trAnsfoRming toMorrow A peNtland centre reSearch & impact digeSt, 2023
Transforming Tomorrow Mobile Access North Yorkshire 4 Better modern slavery reporting 5 PRME in LUMS 8 Resilience and Family Business 10 Plastic Packaging in People’s Lives (PPiPL) 12 Keystone actors and dialogues: The Seafood Business for Ocean Stewardship (SeaBOS) project 6 Three perspectives on stewardship 14 Tragedy of unmanaged commons: Un-sustainability 15 The growing impact of ICT 16 Sustainability at Lancaster University 18 The 17 UN Sustainable Development Goals (SDGs) articulate a globally agreed set of outcomes to be pursued. You will see various goals attached to research stories in this report: this provides an 'at a glance' connection to the SDG outcomes.
3 pentlandcentre@lancaster.ac.uk www.lancaster.ac.uk/pentland It’s my great pleasure to welcome you to Transforming Tomorrow, our first Pentland Centre research and impact review. For the last seven years, the Pentland Centre for Sustainability in Business has striven to produce impactful research that furthers our mission to support and advance the mainstreaming of social and environmental sustainability into purposeful business strategy and performance. Every year, we have produced annual reports on that activity, but this year we wanted to do something different. Complementing our Annual Report, Transforming Tomorrow aims to bring you closer to our research, to allow our members to share their work, their vision, and their ambitions with you. Our work combines three elements. Firstly, the Centre has a vision for a world where business understands, acts upon, and furthers sustainability outcomes in its activities. This entails working to rebuild the integrity of the ecological systems that provide the basis for fulfilling peoples' needs, and which absorb wastes from our activities. This ambition underpins the United Nations Sustainable Development Goals and the Paris Climate Agreement. Secondly, the means by which the Centre’s mission can be achieved is through bringing together colleagues from across Lancaster University (and especially those in Lancaster University Management School) who share our vision to work together to further develop knowledge and its application with policy and practice communities. Ultimately, the purpose of the Pentland Centre is to create more impact than could be achieved through our members working alone. Thirdly, all this activity is underpinned by financial support provided by our sponsor, the Rubin Foundation Charitable Trust – a Foundation run by the owners of Pentland Group plc. This financial contribution is enhanced through the guidance provided by our Advisory Board, as well as support from our network of external partners. As the Centre’s Director, it is my job to create the enabling environment in which members can realise these ambitions, across challenge areas that motivate them. In addition, the inclusion of Professional Services colleagues as members brings a depth of engagement with the Management School that further embeds and integrates members’ work into Lancaster University activities. I hope you will see this realised in these pages. The range of topics that fall within sustainability in business are vast, and this publication seeks to showcase some of the work that Pentland Centre members are undertaking. If you have an interest in any of these areas (and indeed other businesssustainability issues) we would love to hear from you. Professor Jan Bebbington Rubin Chair in Sustainability in Business, and Director of the Pentland Centre
Social inequalities can be both alleviated or exacerbated by digital technologies. Professor Katy Mason explains how the MANY project involves local communities in identifying and solving their own challenges. Mobile and internet access for those living in very rural areas is often technically difficult to provide, uneconomical for suppliers, and unaffordable for residents. Some claim this has created a ‘digital divide’ between urban and rural populations, denying very rural villages and their communities access to services that make their lives better – including health, education and government services. During the pandemic, these deprivations became more acute, unjust and urgent. Mobile Access North Yorkshire (MANY) was an interdisciplinary project, sponsored by the UK Government Department of Culture, Media and Sport. It brought together technologists, communication specialists, NGOs, local authorities, SMEs and social scientists to trial new technologies to provide accessible and useable digital solutions to infrastructure (see P8) these rural communities and their economies. The project used the Responsible Research and Innovation framework to direct activities and to ensure communities were aware of the project and had opportunities to voice aspirations and concerns. Some volunteered to test the technologies in their homes, others in their businesses. LUMS researchers developed a community engagement toolkit to help other projects work with their local communities, and we worked with local businesses to develop use cases and digital skills. We also worked with the local Mountain Rescue Team to use 5G to support their work. This featured on the BBC's Click programme, triallingmountain rescue using the new technology on tracker dogs and patients, so “we can nowmonitor vital signs on the move”. In a gale, in the dark, when you are carrying someone on a stretcher, this can save significant time, keeping the patient warm and enabling the team to return them to safetymore quickly. We worked with local tourist attraction The Forbidden Corner, and used augmented reality to engage children and their families with a garden adventure experience. Our work revealed how the carefully choregraphed process of the project – developing technological solutions for local sociomaterial and economic needs – produced a knowledge architecture that could underpin innovative activities for socioeconomic flourishing in this particular place. By making high-quality digital connectivity services accessible to excluded communities in very rural places, MANY took the first tentative steps in making imperfect markets more moral. We paid particular attention to the sociomaterial practices that sit beneath tourism and agricultural markets, and looked at how materials can be used to insert moralities into the infrastructures that underpin those markets. We now better understand how knowledge architectures capture, reuse, reform and embed experimental sociomaterial practices, through the aggregation and integration of moral market actions. From this research, we have learnt how to develop a knowledge architecture that better infrastructures moral markets in very rural settings – helping us understand how to level up parts of the country where there iare challenges to socio-economic flourishing. Find out more about the MANY project at mobileaccessnorthyorkshire.co.uk Or email Professor Katy Mason, k.j.mason@lancaster.ac.uk Transforming Tomorrow 4 Credit: FloCulture Mobile Access North Yorkshire
