BASIC PRINCIPLES OF SUSTAINABLE AND RESPONSIBLE ECONOMY
SESSION 1 : INTRODUCTION
Ethics, responsibility and sustainability (ERS)
§ Ethics : business ethic studies right and wrong behavior in business and why people and
organizations make certain moral decisions (not the focus of this course)
§ Responsibility : means that companies think carefully about the consequences of their
actions, do not only focus on profit, balance economic, environmental and social
aspects and aim to create a positive impact on society and the environment (focus of
this course)
§ Sustainability : meeting today’s needs without damaging the ability of the future
generations to meet their own needs (focus of this course)
Forward-thinking business economist : someone who
§ Uses planetary and social boundaries as a compass
§ Is a systems thinker
§ Thinks in the long term
§ Has a pluralistic view of the economy (open to multiple perspectives/models)
§ Is an inclusive entrepreneur
§ Can develop policy instruments to achieve sustainability
Brundtland’s definition of sustainable development (SD) : sustainable development means
meeting needs of people today without reducing the ability of future generations to meet their
own needs.
Brundtland’s definition is also about equity : a society cannot be called sustainable if wealth is
extremely unequal and large groups live in poverty : 2 dimensions of equity / fairness
- Intra-generational equity : fairness within the current generation, between rich and poor
people today
- Inter-generational equity : fairness between generations, between people living now and
in the future
à development cannot be called sustainable if these principles are violated
Brundtland’s definition and concept of needs : needs is more than only food, shelter, money.
Needs include : psychological, safety, social, esteem, self-actualization needs.
Brundtland’s definition and tradeoffs : there is a trade-off between needs of current and future
generations. Meeting todays needs can damage the ability of future generations to meet theirs.
- Non-renewable resources : resources that do not regenerate like oil, gas, coal… unless
we recycle properly in a circular economy
- Renewable resources : resources that can regenerate, but only if used within limits like
forests and fish
Brundtland’s definition and concept of ability : the capacity of future generations to meet their
needs and live well. SD = non-declining capital stocks : sustainable development requires that
capital stocks do not decline (like physical, human, institutional and natural capital)
,Brundtland’s definition has many possible interpretations (needs? Ability? Without damaging?),
different attempts to make SD operational : triple bottom line / 3P’s à people, planet, profit
For sustainable development : 5P’s à people, planet, prosperity, partnership, peace
Sustainable development goals (SDG’s) : created by the United Nations to guide countries,
companies and organizations towards sustainable development.
Embeddedness : something exists within something else and depends on it. In sustainability
the economy is embedded in society, society is biosphere and biosphere is the foundation of
everything. Without a healthy planet, there can be no society & economy
SESSION 2 : VIEWS ON SUSTAINABILITY AND THEIR ASSUMPTIONS
Different views on ERS
Disparate view : social and environmental systems are separate. Companies should not
engage in non-economic systems. Focused on profit maximalization
- Implications for sustainability
§ Goal : profit
§ Social and ecological costs are seen as externalities
§ First you think about being profitable, then ethical
§ This view is difficult to find nowadays
- Criticism : negative externalities : environmental damage and social harm are not
corrected by the market alone. Markets do not automatically protect vulnerable groups
Subsuming view : the economy is the most important, and within economy you have the society
and environment. The social and environmental systems contribute to the economic system.
The companies should engage in these systems but only if its beneficial to the economic
performance (=including) à there’s hierarchy : economy depends on society, society on the
environment however, decisions are still driven by economic benefits
- Shared value model : you create value for the 3 systems at the same time, businesses
can create economic value by creating social value
- Social and environmental needs are drivers of innovation, competitiveness and growth
- Criticism : profit maximalisation remains major goal : economic value still dominates
decision-making, sustainability is secondary. Instrumental approach : social and
environmental issues are addressed only when they create market opportunities
Intertwined view : each system is equal. Harmony between economy, society and environment
- Business model 3P’s
- No hierarchy
- Focused on financial + non-financial
- Sustainability is the end goal, not just a tool for profit
- Criticism : trade-offs are difficult, measurement challenges : social and environmental
impacts are harder to quantify than financial ones, risk of social or greenwashing
,Embedded view : the economy is embedded in the social system and the social system is
embedded in the environmental system. Strong sustainability
- Economic activity is a mean to achieve social and environmental wellbeing
§ It’s not seen as a goal
- A new hierarchy : environmental (dominant), society, economy
- When we don’t have the environment the society and economy have difficulties to
continue existing à reverse of subsuming view
- Regenerative model : regenerate the planet (help the planet)
- Example : doughnut economics (9 planet boundaries)
- Criticism : niche model (seen as idealistic or difficult to scale)
These views are not separate (it’s not this one or the other), you can have different views within
one organization
Weak sustainability : natural capital and human-made capital are interchangeable,
environmental damage is acceptable if compensated by economic growth, technological
progress…
Strong sustainability : some parts of natural capital are critical and non-substitutable. A
minimum stock of natural capital must be preserved. Certain ecological systems cannot be
replaced by technology or money.
