05.03.

2024

Corporate social responsibility (CSR).

Corporate sustainability

Dr Łukasz Małys
[email protected]

Lecture topics

Corporate social responsibility (CSR) is a self-regulating business model that helps a

company be socially accountable to internal and external stakeholders.
➔ Focus on stakeholders’ interests,
➔ Measured by expenditure on stakeholders’ initiatives, interests fulfilment.

Corporate sustainability is an approach aiming to create long-term stakeholder value

through the implementation of a business strategy that focuses on the ethical, social,
environmental, cultural, and economic dimensions of doing business.
➔ Focus on long-term economic value with respect to environment and society,
➔ Measured by ESG (environmental, social, governance) criteria.

Specific initiatives may be the same. In business practice the terms are mixed.

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Company stakeholders

Source: EcoCation

Company CSR aim – to be a good citizen

Carroll’s pyramid as dominating CSR model

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Corporate sustainability

UN Global Compact principles

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Corporate sustainability implementation

How to start transformation from unsustainable to sustainable company?

➔ Start with creating sustainable product:
➔ Meets customers' needs at least as good as competitors’ product;
Profitable
➔ Environmentally friendly,
➔ Socially fair,
➔ Identify what is unsustainable in your product (analyse entire supply
chain),
➔ Find ways to improve product sustainability.

Group task 1

What is good (sustainable) and bad (unsustainable) with this products

Avocado Quinoa Dark chocolate

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Group task 2
How to increase sustainability of these products?

Source: Sigma Earth

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Corporate sustainability
improvements
Group workshop

Dr Łukasz Małys
[email protected]

Task

1. Download a list of Additional Resources from the course on Moodle: https://moodle2.e-

wsb.pl/mod/folder/view.php?id=8905630
2. Choose 1 movie to watch.
3. Propose activities aimed at encouraging companies to actively engage in 1 specific
environmental issue presented in the movie. Include environmental business practices
that should be implemented in companies to achieve the environmental targets. Take
into account:
➔ Possible and actual motivators for companies’ engagement in sustainability,
➔ Impact on company’s economic performance,
➔ Essential / possible business model changes,
➔ Cooperation in supply chains and its impact on business model

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Environmental business practices

and company performance

Dr Łukasz Małys
[email protected]

Environmental business
practices

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Environmental business practices (EBP) refer to specific

actions that a company takes to minimize negative
environmental impacts while maintaining profitability.
Thus, environmental business practices are concrete actions
that a company takes as part of a broader sustainability
strategy.
Nowadays, the need to implement them in entire supply
chains is emphasized.

Vachon (2007) classification of EBP

 Environmental collaboration practices - planning and

development of environmental activities and projects that
require the direct interaction of an organization, either
with its suppliers or with its customers, to jointly develop
environmental solutions,
 Environmental monitoring practices typically include
activities such as examining a supplier's environmental
practices through publicly disclosed environmental
records, questionnaires and audits by the buyer or an
independent third party.

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Golicic and Smith (2013) classification of

EBP
 Upstream supplier facing (np. partnership with
suppliers, procurement policy),
 Design (e.g. eco-design, product innovation),
 Manufacturing (e.g. pollution prevention, lean
manufacturing),
 Downstream customer facing (np. logistics process,
cooperation with the customer)

Małys (2023) classification of SBP

Sustainable
Business Practices

Development of
rules for cooperation Targeted at
Targeted at Sustainable
in inter- Eco-design non-business
internal actors Operations
organizational actors
networks

Sustainable production and

service delivery

Sustainable transport

Reverse logistics

Waste Management &

Pollution Reduction

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Rules of cooperarion as EBP

monitoring collaboration
Development of codes of conduct for suppliers, subcontractors, etc.

