FINA 2720 Final
______ risk means reducing risk likelihood through behavior change.
avoiding
______ in product design uses benign chemicals and processes to create product attributes that are modeled after features of plants and animals that have evolved through natural selection.
biomimicry
Under the FTC's Deception Policy Statement, an ad is deceptive if it contains (or omits) information that is likely to ______ consumers acting reasonably under the circumstances, and is material in that it effects purchasing behavior.
mislead
The consumer segment of ______ can be characterized as those who seek safer product alternatives because they want to prevent children from exposure to chemicals in the household.
naturalite
According to FTC's Guidelines, marketers of sustainable products should ______ use generic unqualified environmental benefit claims, such as "eco-friendly."
not
Enterprise risk management is a(n) ______.
ongoing process
The process of converting inputs such as raw materials into outputs such as finished products is the ______ model of Operations Management.
transformation
Baoli
- ancient architectural feature used to passively cool a structure without electricity by using a stepwell design - shelter from desert heat
customers
- any downstream company in a supply chain as well as final consumer
work system design
- area of OM responsible for designing job descriptions - design of jobs/work with an eye toward minimizing harm to the laborer - jobs within company's own operations, and job requirements made upon suppliers
uncontrolled risks
- arise external to the company and outside scope of the company's control - natural disasters, failure of government or major macroeconomic changes (global recession) - require endurance through resilience
efficacy
- certification allows consumers to incorporate information into purchasing decisions in real time - consumers are task oriented not information seeking = label should tell consumers what purchasing the product will do
transparency
- when those affected by corporate conduct (investors, regulators, customers, or communities) impacted by business activities are able to access information about conduct
process design
- developing a production process that can create the exact product that has been designed - product standardized off the shelf product or work with customer feedback to customize products - designed in accordance with sustainability
sick building syndrome
- where a structure has systemic air quality problems from mold, toxins, poor circulation, and the like causing occupants to suffer headaches, congestion, fatigue, and rashes - bad lighting and excessive noise exposure = long term damage to vision and hearing
life cycle assessment
- disclosure of the sum total of adverse impacts of all stages of a product system from raw material acquisition or natural resource production to the disposal of the product at the end of its life, including extracting and processing of raw materials, manufacturing, distribution, use, re-use, maintenance, recycling, and final disposal (cradle to grave) - full environmental and human health impacts of product
disintermediation
- eliminating an intermediate process between the supplier and the end customer
organizational payoffs
- employee satisfaction, improved stakeholder relationships, reduced regulatory intervention, reduced risk, and increased organizational learning - SCM promises benefits in form of risk management, brand improvement, increased revenues, and cost reduction
external data
- enables a business to establish situational awareness and assess external pressures
deception policy statement
- An ad is deceptive if it contains (or omits) information that is likely to mislead consumers acting reasonably under the circumstances, and it is material in the sense that the deceptive information is important to a consumer's decision to buy or use the product.
Marketing sustainability proceeds in three stages of separation from traditional marketing. Stage I is defined by improving standards of social and environmental performance relative to ______.
competitors
unfairness policy statement
- An ad or business practice is unfair if it is likely to cause substantial consumer injury that a consumer could not reasonably avoid, and the risk of injury is not outweighed by the benefit to consumers.
safety performance
- An employee injury rate per hours of work time
human capital value
- Attributing capital value to intangible benefits derived from effective human resources management, instead of merely categorizing personnel as an expense on the balance sheet - proper evaluation of people as productive assets - optimal utilization of human resources
______ verification provides objective assessment and validation of the accuracy of sustainability reporting.
independent, third-party
lifestyle of health and sustainability
- Consumer segment consisting of early adopters of sustainable products who are loyal to brand, influential in their community, and choose green for planet's sake. - married, educated, middle age, female - less sensitive to price for green products, skeptical of paid media, committed to global causes
centralized storage facility
- a "mother ship" warehouse commonly used by distributors for receiving wholesale shipments from manufacturers and sending out batches of inventory to retailers - higher transportation costs = pollution, energy consumption because goods must be delivered from the main warehouse to the point of sale in batches
living building challenge
- a certification program with metrics that go beyond mere reductions of environmental impacts, in order to demonstrate that the built environment can improve the surrounding natural environment - alternative to LEED = full certification, petal recognition, and net zero energy building - documenting construction project to fulfill certification requirements, and submit to auditing before receiving certificate
factor rating
- a facility location optimization tool that involves evaluating multiple alternative locations based on a number of relevant factors - give structure to chaotic process when many location factors need to be considered simultaneously
risk level formula
- a function of the vulnerability of exposed elements of the affected system, less the extent of resilience of that system, all of which is multiplied by the likelihood of the risk occurring - risk level = [(exposure * vulnerability) - resilience] * likelihood of occurrence - not implemented because of data limitations and lack of precision plaguing estimates of likelihoods and impact magnitudes = rely on decision-making rules
information-driven sustainable business model
- A continual process of information gathering and disclosure that enables a company to be responsive to stakeholder concerns and environmental considerations while meeting its own performance goals - external info = global issues, market trends, and environmental factors = shifting stage of business performance
global reporting initiative
- A framework providing comprehensive sustainability reporting metrics for organizations to promote economic, environmental, and social sustainability
carbon disclosure project
- A non-profit that collects climate change information from voluntary business disclosures, including emissions amounts and associated risks, on behalf of 475 institutional investors
ceo water mandate
- A public-private initiative designed to assist companies develop, implement, and disclose sustainable water policies and practices - launched by secretary-general of UN in 2007
ISO 26000
- A set of standards emphasizing a process to ensure business decisions affecting society or the environment are made ethically and transparently
greenhouse gas footprinting
- A tool to determine aggregate climate change impacts from air pollution associated with a supply chain, a single facility, or a single product or service. - identify the most cost effective investment in carbon emission reductions within single firm - determine accountability for emissions amongst firms in supply chain - largely emitted by energy consuming operational and supply chain activities
marketing sustainability
- Addressing the benefits of a product or service and consumer expectations about the company's social, economic, and environmental responsibility - green attributes can't stand alone - need reasons to buy as green attribute is just another incentive - revenue raised = increasing volume of sales or increasing price = raising price of sustainable products is not always available - market segmentation and talking to different niches is important - sustainable products appeal to over 80% of adult population for one or more reasons with all but Unconcerneds segment providing unique sustainable marketing opportunities
endorsement guides
- Guidelines prepared by the FTC that apply truth-in advertising restrictions to third-party seals of approval or third party certifications. - disclose material connections to certifying org - not use environmental certifications or seals that do not clearly convey basis for certification - use seals that don't convey the basis for certification should identify, clearly, and prominently, specific environmental benefits - qualify certifications based on attributes that are too numerous to disclose - third party certifications must substantiate all express and implied claims
sustainable operations management
