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					CREATING
SUSTAINABLE
ENTERPRISES –
A ROLE FOR LAW IN
ENSURING OUR
FUTURE
       Professor Nancy J. King, BA 230, Spring
       2006
   INTRODUCTION

“The hidden architecture of
 sustainable development is
 the law.”
 Source: Economist Hernando de Soto as
  quoted by Colin Powell as he prepared to
  leave for the Earth Summit
“To waste, to destroy, our natural
 resources, to skin and exhaust
 the land instead of using it so
 as to increase its usefulness
 will result in undermining, in the
 days of our children, the very
 prosperity which we ought by
 right hand down to them,
 amplified and developed.”
      -Former President Teddy Roosevelt, 1907
   What Is Sustainable
     Development?
 No Universal Definition
 Three Useful Definitions:
   Classic Definition
   Triple Bottom Line
   The Natural Step
        Classic Definition

Development that meets the needs of the
 present generation while not
 compromising the ability of future
 generations to meet their own needs.



Source: World Commission on Environment and Development
  (Brundtland Commission), Our Common Future (Oxford: Oxford
  University Press) (1987).
        Triple Bottom Line

Creating measures and reporting on
 how a business impacts economic,
 environmental and social issues.



Sources: Andrew W. Savitz, What U.S. Environmental Lawyers Need to Know About
   Sustainability, 17-2 Natural Resources and Environment 98 (2002.
Sustainability Encompasses
Corporate Social Responsibility
 Assumes corporations should conduct
  their affairs in a socially responsible
  manner, but there is disagreement as to
  what constitutes socially responsible
  behavior.
 Three Viewpoints on Corporate Social
  Responsibility:
   Profit Maximization.
   Stakeholder Approach.
   Corporate Citizenship.
 The Stakeholder Approach to
Corporate Social Responsibility
 Fits Well With Sustainability
 Corporations are perceived to hold duties to the
  following groups (stakeholders), duties that
  often come into conflict:

    Shareholders              Consumers


      Employees               Community


                    Society
   Measuring Corporate
   Social Responsibility
 It is difficult to measure corporate social
  responsibility because different yardsticks are
  used (this doesn’t mean we shouldn’t try).
 Traditionally, corporate philanthropy has been
  used as a means of measuring corporate
  social responsibility.
 Increasingly, corporate process, or
  how a corporation conducts its
  business on a day-to-day basis, is a
  key factor in determining whether a
  corporation is socially responsible.
Definitions of Sustainability
Encompass Environmental
        Stewardship
 Stewardship means careful and responsible
  management of something in one’s care.
 Requires more than simply making continuous
  improvements to environmental management
  systems to reduce waste and pollution.
 Requires more than mere compliance with U.S.
  environmental laws related to pollution.
 Sustainability strives to achieve the
  intriguing possibility of economic success
  within life-supporting environmental and
  social systems.
Sustainability Also Addresses
Global Environmental Issues
 Two Key Issues:
  Cross-Border Pollution.
  Global Warming.

 What is the Answer? How do business
  operations and economic development
  impact the solution?
                 The Natural Step
Sustainable (Business) Systems:
 Keep the earth’s natural resources in the earth
  as long as possible.
 Manage the production of toxic substances.
 Not displace, over harvest or otherwise
  degrade our natural ecosystem.
 Use the earth’s resources fairly and efficiently
  to meet basic human needs worldwide.



References: Robèrt Karl-Henrik. 2002. The Natural Step Story: Seeding a Quiet Revolution
    (Gabriola Island, BC: New Society Publishers) (2002), available at www.newsociety.com; The
    Natural Step, at www.naturalstep.org (Natural Step system conditions, also called principles of
    sustainability, define basic conditions that need to be met in a sustainable society).
       What Does It Mean To Use The Earth’s
            Natural Resources Fairly?
                                  Netherlands

                                                        India




“In the U.S., it takes 10.3 hectares (1 hectare = 2.5 acres) to supply
the average person’s basic needs; in the Netherlands, 5.3 hectares;
in India, .8 hectares…Most strikingly, if the entire world lived like
North Americans, there would not be enough ecological capacity on
the planet to support them sustainably. (Source: Ranking the
Ecological Impact of Nations, www.ecouncil.ac.cr.)
Is Sustainability Legally
       Required?
 There are no federal or state laws in the United
  States that require private businesses to
  operate in a sustainable manner (although
  certain environmental laws require sustainable
  practices, e.g. pollution prevention, waste
  minimization, etc.).
 Some states have passed laws that encourage
  sustainable business practices
   Example: Oregon adopted the Oregon Sustainability
    Act of 2001.
What Does The Oregon
Sustainability Act Require?
  Creates an Oregon Sustainability Board
   that encourages sustainable business
   practices and periodically reports to the
   Legislature.
  Establishes sustainability “goals” for state
   governmental agencies.

 Sources: Oregon Sustainability Act of 2001, Oregon
   Revised Statutes Sections 184.423 (2004).
Examples Of Sustainable
   Practices At OSU
 Campus dining halls use 100% biodegradable food
  service packaging for food-to-go.
 Campus construction debris recycling program
 Several campus buildings are being constructed or
  remodeled using U.S. Green Building standards to
  achieve Silver or better LEED (Leadership for Energy
  and Environmental Design) certification.