5 A Pentland Centre Research & Impact Digest, 2023 Protecting vulnerable individuals and groups from modern slavery presents a major challenge for firms. Dr Mahmoud Gad and Professor Steve Young are working to help address reporting and practice issues in the UK. More than 50 million people live in modern slavery, according to the International Labour Organization. In response, UK businesses with a turnover greater than £36 million are required by Section 54 of the UK Modern Slavery Act of 2015 to make an annual statement explaining their steps to address the risk of slavery in their operations and supply chains. Using a sample of 100 major UK companies, we analysed their modern slavery statements and annual reports. We focused specifically on six reporting areas recommended by the statutory guidance: policies, structures, due diligence, risk assessment, training, and effectiveness. Our evidence reveals that one in 10 firms fail to provide a modern slavery statement. Further, two-thirds of compliant companies’ statements lack a clear focus and narrative. Amongst the six key areas, reporting on risk assessment and key performance indicators (KPIs) to measure the effectiveness of the steps taken to minimise modern slavery risks are particularly poor. Only 54% of companies in our sample reported assessing forced labour or modern slavery risks before signing contracts, and only 15% disclosed that they work with suppliers to improve labour rights practices. In addition, only 39% reported one or more KPIs relating to modern slavery risks, along with the rationale for choosing the KPI(s). Moreover, only a quarter disclosed results against their KPIs, and just 12% confirmed they had made informed decisions based on them. We find similar results in disclosures in companies’ annual reports. Specifically, reporting on risk assessment and effectiveness in modern slavery is particularly poor. Overall, our evidence is indicative of poor reporting practice, which we find hard to reconcile with the scale of the underlying risks to business and the societal importance of addressing slavery and human trafficking. We find it both surprising and disappointing that a large proportion of companies still appear unwilling to be transparent around the problem and its implications for key stakeholders. To discuss their work on modern slavery further, contact Dr Mahmoud Gad, m.gad1@lancaster.ac.uk or Professor Steve Young, s.young@lancaster.ac.uk Better modern slavery reporting An outline of the issue Concerns about Modern Slavery (an umbrella term covering forced marriage and forced labour) become relevant for business because workers might be caught in ‘forced, bonded or child labour’ in the private sector. These forms of labour abuse mean workers are not able to withdraw their labour if working conditions are unsafe and, in some instances, they are not paid for the work they undertake. The most recent estimate of the number of people in forced labour is higher than five years ago, due in no small part to an increase in economic insecurity associated with the global pandemic and the impact of climate change. The current cost of living crisis is likely to make risks to workers greater still. A number of Pentland Centre members work on this issue, as well as on how companies report on their actions to address modern slavery (see the work on this page). The Sustainable Development Goals (SDGs) also provide a clear description of what ‘good’ looks like in this context: decent work as encapsulated within SDG 8. There are many resources to support business in understanding this issue. See www.icaew.com/technical/sustainability/modern-slavery and www.charteredaccountants.ie/News/modern-slaveryand-the-role-of-accountants for guidance for accountants.
Transforming Tomorrow 6 Oceans cover approximately 70% of the Earth's surface, and are the site of significant sustainability challenges, including: illegal fishing, forced labour in supply chains, antibiotic use in seafood production, plastic pollution and the response to climate change. The SeaBOS initiative works with ten of the world's largest seafood companies and a group of scientists, to co-develop a stewardship approach to these challenges. The ‘keystone actors’ framing was developed by the Stockholm Resilience Centre in 2015 when researchers identified there were several larger seafood companies that accounted for a relatively larger percentage of wild capture, fish feeds and aquaculture activities. These companies are called keystone actors after the ecology concept whereby keystone species play a disproportionate role in structuring ecosystem function. Keystone actors are companies of an economic size to be impactful as well as working across the globe because of their span of activities. The working hypothesis of the SeaBOS initiative is that if these member companies come together and work with science to develop best practice in response to challenge areas (see below) then there may be a cascading transformation across the whole industry. Within the SeaBOS initiative, science and business collaborate on the basis of shared commitments for change towards sustainable seafood production and a healthy ocean. The science team provides information and support for business as it seeks to further develop company policies, data gathering and corporate reporting. In this ‘dance’ both partners learn more about the possibilities for corporate biosphere stewardship (see also P14 for perspectives on stewardship). The commitments made by SeaBOS include the following: n Improve transparency and traceability in SeaBOS company operations. n Engage in concerted efforts to help reduce illegal, underreported and unregulated (IUU) fishing and seek to ensure IUU products and endangered species are not present in SeaBOS company operations, nor in supply chains. n Engage in concerted efforts to eliminate any form of modern slavery, including forced, bonded and child labour, in SeaBOS company operations and along supply chains. n Work towards reducing the use of antibiotics in aquaculture. n Reduce the use of plastics in seafood operations, and encourage global efforts to reduce plastic pollution. n Reduce greenhouse gas emissions. These are tough challenges, but ones the member companies are working towards (see opposite). In addition, working closely with business develops insight and expertise for researchers who are working in the initiative. Keystone actors and dialogues: The Seafood Business for Ocean Stewardship (SeaBOS) project
