Lectures 5-8: Sustainability Strategy, Stakeholders, Regulation, and Circular Economy

Practice vocabulary flashcards defining core concepts, frameworks, regulatory standards, and supply chain strategies from Lectures 5 through 8.

Green Product Strategy Pathways

Three pathways for developing sustainable products: accentuate, acquire, and architect; chosen based on existing assets, capability gaps, speed, control, and investment risk.

PCOMA

A 5-step strategic integration process consisting of Prioritize (select material issues), Connect (link priorities to strategy and value), Organize (assign ownership, resources, incentives), Measure (track outcomes), and Adapt (review evidence and revise decisions).

Implementation Tests

Five evaluative tests for executing a sustainability strategy: strategic alignment, credibility, capacity, stakeholder effects, and measurement.

Pathways to Business Value

Six ways sustainability creates business value: differentiate products, shape standards, reduce costs, manage risks, redefine markets, and attract capital.

Conditions for the Business Case

Six conditions determining whether a sustainability business case succeeds: materiality, value, capability, credibility, measurement, and durability.

Legal Boundary

The corporate responsibility boundary defined by owned entities and contractual obligations.

Value Chain Boundary

The corporate responsibility boundary comprising suppliers, contractors, logistics, and customers.

Impact Boundary

The corporate responsibility boundary encompassing people and ecosystems affected by corporate decisions.

Stakeholder Boundary

The corporate responsibility boundary encompassing parties with legitimate claims or influence.

Conventional View

A traditional business perspective that focuses primarily on shareholder returns.

Stakeholder View

A management perspective recognizing that business and society are interdependent.

Eco-efficiency

A stage in the evolution of business sustainability focused on reducing costs and environmental impacts.

Stakeholder Prioritization Criteria

Four criteria used to prioritize stakeholder claims: impact (greatest effects), influence (ability to change/constrain decisions), legitimacy (deserving consideration), and urgency (requiring immediate attention).

Sustainability Maturity Model

A 5-level developmental framework progressing across evasive (avoid exposure), compliance (meet rules), operational (reduce costs/risks), integrated (create strategic value), and systems (address systemic needs).

Command-and-Control Regulation

A direct regulatory mechanism consisting of three core components: rules (legal limits or requirements), monitoring (inspections and reporting), and sanctions (fines or other penalties).

Emission Standard

A regulatory standard that limits the pollution released directly by a specific source.

Ambient Standard

A regulatory standard that restricts the concentration of pollution permitted in the surrounding environment.

Technology-Based Standard

A regulatory standard specifying the mandatory equipment or techniques that firms must adopt.

Cap and Trade

A market-based regulatory system setting a cap on total permitted pollution and allocating tradable emission allowances.

BAT

Best Available Technology; a type of technology-based regulatory standard.

BATEA

Best Available Technology Economically Achievable; a technology-based regulatory standard accounting for economic feasibility.

BATNEEC

Best Available Technology Not Entailing Excessive Cost; a technology-based regulatory standard balancing technology and cost burdens.

Pollution Haven Hypothesis

The proposition that stringent regulations increase compliance costs, prompting companies to relocate to jurisdictions with weaker rules and potentially lose competitiveness.

Porter Hypothesis

The proposition that well-designed environmental regulation can trigger innovation and operational improvements that offset costs, potentially generating competitiveness gains.

UN Global Compact

A principle-based voluntary sustainability initiative addressing 10 principles across human rights (principles 1-2), labour (principles 3-6), environment (principles 7-9), and anti-corruption (principle 10).

ISO 14001

An international standard that provides a certifiable management system framework for environmental management systems (EMS).

ISO 26000

An international standard that offers non-certifiable guidance on social responsibility rather than serving as a formal management system certification.

BP Deepwater Horizon Example

A case demonstrating that an operations facility with certified management systems (such as ISO 14001) can still coexist with catastrophic operational failures.

Social License Continuum

A five-stage spectrum of community and stakeholder relationships: withhold/withdraw, acceptance, approval, trust, and co-ownership.

Supply Chain Flow

The movement of materials, information, money, products, and services throughout a supply chain network.

Linear Supply Chain

A traditional sequential supply chain structure defined by the stages: extract, make, distribute, use, and dispose.

Closed-Loop Supply Chain

A circular supply chain system combining forward distribution with reverse collection and product recovery.

Reverse Logistics

The structured operational process of moving used products back through a supply chain via five steps: collect, inspect, route, recover, and reintroduce.

Design Out Waste

A core circular economy principle emphasizing intentional durability, recoverability, and disassembly from the design phase.

Circulate Value

A core circular economy principle aimed at keeping materials and products in productive use for as long as possible.

Regenerate Systems

A core circular economy principle centered on returning biological nutrients safely to the environment and utilizing renewable inputs.

Circular Strategy Hierarchy

The prioritized ranking of circular retention strategies: maintain or repair, reuse or redistribute, refurbish, remanufacture or recover components, and recycle.