- Guiding the transformational process to reduce resource consumption, pollution, and waste while benefiting employees, customers, and communities in order to reduce short-term risks and shore-up long-term cash flows - incorporate external stakeholders and accounting for the entire life cycle of products = PM can play central role in overall sustainable enterprise - innovation, stewardship and accountability permeate sustainable PM - OM's contribution to sustainability is unique from marketing, SCM, and other domains because of its micro-view of firms' processes and environment
greenhouse gas productivity
- How much greenhouse gas emissions per dollar of revenue the company is responsible for generating
steps to responsible growth
- Kingfisher's formal evaluation system that provides actions for each operating company to undertake in order to meet corporate sustainability policy - taking place two times each year to monitor progress
sustainability metrics
- Measures used to calculate the social, economic, and environmental impacts of services or products
wfn water footprint
- Methodology to measure the total volume of freshwater used to produce the goods and services consumed by any well-defined group of consumers, including a family, municipality, province, state, nation, or business/organization - insight into aggregate impacts on water resources and comparisons between the water demand of different market segments
independent, third-party verification
- Objective assessment and validation of sustainability reporting and marketing claims by an outside impartial entity. - success of public disclosures in information-driven sustainable business model = internalize stakeholder engagement and lead to continual refinement of products, greater resource conservation, and limited impacts on human health or environment
cradle to cradle design
- Process of using environmentally friendly inputs and transforming these inputs through change agents - whose byproducts can improve or be recycled within the existing environment - develops outputs that can be reclaimed and re-used at the end of their life-cycle - consider how its design creates life cycle impacts and select the design that minimizes the environmental impacts identified by analysis
sustainable packaging
- Product containers that are sourced, manufactured, transported, and recycled using renewable energy; which optimize the use of renewable or recycled source materials; are manufactured using clean production technologies; are physically designed to optimize energy and materials used; and are effectively recovered using biological or closed loop cycles - beneficial, safe and healthy for individuals and communities throughout its life cycle; is sourced, manufactured, transported, and recycled using renewable energy, optimizes the use of renewable or recycled source materials used; is effectively recovered using biological or closed loop cycles
MD&A
- SEC disclosure obligations that require a company to follow a specific process of management-level discussion and analysis of risks - presumes that risks should be disclosed unless one of two possible outcomes is met - aware of trend = assess whether risk is likely to occur - disclosure is required unless it can be determined that no risk is likely - impossible to tell likeliness = still required unless consequence of risk would not be material
sustainability framework 2.0
- The International Federation of Accountants' Framework for measuring sustainable performance through accountancy by integrating environmental and social values into the economic structure of a firm - business strategy, operational perspectives, and reporting methods - annual corporate disclosures to investors and public
information and communication
- The identification of salient information about risks and transmission of that information to those within a company responsible for managing those risks - must be communicated across entire org = transparency of process and agreement
revenue share from sustainable products
- The share of annual revenue derived from investments into sustainable products or services. - understanding of ROI for sustainability initiatives - benefits can spill over to other aspects of businesses = revenue growth and strong operating profits
percent of nature mimicked
- The use of ecosystem services to accomplish environmental remediation that would otherwise require major capital expenditure. - avoided expense
environmental footprint analysis
- Used to determine aggregate or individualized impacts on climate change, air quality, water resources, forests, fisheries, and soil quality among other environmental mediums.
water sustainability tools
- Used to enable companies to build a corporate water strategy - understanding of relationship between business facilities and water access, risk identification, and developing business case for action based on water conservation opportunities
global water tool
- Used to integrate corporate water use, discharge, and facility operational information with specific watershed and country-level data about water resources - assess and communicate water risks within context of geographic water resource availability - planning operations and supply chain water use to fit within regional availability
brand extension
- Using a successful brand name to launch a new or modified product in a new category - natura = cosmetics extending to lotion, perfume, and other personal care product categories
challenge of indirect benefits
- When the social, economic, or environmental benefits of a company's sustainability commitments do not directly benefit primary customers or clients - environmental and social commitments create indirect benefits that may be intangible or insignificant to primary customers
ISO 14000
- a set of tools to identify and report on adverse impacts of business, including environmental management systems that track energy use and water consumption at specific facilities; life cycle impact analysis of products in development; methods of communicating about sustainability; and auditing protocols - reduce waste management costs, reduce material and resource consumption, reduce costs of distribution, improve reputation among govt officials and clients
good guide
- a source of authoritative information for consumers about the health, environmental, and social performance of products and companies - help customers make decisions that better reflect their preferences and values
sustainability measurement and reporting system
- a standardized framework for communicating sustainability related information throughout product supply chains, developed by the sustainability consortium - enables product level life cycle assessments to be done at fraction of today's time and cost and provides platform for sustainability related data sharing across supply chain - data sharing = easier for companies to effectively manage the sustainability of upstream supplies and suppliers and communicate product sustainability downstream to consumers
life cycle assessment
- a technique to assess environmental impacts associated with all the stages of a product's life - process from raw material extraction through manufacture and distribution to ultimate consumption - key environmental impacts = amount of carbon dioxide released - avoid narrow outlook on environmental concerns that would arise by looking at product only at one stage of its life = compiling inventory of relevant energy and material inputs and environmental releases and interpreting the results to enable the company to make a more informed decision - improve environmental performance of processes and systems - environmental impacts of product analyzed through all phases of life with objective of reducing environmental damage by enhancing resources conservation and efficiency - part of ISO14000 family of standards on environmental management - enable cradle to cradle design = illuminating impacts of materials, processes, reuse, recycling, and final disposal
priority rules
- a traditional method for worker scheduling that attempts to deploy the human resources optimally, such as "the most productive workers are assigned to cover peak hours" - most optimal allocation of human resources to satisfy operational objectives = rule punishes productive employees with more demanding shifts, and can lead to breaking shifts and forcing workers into shifts that interrupt their personal life - modified to help develop schedules that meet sustainability criteria - scheduling = staffing jobs with right people with right materials = expand on these rules to include meeting sustainability criteria by understanding the social, and environmental impacts of workforce scheduling decisions
remanufacturing
- a type of reuse that uses components of old products in the production of new ones - requires operations of disassembly, repair or replacement of worn out or obsolete components and modules - environmental and cost benefits = remanufactured product can be fraction of price of new counterparts - remanufacturing = popular in electronics industry = production of computer/tvs
resilience
- ability of a system to adapt and survive in the event of a disaster - endure and adapt to risks = thriving from changing scenarios at a time when competitors stumble - vulnerability can be reduced through resilient organizational and supply chain design
robustness
- ability to absorb and withstand disturbances
resourceful