7 A Pentland Centre Research & Impact Digest, 2023 Read more on SeaBOS SeaBOS member companies reported on their progress over the last five years towards ocean stewardship. The report provides transparency on activities and achievements (focusing on commitments made) and forms the basis from which SeaBOS can discharge its accountability to those who support the initiative. Information provision is the basis for accountability. The report also sought to inspire others to learn from the collaboration in terms of developing policies, gathering data and intervening to improve performance. The report was launched at the United Nations Ocean Conference, in Portugal, in June 2022. Here, world leaders confirmed their commitment to conserve and sustainably use the oceans, seas and marine resources for sustainable development. Civil society and business also attended the event, which focused on scaling up ocean action based on science and innovation for the implementation of Sustainable Development Goal 14. To discuss this project, or the idea of keystone actors, further, contact Professor Jan Bebbington, j.bebbington1@lancaster.ac.uk Professor Nick Barter, from Griffith University, Australia, is exploring how to bring future generations’ thinking into business. In presenting his concept to Pentland Centre members, he noted that the average age of a CEO is 59, and that 30 years is the length of a generation. Therefore, future generations are already working in or are organisational stakeholders. One way to provide these near-future generations with a meaningful voice is to have ‘shadow boards’ where (with training, capacity building and good governance) their voices and perspectives can be heard. If you wish to apply this idea, Nick and the Centre would love to hear from you. For more information, see: www.griffith.edu.au/engage/professional-learning/contentcentre/future-generation-boards-no-time-travel-needed Future Generation Boards Reuse is the process of passing objects from one user to another. In extending the life of products and reducing demand for raw materials, reuse is an essential and important technical feature of a more circular economy. At the same time, reuse often operates outside mainstream economy settings, and is depicted as an act of political consumption. Drs Lucy Wishart and Katherine Ellsworth-Krebs’ work explores the hidden practices of the reuse process in organisations. Reuse is not seamless: sometimes objects do not move directly from one user to another, instead they are moved and stored by intermediaries engaged in the ‘stewardship of things’. Through their ethnographic study of a university reuse project, they discovered that, in addition to the care, storage and movement of objects, many practices also sanitise the stewardship of things. For example, promoting the growth of reuse rather than reducing initial consumption or devaluing the dirty, painful messy labour involved by celebrating volunteers rather than paying the full cost for this work. For more information, contact Dr Katherine Ellsworth-Krebs, k.ellsworth-krebs@lancaster.ac.uk, or Dr LucyWishart, l.wishart@lancaster.ac.uk Sanitising Stewardship
Transforming Tomorrow 8 Principles for Responsible Management Education (PRME) is a UN-supported initiative to raise the profile of sustainability in global business schools, and ensure they provide future leaders with the skills to balance economic and sustainability goals. Lancaster University Management School (LUMS) is a PRME signatory, and in 2020 Pentland Centre Director Jan Bebbington led a team to produce its first report, explaining how LUMS has and will incorporate responsibility. This action plan gives more detail of what LUMS plans to do next. Strategy and Vision n Translate our core capabilities through the lens of economic, environmental and social responsibility to be more specific about actions (see also, Mobile Access North Yorkshire, P4) and capabilities needed to be a responsibility-focused institution. n Explore how an integrated reporting framework may be used to explain our performance in the area of responsibility. n Involve teaching partners in PRME activities from 2022. Teaching n Identify links between SDGs and subjects taught across LUMS. n Develop a common understanding of the array of topics and issues taught that are connected to questions of responsibility. n Develop a student guide by programme to identify where responsibility-themed topics are addressed. n Create a learning community of PhD candidates exploring responsibility-focused themes. Research n Undertake a more systematic audit of responsibility- themed research. n Identify and undertake concrete actions to build synergy between research in various departments. n Identify and undertake concrete actions to build synergy between research in LUMS and across Lancaster University. Wider societal engagement n Create a baseline map of responsibility-themed connections between LUMS activities, the Dean’s Council and the Young Leaders’ Council. n Develop a strategy for systematically leveraging responsibility across external engagement. PRME in LUMS Colleagues in the Pentland Centre continue to search for wellfounded and useful conceptual tools with which to understand the world as it is and how it could be in the pursuit of sustainability in business. Some of these tools are covered in this report, such as resilience (P10) and stewardship (P14). In September 2022, the Centre hosted a workshop to develop insight into another potential framing: ‘infrastructuring moral markets’ (see P4). This is a way of framing and reflecting upon (1) how, and by what means, expectations about what constitute right/proper/moral ways of working change; and (2) by what means these new expectations materialise and are put into practice. This framework is predicated on something being found not to function well (e.g. irresponsible business behaviour, or unintended/damaging social/environmental impacts from activities). Changing a reality (i.e. newmarkets) involves the idea of infrastructuring. Infrastructures in this context include: (1) knowledge and expertise about how to address current market shortcomings; (2) rules that govern how agents act together and rules for market functions, as well as the functionality of these rules; and (3) people who act in purposeful ways to achieve outcomes. This framing means that as a researcher you pay attention to what people believe as well as what they do (and what they do it with) to better understand the behaviour of markets. Colleagues at our workshop used this framework to reflect upon: the conduct of financial firms, corporate governance, project management, management education, and the role of a civic university. Responsibility Scholarship
