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Economics for Sustainability
Prof. Dr. René SchmidpeterDr. Juergen Meyer Lehrstuhl Guest ProfessorWissenschaftlicher LeiterInternationale Wirtschaftsethik und CSR Nanjing Unive3rsity of Finance and Economics Zentrum für Humane Marktwirtschaft Cologne Business School CHINA SALZBURGKÖLN
LECTURE-Series: How Business is Changing the World
IDEAS MATTER!
D.C. North
1776
Adam Smith
Kupferstich: William Hogarth (rechts)
Kupferstich: unbekannt (oben)
Industrial Revolution – a world in transition
Coalbrookdale at night. Oil painting of Philipp Jakob Loutherbourg d. J. from 1801.
Badische Anilin- und Sodafabrik 1881, unknown artist.
Today:
World in Transition
Todays Business Challenges
• Fossil Fuels• Rare Earths• Fertile Farmland• Freshwater
• Volatility of Demand / Supply
• New markets• Changing
demographics
• Interdependencies• Disruption risks• Stability of supply
networks
• Record Profits• Societal Issues• Compliance
Business Challenges Accelerators
“What is the right approach to value
creation?”
Market Volatility Natural resources
Profit vs. PurposeGlobal Value Chain
xSocial Pressure
Natural disasters
Key Question
Source: Michael Dheur (2013) CSR und Value Chain Management. Management-Reihe CSR (Schmidpeter)
5 Cornerstones
Prof. Dr. René SchmidpeterDr. Juergen Meyer Lehrstuhl Guest ProfessorWissenschaftlicher LeiterInternationale Wirtschaftsethik und CSR Nanjing Unive3rsity of Finance and Economics Zentrum für Humane Marktwirtschaft Cologne Business School CHINA SALZBURGKÖLN
5 Cornerstones
1) Sustainability: Should or Can?
5 Cornerstones
2) Sustainability: Functional or Systemic
Thinking?
CSR new thinking: Overcoming old dualism!
Socital Value
Sustainability
Business Value
Profitability
Business Value
„business case“
Socital Value
CorporateSocial
Responsibility
purephilathropy
pure profitmaximazation
without goal or plan
„social case“
In Anlehnung an: Schmidpeter, Verantwortung Zukunft, FAZ Institut für Management 2012
Value for Business and Society
Sustainability and Economic Performance
During the crisesnon-sustainable companies
lost 50 %, Sustainable company only 43 %
of their market value
Sustainable companiesin 16 out of18 branches/industries
have 15 % less capital costs
non-sustainable companies lost
1.9 $ billionmore in average
Source: Oekom Research 2010, A.T. Kearney 2009, Sloan Management Foundation 2013
Sustainable Investments
over 5.000 Billion Euro worldwide
Over 60 % of the topmanager: „Sustainability adds to profit“
5 Cornerstones
3) Sustainability: 3 pillars – ecological,social and economic
dimension
Sweet Spot of Sustainability
SWEETSPOT
ECONOMY
SOCIAL ECOLOGY
5 Cornerstones
4) Sustainability: Material or not?
Materiality of Sustainability policies
Quelle: Harvard Business School 2015
Material CSR Non-materialCSR Alpha
weak
weak
strong
strong
weak
weak
strong
strong
- 2,90%
+ 0,60%
+ 1,96 %
+ 6,01 %
5 Cornerstones
5) Sustainability – static or dynamic
thinking?
PureProfit
Maximation
SocietalPressure
PurePhilantropy
Scarcityof Resources
FinancialCrises
EconomicPressure
© Schmidpeter, 2014
Current Business Models get under pressure
Limitsof
Growth
Integrative Growth through Sustainable Business
Pure ProfitMaximization
PurePhilantropy
CorporateSocial
Responsibility
Social Entrepreneurship
InclusiveBusiness
Shareconomy
???
New Opportunities
New Challenges
Limitsof Good Causes
New GrowthOpportunities
© Schmidpeter, 2014
Resume:Sustainable Management: Extended capital theory
market value of the firm
physical capital human capital social capital
ResumeBusiness: CSR as
management concept for Sustainable
Growth„CSR is a process whereby companies integrate social, environmental and ethical issues into their business operations and strategy in close interaction with their stakeholders, going beyond the requirements of applicable legislation and collective agreements. …
A strategic approach to CSR is increasingly important to the competitiveness of enterprises, helping them to create value both for owners and stakeholders… to win the trust and respect of citizens …
Source: Communication European Commission , Oktober 2011
3. November 2007 Page 27
CSR matters – public policy too
Of course: first and foremost CSR addresses the business world
But: CSR can only reveal its full potential when public policy plays an active role in implementing and supporting CSR
Facing the complex problems of today‘s world – we need the contribution of all societal actors to find appropriate solutions
Capabilities of actors tocontribute to problem solving
sources: World Bank, Public sector roles in strengthening corporate social responsibility: a baseline study; Bertelsmann Stiftung: The CSR-Navigator – Public Policies in Africa, the Americas, Asia and Europe
Europe‘s Strategy for Sustainable Growth
Europe 2020: Growth Strategy
SMART SUSTAINABLE INCLUSIVE
Europe 2020 is the EU's growth strategy for the coming decade.
In a changing world, we want the EU to become a smart, sustainable and inclusive economy.
These three mutually reinforcing priorities should help the EU and the Member States deliver high levels of employment, productivity and social
cohesion.
Europe 2020 – Governance Targets
Innovation Union Scoreboard:
Member States Performance
Innovation Union Scoreboard:
Messurement Framework
Innovation Leaders/Followers –
Moderate/Modest Innovaters
New Economic Thinking: Bringing Business and Society
togetherSustainable growth models have always been based on serving the needs of society. Due to its problem solving capacity business has always been a main driver for social innovation.
Under the current circumstances business models which are cooperative and sustainable are becoming more relevant again. Sustainable Entrepreneurship und Corporate Social Responsibility.
many examples and initiatives do exist in order to reactivate mainstream businesses’ role as a driver for social innovation
Corporate Responsibility and Sustainability can be a driver for new business approaches in the fields of education, job creation, minority integration
