Critical Thinking

Debate
Group 3

Zaniar Gheibi 1087691

Mussab Hussein 1092435
Monique Noelle Occillia 1087624
Elizabeth Okech 1090427
Leila Ezatzadeganjahromi 1087671
Claim: Sustainable
business is a smart
business
Reason 1:Businesses are able to meet Consumer Demand

Evidence :Consumers today are more aware of the influence their purchases have on the environment
and society. As a result, companies that prioritize sustainability are more likely to attract and keep cus-
tomers ready to pay a higher price for environmentally friendly and socially responsible products and
services. According to Obermiller et al.,(2008), DANONE and Patagonia have benefited from the public's
perception of their sustainability efforts. This positive positioning has led to increased demand, boosting
unit sales or enabling them to support price premiums. Conversely, Wal-Mart, initially known for its very
negative reputation regarding sustainability, has shown the advantages of its recent efforts to reposition
itself in this area (Obermiller et al.,2008).
Moreover, a study by Accenture (2021) revealed that 60% of consumers worldwide have made a
sustainable purchase within the past six months.
Reason 2:Enhances cost reduction
and increases Efficiency

Evidence:Investing in sustainability can also enable companies to lower costs and enhance
efficiency. Studies show that by adopting energy-efficient technologies, minimizing waste, and
optimizing their supply chains, companies can cut expenses while also lessening their
environmental impact (Baragiola and Mauri, 2021). For instance, Unilever saved over €500 million
by reducing waste and increasing energy efficiency (Accenture, 2021) .
 Reason3: Investor Attraction

Evidence: Businesses which integrate sustainable practices tend to attract more investment from socially responsible investors. This
comes as a result of an increasing interest of Environmental, Social and Governance (ESG) performance of businesses by investors,
since recent studies have shown that sustainability leads to financial success of a business over time. As a result, sustainable
businesses tend to have greater chances of obtaining investment from investors by presenting their positive contribution to the
society and the environment (Unruh et al 2016).
Reason4: Access to green
technology markets.
Evidence: Technological sustainable businesses can enter and dominate
markets which focus are on green technology and renewable energy.
Companies such as TESLA, with their electric vehicles, which reduces
pollution and dependency on fossil fluels, has emerge as leaders in the
electric vehicle markets, giving them competitive advantage,thus making
high profits. Also, Tesla produces renewable energy goods such as solar
panels for homes which contributes to an increase in profits made by
this company (Maradin et al, 2022).
Reason 5: Risk
Management

Evidence: Sustainable businesses are more capable of managing risks related to

environmental regulations, resource scarcity, and market volatility. According to
the Carbon Disclosure Project (CDP), companies that manage their carbon
emissions and other environmental impacts are less likely to face legal fines
and are more likely to win investors' trust, reducing financial risks. As
mandatory disclosures are on the rise globally, using CDP for disclosures helps
companies comply with reporting requirements in different jurisdictions.
Reason 6: Employee Engagement
and Retention
Evidence: Companies with strong sustainability programs typically have higher employee satisfaction and
retention levels. Research from the Society for Human Resource Management (SHRM) shows that employees
are likelier to stay with a company that demonstrates social and environmental responsibility. This can lead to
lower attrition rates and lower costs for hiring and training.
Claim:
Sustainable
business is not
a smart
business
Reason 1 - Greenwashing
There are a lot of companies that claim to have a sustainable
business model, but this is not all true. There is a lot of
greenwashing going on. Greenwashing is the process of
conveying a false impression or misleading information about
how a company’s products are environmentally sound. They
spend more resources on advertising ‘being green’ than on
environmentally sound practices!Greenwashing is reducing the
confidence of consumers in truly sustainable business models
and damaging the road to sustainable societies. United nation
(2024).

Evidence
The fashion sector contributes 2 to 8% of world carbon
emissions due to energy-intensive production, lengthy supply
chains, and the extraction of raw materials. To put this in
perspective, the shipping and aviation industries together
account for roughly 5% of global emissions. Although there are
significant initiatives in place to lessen the pollution caused by
the fashion industry, such as the UN-backed Fashion Charter,
greenwashing is still a problem. According to a recent study,
sixty percent of the sustainability claims made by the biggest
names in European fashion are "misleading" and
"unsubstantiated." Customers are now confused and
increasingly sceptical of what is and is not sustainable as a
result of this. (United nation(2024).
Reason 2 - Consumers are not ready to pay for the increased
production costs of sustainable products
Producing goods in an environmentally sustainable way almost
always leads to increased costs. Companies need to invest in
research and new production methods. This requires large upfront
investments from businesses. It is also very time consuming.
Evidence
Research by Netherlands-based consulting firm Kearny shows that
sustainable products, which provide more environmental and social
benefits than conventional products do, are an average of 75 to 85
percent more expensive, with the markups varying widely
depending on the category (products in fashion, beauty and health
have markups of well over 200 percent, vitamins and fresh and
processed food have markups between 30-140%).
According to a study by Nielsen, 80% of consumers are willing to
pay more for sustainable products. However, there is a big gap
between what people say they are willing to pay and what their
behaviour is.
With sustainable products 75 to 85 percent more expensive than
conventional ones, there is a large gap between prices and what
the mass market will tolerate. Even if customers want to shop with
sustainability in mind, many cannot afford or simply do not want to
spend so much more. This causes a gap between consumers’ stated
intention to act sustainably and their actual behaviors. This green
gap is extensive across Europe.
Therefore, a sustainable business is not smart as long as consumers
are not ready to pay the real cost of producing sustainable
products.( Kearney management consulting, (2020).
Reason 3: Technological Challenges
Businesses seeking to implement sustainable practices may face
additional difficulties and risks due to the incomplete or limited
availability of the technology needed for these practices.
Explanation: Innovative technologies for minimizing waste, energy
efficiency, and renewable resource utilization are frequently the
foundation of sustainable practices. These technologies might still be in
the beginning stages, which raises questions about their flexibility,
performance, and dependability. Additionally, companies may be
discouraged from investing in sustainability due to the high
implementation costs of new technologies (Gyatk,2024)

