA found that customers who started
reducing food waste gradually adopted other sustainable practices, such as
energy conservation.
○ Effortful Commitments: Encouraging more significant initial commitments
can lead to a higher likelihood of continued positive behavior, avoiding the risk
of “slacktivism” where minor actions (like signing a petition) are seen as
sufficient engagement.
4. Decide Whether to Appeal to the Heart or the Brain:
○ Emotional Appeals: Positive emotions like hope and pride can drive
sustainable behaviors more effectively than guilt. For example, Bacardi’s
#thefuturedoesntsuck campaign focuses on optimism to reduce plastic waste.
○ Rational Appeals: Highlighting tangible impacts, such as Unilever’s focus on
sustainably sourced palm oil, can persuade consumers by demonstrating the
effectiveness of their actions. Loss aversion, where consumers are motivated
by the potential loss of benefits, can also be a powerful driver.
5. Favor Experiences Over Ownership:
○ Experience Economy: Businesses like Airbnb and Rent the Runway focus
on access rather than ownership, promoting sustainability by reducing waste.
Companies can also integrate circular models, encouraging product returns
and refurbishments to extend product lifecycles.
○ Sharing Economy: Models that prioritize access over ownership, such as
car-sharing services, can reduce environmental impact. However, these
services need to be carefully managed to avoid inadvertently increasing
overall consumption (e.g., using ride-shares instead of public transportation).

Conclusion: Companies striving to promote sustainable consumption need to understand

their target consumers’ motivations and barriers. By employing strategies grounded in
behavioral science, firms can nudge consumers toward more sustainable choices. Success
in this area not only benefits the planet but also strengthens brand loyalty and market share
in the long run.

This summary highlights the critical insights from the article, emphasizing practical strategies
businesses can adopt to encourage sustainable consumer behavior. It is designed to foster
discussions on consumer psychology, marketing strategies, and sustainability in your
upcoming classes.
 30

Session 7: Different Sustainability Models and their Implications to Business and Corporate
Functions (Circular Economy, Cradle to Cradle, etc.) & Good Governance and Management Practices
following DEI (Diversity, Equity, and Inclusion) Principles

Essential readings for class discussions and MCQs

Reading 1:

Case: Ant Forest: Starting From Environmental Protection [S7-ER-1 of 2]

Summary of "Ant Forest: Starting from Environmental Protection"

Introduction and Background Ant Forest, an in-app environmental initiative, was launched
by Ant Financial (a subsidiary of Alibaba Group) through Alipay in 2016. The aim was to
leverage the popularity of Alipay to promote eco-friendly behaviors among users. The
program incentivized users to adopt low-carbon activities, such as walking, using public
transport, and online transactions, by awarding them "green energy points." These points
could be accumulated to grow virtual trees, which could later be converted into real trees
planted in China’s arid regions. This initiative sought to mitigate desertification and promote
a sustainable lifestyle.

Objectives and Strategy The primary goal of Ant Forest was to raise environmental
awareness and drive a low-carbon lifestyle among its users. The initiative effectively turned
everyday activities into game-like challenges, fostering user engagement. By converting
emissions reductions into green energy points, users were motivated to adopt greener
habits. For every virtual tree grown, Alipay planted a real one, creating a tangible impact on
the environment. By August 2019, Ant Forest had attracted over 500 million users and
planted 122 million trees, offsetting approximately 7.9 million tons of CO₂.

Success Factors and User Engagement Ant Forest’s success was largely due to its
gamification approach and the integration of social elements. The platform encouraged
users to interact with each other by allowing them to “steal” green energy from friends’ virtual
trees or collaborate to grow trees together. The initiative also leveraged social media
campaigns, particularly during Chinese festivals, to boost user engagement.

The platform's algorithms tracked users’ low-carbon activities like walking, taking public
transportation, and making online payments, converting these actions into points. By
partnering with various tech firms, Ant Forest utilized remote sensing, AI, and satellite
technologies to monitor tree planting and ensure transparency. Users could view their trees
and their environmental impact through the app, which kept them engaged and motivated.

Partnerships and Impact Ant Forest partnered with multiple stakeholders, including
non-profits, forestry authorities, and tech companies. These collaborations facilitated the
planting and maintenance of trees, while tech partners provided innovative solutions like
drones and satellite imaging for monitoring tree growth.