9 A Pentland Centre Research & Impact Digest, 2023 If companies are to meet ESG targets, there need to be incentives to do so. Dr Agryro Panaretou and her colleagues are looking at how reporting of financial instruments must adapt in this field. Financial instruments are agreements between lenders and borrowers that take on a variety of forms, with some of these now containing contractual terms related to Environmental, Social and Governance (ESG) factors. An example is a loan issued by a bank, where the interest rate is reduced if the customer meets their carbon footprint reduction target. As these are novel conditions, existing accounting standards do not provide explicit guidance on their treatment. The International Financial Reporting Standards require that financial instruments bemeasured at ‘fair value’ if they introduce risks other than credit and liquidity. ‘Fair value’ is a way to determine value and focuses on what something could be exchanged for in the market on a particular date (note – bank loans can be bought and sold). The existing standards imply that a bank shouldmeasure ESGlinked loans at fair value, unless a clear link can be demonstrated between ESG criteria and the credit quality of the loan. Under fair value measurement, assets are recorded in financial statements at a current market value, with changes in the value recognised in the income figure (this means that increases and decreases in the fair value of a loan will affect the profit figures year by year). While our research indicates that fair value measurement for financial instruments provides the most useful information to the market, it is often not welcomed by banks as it introduces volatility in their income. This led us to the following question: Are the current accounting rules appropriate for ESG-linked instruments? The answer is important, because accounting rules can have significant unintended consequences. The requirement to demonstrate and document the link between the ESG criteria and credit quality of the instrument means banks will need to carefully assess the risks they engage in, potentially improving their risk management. However, if the link is weak, banks will have to measure ESG-linked instruments at fair value. In practice, this can result in banks refraining from issuing such instruments or modifying the ESG features so they are not financially important. Such modifications can enable banks to avoid fair value measurement but at the same time reduce the incentives of the other parties to meet ESG targets. Find out more about the work of Dr Argyro Panaretou by emailing a.panaretou@lancaster.ac.uk How to account for ESG-linked instruments? The Innovation Catalyst is based on LUMS open innovation research, and brings together businesses, industry experts, academics, public sector bodies and others to build a system that has the ability to solve both individual and shared challenges. Ultimately aiming to build a sustainable place-based innovation ecosystem that can transform places, innovation ecosystems are collaborations of and for their place. The Innovation Catalyst, delivered in part by the Centre for Global Eco-Innovation (see P19), has been deployed in various contexts and places within the North West of England, including Cumbria’s food and drink sector. Here, organisations working in and around the sector considered the challenge and opportunities posed by the Net Zero agenda. The InnovationCatalyst enabled delegates to access academic expertise and collaboratewith like-minded peers to collectively develop solutions to the challenges pertinent to them. Broader stakeholderswere engaged throughout to ensureCatalyst outcomes were enacted and sustained, these includedCumbria Tourism, local authorities and theCumbria Local Enterprise Partnership. Highlights from the Cumbrian Innovation Catalyst included one delegate, a hotelier, being invited to take a stand at COP26 in Glasgow, to share the solutions she developed for her business as a result of her Catalyst experience. The Cumbrian group also identified food packaging and land management as key issues in Cumbria, and as a group they committed to trial new packaging. In addition, another delegate implemented a newmethodology on a selection of farms within their supply chain, designed to stop ploughing, which will contribute to a reduction in carbon usage. Find out more about the Innovation Catalyst here: www.lancaster.ac.uk/lums/business/sme-programmes/cuspinnovation-catalyst/ Innovation Catalyst
Transforming Tomorrow 10 Longevity and resilience are crucial aspects of sustainability - and family businesses are a bellwether of the wider economy. They face many obstacles in order to survive and thrive. Working with partners in other Lancaster University Management School research centres, we engaged with family businesses to explore how they understood resilience, in partnership with Stockholm Resilience Centre (SRC). Family businesses make up a substantial element of any economy, and their resilience is crucial. Resilience implies challenges, which organisations face from a multitude of sources – including climate change and biodiversity loss – that require them to adapt and develop so they can continue to provide goods/services, employment, and returns to their owners. Family businesses have weathered many storms and have unique insights into longevity, inter-generational thinking and other strategies organisations can learn from. The flip side is that some kinds of resilience can ingrain negatives, e.g. gender bias, that can affect a family business’s ability to adapt and flourish. This thinking underpinned the Resilience and Family Business workshop, co-organised by the Pentland Centre, the Academy for Gender, Work and Leadership, the