Creating Sustainable Business Models And Corporate Responsibility In The Age Of Responsibility Is The Essay.

Failures and Reforms of Traditional CSR

Write on three of the following questions, for which you will write a long answer response. These responses should reflect your own thinking. You must find your own examples and application, and not those or your study group, or ‘googled responses’ or textbook examples. You will be graded on uniqueness and originality and fit of your examples/application.

1. What are the key drivers in the Age of Responsibility, according to Wayne Visser? In other words, what is causing companies to take sustainability more seriously, and what are some of the reasons or evidence for this shift in the market? What are some of the consequences for companies that ignore sustainability as a driver?

2. Human bias is a serious impediment to forming beliefs that map on to reality.Corporations create impacts on the environment and community, and we sometimes ignore such impacts for the sake of gain, and allow negative externalities to accumulate into a mixed bag of unintended consequences. The way we talk about environmental and social problems has been a challenge to business, but how can we convince others (customers) that sustainability is a desirable end? Refer to the best/latest science or behavioural economics in describing a plan for nudging consumers toward sustainability.

3. Why does Visser view Walmart as an example of a company worthy of emulation? What are some of the problems about how sustainable companies have introduced sustainable products and services into the marketplace, and what does Walmart’s best practices have to teach us about sustainability? Furthermore, why would Walmart pursue sustainability, if its primary objective is profit?

4. What does it mean to be responsive in the Age of Responsibility? Provide examples, and explain the trade-off between responsiveness and scalability.

5. Whatis glocality, and how would you apply the concept to any product or service of your own choosing? What is the benefit to business of glocality?

6. Explain the difference between ‘cradle to grave’ and ‘cradle to cradle’ design, anddescribe a process by which a service or product could become circular. In other words, how can we look at waste differently, or create products that don’t produce negative externalities? Can you provide examples of companies that have successfully transitioned to a cradle to cradle process?

7. Yvon Chouinard doesn’t think it is appropriate to describe a company as sustainable.He thinks we need to spend more time in nature, simplify our lives and be  Explain how these ideas fit together with his beliefs about running a responsible company.

1. Wayne Visser’s Age of Responsibility persuasively and elegantly demonstrates the failures and the limits of the traditional Corporate Social Responsibility (CSR) and reforms necessary for creating conditions for authentic corporate responsibility and termed it as CSR 2.0 (Visser, 2014). He not only helped in identification of the five overlapping economic periods but also classified the stages into key enablers, stakeholder target and modus operandi. Besides, he also identified five principles of CSR 2.0, which included creativity, scalability, responsiveness, circularity, and locality that also acts as key drivers of the Age of Responsibility.

The reasons for the companies to consider sustainability seriously are as follows:  

1. Sustainability as Key Driver of Business Strategy and Competitive Advantage: Sustainability has become vital not only for all the companies but across most of the industries (Lozano, 2015). Close to 62 percent of the executive considers sustainability strategy for being competitive. Nowadays, it is considered a business approach for the creation of a long-term value through consideration of how a specific organization undertakes operation in a social, ecological and economic environment. The aspect of sustainability is built on the notion that development of such strategies fosters longevity to the company. Adoption of sustainability also helps the company in becoming more transparent.
2. Enhanced Material Risk due to Environmental Degradation and Changes in Climate: The issues of sustainability identified by World Economic Forum included water, weather and change in the climate as one of the risk across the global business. Environmental degradation and d climate change have resulted in unexpected chains in the corporate chains (Jabareen, 2013). Companies belonging to the food sector are threatened by the changes in the climate. Environmental threats also give rise to risk. For instance, occurrence of drought in northwest Pacific portion of United States influenced operations of the largest beer brewer Anheuser-Busch. The dip in water through irrigation facilities hiked the price of the barley the vital ingredient used by the beer brewers.
3. Sustainability defines the Transparency of A Company: Most of the companies operate within a structure where all of its flaws remain on total display.  The NGOs nowadays plays a vital role in exposing practices of the company and hold them responsible in case of environmental damage. Gibson Guiter Company has been a prominent example that tarnished its reputation while paying fines for using exotic wood from Madagascar and India (Welford, 2013). Besides, there has also been presence of online tools like the Global Forest Watch that generates authentic information on deforestation across the globe.  

The consequences of ignoring sustainability as a driver by companies’ results in financial crisis, reduced growth, influences the process of strategy and decision-making at every level of  the company (Gast,  Gundolf & Cesinger, 2017).

3. Visser viewed Walmart as an example worthy to emulate as it incorporates the aspect of sustainability in all its operations. Some of the sustainability initiatives of Walmart are as follows:

1. Walmart is Inclined in Using 100 Percent Renewable Energy: Close to 26 percent of the global electricity of Walmart is supplied through renewable energy although the amount varies across the countries. The amount of electricity generated is over 60 percent across Mexico and only 14 percent across United States. In the year 2014, Walmart produces over 3000-gigawatt hour of renewable energy on global scale (walmart.com, 2018).
2. Walmart Believes in Zero Waste: Walmart diverted close to 82.4 percent of the waste in 2014 in United States across the clubs, stores, other facilities and the distribution centre. Outside United States, it acquired close to 68 percent diversion in waste. The company believes that it is on a target of eliminating all landfill waste in the United States by the year 2025 (Laszlo & Cescau, 2017).
3. Walmart’s Step toward Greener Products: As the global retailer, Walmart possess the ability of influencing the aspect of sustainability at every step of supply chain. The global retail chains collaborate with the suppliers thereby ensuring that the products are not only sustainable but also affordable and safe (walmart.com, 2018). The initiatives undertaken included supporting measurement and transparency, reducing the impact on the environment, providing healthy, safe and affordable food quality .

