Spring 2025

Business in a Sustainable Society (BUS 275)

Systems and systems thinking

Agenda
● Recap
● Readiness Assurance Test
● Lecture
● Next week
 ● Group project: Lifecycle Analysis for a product
○ Products will be assigned/claimed in the coming
weeks
○ Individual “issue memo” assignment is also about this
product
House
Keeping ● Teams for group project will be created next week
○ Based on tutorial sections

● Readiness assurance test next week

● In the news presentations sign-up today in tutorial

Recap
 ● Indigenous knowledge and
worldviews has much to
offer in the pursuit of
sustainable development
Two-eyed (Reid et al., 2020: p 254)

seeing ● Business sustainability can benefit from two-eyed seeing to

move back and forth between Indigenous and Western
worldviews in complementary ways, recognizing and
embracing their merits of both of them

● A long journey with abundant with challenges remains ahead

 ● The concept of value creation or value added is core to the
foundational ideas (e.g., capitalism) on which economies
and societies operate and businesses

Value
creation
 Meeting the needs of the present without compromising the ability of future
generations to meet their own needs

An enterprising entity with the

purpose of creating “value”

What is business sustainability?

● Business sustainability “means that businesses should create wealth and make people’s
lives better. But, they need to do so without compromising the health and wealth of future
generations … The long-term goal is thriving societies and ecosystems.” (Bansal, 2020)

○ In economics, “wealth” is often viewed as the overall aggregate of “value”

 ● For decades, business sustainability is often talked about
as and confused with other related and overlapping ideas:

○ Corporate social responsibility (CSR)

■ Behave “responsibly”
Other related ○ Triple bottom line
ideas ■ Consider social, environmental, and financial
performance

○ Shared value
■ Simultaneously create value for businesses and
society
Readiness Assurance Test
1. Open Canvas
2. Go to Quizzes
3. Individually take the quiz titled “Readiness Assurance Test: Knowledge,
sustainability, and value (Week 2)”
4. Enter the Code
5. Partner with your neighbour(s) and retake the quiz.
 This week’s topic:

Systems and systems thinking

Shareholder (Embedding Project, 2020)

view ● For decades, companies have prioritized shareholder value

and viewed business as unrelated to society and the planet

● The Friedman Doctrine

“There is one and only one social responsibility of
business—to use its resources and engage in activities
designed to increase its profits”(Milton Friedman, 1970)
Friedman
Doctrine

● Friedman Doctrine was published in the NY Times (1970)

● Friedman was an American economist and received the
1976 Nobel Memorial Prize in Economics

● Still have people that believe in the Friedman Doctrine

 ● Shareholder: “... a person or institution that has invested
money in a corporation in exchange for a “share” of the
ownership” (BDC)

Shareholder
Stakeholder
view
● Then, companies began to recognize stakeholder value and
view businesses as overlapping with society and the planet

● Witnessed the proliferation of ideas:

○ Corporate social responsibility (CSR)
○ Triple bottom line
 ● Stakeholder: “...any group or individual who can affect or is
affected by the achievement of the organization's
objectives.” (Freeman, 1984: p 46)

Stakeholder

(see Embedding Project, 2021)

 ● “Stakeholder Capitalism Is Not Enough”
○ Positive contributions in one place don’t offset
negative impacts elsewhere
○ Need to do more than balance interests
○ Won’t necessarily achieve long-term sustainability
○ Ignores bigger system issues at play

● …shareholders still prioritized over others

Stakeholders
management
 Corporate ● Focuses on “responsibility”

social ● Can be contradictory

responsibility
● Ambiguous on the ground
(Carroll, 1991)

● …again, responsibility to shareholders often prioritized at

the expense of others
 ● Consider social, environmental,
and economic impacts when
considering the return on
investment for companies
Triple
bottom ● Phrase coined in 1994 by John Elkington and was a step in
the right direction and with good intentions (Elkington, 1994)
line
● Yet again, on the ground profit/shareholders prioritized in
trade offs
 ● “policies and operating practices
that enhance the competitiveness
of a company while simultaneously
advancing the economic and social
Shared conditions in the communities in
which it operates.” (Porter & Kramer, 2011)
value
● Concept proposed by Michael Porter and Mark Kramer in the
Harvard Business Review in 2011

● Goal was to move beyond tradeoffs to “win-win” situations,

but it directed people to a tiny space of opportunity and the
core strategy of businesses stayed the same
The short and simple?
● Focusing on these small intersections is NOT enough
and is not actually fundamentally changing anything
Notable ecosystem changes
Massive amounts of waste
…including horrific amounts of plastic

(Visual Capitalist, 2019)

…that is barely being recycled

(Visual Capitalist, 2019)

Rising inequality around the world
 Risks to
business are
real

(World Economic Forum, 2022)

 Extreme Weather Events
are Becoming More Frequent
Why Should Businesses and Organizations Care?

What Industries are Affected?

“The news comes as many
Okanagan fruit farmers are
facing catastrophic crop losses
from extreme weather this
winter that wiped out almost all
of the valley's peach, apricot
and nectarine crops and
severely damaged cherry
orchards.”