Development of codes of ethics

Conducting environmental or social audits at business partners

Procurement policy taking into account environmental objectives

Requirement for Environmental or Social Certifications of Suppliers
Providing suppliers with a design specification that takes into account
environmental goals
Enforcing an appropriate standard of work on suppliers

1-54% of Polish companies have implemented them

Eco-design EBP
Use of environmentally friendly packaging

Developing products with fewer harmful, hazardous and toxic substances compared to the original

Easily recyclable product development

Product development with a focus on packaging reduction

Development of products that allow the reuse of their components or materials used.

Development of products that enable easy and relatively environmentally friendly end-of-life

Development of products that are easy to repair and regenerate

Rozwój produktów pozwalający na dłuższe ich użytkowanie w porównaniu do oryginału.

Developing products that require fewer raw materials, production materials, energy, etc. to be manufactured
compared to the original

52-75% of Polish companies have implemented them

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Sustainable production EBP

Use of renewable sources of supply (m.in. energy, raw materials, recycled materials)
Recycling in the workplace
Measuring the environmental impact of production and service provision
Location of production and warehouse centres based on environmental analyses
Dismantling of end-of-life products
Reuse of end-of-life product components
Reduction of resource losses during production and service provision
Provision of product repair and restoration services
Reducing the use of hazardous, harmful, toxic substances in production and service provision

Reducing the consumption of raw materials, production materials, energy, etc. in the production
and provision of services
50-75% of Polish companies have implemented them

Sustainable transport EBP

Organization of transport with other entities

Shortening transport routes

Reduction of exhaust emissions in transport

Transportation design based on environmental analyses

Measuring the environmental impact of transport

47-54% of Polish companies have implemented them

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Reverse logistics

Recycling of manufactured products or their components -

collection and processing

66% of Polish companies have implemented them

Waste Management & Pollution Reduction

Preventing pollutant emissions

Waste restriction

Emissions reduction

61-74% of Polish companies have implemented them

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EBP and company economic

performance

Some assumptions

 With some EBP companies will be successful and with others they will be
not (as with every type of company operations),
 Some EBP are regulated by law (or will be) and may influence company
performance in a different way,
 Some EBP will have:
 Short and long term positive impact on performance,
 Long term positive and short term negative impact on performance
 Short and long term negative impact on performance

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Research results

Environmental A Environmental B
and social
and social
performance
performance

Economic performance Economic performance

Environmental Environmental
and social
C D
and social
performance performance

Economic performance Economic performance

Supporting factors

 Risk Management,
 Transparency,
 Strategy,
 Organizational Culture,
 Increased communication with the use of ICT

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Research conclusions

 You can improve your economic performance by

implementing EBP,
 It may require some changes in company procedures,
business model, products etc.,
 Companies should learn on the mistakes in EBP
implementation.

How to start environmental transformation

 Evaluate potential EBP based on short and long term

economic benefit (1), costs (2), impact on
environmental performance,
 Asses possible legal changes,
 Allocate resources,
 Make decisions…

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Group task

 Choose company that you know,

 Propose an EBP for this company that will bring
 an immediate positive economic effect
 a positive economic effect in the long term (and short term
negative)

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Motivators for environmental protection

Dr Łukasz Małys
[email protected]

Small-groups discussion

What are the main reasons why humanity

wants to protect the natural environment?
➔ Take mankind (not business perspective)
➔ List as many reasons as possible (take differences between people into account)
➔ Have the answer on one slide

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Main mankind motivators

for environmental protection

Religious and spiritual reasons

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Patriotic, historical reasons

Economic reasons

The whole
economy is based
on exploitation of
natural resources

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Scientific reasons

Parts of natural
habitats must be
preserved to
conduct scientific
research

Educational reasons

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Recreational reasons

Health reasons

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Aesthetic reasons

Ethical, moral reasons

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Possible classification of mankind motivators for

environmental protection

Motivators

Objective Subjective

Religious,
Economic
spiritual

Patriotic,
Health
historical

Scientific Recreational

Aesthetic

Ethical,
moral

Educational

Business motivators
for environmental protection

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Why business motivators for environmental protection

differ from the mankind motivators?
➔ in business, we know the criteria for assessing our actions in advance; these
criteria usually refer to economic values,
➔ business uses short-term measures to evaluate performance,
➔ market complexity - difficulties in assigning responsibility,
➔ market uncertainty – actions of other entities,
➔ competitive pressure,
➔ …