The program also supported rural development by generating employment in afforestation

projects. By hiring local communities as tree planters and forest rangers, Ant Forest not only
 31

contributed to environmental protection but also addressed poverty in underdeveloped

regions. This dual impact enhanced the initiative's appeal, both environmentally and socially.

Challenges and Sustainability Despite its widespread popularity, Ant Forest faced
challenges in sustaining growth. The initiative relied heavily on financial support from Ant
Financial, raising concerns about its long-term viability. The platform needed to attract more
partners to diversify funding and explore new business models to ensure sustainability.
Another challenge was to maintain user engagement, as gamified platforms often face
diminishing user interest over time.

Future Prospects Looking ahead, Ant Forest aimed to expand its impact by partnering with
over 1,000 eco-friendly organizations and inspiring one billion people worldwide to adopt
low-carbon practices. The initiative also sought to explore new ways to monetize the
platform, such as integrating carbon credits trading. However, the key challenge remained in
scaling up its impact without compromising user engagement and financial sustainability.

Conclusion Ant Forest exemplifies how digital platforms can drive sustainable behaviors
and make significant environmental and social contributions. By turning everyday actions
into meaningful environmental impact, Ant Forest successfully harnessed technology,
gamification, and social engagement to promote sustainability. Its innovative model has set a
precedent for other organizations looking to address global challenges like climate change
and resource conservation.

The case serves as an excellent example for sustainability and ethics discussions,
demonstrating how businesses can align profitability with social and environmental goals.
 32

Reading 2:

Article: Nidumolu, R., Prahalad, C. K., & Rangaswami, M. R. (2009). Why sustainability is now the
key driver of innovation. Harvard Business Review, 87(9), 56-64. [S7-ER-2 of 2]

Summary: Why Sustainability is Now the Key Driver of Innovation

This Harvard Business Review article by Ram Nidumolu, C.K. Prahalad, and M.R.
Rangaswami argues that sustainability is not a burden on businesses but a catalyst for
innovation. The central thesis is that sustainability, contrary to common beliefs, enhances
both profitability and competitive advantage. By integrating sustainable practices, companies
can reduce costs, drive technological advancements, and build new revenue streams.

Key Insights:

1. Sustainability as a Driver of Innovation:

○ The article posits that sustainability is the new frontier of innovation.
Organizations that focus on sustainability are finding ways to innovate, often
leading to cost reduction and opening new market opportunities. It highlights
how early adopters gain competencies that are difficult for competitors to
replicate, giving them a significant edge.
2. The Five Stages to Sustainability: The authors identify five stages that companies
undergo on their journey towards sustainability:
○ Stage 1: Compliance as Opportunity:
■ Initially, companies comply with environmental regulations to avoid
penalties. However, leading firms proactively embrace compliance,
which fosters innovation. For example, Hewlett-Packard's early
adoption of lead-free soldering put it ahead of competitors when
stricter regulations were enforced.
○ Stage 2: Making Value Chains Sustainable:
■ Companies then optimize their supply chains to reduce resource
consumption and waste. This stage includes innovations like life-cycle
assessments and carbon footprint analysis. Wal-Mart, for instance,
encouraged its suppliers to reduce packaging waste, driving efficiency
and cost savings.
○ Stage 3: Designing Sustainable Products and Services:
■ The focus shifts to creating products that minimize environmental
impact. Companies like Procter & Gamble have developed cold-water
detergents, significantly reducing energy use in households.
○ Stage 4: Developing New Business Models:
■ Organizations reimagine their business models to deliver value
sustainably. Waste Management, for example, shifted from traditional
waste disposal to extracting valuable materials from waste, turning it
into a profitable venture.
 33

○ Stage 5: Creating Next-Practice Platforms:

■ At this stage, companies explore transformative innovations that
challenge existing paradigms. For instance, Calera’s technology to
convert carbon emissions into cement mimics natural processes,
potentially revolutionizing the cement industry.
3. Strategic Implications:
○ The article emphasizes that sustainability leads to long-term competitive
advantage. By rethinking products, processes, and business models,
companies not only align with regulatory trends but also unlock cost savings
and new revenue streams.
4. Leadership and Culture:
○ The transformation towards sustainability requires commitment from top
management. Companies like General Electric have integrated sustainability
into their core strategy, which not only enhances their market position but also
helps attract and retain talent.