- ability to adapt flexibly to crises
response
- ability to mobilize quickly in face of crisies
recovery
- ability to regain a degree of normality after a crisis or an event
triple bottom line
- accounting for social, economic, and environmental performance of an organization - avoid social and environmental costs = reduce operating costs - create financial value while benefitting communities and environment
greenhouse gas protocol
- accounting tool used to understand, quantify, and manage greenhouse gas emissions, including guidance, frameworks, and calculation tools for virtually every greenhouse gas standard in world
commission guidance regarding disclosure related to climate change
- advises managers to provide future oriented disclosures about known trends and uncertainties associated with climate change that are reasonably likely to have a material impact on a company's liquidity, capital resources, or operations - existing refineries = exposed to weather = vulnerable to climate change
child labor
- age-inappropriate and hazardous work by children - concern when sourcing labor from developing countries where worker protection oversight is minimal or non-existent - does not include children engaged in permissible light work for only a few hours a week - hazardous work by children = activities that lead to hours, night shifts, all forms of abuse, physically dangerous working conditions, and heavy loads
challenge of credibility
- aligning marketing claims with actual corporate conduct so these claims are both significant and sincere - appear significant either relative to overall environmental impact of company making those claims or relative to nature of problem that company's efforts address
risk appetite
- an individual's or firm's preference for risk, lying along a spectrum between risk aversion and willingness to accept risk - tradeoff between risk aversion and willingness to accept risk - entrepreneurs = high in willingness to accept risk and low in risk aversion - completely risk averse = not be willing to accept risk
aqueduct
- an online global database of local and global water risk indicator metrics and reporting standards - based on information about water supply, quality, government regulations, climate change, socioeconomic factors
sustainability tools
- analytical frameworks for applying metrics to the social and environmental dimension of business performance
value analysis
- analyzes the functions of the materials that go into a product in an effort to reduce the cost and improve the performance - identify possible reductions - asks = could a cheaper part be used? is function necessary? can function of two or more parts be performed by single part at lower cost? - continues until no further reductions are possible
sustainable scheduling
- assigning workers based on meeting social and environmental, in addition to operational, needs - develop schedules to minimize carbon emission, minimize energy use, lower material chemical content and other environmental pollutants, and maximize use of recycled material - fair treatment of workers = job designs and worker schedules - extends to how employees are treated by employer whether employees are consulted on schedule development, and extent to which work demands and deadlines put the laborers of suppliers at risk - social sustainability = requires management practices with respect to employees that should go above minimum requirements of health, safety, and nondiscrimination mandated by labor laws - employing diverse workforce with competitive wages and ample time away from work - employment practices = maximize productivity and quality of employees by fostering a culture of mutual respect, appreciation, and care - design difficult jobs and move away from long hours/poor pay
rainforest alliance
- assists forestry and agricultural sectors conserve biodiversity and improve livelihoods of workers by promoting and evaluating the implementation of sustainability standards
operational risk
- associated with failure to properly manage a company's operation and its supply chain - tactical activities taking place in operation of organization or failures on part of employees - within control of company and can be prevented because they arise from internal actions - reduce through regular employee training, safety inspections, management training, proactive equipment maintenance
sustainable inventory management
- balancing the risks of stock-out with the cost of wasted overstock given the social, economic, and environmental factors affected by each scenario - comparing cost of stockout (social impacts this might cause by frustrating customers) to the cost of wasted overstock (energy and water footprint of wasted food) - balance social, economic, and environmental costs and benefits given capabilities of suppliers/retailers/nature of products and needs of customers
objectivity
- based on facts rather than feelings or opinions - measures actual environmental or social outcomes not simply industry process inputs or efforts made
internal analysis
- benchmarking progress and regress based on past and present performance data - metrics play a role = can't report what is not measured - without data in the past or present = no way to benchmark progress
supply chain collaboration
- building task oriented long term relationships between buyers and suppliers - key to sustainable supply chain management - collaboratively manage transactions, events and processes - move away from agnostic outsourcing towards long-term partnerships = resilience built via improved security, information sharing, and knowledge exchange - long term relationship = provide sustainable competitive advantages = reduce supply chain management risks and promote sustainability policies through supply chain
operations management
- business functions responsible for producing a company's goods and services - process of transforming a company's inputs into outputs - responsible for planning, organizing, and managing all inputs needed to produce a company's goods - inputs = HR (workers), facilities and processes (warehouse), materials, technology, and information - outputs = goods that company products and waste, pollution emissions, employee injuries, and impact of operations on local communities - manufacturing plant = transformation is physical change of raw materials into products
stage II
- businesses collaborate with clients to develop sustainable products, sharing the responsibility with consumers who voluntarily change their behavior - develop the market for products by educating consumers about problems addressed by company's sustainability initiatives - exclusive = create impression of an in-group drawn to celebrity endorsements - inclusive = create sense of community brought together by common cause - create value = encourage customers to switch to products for a cause
stage III
- businesses enable breakthroughs in sustainable design and technology that have the potential to reshape markets - transform what was previously considered property owned by individuals into a service = zipcar - create value = challenge the premise of consumer culture (the idea that status is conferred through ownership of ever-newer and ever-pricier products - consumer culture = drives the make-take-waste process that is unsustainable - create durable, high quality products that can appreciate over time = services that can be shared = reduce waste and resource consumption
stage I
- businesses set the example within their industry by achieving improved standards for environmental performance, and market the benefits of their services or products by comparison with the performance of competitors - provide substantial claims of superiority within their product - credible partnership with independent groups authenticate sustainability claims
united nations global compact
- calls for participating companies to know and show that they are respecting human rights, and when people are harmed by business activities, that there is both adequate accountability and effective redress - adverse impacts must be accounted for = companies are encouraged to explore what positive impacts they can have on human rights as both a business opportunity = improved reputation, consumer solidarity and innovation, maintain social license to operate - vulnerable to human rights abuses = special attention given to women, children, indigenous people, minorities, and people with disabilities
resilient supply chains
- can absorb system shocks from environmental disasters in order to avoid supply chain disruptions and resume normal operations - withstand system shocks from environmental disasters - resilience = assessed by extent to which value is reduced or harm is caused and speed with which normal operations can be restored
preventable risks
- can be prevented through careful planning and operational excellence - breakdowns in regular business processes = employee accidents, machine malfunctions, poor supplier quality - carefully select employees and suppliers, maintain best practices and codes of conduct and protect business continuity - foreseeable and within scope of managerial or employee control
vulnerability
- capacity of a system to endure shocks to its environmental conditions - capacity of an org to withstand adverse effects if faced with disaster = depends on dispositions, susceptibilities, fragilities, weaknesses, deficiencies, and lack of capacities