Business green motivators

Business
motivators

Internal External

Normative Regulatory

Instrumental Market

Social

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Internal business motivators

➔ Normative
➔ Subjective,
➔ Personal values of owners, managers, employees,
➔ Instrumental
➔ Objective – clear benefits for companies,
➔ Cost-cuttings,
➔ Increased income,
➔ Image-related…

External business motivators

➔ Regulatory
➔ Current and future legal regulations,
➔ Voluntary adaptations to specific requirements
➔ Market
➔ Market entities pressure (customers, suppliers, intermediaries…)
➔ Social
➔ Social groupspressure (NGOs, communities…)

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Research results – Poland, 2020

Motivator Type of motivator Indications

N=500
adjustment to legal regulations external n=275
p=55.0%
customer requirements external n=236
p=47.2%
willingness to obtain specific certificates external n=165
p=33.0%
supplier requirements external n=90
p=18.0%
shareholder requirements internal n=37
p=7.4%
subsidy from EU funds external n=16
p=3.2%
internal initiative of the company's internal n=10
employees p=2.0%
social pressure (e.g., NGOs) external n=8
p=1.6%
reputational threat / crisis in the firm internal n=3
p=0.6%
financial motivators internal n=3
p=0.6%

Task

How can we increase Polish companies motivation to

engage in environmental business practices?
➔ Give proposal of 3 actions, programmes
➔ Use information from the lecture
➔ Add second slide (to the one with mankind motivators)
and uploand on Moodle: https://moodle2.e-
wsb.pl/mod/assign/view.php?id=9147354&forceview=
1

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Ecology
Course introduction

Dr Łukasz Małys
[email protected]

Grading

➔ Grading: Elements of assessment:

➔
➔
0
50
-49
-59
2
3
1. Written exam (20 test + open
➔ 60 -69 3,5 questions) – moodle, last lecture –
➔ 70 -79 4
➔ 80 -89 4,5 60 points.
➔ 90 -100 5
2. Group assignments during each
lecture – 40 points (all):
➔ Sent via moodle (or
[email protected]),
➔ Names of students in the file,
➔ Sent untill Monday 13:00 (day
after lecture)

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Lecture topics
1. Sustainable development. Circular economy. Natural environment values and
protection.
2. Corporate sustainability. Corporate social responsibility (CSR). Sustainable business
models.
3. Motivators for corporate sustainability.
4. Sustainable supply chain management. Sustainable business networks.
5. Sustainable business practices.
6. Sustainability reporting. ESG as environmental policy.
7. Environmental performance measurement vs. Business performance measurement.
8. Company behaviour in sustainability.
9. Corporate sustainability improvements (mistakes and good practices).
10. Sustainable product development and marketing.

Last lecture – ONLINE EXAM

Sustainable development

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A bit of history

➔ the term "sustainable development" comes from forestry and was introduced in
the 19th century in Germany (similar concept – three-field in agriculture)

➔ the concept of sustainable development was introduced into the mainstream of

public discussion as a result of the work of the United Nations Commission on
Environment and Development, which ended in 1987 with the report "Our
Common Future”,

➔ subsequent UN conferences were to set global standards for sustainable

development,
➔ Currently, the global sustainable development agenda is set by the UN goals

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➔ European Union intends to follow UN 17 Goals,

➔ Poland declares to follow EU regulations and UN 17 Goals,
➔ the principle of sustainable development was given the status of law by including
it in Article 5 of the Constitution of the Republic of Poland,
➔ some countries set their own environmental regulations (formal, legal),
➔ there are some local and international industry regulations (informal, road map),
➔ ESG as a new responsibility in EU