Practical Takeaways for Businesses:

● Don't Wait for Regulations: Proactively meeting the most stringent standards can
provide a competitive edge and avoid rushed compliance efforts.
● Collaborate and Innovate: Partner with suppliers, competitors, and NGOs to
develop sustainable practices, share knowledge, and drive industry-wide change.
● Focus on Learning Before Scaling: Invest in small-scale pilots to understand the
impact of sustainable practices before scaling them company-wide.
● Leverage Global Presence: Use global operations to pilot sustainable innovations,
especially in regions with fewer entrenched systems.

The article concludes that sustainability should not be seen as a cost but rather as a driver of
strategic innovation that will be essential for companies to thrive in the future. By aligning
sustainability with business goals, organizations can not only protect the environment but
also ensure their long-term viability.
 34

Session 8: A Sustainability Simulation Game

Reading 1:

Sustainability Management Simulation: Net Zero | Harvard Business Publishing Education

Summary of the "Net Zero Debrief Slides"

Overview:

The document is centered on a sustainability management simulation focusing on achieving

"Net Zero" emissions, specifically targeting a hotel's operations. The simulation explores
strategies for reducing carbon footprints while balancing financial performance. It delves into
various sustainability initiatives, their impact on emissions, and the associated challenges of
reaching Net Zero targets across different scopes (Scope 1, 2, and 3).

Key Sections & Insights:

1. Emissions and Consumption Analysis:

○ The simulation tracks the development of electricity consumption, solar
production, and annual CO2e emissions.
○ It highlights how reductions become increasingly challenging over time and
analyzes the effectiveness of various emissions reduction strategies.
○ The focus extends beyond electricity to include other sources of emissions
like water, waste, food, and purchasing.
2. Emissions by Scope:
○ Scope 1: On-site emissions, with strategies like switching to Electric Vehicles
(EVs) to achieve reductions.
○ Scope 2: Emissions from purchased electricity, where solar panels and LED
lighting play a significant role.
○ Scope 3: Emissions from the broader value chain, including the impact of
purchasing decisions and initiatives like solar panels or EV purchases that
may temporarily increase emissions before reducing them.
3. Energy Management Initiatives:
○ High-impact initiatives include solar rooftop installations, LED lighting, and
purchasing EVs.
○ Other impactful measures involve upgrading air conditioning systems and
improving insulation, while some efforts like electricity-generating gym
equipment are deemed less effective.
○ The simulation emphasizes the significant emissions reduction potential of
transitioning to renewable energy sources.
4. Purchasing Decisions:
○ Emphasis on medium-impact initiatives like installing water-efficient
appliances and expanding vegetarian menu options.
○ Some low-impact initiatives, like eliminating plastic bottles, have sustainability
benefits beyond direct emissions reduction.
○ Sustainable procurement strategies are crucial, especially in Scope 3
emissions management.
 35

5. Management Strategies:
○ Staff training and guest communication are vital for influencing behavior,
reducing energy and water consumption, and minimizing waste.
○ The simulation indicates that while spending on guest communication has
lasting effects, staff training needs to be reinforced regularly.
○ Recruiting a Sustainability Officer can enhance the effectiveness of
sustainability strategies but requires management evaluation of proposals.
6. Financial Implications:
○ Sustainable initiatives, while sometimes increasing upfront costs (e.g., staff
training, guest awareness), can result in long-term savings through reduced
electricity and water consumption.
○ Revenue impacts are observed, particularly through changes in restaurant
menus (e.g., vegetarian and organic offerings) and sustainability certifications,
which attract environmentally conscious customers.
○ Certain initiatives, like free parking for EVs, have mixed financial implications,
slightly boosting occupancy rates but reducing parking revenues.
7. Impact of Location:
○ The effectiveness of various sustainability initiatives varies by location due to
differences in emission factors and local conditions (e.g., solar panel
efficiency and water usage).
○ For instance, solar panels are more effective in sunny locations like
Singapore, while London’s grid electricity has a lower carbon footprint, making
non-energy initiatives more impactful there.

Critical Takeaways:

● The simulation underscores the complexities and opportunities in emissions

reduction efforts, highlighting the need for a well-rounded business case for
sustainability.
● Success in achieving Net Zero requires continuous action, prioritizing high-impact
initiatives, and aligning strategies with financial goals.
● It stresses the importance of measuring, setting targets, and modeling the impact of
sustainability actions while also involving employees, customers, and suppliers in the
process.