“With the co-operative's sudden

collapse, Lalli and other fruit
farmers are meeting this
weekend to discuss how they
can get their fruit to market
this year”
The economic models underpinning society
are failing us
● Capitalism
“an economic system based on private
ownership of property and business, with the
goal of making the greatest possible profits
for the owners.” (Cambridge Dictionary)
Models and
ideas need
rethinking
● Adam Smith (1729-1790, United Kingdom)

○ “Founder of Modern Economics”

○ “Forefather of Capitalist Thinking”
○ Wrote “The Wealth of Nations” (1776)
○ Created gross domestic product
A look into
history
“Our modern world originates in the cotton factories, cotton ports, and cotton
plantations of the 18th and 19th centuries. … After the Civil War, a new kind
of capitalism arose, in the United States and elsewhere [that] … had been
enabled by the profits, institutions, networks, technologies, and innovations
that emerged from slavery, colonialism and land expropriation... That legacy is
still with us today. The great inequalities, both domestically and
internationally, that characterize the world we live in are at least partly the
result of capitalism’s long and violent history.”

– Sven Beckert, Professor, Harvard U. (“Empire of Cotton”)

 The conditions of society have changed

We need to understand the problems in order

to create and implement effective solutions
Natural ecosystem changes (1700 vs. 2018)

(Visual Capitalist, 2022)

The societal conditions of society have
changed …
It’s Time for Another Shift

(Embedding Project, 2020)

 ● On the climate emergency: “Governments, businesses, investors
and communities are increasingly converging on the need for a
quicker transition—each group setting higher expectations of
the other.” (World Economic Forum, 2022)

Need for ● Recognized needs for action:

action is ○ Managing disruptive risks and opportunities

being ○ Maintaining societal acceptance and credibility
recognized
● Acknowledgement that sustainable development is a collective
process and every entity only have so much resources and needs
to choose where to prioritize their actions

○ Credibility is based on doing your part

Systems
(Embedding Project, 2020)

● “Business sustainability is not CSR, the triple bottom line,

view or shared value. It’s bigger, more systemic, and more long
term… No single business can be sustainable – only groups
of organizations.” (Bansal, 2022)

● “..the last few years - and more recent events - have

highlighted the need for companies to view their operations
as part of a nested system, bounded by, and embedded
within, the environmental, social, and economic systems in
which they operate” (Embedding Project, 2020)
 ● A system is more than a collection of parts. It is a group of
inter-related interdependent parts that form a complex and
unified whole.
● “... any group of interacting, interrelated, or interdependent
parts that form a complex and unified whole that has a
specific purpose; all parts are interrelated and
interdependent.” (The Systems Thinker)
Systems
Systems Thinking
● Like putting on glasses that let you see the relationship between everything and how they
depend on and affect each other.
 ● “Systems thinking is to view the natural environment,
human relationships and non-human relationships with a
systems lens.”
Systems ● “When we see the world with a systems lens we are seeing
Thinking how an action or change to one element of a system can
impact many other interrelated parts. “
(Common Ground)
Systems Thinking & Two-Eyed Seeing
● Systems thinking is not a “new” idea; Indigenous peoples have been embracing systems
thinking for millenia

○ Important factor influencing survival for milenia

○ Holds the answer to many of today’s challenges

● Relationality (an important part of Indigenous worldviews) is a foundation of systems

thinking

● Intergeneration thinking is also an important part of Indigenous worldviews

 ● Relationality is at the heart of Indigenous worldviews and
systems thinking

● “Relationality refers to the relationship between everything

Relationality and the strength of each of these relationships. Through
relationality we know that everything is interconnected and
shifting in a non-static way.”
(Common Ground)
 ● Intergenerational thinking is a key part of systems thinking

● What happens today also affects tomorrow and the future

Intergenerational
Thinking ● Many Indigenous communities deliberately think about
future generations for all decisions, looking forward and
behind
Example: Seventh Generation Principle
● Seventh Generation Principle of the Haudenosaunee (Iroquois) community explicitly
embraces intergenerational thinking
● Encourages us to think of the three generations that came before us, our generation, and the
three generations that will follow us when we make ethical decisions.
● Video
The mainstream business world has not yet
embraced systems thinking… although tiny
steps are being made
 Past / present Potential future

A shift in
thinking is
underway

(Raworth, 2017)
 Sustainable
Development
Goals

The world has identified what we need to prioritize to have

thriving societies and develop sustainably
 Sustainable
Development
Hierarchy

We know how these priorities relate to each other

Doughnut
Economics

● “A new model of human wellbeing is emerging to guide

humanity in the Anthropocene. In essence, it recognises
that wellbeing depends on enabling every person to lead a
life of dignity and opportunity, while safeguarding the
integrity of Earth’s life-supporting systems.” (Raworth, 2017)
System thresholds
● Can be understood as tipping points

○ “Ceilings” for ecological/planetary aspects (don’t want to exceed maximum)

○ “Floors” for social aspects (don’t want to fall below a minimum)

● Going beyond the ecological ceilings leads to changes that threatens humanity’s survival

● Not meeting the social floors means that humanity doesn’t have its basic necessities met
 Target:
Safe and Just
Space for
Humanity

(Embedding Project, 2020)

 ● Most forward thinking companies are thinking about
“embedded strategies” that embrace a systems view to
support environmental and social “resilience” (i.e., the
capacity to withstand/recover) (Embedding Project, 2020)
System era of
business
sustainability
is just
beginning
Before Next Class

• Sign up for “In the News”.

• Post on Week 02 Discussion Board (participation)

• DUE Sunday

• Complete Readings:
1. Global Footprint Network (Exercise) - Calculate your personal
footprint
2. Mongabay (Article and Video) - Nine boundaries humanity
must respect to keep the planet habitable - AND - What are
the planetary boundaries?
3. Al Gore (Video) – The climate crisis is a fossil fuel crises