WEBVTT Kind: captions; Language: fi 1 00:00:00.750 --> 00:00:08.910 In this video I will explain the very basic concepts of this course. 2 00:00:08.910 --> 00:00:12.950 I will focus on sustainable development and then I 3 00:00:12.950 --> 00:00:18.910 will explain corporate sustainability. 4 00:00:18.910 --> 00:00:23.480 Let's start with sustainable development. 5 00:00:23.480 --> 00:00:29.410 This is the very basic definition of sustainable development that comes from the so-called 6 00:00:29.410 --> 00:00:35.290 Brundtland report that is published by the World Commission on Environment and 7 00:00:35.290 --> 00:00:41.730 Development. And their definition on sustainable development says that it's a development 8 00:00:41.730 --> 00:00:47.310 that "meets the needs of the present without compromising the ability of future 9 00:00:47.310 --> 00:00:50.370 generations to meet their own needs." 10 00:00:50.370 --> 00:00:53.770 And what does this mean is that 11 00:00:53.770 --> 00:01:01.750 we as the kind of current generation wouldn't make decisions that 12 00:01:01.750 --> 00:01:07.630 would destroy or narrow the abilities of the future generations. 13 00:01:07.630 --> 00:01:11.010 So our children, and especially the children's children's 14 00:01:11.010 --> 00:01:16.250 generation to make their own decisions. 15 00:01:16.250 --> 00:01:25.050 This definition covers economic, environmental and social dimension. 16 00:01:25.050 --> 00:01:33.530 And based on this, companies typically talk about corporate sustainability or 17 00:01:33.530 --> 00:01:41.390 sustainability, and I have gathered in this slide the various other definitions what companies 18 00:01:41.390 --> 00:01:47.390 tend to use. And you are able to see this variation also in the course material. 19 00:01:47.390 --> 00:01:51.050 So, please, don't be confused about the different terms. 20 00:01:51.050 --> 00:01:54.960 More or less they mean the same thing. 21 00:01:54.960 --> 00:02:00.380 I myself when I write in English about these issues, I use sustainability. 22 00:02:00.380 --> 00:02:06.940 But in in these slides I have at least tried to use the corporate sustainability term. 23 00:02:06.940 --> 00:02:11.620 Others that you might see are corporate social responsibility or 24 00:02:11.620 --> 00:02:17.840 CSR, corporate responsibility CR, ,sustainability, 25 00:02:17.840 --> 00:02:24.280 as I said, triple bottom line is also occasionally used and then 26 00:02:24.280 --> 00:02:29.640 there is this people planet and profit, 3Ps. 27 00:02:29.640 --> 00:02:35.760 For example, Finnish company Nokia is using this approach in their 28 00:02:35.760 --> 00:02:41.320 communication on sustainability issues. And then there are also companies 29 00:02:41.320 --> 00:02:44.000 that do use sustainable development. 30 00:02:44.000 --> 00:02:51.820 For example, Finnish company Fortum uses sustainable development in their reporting, for example. 31 00:02:51.820 --> 00:02:59.330 But quite often it is just that sustainable development is used by either 32 00:02:59.330 --> 00:03:05.390 countries, regions or cities and then in companies it's some sort of sustainability 33 00:03:05.390 --> 00:03:10.790 or responsibility, the term that they are using. 34 00:03:10.790 --> 00:03:16.610 So now I'm going to explain to you the content of environmental sustainability, 35 00:03:16.610 --> 00:03:21.230 social sustainability and economic sustainability. 36 00:03:21.230 --> 00:03:23.570 There is some variation 37 00:03:23.570 --> 00:03:29.290 of the content of these areas between companies, for example. It depends 38 00:03:29.290 --> 00:03:34.530 somewhat on the context of country and both the industry in which the 39 00:03:34.530 --> 00:03:37.730 company operates that how they will define these. 40 00:03:37.730 --> 00:03:43.310 But I'm anyhow going to give you some examples of the content. 41 00:03:43.310 --> 00:03:49.930 So, environmental sustainability addresses the planet, so the environment and 42 00:03:49.930 --> 00:03:57.010 it deals with what kind of impacts does the company cause on 43 00:03:57.010 --> 00:04:01.220 the environment. Here are some examples. They talk about, 44 00:04:01.220 --> 00:04:04.400 for example, energy efficiency and more and more 45 00:04:04.400 --> 00:04:06.400 they actually talk about, 46 00:04:06.400 --> 00:04:10.110 also, the use of renewable energy in a company. 