1. Chapter 20 Environmentally Sustainable Work Practices
Corporate Governance

2. What is Sustainability?
The widely accepted definition of sustainable development is: “Development seeking to meet the needs of the present generation without compromising the ability of future generations to meet their own needs.” Meeting the needs of people today and in the future means considering the “three pillars” of sustainability; economy, environment and society.

3. Sustainability in the Economy
Encompasses issues conventionally reported in a company’s annual financial report, such as the ability of the company to maximise profits, minimise costs and maintain its assets.
However, it also considers matters such as:
Investments in human capital
Investments in research and development
Wages and benefits paid
Community development initiatives
The value and location of outsourced goods and services

4. Sustainability in Society
Sustainability refers to the interactions between an organisation and the community. It includes issues such as:
Employee relations
Health and safety
Ratio of wages to cost of living
Discrimination
Indigenous rights
Impact of community involvement
Customer satisfaction

5. Sustainability in the Environment
The amount of energy consumed and whether it is renewable, resource and material usage, pollution emissions, effluents and waste management, land use and the management of habitats.

6. Sustainability in the Financial Services Industry
There is growing evidence of a positive relationship between improved environmental and social corporate performance on the one hand, and improved financial performance on the other.
Three key factors that motivate businesses to implement sustainability policies:
Reputational risk – Being seen as environmentally irresponsible can result in severe damage to a company’s brand.
Legislation and liability – There are a growing number of cases where businesses are held liable for damage to the environment or society.
Operational costs – There is a great deal of monetary benefit in implementing energy efficient practices throughout a business.

7. Sustainability Policies and Legislation
Some examples of environmental legislation and guidelines include:
National Greenhouse and Energy Reporting Act 2007
Australian Standard Greenhouse Gases
Greenhouse Gas Protocol
Global Reporting Initiative
Corporations Act 2001

8. National Legislation The National Environment Protection Council
The National Environment Protection Council (NEPC) comprises environment ministers from each State and Territory. The purpose of the NEPC is to ensure that:
Australians enjoy the benefit of equivalent protection from air, water, soil and noise pollution wherever they live.
Business decisions are not distorted and markets are not fragmented by variations in major environment protection initiatives between member governments.
A carbon tax on Australian business will come into effect from 1st July 2012.

9. State Legislation
In keeping with international trends, government organisations are playing an increasingly active role in promoting the issue of sustainability within the financial sector.
The Victorian Environmental Protection Agency (EPA) hosted the first United Nations Environment Programme Financial Services conference in Australia.

10. Consumer Law
Greenwashing is the use of green marketing to mislead customers into believing a company is environmentally friendly. Consumers are protected by section 18 of the Australian Consumer Law which states: “a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.
Coca-Cola has portrayed itself as an environmentally friendly company. However, it takes 2.5 litres of water to produce one litre of Coca-Cola.

11. Carbon Dioxide and Greenhouse Gases
A gas in the Earth’s atmosphere that absorbs and emits radiation and greatly affects the temperature of the Earth. The burning of fossil fuels has increased the levels of carbon dioxide in the atmosphere from 280ppm to 390ppm. It is believed that these increases are the cause of global warming.
China is the world’s greatest polluter.

12. The Carbon Tax
A carbon tax is a tax on carbon dioxide emissions by polluters. Polluters must pay a fee on each unit of carbon dioxide they emit. Once polluters have to pay to emit carbon dioxide they will strive to find less carbon intensive production processes in order to lower their carbon emissions.

13. ETS
Under an ETS, a business must have carbon permits for at least the amount of carbon dioxide that they are emitting. If they are emitting more or less, they can buy or sell permits in the market.
The ‘cap’ is the total number of permits in the market, as set by the government, and
will be reduced periodically in line with the country’s carbon emissions reduction
goals.
Corporate Governance

14. Carbon Offsets
Carbon offsets are reductions in carbon dioxide emissions designed to compensate
for a given carbon dioxide emission.
The idea is that the consumer pays a small fee for a carbon offset, and in return the company will perform some task that will reduce carbon dioxide emissions elsewhere, like planting a tree.
This can make the transaction ‘carbon neutral’, that is, the amount of carbon dioxide created by the actual transaction is exactly offset by the reduction in carbon dioxide created by the carbon offset.
Corporate Governance

15. Ecological Footprint
The ecological footprint is a measure of human demand on the Earth’s ecosystems.
When businesses look at reducing their ecological footprint, they are looking
at reducing the amount of carbon emissions and waste generated by their daily
activities, rather than offsetting them.
Here are some ways in which businesses can reduce their ecological footprint:
Innovative workplace design.
Changing procedures and behaviours in the workplace e.g teaching staff about
correct recycling procedures.
Switching to energy efficient technology.
Using alternate, renewable energy sources such as solar power.
Reducing, reusing and recycling.
Corporate Governance

16. Green Office Program Steps towards a greener office:
Purchase environmentally friendly products.
Purchase socially responsible, locally-produced, fair trade and organic products.
Reduce paper usage through double-sided photocopying or printing
Reduce energy usage through using power management settings
Use durable crockery, cutlery, cups and bags
Recycle just about everything, including paper, bottles and cans, printer cartridges, cardboard, batteries, IT and furniture.
Promote sustainable transport by encouraging employees to walk, cycle, catch public transport or carpool to and from work and meetings.
Promote environmental responsibility amongst new staff, students, visitors, contractors and suppliers.

17. Triple Bottom Line Principles
The term Triple Bottom Line was coined by John Elkington in 1998 and is also known as TBL or 3BL. It stands for:
Triple Bottom Line
People
Interests of employees, customers, suppliers, shareholders and the local community
Planet
This term refers to the direct and indirect impacts a business has on the environment.
Profit
This term balances commercial viability with the principles of People and Planet.
In reality there is no single reporting standard and therefore TBL can potentially be used as spin rather than as a genuine business philosophy.

18. Triple Bottom Line Reporting
TBL Reporting can benefit a business in many ways. It can:
Identify weaknesses or gaps in systems, as well as opportunities for improvement.
Provide a more transparent picture of the environmental, social and economic performance of a business and help the organisation build trust within the community.
Improve the image and credibility of the business.
Improve communication with shareholders and customers.
Attract and retain skilled employees.
Create an advantage over competitors.

19. Benefiting from Sustainability Practices
Implementing sustainability practices is not just good for the environment, it is good for business:
Greatly improves relations with the community and key stakeholders.
Developing a report often also uncovers opportunities for improvement in environmental performance, efficiencies in operations and monetary savings.