leadership in energy and environmental design
- certification authorized by the U.S. Green Building Council, the recognized standard for measuring building sustainability - obtained for new commercial construction and major renovation projects, interior projects, and existing building retrofits - non-profit coalition of building industry leaders - designed to promote design and construction practices that increase profitability while reducing negative social and environmental impacts of buildings
sufficiency
- certification contains no more information than is necessary to avoid information overload - avoid information overload - sustainable label is effective = depends on consumer's ability to understand and act upon the information it contains - labels = promote informed consumer choice by providing sufficient information to differentiate sustainable from others - excessive information = overwhelm or confuse consumers
relevancy
- certification contains only information that is relevant to customer - information value and information cost - cost of time and effort for the consumer - information it contains is accessible to the consumer = relevant is more important than lots
facility location
- choosing the parcel upon which capital assets and corporate activities will take place - direct impact on difficulty of movement of products, distances of travel, and customer satisfaction - optimal locations of distribution centers = dramatic impact on how quickly deliveries can be received at retail locations - location decisions = impact on transportations costs and inventory levels - logistics determines the best location of facilities = consider modes of transportation to move goods between them and final customer
suppliers
- companies that provide raw materials and components to producers or manufacturers - supply and transport raw materials and components to producers or manufacturers
distributors
- companies that receive product shipments in bulk from manufacturers at centralized storage locations, and in turn supply smaller batches to retailers
retailers
- companies that sell to end users of products - products shipped to retailers who sell product to final customer
manufacturers
- companies that transform raw materials into finished products - finished products shipped either to the manufacturer's own distribution centers or to wholesale distributors
functional equivalency
- comparisons are made between like-in-kind products only - market analysis that analyzes functionally equivalent goods across environmental metrics - effective sustainable label = compete against functionally equivalent goods without sustainable certification
drifters
- consumer segment consisting of those merely driven by trends with no integration of values into lifestyle or purchases - driven by trends, no integration of values into lifestyle or purchases - half wish they did more to advance sustainability, get satisfaction from joining a cause - younger, middle class, concentrated to coastal cities, larger families
unconcerneds
- consumer segment consisting of those who are unlikely to care about sustainability - less than a quarter recycle, unlikely to promote sustainability - least concerned consumer, least likely to boycott brand, no sense of responsibility - young males, southern US, below average income, low education levels
conventionals
- consumer segment consisting of those who pursue recycling, reusing, repurposing, and reducing waste as a form of cutting costs - recycling, reusing, repurposing, reducing waste, and cutting costs - driven by practical reasons, green for sake of reduced costs, ingenuity and heartland values - males in mid to late forties, highest incomes, some retired, good credit
naturalites
- consumer segment consisting of those who seek safer product alternatives for household safety - seek safer product alternatives, attitudinal behavioral disconnect exists because of income - sees connection between environmental protection and personal health, seek to avoid exposure to chemicals - least college educated, lowest income, southern US, african american
sustainable building design
- creates structures that conserve energy, use renewable resources in an efficient manner, and provide healthy indoor environments for employees that are conducive to productivity, and which are resilient against natural disasters - retrofit existing structure = improve sustainability performance - reduce burden of the built environment on natural resources or climate impacts but also to promote employee health and productivity
specficity
- criteria are defined clearly to avoid ambiguity - defined specifically and consistently throughout the certification process to avoid equivocation or ambiguity - product boundaries must be demarcated to ensure accurate comparisons
consistency
- criteria are the same across time - defined using same method and time frame so that updates can be made - certification means the same today as it does in future
internet age
- demarcates the emergence of a digital marketplaces for ideas, products, and services made possible by internet access - social networking websites = promote products to other members, track trends, interact with customers, gain valuable feedback - transaction costs for communication are zero - marketing SMEs = direct access to consumers and low cost of social media and internet venues
risk management frameworks
- descriptions of a specific set of functional activities and processes that an organization will use to manage risks - enhance and improve risk management
sustainable work system design
- designing a working environment to protect employees from work hazards and to encourage healthy routines throughout the work-day
risk assessment
- determination of potential adverse event's magnitude and likelihood - highly probable and present serious setback = priority in risk management stage - unlikely to occur and minimal impacts = resources should be allocated to mitigate risk
risk response
- determination of which risks are worth addressing and the means by which they should be addressed - after salient risks have been identified and materiality of those risks has been assessed - most likely and salient risks are laid out before decision making authority to determine whether risk can be borne, avoided, mitigated, or shared through org's supply chain
sarbanes-oxley act
- enacted to protect investors by improving the accuracy and reliability of corporate disclosures, requiring senior management to certify the accuracy of financial information, and carrying severe penalties for fraudulent activity - empowered the SEC to develop and enforce rules - narrative that allows investors to see the company through the eyes of management
new brand
- entering a new product category with a new product - retailer coop = introduced new sustainable brands in separate categories including food and textiles
risk
- exposure to the chance or likelihood of hazard or disaster
exposure
- extent of a system that would be impacted if an event was to occur
magnitude of harm
- extent of exposure and vulnerability, less the degree of resilience enjoyed by the impacted system - magnitude of harm = (exposure * vulnerability) - resilience - lower the exposure and vulnerability = lower the magnitude - further reduced through higher resilience
product related information
- facts about a product's attributes, such as whether it is safe, whether it performs its intended purpose, what ingredients it contains and how much it costs - whether product poses risk to consumer
process-related information
- facts about the methods and labor practices that went into -producing a consumer good - whether production of good harmed laborers, the environment, or animals
balanced scorecard
- financial and operational information integrated in a single dashboard that allows managers to identify the real-time relationship between market dynamics, sustainability initiatives, operational efficiency, and profit improvement
active packaging
- food product containers which can absorb food odors, retard oxygen migration, and preserve food in order to reduce food waste, prevent foodborne illnesses, improved product quality, increase shelf life, and increase distribution channels - concerns with new types of plastics being invented
roundtable on sustainable palm oil
- formed to promote the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders - retained UTX certification to develop traceability system to ensure transparency, disclosure, and clarity and efficiency in physical trading
probabilistic risk analysis
- formulaic approach to determining the risk level of a given event - risk level = likelihood of occurrence * (magnitude of harm) - likelihood = nature of risk and historical frequency = between 0 (impossible) to 1 (actual occur) - magnitude of harm = quantitative or qualitative
reporting
- forthright disclosure of relevant information regarding corporate conduct to affected stakeholders - share progress demonstrated by metrics with investors and other stakeholders to achieve transparency and document success - measuring and reporting social, economic, and environmental performance
the lean and green supply chain
- four-step framework for establishing a sustainable supply chain, developed by US EPA - identify environmental costs within processes - determine opportunities that would yield significant cost savings and reduce environmental impact - calculate benefits of proposed alternatives - decide, implement, and monitor sustainability innovations - equally applicable to social and economic impacts of supply chain activities