Applicability to Other Organizations:

● The lessons from this simulation are transferable to various industries aiming to align
their sustainability targets with the Paris Agreement.
● Key steps include establishing baseline emissions, setting medium and long-term
reduction targets, and selecting initiatives that balance emissions reduction with
financial sustainability.
● Ongoing measurement and adjustment of strategies are crucial to achieve and
sustain Net Zero goals.

This debrief provides a comprehensive framework for businesses to implement sustainable

practices, demonstrating how thoughtful planning and strategic investments can drive both
environmental and economic value.
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Session 9: Ethical Reasoning & Decision-Making, Case studies on ethical issues, trade-offs, and
dilemmas in Corporate Governance.

Essential readings for class discussions and MCQs

Reading 1:

Case 1: Kudremukh Iron Ore Company Ltd: The Sun Sets on Its Mining Operations [S9-ER-1 of 2]

The case study, Kudremukh Iron Ore Company Ltd.: The Sun Sets on Its Mining Operations, revolves
around the complex ethical, environmental, and economic issues faced by Kudremukh Iron Ore
Company Ltd. (KIOCL) as it approached the end of its mining operations in Kudremukh, Karnataka.

Summary:

Background

KIOCL, a public sector undertaking, was established in 1969 to extract iron ore from the
Kudremukh region. The company operated in a 4,605-hectare lease area within a
biodiverse, ecologically sensitive zone that later became part of the Kudremukh National
Park (KNP). The mine was initially developed during the 1970s, a period when India's
environmental regulations were relatively lenient. At the time, the project was seen as a
strategic move to enhance India's export capabilities, especially after entering a bilateral
agreement with Iran.

Environmental and Social Impact

While KIOCL contributed significantly to India's economy, exporting iron ore and generating
foreign exchange, its activities raised serious environmental concerns:

1. Ecological Damage: Open-pit mining led to deforestation, habitat loss, and siltation
in the Bhadra River, which affected downstream agriculture and water quality. Studies
indicated that KIOCL’s mining was a major contributor to the siltation, significantly
reducing the storage capacity of the Bhadra reservoir.
2. Wildlife and Biodiversity: The mining operations encroached upon KNP,
threatening the habitat of endangered species, such as the lion-tailed macaque.
Conservation groups argued that continued mining would destroy the park’s rich flora
and fauna, which included several rare and endemic species.
3. Conflicts with Local Communities: The project disrupted the livelihoods of local
communities dependent on agriculture, forestry, and river resources. Despite efforts
by KIOCL to support displaced families with compensation, jobs, and infrastructure,
opposition from locals grew as the negative environmental impacts became evident.

Legal Challenges and Supreme Court Verdict

KIOCL faced increasing legal battles due to its mining operations inside a declared national
park. In 2002, the Supreme Court of India, acting on petitions from environmental NGOs,
ruled that KIOCL must cease all mining activities by the end of 2005. The Court emphasized
the principles of sustainable development and the precautionary principle, highlighting the
irreversible damage to biodiversity and ecosystems caused by mining.
 37

Key arguments from both sides included:

● KIOCL's Defense: The company highlighted its economic contributions, investments

in infrastructure, and efforts in environmental management, such as constructing the
Lakhya Dam to control pollution. It also argued that discontinuing mining would lead
to massive job losses and wasted public investments worth billions of rupees.
● Conservationists' Position: NGOs like Wildlife First, advised by conservationist Dr.
Ullas Karanth, presented scientific evidence of environmental degradation, arguing
that preserving the Kudremukh ecosystem was more valuable in the long run than
short-term economic gains.

Ethical Dilemmas and Questions

The case raises critical questions about balancing economic development with
environmental conservation:

1. Development vs. Conservation: Is it justifiable to prioritize economic growth at the

expense of natural ecosystems, especially in regions that are biodiversity hotspots?
2. Public Sector vs. Private Sector: The case suggests that public sector companies
like KIOCL may face stricter scrutiny and opposition compared to private companies,
which often have more influence over political and regulatory bodies.
3. Legacy of Past Decisions: Should projects approved in an era of lax environmental
regulations be forced to comply with today's stricter standards? How should
governments handle conflicting priorities between past economic policies and current
sustainability goals?
4. Social Justice: What responsibility does the state have toward the communities
affected by such large-scale projects? How can companies balance profit motives
with their social and environmental responsibilities?