Centre for Family Business and theWork Foundation, in April 2022. More than thirty family business representatives, policy-makers, and academic contributors engaged in frank, generative dialogue about the concept of resilience and its multiple interpretations through the lenses of planet, place and people – all within the context of family business. The workshop acknowledged the complexity of family businesses, the non-linearity of transformation, and the urgency to respond to the climate and biodiversity crisis. Analyses of power relations went hand-in-hand with agreement that there is a need for diversity, and for all voices to be honoured. The value and importance of place and community, and of concepts of guardianship and stewardship, were also explored. The Pentland Centre are committed to continuing this work. In particular, we will: n Develop structured conversations around resilience in family business – both roundtables with family business members about crisis response, and with representative groups to explore themes that emerged from the workshop. n Conduct a wider ranging survey of resilience in family business, drawing from the above conversations. n Develop protocols for identifying examples of where family business has navigated challenges in ways that have built resilience across multiple domains. The full workshop report can be downloaded here: www.lancaster.ac.uk/pentland/news-and-events/resiliencefamily-business-2022/ Resilience and Family Business
11 A Pentland Centre Research & Impact Digest, 2023 An active community of international scholars and family businesses developing global resources to bring new and meaningful insights to advance the business practice of small and medium-sized family firms. A dynamic research hub focused on exploring relationships between gender, work and leadership and their impact on individuals, organisations and society. The leading think tank for improving work in the UK. An authoritative, independent source of ideas and analysis on the labour market and the wider economy for over a hundred years. The SRC introduced the biosphere basis for resilience at this seminar. The SRC researches the complex dynamics of people and planet in the Anthropocene (where human action drives global environmental change). They are also the science lead for the Seafood Business for Ocean Stewardship initiative (see P6-7). Family businesses represent a significant proportion of UK employers. Many have been operating for over a century, proving resilient and adaptive to significant economic, social and political change. But as a nation we face further substantive transitions. Understanding how family businesses can adapt and be resilient to these changes will be key to developing approaches to policy and practice. Ben Harrison, Director, The Work Foundation The future for sustainability in business will be about how organisations navigate more complex and dynamic ecological contexts, entwined with social and economic dynamics. Family businesses are especially important. Possibilities for corporate biosphere stewardship rely upon business being more conscious of environmental matters, as well as accepting responsibilities for ecosystem operations where they operate. Professor Jan Bebbington, Director, Pentland Centre for Sustainability in Business Examining gender in relation to resilience and family business is important. Businesses committed to gender equity tend to be receptive to innovation and change, and are more resilient. Adversity puts longevity at risk, placing a spotlight on leadership and succession. These practices are often shaped by primogeniture and gender bias, affecting the ability to flourish and adapt. Professor Valerie Stead, Director, Academy for Gender, Work and Leadership There is growing concern about how family businesses respond to adverse circumstances. They represent the world’s dominant business form, so understanding how different aspects of place influence their diverse strategies to address adversity presents an opportunity to understand why family businesses matter for the resilience of particular locations. Dr Allan Discua Cruz, Director, Centre for Family Business Four perspectives on resilience Our event co-organisers Our external partner
Transforming Tomorrow 12 Plastic Packaging in People’s Lives (PPiPL) Through the Plastic Packaging in People's Lives (PPiPL) project, our members are addressing one of themost visible environmental issues of our time. There is a longstanding public conversation about the environmental and societal impacts of plastic. Plastics businesses and government have agreed to meet ambitious targets via the UK Plastics Pact. However, widespread consumer practices in using plastics remain at odds with consumer views. This is an attitude-behaviour gap, and there is a lack of understanding of the factors shaping, influencing, and contextualising this gap. The PPiPL project focuses on how plastic food packaging is embedded in consumers’ day-to-day lives, examining the whole packaging supply chain. We are focused on understanding how consumption – in its various forms – impacts, and is impacted by, decisions throughout businesses and society. We work with partners across supply chains, combining various tools, concepts, and methods to provide valuable insights to increase collaboration and shared understanding along the UK food plastic packaging value chain. There are diverse perspectives on the role of the consumer in sustainability challenges. An important aspect of our work is to understand how these can be reconciled and made coherent. We ask: how is the consumer Attitude-Behaviour (A-B) gap understood from multiple perspectives (including consumer; supply chain; waste organisations)? PPiPL is a collaboration between researchers at Lancaster University (from the Management School, the Centre for Consumption Insights, the Department of Chemistry, and the Materials Science Institute) and an extensive network of industry partners, including: n Supermarkets (Booths; Waitrose); n Food suppliers (Bells of Lazonby; Butlers Larder); n Next generation packaging producers (BioTech Services Ltd); n Professional industry networks (Chartered Institute of Waste Management; Institute of Materials, Minerals and Mining); n Reusers (Relic); and n Waste management (Preston Plastics; Lancaster City Council). Research approach The project is divided into five stages: 1 Literature Review/Plastic packaging landscape mapping: To produce a comprehensive map of the conditions and structures that have created the perceived legitimacy and normalcy of plastic packaging material. 