Some of the problems faced by sustainable companies in introducing sustainable products and services include:

• Greener products require recyclable and renewable energy that is expensive.
• Requires technology which is dependent on the huge investment of research and development
• Requirement of an expensive water treatment technology
• Most of the people are unaware about the uses of green products
• Most of the people are not ready in paying premium prices for the green products.

The best practices of Walmart in terms of sustainability are as follows (walmart.com, 2018)

• Influencing the Suppliers:Walmart encouraged over 66,000 suppliers in adopting sustainable practices
• Taking Steps for Burning Less Fuel:Walmart accomplished it by reducing fuel usage of the fleet trucks so that they are able to lower fuel cost and carbon emissions.
• Preparing a Supply Chain for Dealing with Weather Conditions: Walmart not only stocked its distribution centre away from the way of natural calamities but also appointed own meteorologist for keeping a tab on the weather.

Although the primary objective of Walmart is profit but it should pursue sustainability because it will help the supermarket chain in achieving significant and lasting improvement in environmental and social outcomes and help in achieving aspirational goals for creation of  zero waste (walmart.com, 2018).  

4. Responsiveness in the Age of Responsibility not only represents higher transparency in the mechanism of reporting like the Carbon Disclosure Project and the Global Reporting initiative but sharing of the critical intellectual resources (Visser & Tolhurst, 2017). For instance, The World Business Council for Sustainable Development (WBCSD) introduced the Eco-Patent Commons for ensuring the availability of the technology patents without any royalty thereby helping in reducing pollution, waste, demands for energy and global warming. This represented one of the steps in right direction. The donor exchange platform represents one such platform that allows the corporate donors and the individuals in connecting directly to the beneficiaries through web thereby tapping into the longer tail of corporate social responsibility.

On the other hand, scalability does have its limitation to retail sector (Krisnawati, Yudoko and Bangun 2014). To explain scalability the example of Muhammad Yunus is drawn who built the rural bank for providing loans up to $2.5 billion to the enterprise after the devastation caused by the Bangladesh famine. The loans provided had been a lesson of scalability as the loans spawned over close to 3000 microcredit institutions across 50 countries that reached over close to 133 million clients. On the other hand, Toyota is credible with the premium priced the Prius for rich while it Tata remains eco friendly and cheap for the masses with Nano.  Tata’s eco friendly car represents a scalable solution with instant impact.

The trade-off between responsiveness and scalability is defined through the following practical steps:

• Adopting the investing principlesof impact for helping in assessing the effectiveness of philanthropy and expenditures within community.
• Institutionalization of various panels of the stakeholders for ensuring honest feedback towards the sustainable performance of organization
• Engagement in constructive and positive lobbying policy on the aspect of social and strategic environmental issues
• Acceptance of the approaches put forward by web 2.0 that included crowd sourcing the and social media for ensuring the improvement of transparency similar to sites like JustMeans
• Working enthusiastically for the advancement of full cost accounting and integrated reporting similar to what Puma does with the account of the environmental profit and loss and the ContextReporting.org does with the platform for benchmarking.

References: 

Gast, J., Gundolf, K., & Cesinger, B. (2017). Doing business in a green way: A systematic review of the ecological sustainability entrepreneurship literature and future research directions. Journal of Cleaner Production, 147, 44-56.

Jabareen, Y. (2013). Planning the resilient city: Concepts and strategies for coping with climate change and environmental risk. Cities, 31, 220-229.

Krisnawati, A., Yudoko, G. and Bangun, Y.R., 2014. Development path of corporate social responsibility theories. World Applied Sciences Journal, 30, pp.110-120.

Laszlo, C., & Cescau, P. (2017). Sustainable value: How the world's leading companies are doing well by doing good. Routledge.

Lozano, R. (2015). A holistic perspective on corporate sustainability drivers. Corporate Social Responsibility and Environmental Management, 22(1), 32-44.

Visser, W. (2014). CSR 2.0: Transforming corporate sustainability and responsibility. New York, NY: Springer.

Visser, W., & Tolhurst, N. (2017). The world guide to CSR: A country-by-country analysis of corporate sustainability and responsibility. Routledge.

walmart.com (2018). [online] Available at: https://corporate.walmart.com/global-responsibility/sustainability/ [Accessed 5 Dec. 2018].

walmart.com. (2018). Retrieved from https://corporate.walmart.com/global-responsibility/sustainability/sustainability-in-our-operations

walmart.com. (2018). Retrieved from https://corporate.walmart.com/_news_/executive-viewpoints/making-sustainability-sustainable-lessons-weve-learned

walmart.com.(2018). Retrieved from https://corporate.walmart.com/global-responsibility/sustainability/sustainability-in-our-value-chains

Welford, R. (2013). Hijacking environmentalism: Corporate responses to sustainable development. Routledge.