   What other examples of sustainable practices
    are found our campus?
Which U.S. Companies Are
    Moving Towards
 Sustainability And Why?
 Large companies are more likely to develop
   sustainability programs (e.g., Hewlett Packard
   Company, IBM).
 Companies are committing to sustainability to either
   enhance their reputations or gain a competitive
   advantage (e.g., Nike).
 Most large companies see sustainability as a
   permanent change in the way that corporations will
   be managed, measured and valued.
(source:PricewaterhouseCoopers 2002 Sustainability Survey Report).
     Product Stewardship
(Also Known As “Extended Product
         Responsibility”)

  Product stewardship is a product life cycle
   approach to environmental protection.
  It requires product manufacturers, distributors,
   end users and waste disposers to share
   responsibility for minimizing the environmental
   impact of the product.
  Examples:
     reducing the use of toxic substances;
     designing for reuse and recycling;
     product take-back programs.
       Examples Of Companies
        Focusing On Product
           Stewardship:
 Extending the useful life of products they manufacture (e.g.,
  U.S. manufacturers design refillable ink jet cartridges for
  inkjet printers).
 Designing products to make recycling and reuse much
  easier (e.g., Japanese manufacturers design washers and
  dryers to be easier to disassemble for recycling purposes).
 Developing products that minimize natural resource use and
  environmental impacts (e.g., the Environmental Protection
  Agency’s Energy Star program encourages production of
  energy efficient products through a certification program)
 Making products from recycled materials – waste becomes
  raw materials (e.g., companies that use recycled paper to
  make new products).
   Countries that Mandate
Product Stewardship in their
  Laws For Some Products
 Japan – Product Reengineering to
  enable recycling of household appliances
  (e.g. refrigerators, washers, dryers).
 Sweden – Producers of electronic
  equipment are required to “take-back”
  obsolete electronic equipment free of
  charge.
      The European Union
    Leads the Way on Product
          Stewardship
 Waste Electrical and Electronic Equipment
  (WEEE) Directive Applies to equipment which
  depends on electric currents or electromagnetic
  fields to function [Directive 2002/96/EC].
 Requires producers of electrical and electronic
  equipment to take back “end-of-life” or waste
  products free of charge and to recycle the waste
  products. Also requires substitution of less
  hazardous products (replace lead, mercury, etc.)
  in new electrical equipment put on the market
  starting in July 2006.
EU WEEE Directive, Cont’d

  WEEE covers: household appliances;
   computer equipment;
   telecommunications equipment.
  WEEE does not cover “consumables”
   (e.g. printer ink cartridges).
  The WEEE Directive must be fully
   implemented in EU Member States’ laws
   by August 2005.
Why Do U.S. Companies Care
About Product Stewardship And
Sustainability?
    The global competitiveness of many
     U.S. companies depends on
     compliance with sustainability laws in
     other countries.
    Ethical Query: Should U.S.
     companies offer sustainable products
     and services in the U.S. even if U.S.
     laws do not require this?
New Belgium Brewing
Company
New Belgium Brewing
Company – The Owners, The
Employees




Owners: Jeffrey Lebesch and Kim Jordan,
Fort Collins, Colorado
“OUR CORE VALUES AND BELIEFS
At New Belgium Brewing Company, We Believe In:

Producing world-class beers.

Promoting beer culture and the responsible enjoyment of beer.

Continuous, innovative quality and efficiency improvements.

Transcending our customers' expectations.

Environmental stewardship: minimizing resource consumption,
maximizing energy efficiency and recycling.
Kindling social, environmental and cultural change
as a business role model.

Cultivating potential: through learning, participative
management
and the pursuit of opportunities.

Balancing the myriad needs of the company, staff,
and their families.

Committing ourselves to authentic relationships,
communications, and promises.

Having Fun”

[Source: New Belgium Brewing Co.’s webpage]
New Belgium Brewing
Company
 Viewing film clips to identify sustainable
   business practices:
  Sustainability - Environmental
   Stewardship
  Corporate Social Responsibility
    Vibe – Tour de Fat
    Good Home - Philanthropy
In-Class Group Exercise:
New Belgium Brewing
Company
 A. Using the Triple Bottom Line definition
   of sustainability, identify at least five
   different sustainable business practices
   followed by the New Belgium Brewing
   Company.
    For Your Use --The Triple Bottom Line Definition of
     Sustainability: Creating measures and reporting on
     how a business impacts economic, environmental
     and social issues.
In-Class Group Exercise:
New Belgium Brewing
Company
  B. Improvements for the Future: identify
    several other business practices that
    were not discussed in the articles that
    we read about New Belgium Brewing
    Company but that it could/should
    evaluate to ensure its operations are
    sustainable.
Student Writing Assignment
On Sustainable Business
Practices
  Using the assignment handout, choose one of
   the three topics on sustainability for your
   paper. Find a company that is implementing
   that type of sustainable business practices and
   write about it.
  Research sources:
    Internet, Lexis-Nexis academic database,
     newspapers, magazine articles, your personal
     contact with a company manager. See “Web Links”
     on Blackboard for help using Lexis-Nexis.
    The list of Selected Web References About
     Sustainability for Students included at the end of the
     assignment.
 We do not inherit this
 land from our
 ancestors, we borrow
 it from our children.
 Haida Indian Saying

Last Revised: February 2005

				
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