Sustainable development defined

➔ „Sustainable development is a development that meets the

needs of the present without compromising the ability of
future generations to meet their own needs” (Brundtland
et al., 1987)

Potential misunderstandings:
➔ Determination of needs
➔ Macroeconomic character of the definition

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Macroeconomics vs. Microeconomics

Macroeconomics level measure Microeconomics (company) level

measure
GDP – gross domestic product EBIT, ROA, ROE…
Sustainability: Sustainability:
• Global grennhouse gases emission • Carbon footprint measure, some financial
regulations

• Global water consumption • Limited measures, no regulations

• Waste • Limited measures, some regulations

• ESG
It is difficult to translate macroeconomic concepts into microeconomic
ones in terms of responsibilities, obligations, regulations

Triple bottom line

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False believe about sustainable development

Rich countries became rich by using unsustainable approach. Now, they try to impose
sustainability on poor countries limiting their possibility to develop.

Why it’s false:

➢ Negative effect (both social and environmental) of unsustainable development are
affecting mainly poorer countries,
➢ Lots of sustainability initiatives are mainly beneficial for poorer countries,
➢ Sustainable development by definition includes economical development –
initiatives that are beneficial for the environment or society, but economically
unsound are considered unsustainable.

Sustainable development of the company – general

assumptions

Business:
➔ does not operate only to make a profit (the degree of
profit orientation is largely industry-specific),
➔ has groups of stakeholders in the external and internal
stakeholders whose interests should be taken into
account in company’s activities,
➔ should be a good citizen.

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Circular economy

Definition

A circular economy is a model of production and consumption in any economy that

involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing
materials and products for as long as possible.
In this way, the life cycle of products is extended and demand for resources
decreased.

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Circular business model

Cost of manufacturing 80 Cost of regenerating 5

Price 100 Price 30
Profit 20 Profit 25

Aim: sales volume Aim: reuse of product

Planned obsolescence Service-life extension

Group task

Make and present a mind map:

1. How society perceives the impact of companies on the environment?
2. What expectations does society have towards companies regarding the
environment?
3. How companies perceive their impact on the environment and what they would
like to do or not do?
4. What is „poorer countries” perception of sustainable development?

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Green supply chain

management

Dr Łukasz Małys
[email protected]

Unsustainable vs. Sustainable supply chains

Management = coordination between links

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Development of ecological thinking in business

1. Compliance with legal regulations.

2. Reduction of risk (initially mainly image-related).
3. Linking environmental issues and competitiveness.
4. Development of green supply chains. current focus
5. Development of green business networks.

Challenges in green supply chain development

1. Supplier engagement - lack of formal authority; perceived benefits, lack

of expertise.
2. Cost consideration – division of costs and benefits.
3. Regulatory compliance – differences between countries; regions.
4. Complexity of supply chains – boundary issues; changeability.
5. Performance measures – economic vs. environmental; firm vs. supply
chain.
6. Lack of universal standards, different stakeholder awareness.

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Green supply chain management – evolution of

concepts

I. Entities engaged.
II. Decision-making models.
III. Governance mechanisms.

Green supply chain management entities– concept 1

Sustainable purchasing

Upstream Supply Chain Collaboration

N-tier Suppliers Focal company

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Green supply chain management entities– concept 2

Green supply chain

Upstream Supply Chain Collaboration Downstream Supply Chain Collaboration

N-tier Suppliers Focal company Buyers & Intermediaries

Green supply chain management entities– concept 3

Green supply chain – modern approach

Upstream Supply Chain Collaboration Downstream Supply Chain Collaboration

N-tier Suppliers Focal company Buyers & Intermediaries

Reverse logistics entities

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Green supply chain management entities– concept 4