2 Consumer Insights: To analyse the role of plastic packaging in consumer lives – how it is encountered in everyday experience; the problems of existing packaging materials; and the possibilities for ensuring sustainable futures. 3 Supply Chain: To unpack how supply chain actors respond to customer attitudes and behaviours, and to map out mechanisms for collaboration across supply chains and sectors. 4 Waste management and sustainability: To better understand the values attributed to plastic waste and disposal practices; to deliver actionable insights for authentic consumer and business behaviours across the supply chain; to highlight novel, sustainable change measures that will significantly impact on consumer demand and use. 5 Project oversight and closing the attitude-behaviour gap: This is the stage we are reaching now. Our next steps are to complete data gathering/analysis and develop the following: n Two pilot projects that close the attitude-behaviour gap; n A guidance report for businesses, public and third sector organisations outlining key points to overcome to create cultural shifts away from plastics; n Guidance documentation for: - Consumers ‘to make the right choice’ - Retailers on ‘how to influence consumers’ - Supply chain actors on ‘consumer attitudes and supply chain responses, identifying and documenting change intervention opportunities’ - Post-consumer organisations on ‘consumer attitudes and discarded plastic packaging drivers, barriers and opportunities for alternative plastic packaging, effective recycling and further investment in material recapture’. n Two case studies of plastic packaging change interventions; n A white paper ‘How to overcome the attitude gap’ targeted at industry and policy-makers; n Pilot project in Malaysia for comparative work. For more information, see www.lancaster.ac.uk/ppipl
13 A Pentland Centre Research & Impact Digest, 2023 ESG and Sustainability Business and biodiversity ESG (environmental, social and governance) are three letters used by the corporate and investment community to describe sustainability concerns. ESG and sustainability are similar ideas, but also differ from each other because they view ‘materiality’ differently. In short, materiality is all about the importance or significance of an issue and there are two sources of materiality. Inside-out describes how companies and organisations impact society and the environment. This may result in corporate sustainability programmes on responsible sourcing addressing human/labour rights and the environmental impacts of supply chains, and also how company action might make a positive impact, say, by undertaking regenerative agriculture or being a living wage employer. This is a sustainability focus. An outside-in focus is the basis of ESG. Here the question is how, for example, climate change will impact the company and its total financial value. Investors need this information to assess the value of the company, and to understand a company’s sustainability response. This understanding guides investment decisions. If you address both perspectives, you are thinking about double materiality. If you consider how these two perspectives interact, you are thinking about dynamic materiality. Read a blog on these issues by Professor Jan Bebbington and Duncan Pollard on the Pentland Centre website. The Pentland Centre is developing a stream of research and engagement focused on how business can support global aspirations to arrest the loss of biodiversity. The Convention on Biological Diversity provides the global governance context in which countries address their biodiversity challenges. At the same time, business (including the financial system) is formulating its contributions to addressing biodiversity impacts. Centre work in this area is under development, and includes: n Describing the nature of the challenges that arise for business-biodiversity connections (see our blog) n Documenting reporting practices for a sample of companies who depend upon and impact biodiversity (see our blog) n In partnership with We Value Nature, we contributed thinking around how to guard against perverse outcomes from ‘natural capital’ thinking (see our blog) Our work in this area will continue over the next few years, as a variety of new business focused tools and assessments are under development. This includes the World Benchmarking Alliance’s nature benchmark as well as guidance on communicating nature risk to financial markets via the TaskForce on Nature Related Disclosure (https://tnfd.global/). If you are interested in learning more about this work email Professor Jan Bebbington, j.bebbington1@lancaster.ac.uk
Transforming Tomorrow 14 Drawing on the wisdom of indigenous understandings of the relationship between humans and nature, we can explore notions of ‘stewardship’ in different contexts to evaluate its potential to replace the debased currency of leadership across a range of stakeholders. Our research posits a return to the relational ontologies of indigenous cultures, with their profound connections between humans and nature and the consequent obligation of stewardship – in contrast to Enlightenment beliefs in the domination of nature for our own purposes – as fundamental to addressing the current ecological crises. We are at an early stage, but our research will consist of two elements: an integrative literature review across six research domains, from arts and humanities to the physical and social sciences, exploring the core of human understandings of stewardship and how these are utilised in sustainability-related activity; and collecting data from family businesses and FTSE100 companies, across a range of industrial sectors, to understand the inter-relatedness between preserving family assets, pursuing CSR policies, and tackling broader sustainable development goals as different aspects of stewardship. Collectively, the findings will inform workshops, seminars, and online resources. If you’d like to find out more, contact Dr Marian Iszatt-White, m.iszattwhite@lancaster.ac.uk Three perspectives on stewardship Good Dividends seeks to answer the question of ‘leadership for what?’ through an inter-disciplinary perspective based on the dual notion of capitals and responsible leadership. Responsible leadership moves the axis of leadership from leader-followers to leader-stakeholders and a focus on the purposes, responsibilities and activities of leading to