Business, Sustainability, and Innovation – GEO3-2122
Learning objectives
1. Problematize the role of business in society and explain the business case for
sustainability
2. Discuss and apply a range of methods and tools available to companies to
become more circular/sustainable
3. Analyze and evaluate how companies innovate their products, processes,
organizational, and marketing approaches to deliver environmental, social, and
economic value
4. Provide advice to companies on how to move forward in their efforts to integrate
circularity/sustainability in their business practices
5. Work collaboratively and collegially with peers
Assessment →
Final written exam (50%)
Group assignment 1 (25%)
Group assignment 2 (15%)
Group pitch (10%)
Readings lecture 1 – Corporate sustainability, what it is and
why it matters + Sustainability-oriented innovation of SMEs +
Circular economy systems
1. Corporate Sustainability – What it is and why it matters
A shift from the linear ‘take-make-dispose’ economy is needed towards more
regenerative models of production and consumption
Context and rationale
- Current economic systems rely heavily on resource extraction, fast
consumption, and waste creation
- This model is environmentally destructive and socially unsustainable
- The circular economy is presented as a transformative alternative that closes
resource loops, minimizes waste, and regenerates natural systems
Circular economy paradigm
- It is not just about recycling; it involves rethinking value creation, business
models, and consumption habits
- Innovation is key, but so are new forms of governance, collaboration, and policy
Opportunities
- Economic gains through efficiency and new markets
- Environmental benefits (less waste, lower emissions, biodiversity protection)
- Social benefits such as new jobs and healthier lifestyles
Challenges
- Technological barriers (immature recycling/upcycling solutions)
- Economic risks and uncertainties
- Institutional misalignment (lack of regulation or conflicting rules)
- Cultural resistance (consumer habits of convenience and ownership
,Business and policy implications
- Companies need to innovate by adopting circular business models (reuse,
repair, remanufacture, sharing models)
- Policymakers must create supportive frameworks, incentives, and regulations
- Collaboration across stakeholders (firms, governments, citizens) is essential
2. Sustainability-oriented innovation of SMEs: a systematic review
- SME: small and medium-sized enterprises
Defining the circular economy
- An economic model that reduces resource input and waste, emissions, and
energy leakage
- Core principles → closing loops (recycling, reuse), slowing loops (extending
product lifetimes), and narrowing loops (improving efficiency)
Processes and strategies in the circular economy
- Design for longevity, reuse, repair, and recycling
- Industrial symbiosis, where waste from one process becomes input for another
- Product-service systems (e.g., leasing instead of selling)
- Reverse logistics and closed-loop supply chains
- Business model innovation to capture value from circular practices
Environmental and economic impacts
Benefits
- Reduced environmental footprint (lower emissions, waste, and pollution)
- More efficient resource use
- Economic opportunities through new business models and markets
Risks and limitations
- Trade-offs between environmental and economic goals
- Risk of ‘rebound effects’ (efficiency gains leading to overall higher consumption)
3 types of rebound effects → examples
1. Direct → washing machines are designed to use less water and energy, so
households may do laundry more frequently since it feels less wasteful
2. Indirect → a consumer saves money by buying second-hand clothes but spends
these savings to book extra flights, increasing overall emissions
3. System level → advances in recycling make materials cheaper, encouraging
companies to produce more goods and expand markets, leading to more
resource extraction
- Lack of standardization in metrics to measure CE’s real impact
Policy and governance implications
- Effective CE requires policies, regulations, and standards
- Governments need to align incentives to encourage circularity and overcome
linear ‘lock-ins’
- Collaboration between businesses, policymakers, and consumers is essential
, 3. Circular economy ecosystem: a typology, definitions, and
implications
Defining the circular economy ecosystem
- Emphasizes multi-actor collaboration across sectors to achieve clarity
- CE ecosystems are categorized based on the type of flow they facilitate
1. Material flows: physical resources and waste → industrial and urban
ecosystems
2. Knowledge flows: information, expertise, and innovation → entrepreneurial and
knowledge sharing ecosystems
3. Value flows: business models, platforms, and market mechanisms →
innovation ecosystems
Lecture 1 – Introduction – 2/9/2025
Business
A business enterprise is →
- A profit-seeking organization
- That provides goods and/or services designed to satisfy customers’ needs
- By transforming lower-value inputs into higher-value outputs (adding value)
, The role of business in society
- They impact many environmental, social, and governmental challgnes
- These challenges also impact how firms do business → they shape relevant
risks and opportunities
- Corporations are considered critical actors when addressing ESG issues
because of their reach and size
Corporate sustainability
- Systematic management efforts by corporations to balance environmental and
social with economic goals in order to minimize harm to and increase benefits
for natural environments and societies
What are firms responsible for?