Evidence:
The World Economic Forum notices that one major obstacle that
businesses may face is the absence of developed sustainable
technologies (WorldEconomic,2023). The intermittent nature of
renewable energy technologies and grid integration challenges are
highlighted in a report by the International Energy Agency. (IEA,2024)
Reason 4: Sustainable practices may not provide sufficient ROI to justify the costs.
Businesses need to show quick financial returns to satisfy shareholders and investors.
Sustainable practices require significant upfront investments in technology, training, and
supply chain modifications. Without immediate financial benefits, these investments
can seem too risky or financially imprudent (Harvard,2022).

Evidence: According to a Deloitte survey, a lack of return on investment is the main

reason why many executives are dubious about the financial advantages of
sustainability initiatives (Deloitte,2022). The Harvard Business Review emphasizes that
because sustainability initiatives have a slow payback period, companies are
discouraged from committing to them due to the pressure for short-term financial
performance (Harvard,2022).
Refrences
Obermiller, C., Burke, C., & Atwood, A. (2008). Sustainable business as marketing strategy. Innovative Marketing, 4(3).
Baragiola, G., & Mauri, M. (2021). SDGs and the private sector: Unilever and P&G case studies.
Accenture.(2021), Life Reimagined: Mapping the Motivations that matter for today. https://www.accenture.com/us-en/insights/strategy/reimagined-
consumer-expectations
Maradin, D., Malnar, A., & Kaštelan, A. (2022). Sustainable and clean energy: the case of tesla company. Journal of economics, finance and
management studies, 5, 3531-42.
Unruh, G., Kiron, D., Kruschwitz, N., Reeves, M., Rubel, H., & Zum Felde, A.M. (2016). Investing for a sustainable future: Investors care more about
sustainability than many executives believe. MIT Sloan Management Review, (57(4).
Greenwashing – the deceptive tactics behind environmental claims. 2024,05,26 from
https://www.un.org/en/climatechange/science/climate-issues/greenwashing.
Kearney is a leading global management consulting, Why today’s pricing is sabotaging sustainability, Retrieved 2024, May 13 from
https://www.kearney.com/industry/consumer-retail/article/-/insights/why-todays-pricing-is-sabotaging-sustainability.
Challenges of Green Technology." (2024,February). GYATK. Retrieved 2024 29 May from https://gyatk.com/challenges-of-green-technology/
World Economic Forum. (2023, January). The future of business: Digital & Sustainable.
https://www.weforum.org/agenda/2023/01/the-future-of-business-digital-sustainable-davos2023/
International Energy Agency. (2024,April). Scaling up of innovative clean energy technologies needed to achieve net-zero emissions targets globally.
IEA. https://www.iea.org/news/scaling-up-of-innovative-clean-energy-technologies-needed-to-achieve-net-zero-emissions-targets-globally
Deloitte. (2024). ESG disclosures in audit: A cross-border survey. Retrieved 2024,29 May from
https://www2.deloitte.com/us/en/pages/audit/articles/esg-survey.html
Harvard Business Review. (2022, September). How Sustainability Efforts Fall Apart. Harvard Business Review.
https://hbr.org/2022/09/how-sustainability-efforts-fall-apart
Refrences

https://www.cdp.net/en/companies
Tila, S. M., & Agustine, Y. (2019). The effect of corporate governance, green strategy and
carbon risk management toward carbon emission disclosure (listed company in and out on
calculation indeks Sri Kehati in IDX periode 2016–2017). European Journal of Business and
Management, 11(23), 41-51.

https://www.shrm.org/topics-tools/tools/toolkits/developing-sustaining-employee-engagement
Herrera, J., & de las Heras-Rosas, C. (2020). Corporate social responsibility and human
resource management: Towards sustainable business organizations. Sustainability, 12(3), 841.
Strenitzerová, M., & Achimský, K. (2019). Employee satisfaction and loyalty as a part of
sustainable human resource management in postal sector. Sustainability, 11(17), 4591.
Thank you