Industrial Ecology – Fabio Iraldo

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From the course by Università Bocconi

Corporate Sustainability. Understanding and Seizing the Strategic Opportunity

18 ratings

Università Bocconi

Corporate Sustainability. Understanding and Seizing the Strategic Opportunity

18 ratings

The achievement of a balanced economic, social and environmental development - as expressed in the UN Agenda 2030 for Sustainable Development - is recognized as one of the major challenges humanity is facing today. What is less clear is whether and how organizations can generate business opportunities and value for their stakeholders while tackling such challenges. In this course, thought leaders in a wide variety of management and economics fields illustrate how to assess and seize the opportunities offered by these global emergencies. They will offer new ways to understand the purpose and the logic of success of the business enterprise in this new context, providing ideas and examples on how to manage the transition process to realize the value creation potential from corporate sustainability for all involved stakeholders. Learning objectives The course will allow you to: - Understand What the macroeconomic and microeconomic consequences of both climate changes, poverty, hunger, gender or race discriminations, lack of communication between the State, Civil Societies, and businesses, etc are. - Understand Why it is important for businesses to tackle sustainability issues in order to create more and better business opportunities; - Learn How each individual, organization and system can start to analyze its behaviors and change towards more sustainable practices and models.

From the lesson

Understanding the Sustainability Challenge: the Systemic Level

This section will introduce the course and frame the complex set of issues that the course aims to tackle. You will learn about some of the most important global sustainability challenges within the framework of the UN Sustainable Development Goals, and how to reflect on their implications for business.

The Sustainable Development Goals and their Relevance for Business – Valentina Mele6:24

Climate Change and its Economic Implications – Valentina Bosetti6:19

Industrial Ecology – Fabio Iraldo8:53

Poverty and Income Inequalities – Eliana La Ferrara, Maurizio Zollo11:11

Gender Equality and Sustainability – Paola Profeta6:47

Meet the Instructors

Maurizio Zollo
Dean’s Chaired Professor in Strategy and Sustainability
Management and Technology Department

Today we will talk about green management and circular economy.

Green management is the way in which companies tackle environmental problems

and try to turn these problems into business opportunities.

And the circular economy is the number one frontier for green management to date. There are a lot of companies that are

interested in the opportunities offered by the circular economy, and this concept is becoming more

and more attractive for managing. But what is the circular economy

and how managers can deal with the opportunities offered by this new approach? Well, a lot of time ago, twenty years ago or more,

Michael Porter already said something about the circular economy without mentioning it-

It was back in 1995 and he said, dealing with things

that were concerning competitiveness of companies, not the environment,

but he said every pollution flow, every consumption of natural resources made by a company, if it doesn't go into the

final product that is sold on the market, is a loss of efficiency.

It is something that makes the company lose a value that has been paid to buy this natural resource

or to buy the material that is lost into the environment through pollution. So the idea is that if I save natural

resources, if I avoid and prevent pollution, then I'm going to gain an economic benefit from that. The circular economy today,

a very fashionable and up-to-date concept, bases on this very old theory of Michael Porter.

If I am a company, and I want

to take the best out of the circular economy, what I have to do is to try to save resources,

or to recover, reuse, recycle the material that otherwise is going to be lost. It doesn't go to the final consumer,

so it doesn't get any value from the market. Until a very few years ago, the traditional model by which companies operate

for their production process was 'take, make, dispose',

a very linear approach. They took everything they need from the environment. They didn't care if

resources were available or not. They used these resources to manufacture their product.

And in the end, they threw away whatever they didn't need any more. Now, the idea is that the linear model becomes a

circular one, and a circular model

allows companies to consume a lot less resources because resources are not available anymore in an

infinite amount, and they recover and recycle

material they don't use for the product instead of throwing it away. This is done by several strategies that

the company can adopt in the different phases of a lifecycle of a product.

When I need to manufacture a product, I need to get resources with my supply chain. I need to carry out production

processes. I need to have a packaging from my product. I need to transport my product on the market

and sell it on the market, and then the consumer is going to use the product,

and throw it away at the end of its useful life. All these phases imply the generation of waste. If the company are able

to prevent this waste, or they are

able to reuse or recover this waste, turning this material into useful inputs for other production processes

or for their own production process, that's how they are able to carry out a circular process. So let's imagine a perfect

circle by which everything that is used by companies is also given a value by reusing, recovering,

and recycling waste. Is the economy today working like that in a perfect circular way? Not yet. We have some companies

that manage to operate in a circular way,

and they're saving a lot of money by doing that. The question is, can all the companies, even the smaller ones, be able to

approach their production processes and their strategy in a perfectly circular way or not?

Well, let's see now some example of companies that have been able to get some real successful story by managing their

processes in a circular way. Let's consider, for example, a very well-known motorbike manufacturer, Piaggio.

With his Vespa, Piaggio was able to launch a new product that is based on some components derived from a very

difficult to recycle plastic. So they were able to get an economic advantage because they used a secondary raw material

and benefit for the environment because those plastic were going to be very difficult to be disposed of.

Or let's consider Carlsberg Group,

a very well-known beer producer. They launched on the market a new way of distributing beer with a very light keg.

In that case, they didn't materialize the product, so they used a lot less material for the packaging.

It was so less harmful for the environment to transport the keg around the world to sell the beer,

and also the keg was totally recyclable in such a way that the plastic was going to be recovered.

Or take into consideration the last example, H&M. H&M is taking back

the used clothes from its consumer,

and this consumer get a discount for the clothes they take back at H&M to buy a new product. This is a very strong

incentive not to throw away the clothes

and to get money from a recycled product. Then if we have so many successful case histories of circular economy

approaches carried out by companies, we should ask ourselves, why not all companies are already today operating in a

circular way, recovering old materials they can recycle from the environment

or using less resources? Reason is that there are a lot of barriers, unfortunately, for the circular economy to be adopted

by companies. First of all, we have some technical barriers. It means that solutions are not always already available

or are very costly to be able to recycle materials, or secondary raw materials are not available at all on the

market of a high quality. Second, we have legislation barriers. It is not always easy for a company to reuse something

that is classified as waste. And now,

we have many many barriers related to the market. Are we sure that consumers are ready to accept products

that are made of recycled materials? Then the good news is, in the end, that if a company is able to overcome these

barriers, it can get a lot of advantages on the market. Circular economy appears to be very convenient. From an

efficiency point of view, it makes the company save a lot of money,

and also, it makes the company more competitive with respect to the other companies operating in the same sector that

are not able to get the same advantages using a circular approach.

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