Conclusion

The Supreme Court's decision to halt KIOCL’s operations reflects a significant shift in India’s
approach to environmental conservation, prioritizing long-term ecological sustainability over
short-term economic gains. The case serves as a critical example for MBA students studying
sustainability and ethics, demonstrating the complex interplay between business interests,
legal frameworks, environmental protection, and social welfare.

This case study can be effectively used in your course on sustainability and ethics to explore
how businesses can navigate the delicate balance between economic growth and
environmental stewardship, especially in the face of legal and societal pressures.
 38

Reading 2:

Article: McCoy, B.H. “Parable of Sadhus” Harvard Business Review, 1983. [S9-ER-2 of 2]

Summary: "The Parable of the Sadhu"

The case study, authored by Bowen H. McCoy, revolves around a real-life incident that
occurred during a trekking expedition in the Himalayas. The narrative explores complex
ethical dilemmas, highlighting the conflict between individual and collective responsibilities,
particularly when facing critical decisions.

1. The Incident

While on a challenging trek to Nepal's Himalayan mountains, McCoy and his group of
climbers encountered a nearly unconscious Sadhu (a holy man) on their path. The Sadhu
was suffering from extreme cold, altitude sickness, and lack of clothing. The trekkers, who
were from different cultural backgrounds, responded to the situation with varying levels of
concern and involvement. Despite some efforts—providing the Sadhu with clothing, food,
and temporary shelter—none of the groups took full responsibility for ensuring his safety.
Eventually, they left him behind to continue their journey to the summit, uncertain of his fate.

2. Ethical Dilemma

The incident raises significant ethical questions: How should one prioritize individual goals
versus the moral obligation to help others? The trekkers faced a choice between achieving
their long-anticipated personal objectives (reaching the summit) and saving a stranger's life.
McCoy reflects on whether he and his companions did enough to save the Sadhu and
questions the ethics of their actions.

3. Analysis of Group Dynamics and Responsibility

The story serves as a metaphor for organizational and societal behavior. It explores how
group dynamics can lead to a diffusion of responsibility, where individuals believe that
someone else will take action, thereby justifying inaction on their part. In this case, each
member of the trekking group did just enough to ease their conscience but failed to take
decisive action to save the Sadhu.

4. The Broader Implications for Organizations

The Parable of the Sadhu illustrates the challenges that organizations face when balancing
ethical responsibility against business objectives. The story suggests that, like the climbers,
companies often focus on short-term goals at the expense of long-term ethical
considerations. It emphasizes the importance of having a clear organizational ethos that
guides decision-making, especially in situations where there are no straightforward answers.

5. Lessons for Sustainability and Ethics

 39

The story is particularly relevant to your MBA course on "Sustainability and Ethics" as it
underscores the importance of:

● Ethical Leadership: Leaders must recognize their moral obligations even when
under pressure to achieve specific goals.
● Corporate Social Responsibility (CSR): The case serves as a reminder that
businesses should not ignore ethical duties while pursuing profit and growth.
● Decision-Making Under Uncertainty: The trekkers' dilemma mirrors the real-world
scenarios where businesses must make decisions with incomplete information and
competing priorities.

6. Reflection for Students

The case challenges students to reflect on their personal and professional ethics. It asks
them to consider how they would act in a similar situation and how they would address
ethical dilemmas within an organization. The key takeaway is that ethical decision-making
often involves difficult trade-offs, and one’s actions reveal underlying values.

Conclusion

"The Parable of the Sadhu" serves as a powerful allegory for the ethical challenges faced in
both personal and professional contexts. It highlights the critical role of individual
responsibility and collective action, emphasizing that inaction can be as consequential as a
wrong action. For MBA students, the story offers a thought-provoking framework for
examining the intersection of ethics, leadership, and sustainability in business.

This summary captures the essence of the case study while focusing on themes relevant to
your course on "Sustainability and Ethics."
 40

Session 10: Role of Leaders in Ethical Decision-Making, Ethical and Sustainable

Leadership in Action.

Essential readings for class discussions and MCQs

Reading 1:

Case: Impossible foods [S10-ER-1 of 2]

"Impossible Foods" is a Harvard Business School case study that delves into the origins,
strategies, challenges, and future prospects of Impossible Foods, a company founded by Pat
Brown with the mission to replace animals in the food system by 2035. Below is a detailed
summary of the case:

Overview of Impossible Foods' Mission

Pat Brown, a biochemist and former Stanford professor, founded Impossible Foods in 2011
with the ambitious goal of addressing climate change by eliminating animal agriculture.
Brown identified livestock farming, particularly beef production, as a significant contributor to
greenhouse gas emissions, deforestation, and water usage. He believed that creating a
plant-based meat alternative that matched or surpassed the taste and texture of real meat
was key to driving consumer adoption and reducing reliance on animal products.