big data analysis
- gathering and analyzing enormous amounts of data to determine trends which can be translated into business intelligence - expand current ERP capability - collect and analyze information from sustainability metrics at manufacturing, transport, product and SKU level - enable companies to accurately track and report sustainability performance
scope 1 emissions
- greenhouse gas metric bounded by direct emissions from internal operations - contained in horizontal report
scope 3 emissions
- greenhouse gas metric bounded by indirect emissions caused by entities in the company's supply chain over which it has no control - second or third tier suppliers - reported in vertical point of view
scope 2 emissions
- greenhouse gas metric bounded by indirect emissions from other companies over which the reporting company has control - emissions generated by energy suppliers resulting from reporting company's electricity consumption = consumption of energy - contained in horizontal report
redundancy
- having excess capacity and back-up systems in place
waste productivity
- how much waste per dollar of revenue the company is responsible for generating
process velocity
- how much wasted time exists in a process, computed as the ratio of throughput time to value-added time - closer ratio is to 1 = lower the amount of time the product spends on non-value-adding activities (waiting) - reducing idling times of trucks during loading/unloading = process velocity improvement that impacts sustainability performance through decreased vehicle emissions
water productivity
- how much water per dollar of revenue the company is responsible for consuming
risk identification
- identifying weaknesses of and threats to the company - perform SWOT analysis to identify critical risks - survey of social, economic, and environmental systems in which business operates to identify potential risks
reputational risk
- impairs a company's brand through negative association - impacts customer purchasing decisions by impairing company's brand through negative association - greater access to information
logistics
- movement and storage of product inventories throughout the supply chain - responsible for transporting and delivering products to the right place at the right time throughout supply chain - movement and storage of product inventories throughout chain - supports supply chain management by being responsible for inventory flows both upstream and downstream - without it, materials would not arrive when and where they are needed - requires deal of coordination = organizing, managing the entire distribution network - organize the transporting, storage, receiving, inspecting, and sorting, and all other activities to ensure efficient flow upstream
sustainable OM strategy
- includes value creation for social and environmental stakeholders as a competitive priority - create the building blocks of a firm's unique strategic sustainability architecture or sustainable operating system - intersect with finance, accounting, and risk management at point of monitoring and reporting sustainability performance = measure operations' environmental and social performance through metrics to support operations strategy with relevant information about emissions, waste, accidents - accurate monitoring = enables accuracy in reporting and proactive risk management - sustainability metrics as KPIs = optimize manufacturing and production beyond the traditional goal of cost reduction to one of shared value creation
customer-related payoffs
- increased customer satisfaction, product innovation, market share increase, improved reputation, and new market opportunities
greenhouse gas emissions
- indicate the company's contribution to climate change - track emissions to reveal hidden fossil fuel risks and reduce liabilities from carbon taxes - greater financial performance
material
- information bearing a substantia likelihood that a reasonable investor would consider it important to an investment decision - must balance probability that event will occur with magnitude of the risk to the company's total activities
financial risk
- internal and external financial challenges arising from the management of company capital, debt, cash flow, and equity - highly dependent on continued supply of natural resources from resource stressed area = sustainability impacts finances - legal frameworks force companies to internalize costs = balance sheet look different - potential for tax on GHS = impact financial performance of many industries = creating risks and rewarding sustainable leaders
marketing
- introducing an offering to the market in such a way as to inform prospective customers of the attributed of the product or service and inducing them to purchasing it - link between innovation and profitability, connecting new products and services with potential buyers - creating consumer demand by persuading potential consumers that product would be beneficial to them - satisfying customer demand by informing target audience as to how new products address needs
rana plaza disaster
- largest disaster in history of garment industry involving collapsed manufacturing building in Bangladesh - ethical questions = companies that source from high-risk area have any responsibility over the people put in harm's way while fulfilling orders
bottom of the pyramid
- largest poorest socioeconomic group of the population, consisting of some 4 billion people living on less than $2.50 per day - give individuals access product markets typically only available to consumers in developed countries
multi-brand
- launching two or more sustainable brands within the same product category - philips = introduce long lasting energy efficient light bulbs which reduce pollution and consumption = distinct bulb life spans at different price points
strategic decisions
- long term, broad in scope, authorizing tactical and operational decisions and serving to set the direction for the entire organization and determine the value proposition of company - commit to greenhouse gas reduction goals through sustainable OM strategy - commitment to sustainability starts here = drive priorities and decisions at tactical and operational levels
enterprise resource planning
- management tool for executing and tracking the success of operational initiatives in terms of deployed resources - major part of life in most businesses and supply chains - manage company's data and process from single system - increasingly important in managing sustainability - help in executing and tracking the success of their sustainability initiatives - managing resources and measures sustainability show how well a company uses these resources to achieve sustainable performance - platforms for sustainable performance analysis = providing accurate reports on items (eg. carbon footprints) - link organizational activities to sustainability metrics
process performance metrics
- measurements of different process characteristics that tell how a process is performing - operations managers use process performance metrics that focus on different aspects of operations
key performance indicator
- measures progress based upon data relating to the mission, stakeholders, and goals of an organization - help leaders monitor, benchmark, and disclose sustainability practices
real-estate efficiency ratio
- measures the amount of energy, water, and resources consumed per square foot of corporate-owned real estate - cost reductions = operational costs
water footprint tools
- measures water use, polluted water discharge, and water-related business risks across a variety of geographic contexts and industry sectors
natural capital acccounting
- measuring, managing, and reporting the environmental externalities of business in order to inform business decision-making with proper valuation of environmental assets - manage risks of natural resource dependency = volatile commodity prices, investor prompted calls for transparency and increasingly stringent government regulations = companies need objective basis for measuring and accurate pricing
tactical decisions
- medium term, determining how resources and middle management will be deployed in furtherance of strategic decisions - deciding to launch sustainable product design in furtherance of company-wide commitment to greenhouse gas reductions - tactical and operations decisions must be aligned with strategic decisions because they are key to company' effectiveness in long run = provide feedback to strategic decisions which can be modified accordingly over time
analytical tools
- methods and devices that enable analysis and interpretation of information
creating shared value
- nestle's rural development program to help cocoa and coffee suppliers financially while benefitting local communities - improve water quality, nutrition and rural development - goes beyond compliance by identifying areas of benefit for local communities and shareholders
multi-stakeholder partnerships
- networks of governments, civic groups, and businesses that seek to connect corporate priorities with local action - given priority due to increasing complexity of business environment and increasingly rapid pace of change - bridge multilateral best practices and local action - involving participants from various places from around the world dedicated to developing new standard for measurement and reporting - agreeing to common standard = competitors can ensure level playing field
