and feedback, and pay and benefits. Our human resources chapter concludes with a discussion on human rights issues. In Chapter 4 "Finance", we discuss how sustainability impacts the function and industry of finance. In the finance function, we review how sustainability considerations play into capital investments and financial investments as well as measures of firm performance. In the finance industry, we discuss how sustainability has generated a new area of finance, carbon finance, and how sustainability impacts the areas of banking and insurance. In Chapter 5 "Research and Development", we discuss sustainability within the context of the research and development function and show how sustainability is generating new ways of thinking when it comes to research and product design. In Chapter 6 "Marketing", we discuss sustainability within the common components of marketing: product, price, place (distribution), and promotion. Chapter 7 "IT and MIS" discusses how sustainability can help increase efficiency, reduce costs, and track key indicators through information technology and management information systems. Chapter 8 "Accounting" discusses how the accounting function can measure and report its sustainability-related performance. Finally, Chapter 9 "Next Steps: Sustainability Strategy" discusses sustainability as an integral component of the overall strategic direction of the firm. Chapter 10 "Sustainable Business: Case Examples" of the book begins with real case examples of sustainable business practices. We provide very brief examples of over 50 businesses implementing sustainability into their daily operations. Finally, the book concludes with an appendix featuring a list of resources gleaned from each chapter. These resources are the organizations mentioned throughout each chapter to which a business may turn for information, guidance, and assistance on a particular area of expertise. As you read A Primer on Sustainable Business, we challenge you to not think of sustainability as a program, an initiative, or an activity. Rather, sustainability is a mind-set, a philosophy, and worldview. Throughout each chapter, you are challenged to alter the way you view your job, the workplace, the business, and the world. Whether you are an executive, an entrepreneur, or an employee, A Primer on Sustainable Business will help you understand the big picture of what it means to be a sustainable business and will give you the information you need to begin your journey toward sustainability.
egalitarian system is beneficial to highly competitive environments where companies are innovative, risk-taking, and continuously investing in new technologies and projects, which is typically how sustainable companies work. This type of compensation system provides more flexibility in employment by creating fewer differences between employee grades, creating a flatter organizational chart, and minimizing status-dependent perquisites. Fewer differences in compensation plans should result in increased task accomplishment and cooperation among employees by reducing barriers. Transparency is a cornerstone of the sustainability movement. Even though companies can be transparent in accounting and financial reporting, transparency can also be achieved by communicating openly about policies and practices related to compensation and employment practices. When compensation practices are hidden from employees, they tend to perceive more underpayment than is actually real. Employees tend to compare their pay and benefits to other employees and may inflate any discrepancies they believe they see, thereby causing more dissatisfaction, less productivity, increased absenteeism, and turnover. Transparent compensation plans make management more fair in administering the compensation. Sustainable organizations should also ensure they pay living wages rather than minimum wages. Minimum wage is set by legislation to be a minimum dollar amount per hour that must be paid by law. By contrast, living wage is the minimum income necessary for a person to attain a specified quality of life given the location and other economic factors where the person is employed. Living wages are generally higher than minimum legal wages. Sustainable firms will recognize the value of living wages in maintaining a productive and sustainable workforce. In addition to providing living wages, sustainable businesses provide important benefits necessary for employee quality of life. Standard benefits packages, such as health insurance, dental insurance, and paid sick leave, are supplemented with additional benefits addressing work–family balance. Employees are considered to be more satisfied and productive with increased quality of work and home and community life. Sustainable organizations tend to establish work initiatives such as child care centers at the job, time off (leave) from work to care for sick children or elderly family members,
Chapter 6 Marketing No product, regardless of how well it is designed, will reach consumers unless it is marketed effectively. The marketing function is an important component of any business. It is involved in the development, communication, and provision of value to consumers of the firm’s products or services. This chapter demonstrates how sustainability efforts are integrated across the marketing mix: product, price, place (distribution), and promotion. 6.1 Product The first element of the marketing mix is the product. The sustainable business addresses issues related to the product’s design, packaging, and branding. Sustainable businesses focus on green product design and development, as discussed in Chapter 5 "Research and Development". Green product design and development engages in design for the environment, sustainable product architectures, design for flexibility and reuse, green product testing, design for recycling, and life cycle analysis (LCA) for sustainability. In designing for the environment, the sustainable business will become familiar with the International Organization for Standardization (ISO) 14000 standards, which focus on environmental management issues. The standards are quality guidelines for companies to continuously identify, control, and improve environmental performance. The sustainable business will take steps to create conditions to assure product testing does not cause unnecessary and harmful social or environmental impacts. Design for recycling, flexibility, and reuse not only reduces environmental impact but can also create cost efficiencies for the organization. It is important that the company conduct LCA on products and processes (discussed in Chapter 5 "Research and Development"). LCA is a method to better understand the impact of a product, service, or process
Hotlips Pizza (Portland, Oregon) is a family-owned four-restaurant business. Hotlips Pizza uses as many locally grown ingredients as possible, including wheat, vegetables, cheese, and meat. The company tracks food miles, uses LED lighting, delivers pizza by bicycle or electric car, captures the heat from pizza ovens to heat the water, composts waste, and is exploring alternative fuel use to heat the pizza ovens. Immaculate Baking Company [36] Immaculate Baking Company (Hendersonville, North Carolina) bakes delicious gourmet all-natural and organic baked cookies and organic ready-to-bake cookie dough. The company philosophy is “Bake well, be creative, have fun and give back.” Immaculate Baking Company works hard to maximize its social impact by baking “Cookies With a Cause.” The company created the Folk Artist’s Foundation to provide support and exposure for folk artists. Folk art also adorns all cookie packaging. In addition, the company created Soul Food Fund “artreach” programs to reach kids of all ages to help them creatively express themselves. As an aside, the company holds the distinction of baking the World’s Biggest Cookie in 2003—102 feet wide and over 40,000 pounds. Indigenous Designs [37] Indigenous Designs (Santa Rosa, California) sells organic Fair Trade fashions created by their own artisan network across South America. All items are handmade by artisans using traditional techniques, natural colors, natural dyes, and low-impact dyes. Indigenous Designs also partners with nongovernmental organizations and others to help provide training, educational materials, and equipment to the artisans. In addition to organic Fair Trade fashions, Indigenous Designs purchases local green power to offset carbon emissions from its business activities, encourages employees to bike to work, and claims that about 20% of employees own and drive hybrid or biodiesel cars. IceStone [38] IceStone (Brooklyn, New York) manufactures surfaces made from recycled glass and concrete. By recycling glass and concrete, IceStone saves hundreds of tons of glass from landfills each year. The products are cradle to cradle certified and are manufactured in a day-lit factory. The factory has a cool, low-emissions manufacturing process. IceStone is working to become carbon-neutral, purchases