SESSION 3 : CLIMATE SCIENCE
1.1 MAIN CLIMATE CHALLENGES
20.000 years ago Earth was in a cold glacial period with low temperatures.
9.000 years BCE Entry into the Holocene stable climate period, which enabled the
development of agriculture and stable food production.
Late 18th century Start of the Industrial Revolution, marked by the widespread use of
fossil fuels (oil, gas, coal) for energy and heating, leading to increased
prosperity and modernization of society.
Present Earth has warmed by approximately 1.2°C above pre-industrial levels,
(21ste century) causing extreme weather events and widespread environmental
changes.
During the first couple of thousand years of the Holocene the climate was stable until the
industrial revolution. So, the climate wasn’t stable the entire period of the Holocene
, Core Concepts and Climate Change Impacts
• Formation of Fossil Fuels:
• Dead marine animals compacted over millions of years formed oil.
• Vegetation decomposed under pressure and heat first formed peat, then coal.
• These fossil fuels became the primary energy sources fueling industrial growth
but also contributed to greenhouse gas emissions.
• Current Climate Changes and Effects:
• Rising global temperature (~1.2°C increase) leads to more frequent and
intense extreme weather events such as droughts, heavy precipitation, and
flooding.
• Physical systems impacted include:
• Glaciers and ice caps melting, reducing ice mass and contributing to sea
level rise.
• Permafrost thawing, which can release stored greenhouse gases.
• Biological systems affected by climate change:
• Increased wildfires and damage to ecosystems, including forests and
marine environments.
• Human and managed systems impacted:
• Food production and economic systems suffer damage from extreme
weather, threatening food security and livelihoods.
Key Global Challenges
• Climate Mitigation
• Focuses on reducing greenhouse gas emissions to limit further warming.
• Strategies include:
• Decreasing fossil fuel use.
• Enhancing carbon sinks (oceans, forests, soil) to capture atmospheric
CO₂.
• Climate Adaptation
• Societies must adjust to ongoing and future climate changes since some degree
of warming and environmental impact is unavoidable.
• Adaptation involves modifying infrastructure, agricultural practices, and
resource management to cope with new climate realities.
Key Insights
• The Holocene stable climate period was critical for the rise of human civilizations due to
stable conditions favorable for agriculture.
• The Industrial Revolution introduced fossil fuel dependency, which, while promoting
economic growth, initiated significant greenhouse gas emissions.
• Current climate warming is already causing observable and measurable impacts on
physical, biological, and human systems globally.
• Addressing climate change requires a dual approach of mitigation and adaptation to
both prevent further damage and manage unavoidable consequences.
SESSION 1 : INTRODUCTION
Ethics, responsibility and sustainability (ERS)
§ Ethics : business ethic studies right and wrong behavior in business and why people and
organizations make certain moral decisions (not the focus of this course)
§ Responsibility : means that companies think carefully about the consequences of their
actions, do not only focus on profit, balance economic, environmental and social
aspects and aim to create a positive impact on society and the environment (focus of
this course)
§ Sustainability : meeting today’s needs without damaging the ability of the future
generations to meet their own needs (focus of this course)
Forward-thinking business economist : someone who
§ Uses planetary and social boundaries as a compass
§ Is a systems thinker
§ Thinks in the long term
§ Has a pluralistic view of the economy (open to multiple perspectives/models)
§ Is an inclusive entrepreneur
§ Can develop policy instruments to achieve sustainability
Brundtland’s definition of sustainable development (SD) : sustainable development means
meeting needs of people today without reducing the ability of future generations to meet their
own needs.
Brundtland’s definition is also about equity : a society cannot be called sustainable if wealth is
extremely unequal and large groups live in poverty : 2 dimensions of equity / fairness
- Intra-generational equity : fairness within the current generation, between rich and poor
people today
- Inter-generational equity : fairness between generations, between people living now and
in the future
à development cannot be called sustainable if these principles are violated
Brundtland’s definition and concept of needs : needs is more than only food, shelter, money.
Needs include : psychological, safety, social, esteem, self-actualization needs.
Brundtland’s definition and tradeoffs : there is a trade-off between needs of current and future
generations. Meeting todays needs can damage the ability of future generations to meet theirs.
- Non-renewable resources : resources that do not regenerate like oil, gas, coal… unless
we recycle properly in a circular economy
- Renewable resources : resources that can regenerate, but only if used within limits like
forests and fish
Brundtland’s definition and concept of ability : the capacity of future generations to meet their
needs and live well. SD = non-declining capital stocks : sustainable development requires that
capital stocks do not decline (like physical, human, institutional and natural capital)
,Brundtland’s definition has many possible interpretations (needs? Ability? Without damaging?),
different attempts to make SD operational : triple bottom line / 3P’s à people, planet, profit
For sustainable development : 5P’s à people, planet, prosperity, partnership, peace
Sustainable development goals (SDG’s) : created by the United Nations to guide countries,
companies and organizations towards sustainable development.