internal environment
- organization's culture, the ethical principles and values that define the character of an organization, how the core team of leaders responsible for critical functions view risk, and the extent to which leaders of a company desire risk
operations strategy
- policies and plans for using the organization's resources to support its long-term competitive position while creating value for customers - based on company's unique core competencies, resources, technologies, and supply network
control activities
- procedures and protocols that an organization implements to make sure the path chosen in the risk response stage is actually carried out - set forth in planning documents
operational payoffs
- process innovation, productivity gains, reduced cycle times, improved resource yields, and waste minimization
business continuity planning
- process of anticipatory preparation for disruptions in business functions to avoid being caught by surprise - addressing possible disruptions in business functions
risk management
- process of deciding which risks are worth addressing and the extent to which these risks should be avoided
objective setting
- process of determining what a company seeks to accomplish - prior to risk assessment and management - set as an objective that ERM systems improve quality and timing of risk response decisions
enterprise risk management
- process that enables the organization to properly evaluate risks, prepare a response plan that is aligned with the company's objectives, and have a system in place to respond when needed - framework for risk management = identify particular events relevant to organization's objectives
design for recycling
- product design that takes into account the ability to break down a used product to recover the recyclable components - product design that takes into account the ability to disassemble the used product to recover the recyclable parts
fair trade
- product label that verifies agricultural ingredients come from environmentally certified farms and orgs that pay fair prices to laborers and which submit to rigorous supply chain audits
materiality
- qualitative assessment of whether a risk is high, medium, or low -- in other words, whether it is the kind that needs to be addressed by management -
hazard risk
- random disruptions from wild card events - intentionally malicious = crime, terrorism, or product tampering - natural forces = hurricanes, floods - result = excessive wind speeds, flooding, power outages, dislocation, impaired transportation - dealt through impact mitigation and organizational resilience = reduce severity of damage that exposure to external risk might cause
reappraisal
- reconsidering potential stakeholder value creation and identifying new business opportunities and developing business models and operations strategies to capture those opportunities
recycling
- recovering raw materials for future use - product design - manufactured parts, materials used during production (lubricants and solvent) - reclaimed metal and plastic may be melted down and used to make different products - cost savings, environmental concerns, environmental regulation - breaking down the used item into raw materials for processing
financial payoffs
- reduced operating costs, increased revenue, lower administrative costs, lower capital costs, and stock market premiums - result of improving sustainability performance
mitigating risk
- reducing risk impact through preparation - reducing vulnerability and exposure to unavoidable risk - reduce the amount of assets that are exposed to risks and reduce severity of damage that exposure to risk might cause - depends on situational factors that provide challenges and opportunities = inventory (too much = overstock, too little = inability to meet demand), transportation (ship goods to customers from warehouse), outsourcing (globalization made outsourcing easy = further away hard to manage risk), environmental conditions (stable conditions to succeed), social conditions (changes in preferences for working conditions can affect business), and economic conditions (where to locate operations can be influenced by economic conditions can depend on govt monetary policy and trade barriers)
avoiding risk
- reducing risk likelihood through behavior change - changes behavior to avoid likelihood of risk occurring - does not usually stand to gain by exposure to avoidable risks = avoiding can be more prudent than bearing risk
impact mitigation
- reducing the severity of damage that exposure to external risk might cause -capital investment into high quality buildings and onsite energy supply, backup IT support and workaround plans to reduce downtime, property insurance coverage to cover cost of repairs - reduce exposure in event of unavoidable risk = fortify physical presence to withstand impacts
strategic risk
- relates to decisions made by executive management that may be high risk but also high reward - trade-offs made under conditions of uncertainty which businesses must take to compete in industry at any given time - M+A, assessment of the competitive environment, social trends and compliance, global currency risk, liquidity, and capital availability - may pay off = competitive advantage - cost the company
Servicization
- replacing a physical product with a service, or a product-service system, to reduce environmental impacts - zipcar = changes can be used to lower net aggregate impacts of operations by cutting out unnecessary processes and replacing ownership with access
automation
- replacing human workers in dangerous job descriptions with robotics - avoid workplace injuries - replacement of human workers with automated processes for tasks that are physically dangerous = exposure to extreme heat or toxic chemicals - difficult/monotonous jobs = cause worker fatigue, increasing error rate = automation can improve process quality - increase operational capabilities while reducing risk of employee injuries by allowing work to be done in extreme conditions / speeds
horizontal view
- reporting focused on the behavior and impacts of a single entity or organization, such as the end producer or the brand under which a product is sold
vertical view
- reporting focused on the impacts associated with a product life cycle, as measured through its entire value chain
collaborative reporting
- reporting process between industry and non-profit sustainability advocacy groups, as well as between nodes in a supply chain - produced environmental measurement tools tailored to informational needs of specific industries and geographic regions
energy productivity greenhouse gas productivity
- reveals how much energy per dollar of revenue the company is responsible for consuming
challenge of salience
- selecting the right product or service attribute that is most pertinent to potential customers at the point of sale - reasons for committing to sustainability (supplier labor concerns, climate change, water shortage, toxic pollution) = come into and out of popularity with customers - salience of sought after advantages of sustainability made products shift with season, political tides, and cultural trends - changes in customer preferences = affect salience of issues - critical to keep up to speed with shifting customer preferences to ensure marketing highlights product attributes that are salient at time to target audience
scenario planning
- serves to raise issues and provide context and perspective on the nature of risks and what strategic responses are available and evaluate their risks and rewards - disciplined method for imagining possible futures with applications in strategic management specifically the evaluation strategic options - scenarios = alternative descriptions of future - monitors ongoing change and responds accordingly - does not remove risks = allows orgs to make decisions while considering all the risks and rewards with possible options - undertaken by company to broaden its thinking about future as basis for developing and implementing robust strategies - forecasts using quantitative modeling - managers must identify which risks are possible = assess materiality of risks
operational decisions
- short term, day to day management of the production process to ensure alignment with tactical and strategic decisions - switching off machines while not in use to reduce total energy consumption
life cycle cost
- social, economic, and environmental impacts of a product throughout its entire supply chain
sharing risk
- spreading risk impact through contract - unavoidable risk are subject to partial mitigation only - share supply chain risks with suppliers = manage inventory surplus or deficit - operational risk shared by outsourcing operations to another party
metrics
- standards of measurement designed to capture critical information about corporate performance in the form of objective data - enable objective decision-making based on data - natural capital accounting = role in investment strategy decisions = reduce investment risks, understand impact of regulations, create investment products, and generate alpha (risk adjusted return on active investments) - provide information about corp sustainability performance that can be used for marketing
decentralized inventory