realise value for connected stakeholders. Good Dividends provides an alternative theory and model from dominant neo-liberal approaches to capitalism. It is an approach for leaders to focus on enhancing five capitals of their business aligned with a sixth – our planet and communities – to pursue their fiduciary duty to shareholders through realising value for all stakeholders. In short, this is a case for leadership to focus on a systemically connected portfolio of Good Dividends. ‘Good’ and ‘dividends’ are significant words. Good captures a range of dimensions: increasing for stakeholders; sustainable because of how the dividends emerge; and ethically-based – the greatest good for the greatest number. Dividends captures the notion of both a return on investment, and also the sense of a ‘yield’, ‘enabling’ the growth of related capitals. We have used these ideas in undergraduate and postgraduate modules, the Executive and full-time MBA and in our engagement programmes. Find out more about the Good Dividends project at www.gooddividends.com or contact, Professor Steve Kempster s.kempster@lancaster.ac.uk Corporate Biosphere Stewardship The idea of corporate biosphere stewardship emerges from a series of assumptions. Firstly, that humans are part of the biosphere and not separate from it. This belief leads to the conclusion that human and biosphere health are inseparable. Indeed, the ‘One Health Agenda’ opens this up further by linking human, animal and planetary health together. The second assumption is that corporations (driven as they are by people) can be a force for good in terms of taking a long-term view on their actions and impacts, as well as seeking to be responsible beyond the narrow demands of the law. This leads to the idea that corporations can become biosphere stewards, in partnership with significant others. Other actors who can support stewardship include regulators who set the boundaries of responsible behaviour (and enforce them), customers who reward responsible producers, and civil society that both holds corporations to account as well as encourages and supports change processes. In addition, there is a powerful role of company owners to support stewardship transitions alongside the need for funders (such as banks) to channel finance in appropriate ways. Taken together, these dynamics might support the pursuit of sustainability in business. To find out more, contact Professor Jan Bebbington, j.bebbington1@lancaster.ac.uk The new leadership? Good Dividends
15 A Pentland Centre Research & Impact Digest, 2023 Financial markets are not naturally designed to incorporate climate issues into their operation. Professor Mark Shackleton explains how changes are afoot that could represent a sea change. Historically, many shared resources have been managed informally and cooperatively for prudent exploitation. Tragedy occurs when individual resource users, acting in their own selfinterest, overexploit a common resource to the detriment of all. The problem of managing atmosphere, oceans and river resources fits in this context, as does the burning of fossil fuels with attendant increases in atmospheric CO2 levels and rates of climate heating. Economics treats such resources as “external” to its system: this either indicates the discipline cannot comment on informal management, or that these resources need formal inclusion by the creation/allocation of private property rights. The role of Finance Finance is mainly viewed as dealing with money, specifically by large bank entities controlled by an elite few. However, these institutions do not operate independently of mass marketplaces, e.g. bond markets, that exert powerful disciplining mechanisms. In volatile stock markets, fund managers have little ability to predict aggregate behaviour across millions of investors. Thus, financial systems are subject to mass crowd effects where the opinion of noisy individuals is averaged out. In the past, such waves have contributed to unsustainable investments, but this is changing. Many climate change solutions involve the creation of rights (e.g. for pollution emissions) to trade and then cap such activities. However, carbon taxation initiatives require agreement and enforcement. Subject to political influence, this slows progress. Another form of collective, apolitical action is coming to the fore. The role of Financing Aside frommanaging existing assets, financiers select new projects to fund. Through the issuance of long-lived and hard to revise legal contracts (equity and debt), they ensure the likely future survival of significant business interests. In the past these have been in coal, oil and gas, although investor governance is moving stock market listings away from these stranded assets into solar and wind energy. Green v. brown and risk Led by the Financial Stability Board, the finance community has realised its own system is at risk from climate change. Firstly, from the immediate physical events associated with weather extremes, but secondly because new investments need to be future proofed. In a world where decarbonising is normal, what are the financial prospects for oil/gas investments? Lower trading liquidity and growth will hamper their attraction long before their eventual closure. Taking it to the masses So-called ESG (Environment, Social and Governance) measures have entered the mainstream, and investment advisers now examine individual initiatives. These interventions are not as low level or empowering as the micro-credit of Yunus Mohammad (Grameen Bank engaged with millions of un-financed women), but they represent a sea change at this more global level of activity. Risk mitigation is changing what growth we seek Financial markets will continue, but participants now realise “value maximisation” is about what those assets will do for the world and how returns will be used. As the world dematerialises, and more of the economy depends on intangible assets, finance will still be available for ideas that resonate with perceptions of new growth that does not deplete natural capital. Although the innovations finance has brought have taken centuries of practice to refine, it is starting to be used alongside older stewardship methods. If you would like to discuss the issues raised in this piece further, contact Professor Mark Shackleton, m.shackleton@lancaster.ac.uk Un-sustainability Tragedy of unmanaged commons: (c) Anthony Quintano, CC BY 2.0 (https://creativecommons.org/licenses/by/2.0/legalcode)