Green business network

Other stakeholders

Upstream Supply Chain Collaboration Downstream Supply Chain Collaboration

N-tier Suppliers Focal company Buyers & Intermediaries

Reverse logistics entities

Decision-making

Green decision-making models in supply chain - a set of

criteria based on which the fulfillment of environmental
objectives in the supply chain is verified. They may refer to:
➔ product being exchanged
➔ entities linked in the supply chain

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Decision-making concerning product

➔ LCA- life cycle assessment,

➔ Carbon-footprint, other standard measures,

Decision-making concerning entities (concept 1)

Open configuration

Impact Impact
and and
evaluation evaluation
Secondary Supplier Tier I Supplier Buyer

Good when:
• Goods (not services) are transferred in the supply chain;
• Tier I suppliers have environmental strategy and competences,
• Unstable supply chains.

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Decision-making concerning entities (concept 2)

Closed configuration

Impact
and
evaluation
Secondary Supplier Tier I Supplier Buyer

Impact
and
evaluation

Good when:
• Tier I suppliers do nothave environmental strategy and competences,
• Social performance is important,
• Stable supply chain.

Decision-making concerning entities (concept 3)

Third party configuration

knowledge knowledge
Tier N Supplier Third party Buyer

Impact
and
evaluation

Good when:
• Stable supply chain,
• Both supplier and focal company are missing environmental competences

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Group task

1. Select a company that you know.

2. Discuss (draw) the supply chain of an important production input for this
company.
3. Indicate possible environmental threats in the supply chain links
(upstream and downstream).
4. Develop proposal for green supply chain management:
➔ Product vs. Entities evaluation,
➔ Entities included
➔ Decision-making configuration.

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Green supply chain

management

Dr Łukasz Małys
[email protected]

Governance mechanisms for the green supply chain 1

1. Supplier Evaluation:
➔ Focal company sets criteria for product or supplier/-s,
➔ Acceptance in the supply chain is based on the criteria,
➔ Most frequently applied in business practice.
2. Cooperation with suppliers
➔ Focal company sets criteria for product or supplier/-s,
➔ Focal company transfers knowledge to suppliers and jointly adjust
operations,
➔ Less frequently used (compared to supplier evaluation), but leads to
better TBL performances.

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Governance mechanisms for the green supply chain 2

3. Multilateral initiative
➔ Similar to cooperation with suppliers, but includes wider range
of entities (competitors, complementors…)
➔ May include joint criteria setting, standards etc.
4. Intermediate mechanism
➔ Application of criteria, standards set by other organization

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 Ecology and Environmental Protection

Additional Resources:

1. Netflix Movie: „Don’t Look Up”:

https://www.netflix.com/pl/title/81252357

2. YouTube movie: „Można panikować” reż. Jonathan L. Ramsey | "It's Okay to Panic" 2020
(subtitles EN, PL, ES, RU):
https://www.youtube.com/watch?v=osm5vyJjNY4

3. Polish part of global initiative “Fridays for Future” − Młodzieżowy Strajk Klimatyczny:
https://www.msk.earth/

4. Netflix Movie: David Attenborough: A Life on Out Planet / Życie na naszej planecie:
https://www.netflix.com/title/80216393
https://www.imdb.com/title/tt11989890/

5. Netflix Movie: Świat na granicy: Nasza planeta oczami naukowców / Breaking Boundaries:
The Science of Our Planet:
https://www.netflix.com/pl/title/81336476
https://www.imdb.com/title/tt14539726/

6. David Attenborough:
https://attenboroughfilm.com/

Do you think, you have a resource worth sharing? Write about it on discussion forums, lets add it to
the above list!

Dofinansowano ze środków budżetu państwa: „Wsparcie uczelni niepublicznych w zakresie prowadzenia zajęć z wykorzystaniem metod i technik kształcenia na odległość” WSB POZNAŃ MEiN/2021/77/DIR/WUN/12 DOFINANSOWANIE: 130 000 ZŁ