Product Development and Innovation

The breakthrough innovation for Impossible Foods was the discovery of heme, a molecule
found in both animal muscle and plant roots that gives meat its distinctive taste and aroma.
After years of research and development, the company developed a way to produce heme
using genetically modified yeast, allowing them to replicate the taste and texture of ground
beef. This culminated in the launch of the first Impossible Burger in 2016, followed by an
improved version, the Impossible Burger 2.0, in 2019. The new version was gluten-free,
contained less sodium and saturated fat, and further reduced the environmental footprint
compared to traditional beef.

Market Strategy and Growth

Impossible Foods adopted a strategic approach by initially launching its products in

high-end, meat-centric restaurants to build credibility among meat lovers. The company’s
focus was on creating a consumer movement rather than using conventional advertising. By
positioning its products as a direct competitor to real meat, not just a vegetarian option,
Impossible Foods attracted attention and built a strong brand reputation.

The company's partnership with Burger King in 2019, resulting in the Impossible Whopper,
marked a significant milestone, expanding its reach to mainstream fast-food consumers.
This partnership not only increased consumer awareness but also showcased the scalability
of plant-based meat alternatives.
 41

Scaling Challenges and Production Issues

Despite its rapid success, Impossible Foods faced significant challenges, particularly in
scaling up production. A shortage of supply in 2019, exacerbated by the high demand from
Burger King and other food service outlets, highlighted the limitations of its production
capacity. This forced the company to rethink its manufacturing processes, leading to a
partnership with OSI Group to boost production.

Scaling production was critical not only to meet consumer demand but also to bring down
costs and compete directly with traditional beef. However, rapid scaling required significant
capital investments, which raised questions about how to fund expansion while retaining
control over the company’s mission and values.

Competition and Market Dynamics

The market for plant-based meats was becoming increasingly competitive, with Beyond
Meat as a notable rival. Both companies shared the goal of reducing meat consumption but
had different strategies. Beyond Meat focused more on retail, while Impossible Foods initially
targeted food service channels. Despite their rivalry, there was mutual acknowledgment that
increasing the availability of plant-based proteins was beneficial for the environment.

Ethical Considerations and Criticisms

Impossible Foods faced criticism from various quarters, including vegan advocates who
disapproved of its use of genetically modified ingredients and the fact that its products were
sometimes served with non-vegan preparations in restaurants. Additionally, the company's
decision to conduct animal testing for regulatory approval of its heme ingredient sparked
backlash from animal rights groups.

From a broader perspective, the company’s mission to replace animal agriculture by 2035
was seen by some as an attack on traditional farming livelihoods and cultural practices
centered around meat consumption. Pat Brown, however, remained firm in his belief that the
future of food lies in sustainable, plant-based alternatives.

The Road Ahead: Strategic Questions

As of 2019, Impossible Foods was at a crossroads, facing key strategic questions:

1. Scaling and Diversification: How quickly should the company scale up production
to meet growing demand? Should it focus on beef replacements, or diversify into
other animal protein substitutes like pork, chicken, and fish?
2. Market Expansion: How should Impossible Foods prioritize international markets,
particularly in regions like China and Europe where meat consumption is high? What
partnerships and regulatory hurdles would need to be addressed?
3. Funding and Control: Should the company pursue an initial public offering (IPO) to
raise more capital, or continue with private funding while retaining more control? How
could it balance mission-driven goals with commercial success?
 42

Conclusion

Impossible Foods stands as a disruptive force in the food industry, aiming to transform global
food systems for environmental sustainability. However, its success will depend on
navigating the challenges of scaling production, managing competitive pressures, and
staying true to its mission amidst growing commercial pressures.