Transforming Tomorrow 16 The growing impact of ICT Technology can provide solutions to some climate and sustainability challenges, but it also creates issues of its own. Professor Adrian Friday explains how research from Lancaster’s School of Computing and Communications is addressing issues of ICT’s impact on the global emissions, and how footprints might be reduced. We are in a climate crisis, and the technology sector unquestionably contributes. The global scale and growth in Information and Communications Technology (ICT) means the sector now produces 2-4% of global greenhouse gas emissions, approximately equal to global air travel. This is estimated to rise. Yet the potential impacts of digital technology on the planet and society are only starting to be recognised. The future is assumed to continue to be digitally mediated. Cloud computing, data centres, online and social media, digital currencies, Internet of Things (IoT), and machine learning are all implicit in business and societal visions of the future. Even decarbonisation roadmaps and achieving our national and global climate change ambitions are predicated on ICT and technological solutions. In our recent work, we consider experts’ best estimates of ICT’s impacts and discuss the driving narratives embedded in these assessments. We find that considerable variations exist due to where boundaries are drawn around emerging technologies and consideration of all emissions scopes (1, 2 and 3). Important gains in efficiency are of course evident, especially in data centres which are increasing in size and scale, leading to significant gains in performance for relatively modest growth in energy demand. But the focus on direct energy efficiency and renewables ignores impacts on other environment resources, especially the hardware and supply chain. There is little convincing evidence that ICT innovations, such as online video conferencing, are leading to reductions in flying or decarbonising other sectors. Rather, growing efficiency without caps to limit overall emissions can even lead to increased emissions through well-known but under-studied rebound effects. This calls for more focus on accountability of ICT's impacts, and a new capability for global management, and limits to ICT’s emissions. Our work has informed a report by Royal Society; 11 panels and invited talks, including at Research Councils UK’s Engineering Net Zero Showcase, Lancashire Digital Tech Talks, TalkTalk’s Making Sense of Sustainability for SMEs, the ITU-T standards CWG-Internet consultation, he UK Government Department for Digital, Culture, Media and Sport (DCMS). In future work, we are focusing on the design methodologies and processes for IT companies to develop more sustainable software, as well as exploring specific growth technologies’ footprints, such as artificial intelligence, machine learning and IoT. We are also interested in collecting evidence and best practice of innovative approaches for reducing ICTs resource footprint, and of ICTs’ utility in reducing societal and business energy and greenhouse gas impacts, to share and accelerate progress towards addressing climate change. If you would like to find out more about this work, contact Professor Adrian Friday, a.friday@lancaster.ac.uk
17 A Pentland Centre Research & Impact Digest, 2023 Emissions from business travel Greenhouse gas emissions from travel constitute 27% of UK emissions. Centre member Adam Mitchell got on his bike this year to show one way of making an impact on university emissions. How and how often we travel for business has a major impact on our personal and corporate greenhouse gas emissions. In June 2022, Pentland centre member AdamMitchell attended the EFMD Marketing Communications, External and Alumni Relations conference at Nyenrode University, in the Netherlands, travelling in the lowest carbon way possible. A keen cyclist, Adam chose to ride from Lancaster to Hull, take the ferry to Rotterdam, and then cycle to Breukelen – 200 miles of cycling. The return journey would produce 13.4kg CO2 equivalent, compared to 33.9kg for travelling by train, and 196.2kg for flying. The journey highlighted the sustainability of different travel modes, encouraging others to think more sustainably when making travel decisions, rather than just considering the financial costs – which ended up little different from flying. In Breukelen, Adam delivered a session about his journey. Recognising such long cycling journeys are not practical for everyone, he challenged fellow delegates to undertake just one small journey per week using a bike (or walking) instead of using a car. The cumulative impact would soon far exceed his return trip. “Climate change will necessitate all of us adapting what we do, doing things we’re not used to, making decisions that are different today than yesterday,” said Adam, now Head of UK Recruitment at the University of Central Lancashire. “I’d love to see more of us travelling in a more environmentally sound way, whether for business travel or personally, and doing what is realistic for each of us to make a difference, together.” Pentland Centre Director, Professor Jan Bebbington, recently won research funding from the Natural Environment Research Council (along with colleagues from the UK Centre for Ecology and Hydrology and Lancaster University) to work on a project that aims to develop Trustworthy and Accountable Decision-Support Frameworks for Biodiversity. The project will co-develop new tools to support decisionmaking given scientific complexity across disciplines, uncertainty, importance and urgency. It will focus on the co-benefits between biodiversity and renewable energy in the planning and operation of solar parks, as well as biodiversity and agricultural production in land use decision-making. The project will require in-depth understanding of the decisions needed with respect to biodiversity interactions, the kind of data that might be used to provide an evidence base for these decisions, as well as creating a safe environment (through the development of virtual labs settings) for decision-makers to explore potential outcomes. The aim is to understand how to support transparent and accountable decision-making around biodiversity in organisational contexts. Our hypothesis is that virtual labs coupled with decision-support frameworks will support an understanding of the complex interactions and feedbacks, and inform policy development and organisational decisionmaking approaches. Decision-Making and Biodiversity
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