Embeddedness : something exists within something else and depends on it. In sustainability
the economy is embedded in society, society is biosphere and biosphere is the foundation of
everything. Without a healthy planet, there can be no society & economy
SESSION 2 : VIEWS ON SUSTAINABILITY AND THEIR ASSUMPTIONS
Different views on ERS
Disparate view : social and environmental systems are separate. Companies should not
engage in non-economic systems. Focused on profit maximalization
- Implications for sustainability
§ Goal : profit
§ Social and ecological costs are seen as externalities
§ First you think about being profitable, then ethical
§ This view is difficult to find nowadays
- Criticism : negative externalities : environmental damage and social harm are not
corrected by the market alone. Markets do not automatically protect vulnerable groups
Subsuming view : the economy is the most important, and within economy you have the society
and environment. The social and environmental systems contribute to the economic system.
The companies should engage in these systems but only if its beneficial to the economic
performance (=including) à there’s hierarchy : economy depends on society, society on the
environment however, decisions are still driven by economic benefits
- Shared value model : you create value for the 3 systems at the same time, businesses
can create economic value by creating social value
- Social and environmental needs are drivers of innovation, competitiveness and growth
- Criticism : profit maximalisation remains major goal : economic value still dominates
decision-making, sustainability is secondary. Instrumental approach : social and
environmental issues are addressed only when they create market opportunities
Intertwined view : each system is equal. Harmony between economy, society and environment
- Business model 3P’s
- No hierarchy
- Focused on financial + non-financial
- Sustainability is the end goal, not just a tool for profit
- Criticism : trade-offs are difficult, measurement challenges : social and environmental
impacts are harder to quantify than financial ones, risk of social or greenwashing
,Embedded view : the economy is embedded in the social system and the social system is
embedded in the environmental system. Strong sustainability
- Economic activity is a mean to achieve social and environmental wellbeing
§ It’s not seen as a goal
- A new hierarchy : environmental (dominant), society, economy
- When we don’t have the environment the society and economy have difficulties to
continue existing à reverse of subsuming view
- Regenerative model : regenerate the planet (help the planet)
- Example : doughnut economics (9 planet boundaries)
- Criticism : niche model (seen as idealistic or difficult to scale)
These views are not separate (it’s not this one or the other), you can have different views within
one organization
Weak sustainability : natural capital and human-made capital are interchangeable,
environmental damage is acceptable if compensated by economic growth, technological
progress…
Strong sustainability : some parts of natural capital are critical and non-substitutable. A
minimum stock of natural capital must be preserved. Certain ecological systems cannot be
replaced by technology or money.
SESSION 3 : CLIMATE SCIENCE
1.1 MAIN CLIMATE CHALLENGES
20.000 years ago Earth was in a cold glacial period with low temperatures.
9.000 years BCE Entry into the Holocene stable climate period, which enabled the
development of agriculture and stable food production.
Late 18th century Start of the Industrial Revolution, marked by the widespread use of
fossil fuels (oil, gas, coal) for energy and heating, leading to increased
prosperity and modernization of society.
Present Earth has warmed by approximately 1.2°C above pre-industrial levels,
(21ste century) causing extreme weather events and widespread environmental
changes.
During the first couple of thousand years of the Holocene the climate was stable until the
industrial revolution. So, the climate wasn’t stable the entire period of the Holocene
, Core Concepts and Climate Change Impacts
• Formation of Fossil Fuels:
• Dead marine animals compacted over millions of years formed oil.
• Vegetation decomposed under pressure and heat first formed peat, then coal.
• These fossil fuels became the primary energy sources fueling industrial growth
but also contributed to greenhouse gas emissions.
• Current Climate Changes and Effects:
• Rising global temperature (~1.2°C increase) leads to more frequent and
intense extreme weather events such as droughts, heavy precipitation, and
flooding.
• Physical systems impacted include:
• Glaciers and ice caps melting, reducing ice mass and contributing to sea
level rise.
• Permafrost thawing, which can release stored greenhouse gases.
• Biological systems affected by climate change:
• Increased wildfires and damage to ecosystems, including forests and
marine environments.
• Human and managed systems impacted:
• Food production and economic systems suffer damage from extreme
weather, threatening food security and livelihoods.
Key Global Challenges
• Climate Mitigation
• Focuses on reducing greenhouse gas emissions to limit further warming.
• Strategies include:
• Decreasing fossil fuel use.
• Enhancing carbon sinks (oceans, forests, soil) to capture atmospheric
CO₂.
• Climate Adaptation
• Societies must adjust to ongoing and future climate changes since some degree
of warming and environmental impact is unavoidable.
• Adaptation involves modifying infrastructure, agricultural practices, and
resource management to cope with new climate realities.
Key Insights
• The Holocene stable climate period was critical for the rise of human civilizations due to
stable conditions favorable for agriculture.
• The Industrial Revolution introduced fossil fuel dependency, which, while promoting
economic growth, initiated significant greenhouse gas emissions.
• Current climate warming is already causing observable and measurable impacts on
physical, biological, and human systems globally.
• Addressing climate change requires a dual approach of mitigation and adaptation to
both prevent further damage and manage unavoidable consequences.