This summary encapsulates the key aspects of the case study, focusing on the mission,
strategy, challenges, and potential future directions for Impossible Foods.
 43

Reading 2:

Article: Kort, E. D. (2008). What, after all, is leadership? ‘Leadership’ and plural action. The
Leadership Quarterly, 19(4), 409-425. [S10-ER-2 of 2]

The article “What, After All, is Leadership?” by E.D. Kort delves into the complexities and
debates surrounding the concept of leadership, aiming to clarify its definition and
distinguishing it from management. Here's a detailed summary of the key insights from the
text:

Central Theme:

The primary focus of the paper is to address the long-standing question: What is
leadership? The author highlights that despite the extensive scholarly attempts to define
leadership, there remains a lack of consensus. Some, like Joanne Ciulla, argue that
leadership is essentially about influencing people to achieve shared goals, while others, like
Archie Carroll and John Washbush, suggest that the term "leadership" is overused and often
conflated with management.

Defining Leadership:

According to the article, Joseph Rost’s compilation of over 200 definitions emphasizes that
while there is wide diversity in definitions, most converge on the idea that leadership involves
a relationship between leaders and followers aimed at achieving common objectives. Ciulla
expands on this by noting that leadership is fundamentally about one person motivating
others to act in a particular direction, focusing on how leaders influence and the ethical
implications of their actions.

However, critics argue that equating leadership with influence can be problematic. For
instance, Carroll and Washbush contend that leadership is an elusive concept because, if
everyone is considered a leader, then logically, leadership loses its distinct meaning. They
challenge the assumption that leadership inherently differs from management.

The Circular Nature of Definitions:

The paper critiques the circularity in existing definitions of leadership, where terms like
“leader” and “follower” are used to define each other. This creates a challenge in establishing
a clear, non-circular definition. For example, if leadership is defined as the influence
relationship between leaders and followers, one must first define what constitutes a leader
and a follower, which often leads back to the concept of leadership itself.

Ethical Dimensions of Leadership:

Ciulla emphasizes that ethics is a critical component of leadership. She suggests that
scholars need to move beyond defining leadership in purely functional or strategic terms and
instead focus on the moral obligations inherent in the leader-follower relationship. The paper
discusses the dilemma known as the “Hitler problem”, where figures like Hitler are
acknowledged as effective leaders despite their unethical actions. This raises questions
 44

about whether leadership should be evaluated solely based on effectiveness or also on

ethical considerations.

Influence vs. Coercion:

The distinction between influence and coercion is crucial in Kort’s analysis. The author
argues that true leadership involves voluntary compliance from followers who endorse the
leader’s vision or directives, as opposed to actions driven by fear or coercion. In this context,
Kort critiques the idea that power is a defining feature of leadership, suggesting that
leadership should instead be tied to influence that is ethically grounded and mutually
beneficial.

Plural Action Framework:

A significant portion of the article explores plural action theory, which examines how
groups coordinate actions toward common goals. Kort differentiates between joint and
disjoint plural actions:

● Joint actions involve all members intentionally working together to achieve a

common purpose, which aligns more closely with the concept of ethical leadership.
● Disjoint actions occur when members contribute individually without a cohesive,
shared intention.

Kort uses examples like a symphony orchestra (joint action) and environmental pollution
(disjoint action) to illustrate these concepts. The paper argues that leadership is more than
just coordinating efforts; it involves a deeper level of influence and shared intentionality.

Managerial vs. Leadership Roles:

The paper also addresses the common conflation of management with leadership.
Managers coordinate tasks and ensure operational efficiency, often through hierarchical
authority. In contrast, leaders inspire and influence others to voluntarily pursue shared goals.
According to the author, holding a position of authority does not automatically confer
leadership. Instead, true leadership emerges when individuals inspire others through ethical
influence and shared purpose.

Conclusion:

Kort concludes that leadership is a complex, multi-faceted concept that cannot be fully
captured by a single definition. The paper calls for a refined understanding of leadership that
considers both ethical implications and the nuanced differences between influence, power,
and management. Leadership, at its core, is about fostering collaborative action based on
mutual respect, ethical influence, and shared goals.

Key Takeaways for Sustainable Leadership:

● Leadership should not be narrowly defined by authority or power but by the ability to
inspire and ethically influence others.
 45

● Ethical leadership is crucial, especially in contexts where the actions of leaders can
have significant social and moral implications.
● Management and leadership, while overlapping, serve distinct functions; leadership
is more about vision and influence, whereas management focuses on coordination
and efficiency.

This analysis is particularly relevant for your course on Sustainability and Ethics, as it
underscores the importance of ethical leadership in fostering sustainable practices and
ethical decision-making in business environments.