47 00:04:10.110 --> 00:04:17.590 It's about minimizing the use of resources, both renewable and unrenewable what 48 00:04:17.590 --> 00:04:24.460 they are using. And it's also about minimizing the amount of waste and pollution 49 00:04:24.460 --> 00:04:29.310 that they are causing as a kind of a side product. 50 00:04:29.310 --> 00:04:35.790 But as I said, also here is a bit of variation that what are the important environmental 51 00:04:35.790 --> 00:04:40.900 impacts in that industry where the company is operating. 52 00:04:40.900 --> 00:04:44.500 And this is really the core content of my faculty. 53 00:04:44.500 --> 00:04:50.690 So we are focusing on corporate environmental management. 54 00:04:50.690 --> 00:04:54.850 Then the second area is the social sustainability. 55 00:04:54.850 --> 00:04:58.550 So this addresses the people around the company, 56 00:04:58.550 --> 00:05:01.950 both inside and outside of the company. 57 00:05:01.950 --> 00:05:07.570 At least, it is about the employee wellbeing, their human rights, the 58 00:05:07.570 --> 00:05:12.590 social justice, health and safety of the employees. 59 00:05:12.590 --> 00:05:18.610 But more and more companies are also addressing that, what kind of impact they have on the 60 00:05:18.610 --> 00:05:25.890 society. How do they impact education, healthcare, the traditional cultures. 61 00:05:25.890 --> 00:05:32.140 So if I tell you short example of the history of Finland. 62 00:05:32.140 --> 00:05:38.580 In Tampere, a part of the city is called area of Finlayson. 63 00:05:38.580 --> 00:05:44.960 It was built around the factory of Finlayson that produced products from cotton. 64 00:05:44.960 --> 00:05:49.160 They, of course, had their factory there, but they also had the housing 65 00:05:49.160 --> 00:05:54.000 for the employees. They had the healthcare system for their employees, 66 00:05:54.000 --> 00:05:56.460 schooling for the employees', children. 67 00:05:56.460 --> 00:05:59.160 They even had a church there. 68 00:05:59.160 --> 00:06:01.870 So that kind of has been, the social 69 00:06:01.870 --> 00:06:08.500 sustainability, kind of has been the tradition of companies way back in the history. 70 00:06:08.500 --> 00:06:11.810 But it's also kind of a current example that if a company 71 00:06:11.810 --> 00:06:16.230 operates in society where the 72 00:06:16.230 --> 00:06:21.830 society as such doesn't take care of the education system or the healthcare system, 73 00:06:21.830 --> 00:06:25.370 it might be beneficial for the company itself to take care 74 00:06:25.370 --> 00:06:30.430 of those in order to have better employees. 75 00:06:30.430 --> 00:06:34.050 But here are really kind of the difficulties in defining. 76 00:06:34.050 --> 00:06:41.140 It really depends on the industry and also the context of the country or region where 77 00:06:41.140 --> 00:06:46.980 the company operates that what are included in these matters. 78 00:06:46.980 --> 00:06:52.520 If I give another example of this, if a company is a service industry company 79 00:06:52.520 --> 00:06:58.880 that operates only in Europe, for example, then it might be enough that it focuses 80 00:06:58.880 --> 00:07:03.080 just on the health and safety of their own employees. 81 00:07:03.080 --> 00:07:07.800 But if we are talking about a larger company, a multinational company that 82 00:07:07.800 --> 00:07:13.520 operates in several countries in several continents, then they really need 83 00:07:13.520 --> 00:07:17.220 to focus on the larger impact also of their 84 00:07:17.220 --> 00:07:25.650 supply chain that what kind of social impacts are there. 85 00:07:25.650 --> 00:07:29.790 Then the last section is the economic 86 00:07:29.790 --> 00:07:35.190 sustainability, so the profit what the company is making. 87 00:07:35.190 --> 00:07:40.610 If you have a background in management or in accounting, this might be very 88 00:07:40.610 --> 00:07:46.000 very familiar to you that you know that the company needs to be 89 00:07:46.000 --> 00:07:51.210 operated in economic efficiency. They need to be profitable. 90 00:07:51.210 --> 00:07:58.570 But in the context of sustainability, we see this as a much larger area. 91 00:07:58.570 --> 00:08:04.280 So it's not just meeting the shareholders' profit expectations. 