- storage that is smaller in size but geographically diffuse in order to maintain inventory closer to the end customer, allowing retailers to maintain lower amounts of safety stock - generate less waste
halo effect
- tendency of consumers to make inferences about a company's sustainability on the basis of very limited information, or to use an observable attitude to infer an unobservable one - applies across domains - customers have information about corporate sustainability in environmental domain then will make positive inference about corporate conduct in social domain
traceability
- the ability to retrace the history, use or location of a product or component by means of recorded identification - defined in ISO9000 for quality management - tracking product from raw materials to final placement in market and ultimately end of life disposal
utilization
- the actual time that a resource (equipment/labor) is being used vs amount of time it is available for use - strive to be a one to one match = resources are only made available when they are being used - sustainable operations = reduce waste and increase efficiency to reduce impact of operations on natural environment and people and reduce operating costs
inventory management
- the area of OM that deals with stocking levels, order policies, storage, and movement of goods - sourcing locally, reducing number of shipments, and selecting transportation modes wisely = meet sustainability goals - keep inventories in stock = too much (pay for excess and risk losing inventory as waste) = too little (not meet demand) - zero inventory is impossible = no one can perfectly forecast the amount of inventory that will be sold in given time period - demand planning and sensing predicts needs and makes real time data analysis for coordinating with seller's supply chain
groundwater footprint
- the area required to sustain groundwater use and groundwater-dependent ecosystem services - understand groundwater withdrawals = pumping wells = impactful to supply as excessive surfe water withdrawals
throughput time
- the average amount of time it takes a product to move through the production system - process performance metrics are generic = apply to operational efficiency in general - time someone is working on product and waiting time - lower time = more product s can move through the system - goal of process improvement = reduce time
water intensity per product unit
- tracks water use through the entire supply chain and production process for a given time period and divides that total volume of water by units of production - isolating single resource input = focus on most critical environmental issues - reduce risk of water shortages from depleting aquifers
sustainable process design
- the creation of goods and services using processes and systems that are non-polluting, ergonomically appropriate, safe from worker hazards, minimally consumptive of resources, and economically viable - product and process design interact - product specifications determine processes that must be undertaken to create the product - sustainable design principles addressed first at product design stage but must continue into process design stage
supply chain management
- the design and management of flows of products, information, and funds throughout the network of all entities involved in producing and delivering a finished product to the final customer - coordination and management of all activities of supply chain = sourcing and transporting raw materials, manufacturing and assembling the products, storing goods in warehouses, order entry and tracking, distribution to retailers, and delivery to the final customer - source, make, move, and sell
ergonomics
- the design of a job description to protect workers from physical stress and environmental exposure - physical stress = trauma disorders and repetitive strain injuries = lifting, bending, reaching, pushing, pulling heavy objects in repetitive manner, or using awkward body positions - indoor environmental exposure = poor air quality, excessive noise, and improper lighting
process quality
- the extent to which production creates error-free products - designing process to produce error free products - focusing on equipment, workers, materials, and other aspect of operation to make sure it works as intended - compete on quality = address that product must be designed to meet customer needs and process must product the product exactly as designed
product quality
- the extent to which products are designed to meet the requirements of the customer
sustainable reverse logistics
- the logistical functions that support cradle-to-cradle design, which close the loop of a typical forward supply chain via reuse, remanufacturing, and/or recycling into new materials or other products with value in marketplace - implement cradle to cradle design via processing returned items that would otherwise be waste products - cut out inefficient returns processes that result in unnecessary transportation moves, help to reduce carbon emissions and improve air quality - manage reverse logistics processes so they are friendly to both the environment and bottom line - refurbish and reuse products = reduce material input costs and create secondary markets for returned products
sustainable product design
- the philosophy of designing goods and services to comply with the principles of social, economic, and environmental sustainability - lowering impact of materials by choosing non-toxic, renewable, or recycled materials - focus on quality and durability as longer lasting and better functioning products will have to be replaced less frequently, reducing impacts of disposal - design with reference to sustainability metrics = allows empiric based marketing - product design strategies = create unique product attributes that appeal to distinct consumer segments
facility layout
- the physical arrangement of all resources within a facility - everything that is part of the operation = work center, machine, entire office, location of desk - impact on performance, production cost, time , and flexibility - poor = inefficiency and increased production cost, workplace injuries - ensure layouts are efficient and enhance workflow and employee safety
transportation
- the physical means by which products and materials are moved through supply chain - most important task logistics performs - costly task given modes of transportation and distribution network design - less expensive = rail // faster = air = most fuel-intensive mode - not sustainable = combustion of fossil fuels to noise pollution
reverse logistics
- the process of moving products upstream from the customer back toward manufacturers and suppliers - returns of damaged products or items the customer doesn't want - returned directly to manufacturer from the customer - third party logistics provider handles returned items and arranges for repairs bypassing manufacturer - challenging to design = flow does not directly add value - lots of possible returns = damaged product being returned for repairs, overstock item that can be sold somewhere else, item has been recalled or has failed and needs to be disposed of - arrange efficient upstream flow of returned products - challenges = financials and cash flows once items are returned = arranging warehouse and storage space in reverse order that does not confuse or take away from usual downstream flow = abide by green laws (proper disposal of chemicals)
product design
- the process of specifying the exact features and characteristics of a company's product - product's features determined by product design - design of complete and integrated bundle of goods - total package offering must be designed to deliver the required value and performance to customers/stakeholders
productivity
- the ratio of outputs to inputs - how well company converts its inputs to outputs - measure for sustainable performance - low productivity = resources are being wasted - higher productivity = resources are being utilized optimally
stakeholder feedback
- the response to public disclosures from the various external stakeholders of an organization - part of the universe of relevant external data
sustainable supply chain management
- the strategic, transparent integration and achievement of an organization's social, environmental, and economic goals in the systemic coordination of key inter-organizational business processes for improving the long-term economic performance of the individual company and its supply chains - combine triple bottom line perspective and life cycle perspective to illustrate the social, economic, and environmental impacts of supply chains - influence over supplier, manufacturer, distributor, and customer behavior when it comes to reducing the life cycle of products
carbon bubble hypothesis
- theory that carbon assets are currently over-valued because of the failure to appreciate the risk of legal restrictions on future carbon emissions - fossil fuel0based assets are over-valued under assumption that they will be consumed = doubtful given legal restrictions on GHG emissions
monitoring
- tracking risk performance through technology (IT) and risk-related metrics - allows modifications to be made to control activities when one or more are not being performed properly - ongoing assessment of performance across business functions, separate evaluations for individual departments
reuse