- A firm’s sustainable + responsible + ethical conduct is contextually dependent
and multidimensional by nature → size, ownership, structure, sector, location of
business activities
Learning objectives
1. Problematize the role of business in society and explain the business case for
sustainability
2. Discuss and apply a range of methods and tools available to companies to
become more circular/sustainable
3. Analyze and evaluate how companies innovate their products, processes,
organizational, and marketing approaches to deliver environmental, social, and
economic value
4. Provide advice to companies on how to move forward in their efforts to integrate
circularity/sustainability in their business practices
5. Work collaboratively and collegially with peers
Assessment →
Final written exam (50%)
Group assignment 1 (25%)
Group assignment 2 (15%)
Group pitch (10%)
Readings lecture 1 – Corporate sustainability, what it is and
why it matters + Sustainability-oriented innovation of SMEs +
Circular economy systems
1. Corporate Sustainability – What it is and why it matters
A shift from the linear ‘take-make-dispose’ economy is needed towards more
regenerative models of production and consumption
Context and rationale
- Current economic systems rely heavily on resource extraction, fast
consumption, and waste creation
- This model is environmentally destructive and socially unsustainable
- The circular economy is presented as a transformative alternative that closes
resource loops, minimizes waste, and regenerates natural systems
Circular economy paradigm
- It is not just about recycling; it involves rethinking value creation, business
models, and consumption habits
- Innovation is key, but so are new forms of governance, collaboration, and policy
Opportunities
- Economic gains through efficiency and new markets
- Environmental benefits (less waste, lower emissions, biodiversity protection)
- Social benefits such as new jobs and healthier lifestyles
Challenges
- Technological barriers (immature recycling/upcycling solutions)
- Economic risks and uncertainties
- Institutional misalignment (lack of regulation or conflicting rules)
- Cultural resistance (consumer habits of convenience and ownership
,Business and policy implications
- Companies need to innovate by adopting circular business models (reuse,
repair, remanufacture, sharing models)
- Policymakers must create supportive frameworks, incentives, and regulations
- Collaboration across stakeholders (firms, governments, citizens) is essential
2. Sustainability-oriented innovation of SMEs: a systematic review
- SME: small and medium-sized enterprises
Defining the circular economy
- An economic model that reduces resource input and waste, emissions, and
energy leakage
- Core principles → closing loops (recycling, reuse), slowing loops (extending
product lifetimes), and narrowing loops (improving efficiency)
Processes and strategies in the circular economy
- Design for longevity, reuse, repair, and recycling
- Industrial symbiosis, where waste from one process becomes input for another
- Product-service systems (e.g., leasing instead of selling)
- Reverse logistics and closed-loop supply chains
- Business model innovation to capture value from circular practices
Environmental and economic impacts
Benefits
- Reduced environmental footprint (lower emissions, waste, and pollution)
- More efficient resource use
- Economic opportunities through new business models and markets
Risks and limitations
- Trade-offs between environmental and economic goals
- Risk of ‘rebound effects’ (efficiency gains leading to overall higher consumption)
3 types of rebound effects → examples
1. Direct → washing machines are designed to use less water and energy, so
households may do laundry more frequently since it feels less wasteful
2. Indirect → a consumer saves money by buying second-hand clothes but spends
these savings to book extra flights, increasing overall emissions
3. System level → advances in recycling make materials cheaper, encouraging
companies to produce more goods and expand markets, leading to more
resource extraction
- Lack of standardization in metrics to measure CE’s real impact
Policy and governance implications
- Effective CE requires policies, regulations, and standards
- Governments need to align incentives to encourage circularity and overcome
linear ‘lock-ins’
- Collaboration between businesses, policymakers, and consumers is essential
, 3. Circular economy ecosystem: a typology, definitions, and
implications
Defining the circular economy ecosystem
- Emphasizes multi-actor collaboration across sectors to achieve clarity
- CE ecosystems are categorized based on the type of flow they facilitate
1. Material flows: physical resources and waste → industrial and urban
ecosystems
2. Knowledge flows: information, expertise, and innovation → entrepreneurial and
knowledge sharing ecosystems
3. Value flows: business models, platforms, and market mechanisms →
innovation ecosystems
Lecture 1 – Introduction – 2/9/2025
Business
A business enterprise is →
- A profit-seeking organization
- That provides goods and/or services designed to satisfy customers’ needs
- By transforming lower-value inputs into higher-value outputs (adding value)
, The role of business in society
- They impact many environmental, social, and governmental challgnes
- These challenges also impact how firms do business → they shape relevant
risks and opportunities
- Corporations are considered critical actors when addressing ESG issues
because of their reach and size
Corporate sustainability
- Systematic management efforts by corporations to balance environmental and
social with economic goals in order to minimize harm to and increase benefits
for natural environments and societies
What are firms responsible for?
- A firm’s sustainable + responsible + ethical conduct is contextually dependent
and multidimensional by nature → size, ownership, structure, sector, location of
business activities