92 00:08:04.280 --> 00:08:10.820 One rather current example, or well, I think companies have focused or kind of 93 00:08:10.820 --> 00:08:17.080 the general discussion has been around the tax justice for couple of years already. 94 00:08:17.080 --> 00:08:20.040 So companies should focus on that 95 00:08:20.040 --> 00:08:26.640 what kind of a contribution they are making to the society, instead of fighting 96 00:08:26.640 --> 00:08:32.530 the locations where they pay as little taxes as possible. 97 00:08:32.530 --> 00:08:38.010 And this kind of connects with the social sustainability that companies 98 00:08:38.010 --> 00:08:42.620 do benefit from the social services, what the country is offering, like 99 00:08:42.620 --> 00:08:45.550 the education system and the healthcare system. 100 00:08:45.550 --> 00:08:52.240 So why not pay taxes and in that way also contribute to the society? 101 00:08:52.240 --> 00:08:55.840 And still the kind of the fact is that 102 00:08:55.840 --> 00:08:59.220 None of the companies are really able to make long term 103 00:08:59.220 --> 00:09:03.280 economic benefits or economic growth 104 00:09:03.280 --> 00:09:08.740 if they don't care about the social and environmental aspect as well. A forest 105 00:09:08.740 --> 00:09:14.980 industry company cannot cut all the trees during the first year of operation because 106 00:09:14.980 --> 00:09:17.820 then in the second year they wouldn't have the trees, 107 00:09:17.820 --> 00:09:25.350 so the raw material available for them. 108 00:09:25.350 --> 00:09:32.560 Then my last point focuses on whether corporate sustainability is voluntary 109 00:09:32.560 --> 00:09:37.930 practise for the company, or if it's compulsory for them. 110 00:09:37.930 --> 00:09:44.220 This is actually quite a tricky question. In a way 111 00:09:44.220 --> 00:09:48.020 in many countries there are legal requirements for different 112 00:09:48.020 --> 00:09:51.220 environmental issues and different social issues. 113 00:09:51.220 --> 00:09:56.780 And they set really the minimum level that all companies should meet. 114 00:09:56.780 --> 00:10:03.900 And from my point of view, and many researchers who share this view, is that if 115 00:10:03.900 --> 00:10:10.320 the company is just meeting the legal requirements, it can't really call itself 116 00:10:10.320 --> 00:10:14.330 as a responsible company. Because it doesn't do anything extra, 117 00:10:14.330 --> 00:10:18.900 it just meets the requirements. 118 00:10:18.900 --> 00:10:24.100 On the other hand, as the kind of the lawmakers have noticed that there are many 119 00:10:24.100 --> 00:10:29.880 companies that still kind of are happy with the minimum standards and they don't do 120 00:10:29.880 --> 00:10:36.800 anything extra, there are more and more laws on sustainability. 121 00:10:36.800 --> 00:10:43.300 Currently there already is a law in EU that requires certain companies to report 122 00:10:43.300 --> 00:10:46.920 on sustainability issues and now there is the discussion 123 00:10:46.920 --> 00:10:52.500 on the kind of general law on sustainability. 124 00:10:52.500 --> 00:11:00.600 There are many different guidelines, standards, commitments for companies to apply, and 125 00:11:00.600 --> 00:11:07.400 I'm actually going to talk about a little bit of those during the next video. 126 00:11:07.400 --> 00:11:13.140 The problem with these guidelines or standards is that 127 00:11:13.140 --> 00:11:16.140 the compliance is not always followed. 128 00:11:16.140 --> 00:11:20.360 So if the company doesn't really meet the guidelines or the requirements 129 00:11:20.360 --> 00:11:24.160 of those, there isn't always a punishment. 130 00:11:24.160 --> 00:11:28.200 So in that sense these different 131 00:11:28.200 --> 00:11:33.820 guidelines or standards don't really fill the requirement of 132 00:11:33.820 --> 00:11:39.280 the law. But typically sustainability is considered 133 00:11:39.280 --> 00:11:42.360 to be a voluntary practise for the company 134 00:11:42.360 --> 00:11:45.780 but then again there are many industries that 135 00:11:45.780 --> 00:11:51.100 certain practises are already a norm 136 00:11:51.100 --> 00:11:57.960 although there isn't an actual law that says. And at least it's really an image 137 00:11:57.960 --> 00:12:03.710 issue for a company if it does something unsustainable 138 00:12:03.710 --> 00:12:08.020 and then the general public learns about those.