- use of a product after it has already been used - conventional reuse = used again for same function // new life reuse = used for different function - reuse recovers the original product - useful products and exchanging them without reprocessing = reuse helps save time, money, and energy and resources - offers quality products to people and organizations with limited means while generating jobs/business activity that contribute to economy
new source selection process
- used by Nike to determine whether to acquire a new factory by assessing criteria such as inspection results along environmental, safety, and health dimensions, as well as third-party labor audit - determine whether to acquire new factory - inspection result along environmental, safety and health dimensions, and third party labor audit - ensure company expansion is consistent with principles of environmental and social sustainability
LEED rating system
- used to rank the extent of sustainable building design - 100 base points and distributes across: sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, innovation in design and regional priority - certified, silver, gold, and platinum - judges the design of the facility = not ongoing environmental performance - ongoing monitoring of facility performance is necessary to ensure LEED lives up to promise
reduce
- using fewer resources
greenwashing
- using marketing to promote the idea that a company is more socially or environmentally responsible than it actually is - hotels encouraged guests to save water by declining fresh towels while making no efforts to conserve resources as a company such as by recycling grey water or improving energy efficiency
value chain
- various value-adding activities performed by an organization to deliver a product or service to market - optimization of SCM
certification
- verification of sustainable marketing claims provided by qualified, independent, third party entities - save customers time and effort of having to scruntinize marketing claims of companies - govt and consumers are wary of self- aggrandizing claims made by some businesses about their own sustainable performance - credibility, honesty, evidence, and values = market sustainable products to overcome appearance of partiality and self-serving bias - use reliable metrics, third party verification, independent standards, codes, labels, and indices to substantiate claims - quantify company's impacts and benchmark progress made to reduce those impacts on environment and communities where company does business
bearing risk
- voluntarily assuming risk - with hope that benefits outweigh the risks - bear risk considering the potential benefits vs likelihood of countervailing adverse consequences of treatment
line extension
- when a company introduces new items in the same category under same brand - american apparel = using environmentally friendly sourcing of materials = extended line of sustainable products from basic cotton knitwear (underwear) to range of fashionable outer garments for men, women, and children
regulatory risk
- when a government agency perceives that an industry is creating high risk levels, it may intercede in the market by imposing restrictions on a variety of commercial activities - permits, pricing mechanisms, pollution emissions = subject to tax or tech standards, licenses to operate may be revoked, and permits for planned expansions may be subject to delays
challenge of trade-offs
- when a sustainable product sacrifices attributes of traditional products (price) in favor of special attributes (environmental impact) - trade-offs in product attributes must be justifiable
explicit element of corporate policy
- when companies are vocal about what efforts they happen to be making toward sustainability - national institutions tend to encourage individualism, implement policies that provide discretion to the regulated parties, and promote incentive for responsive parties
implicit element of institutional frameworks
- when companies do not take credit for engaging in sustainable conduct because they are built-in requirements either in the laws or culture where they operate - sustainability tends to do this especially in europe - coordinated market economies = national institutions encourage collectivism, provide incentives for program driven actions, and promote policies creating obligations for regulated parties - depends on culture and regulatory environment in which company operates
going viral
- when internet content circulates spontaneously through social networks, generating millions of hits in a short period - online social media platforms
challenge of target audience
- when marketing for a product or service is tailored to specific subsets of potential customers rather than advertised to the general population - sustainable marketing requires more nunanced understanding of target audience - look deeper than demographic information - need to understand inner values of customer to induce demand - lifestyle based marketing = independent basis for preferring sustainably made products when it involved indirect benefits and substantial tradeoffs in attributes
externality
- when one party's activity generates a risk that another party bears without consent/compensation
challenge of cost
- when sustainable branding imposes costs in excess of traditional marketing costs - education costs, transactions costs, learning time, changing salience of certain sustainable product attributes - ensure marketing expenses are allocated between education, research, fostering trust among regulators, and winning over members of consumer base
carbon negative
- when the carbon emissions from production, packaging, and shipment of a product are more than offset by other carbon mitigation projects - production, packaging, and shipment of water removes more carbon pollution from atmosphere then it releases into it
pubic disclosure
- when the information gathered during internal analysis is put into context of relevant external data and published in annual report
internalize risk
- when the party responsible for generating risk ultimately pays for the consequence if the risk materializes - see true cost of the risks they take = overall minimization of risk to both company and outside parties who might have been exposed to risk
shared value creation
- where the line between supplier and buyer is blurred by treating the supply arrangement as if both parties were part of the same operation, or as if they were co-owned, and focusing on the best common solutions to issues rather than self-serving solutions - benefits are not distributed evenly between buyers/suppliers = participation provides advantage to both parties
environmental profit and loss
-metric developed by PUMA used to put environmental performance into financial terms - demonstrate greenhouse gas emissions, waste, air pollution, water use, and land use impacts of entire value chain from raw material extraction, product, and consumer use
The ISO ______ series, titled Guidance on Social Responsibility, provides a process to ensure business decisions affecting society or the environment are made ethically and transparently.
ISO 26000
The formula for determining the risk level of a given event is ______ times the Magnitude of Harm.
likelihood of occurrence
Supply chain activities are relevant to climate change because over 80% of a company's ______ flows from its supply chains rather than internal operations.
carbon footprint
Natural capital accounting means measuring and reporting the environmental externalities of business in order to inform business decision-making and to manage the risks of natural resource ______.
dependency
Life cycle assessment calculates the adverse impacts associated with resource extraction, processing, manufacturing, distribution, consumption, and ______.
disposal
Fragmentation along the value chain, extensive subcontracting, and lack of information-sharing are some of the least ______ supply chain risks.
effectively managed
Process performance metrics gauge the ______ of production processes.
efficiency
______ is a process that enables an organization to properly evaluate risks, prepare a response plan that is aligned with the company's objectives, and have a system in place to respond when needed.
enterprise risk management
Puma developed the _________metric to put the environmental performance of products into financial terms.
environmental profit and loss
A(n) ______ is when one party's activity generates a risk that another party bears without consent or compensation.
externality
The majority of companies that report sustainability performance in the S&P 500 use the ______ framework, which is the most widely used sustainability reporting framework in the world.
global reporting initiative
Using marketing to promote the idea that a company is more socially responsible than it actually is can be described as ______.
greenwashing
Five percent of the approximate 1.5 billion children in the world are involved in ______ labor.
hazardous
Process ______ means the extent to which a process creates error-free products.
quality
Workplaces that require excessive ______ increase the risk of employees suffering from heart disease, type 2 diabetes, breast cancer and colon cancer. This has prompted the expression, "______ is the smoking of our generation."
sitting
According to the Greenhouse Gas Protocol, carbon emissions from a manufacturing company's ______ activities should be reported as Scope 3 Emissions.
supply chain
