Corporate sustainability- module:

Exam July 17th

Introduction to corporate sustainability

Lecture 1.

History and status quo of sustainable development

-Sustainable Development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs”

-Main Elements Of Sustainable Development According To Wced (1987)

Intragenerational justice indicators

-“Earth Overshoot Day” marks the day of overconsumption of regenerative resources

-Planetary Boundaries concept = set of nine planetary boundaries within which humanity can
continue to develop and thrive for generations to come.

Elements and Actors of Sustainable Development and Sustainability Management

Concepts of sustainability and sustainable development. Business case for sustainability

Sustainable development goals:

1. No poverty
2. Zero hunger
3. Good health and wellbeing
4. Quality education
5. Gender equality
6. Climate action etc..

Impact = Population x Affluence x Technology

Population:
Grew about 120 within a year
2x developments accelerated growth in population
1.developments in agriculture sector, mainly fertilizers and pesticides that increase crop
production significantly
2. developments in human medicine in terms of medical science and medicines/cures found to
diseases which decreased the morality rates
Today access to technology and digitization increased efficiency and productivity which lead to
even more population growth

Affluence:
-it is basically the material consumption per capita, which is why affluence is regarded as an
indicator for goods & services consumed per individual
- different consumption patterns across the world
> if the consumption pattern existing in western culture is translated into the entire world it
cannot be sustained
> most people globally are part of the low income class & below (distribution more right
skewed, as opposed to the income distribution in the US)
> there is a trend towards achieving a significant middle class especially in developing
economies which can be seen in the Middle East, Africa, Asia and Latin America where the
percentage of middle class is increasing (S.38), while in North America there is a decline or a
stagnation as can be seen in the EU
> an increase the middle class will contribute to a change in affluence which may require more
materials to sustain the lifestyle required
> "Leap-Frogging": Developing countries should not take a gradual development stages the
Western countries have taken but instead they should leapfrog towards using sustainable
technologies straight away
> "Conspicuous Consumption": another term for affluence and it is the consumption of goods
and services to achieve fulfillment ex EU where people buy things they do not need and
associate personal success with the exposure through materialistic things
> How did conspicuous consumption emerge in Western society? Think of some factors leading
to it.
 much easier access to credit which increased consumption beyond the direct needs of
people industrial revolution & capitalism is one of the first factors leading to it because
people started to earn more than they needed media, ads, marketing has a great
influence and impact on consumption behavior
 planned obsolescence: products are given a short shelf life than the theoretical value
 perceived obsolescence: change in design to encourage continuous consumption of the
product

Technology:

> technology now and in the last century is highly dependent on oil
> now technologies are trying to become more independent from oil
> Factor Four Concept: theory poses that we need to reach a factor four efficiency to reman in
the limit of the earth, meaning that the output is increased at half the amount of resources
used (obtaining twice the output, while using half of the resources)
efficiency: amount of output obtained with a unit of input

> How far can we rely on technologies to solve problems?

 using the technology & how its impact is defined based on that which can be seen in the
rebound effect: increases in efficiency and perhaps this increase has a higher absolute
impact (ex cars and increased use of oil; technology itself might reduce the impact but
the way it is used could increase it
 downsides of the technology may be the consumed resources needed that have a huge
footprint next to technology there are other factors that influence the environmental
impact (Ehrlich formula)
 population growth cannot really be influenced directly
 affluence can be affected through marketing and the variety of products offered,
governments can interfere by increasing prices or putting taxes to move people towards
 more sustainable choices, or companies can take a stand and divert consumption
patterns

Environmental Impact

> 2x sides: sinks (~output), sources (~resources)

> earth has a limited capacity of resources and a limited capacity to deal with waste
> Ecological Footprint: is measured in global hectares (gha) and it is a measure of how much
biologically productive land & water an individual, population, or activity requires to produce all
the resources it consumes, and absorb the waste it generates
 different types of lands have different productivity rates which makes gha an average
measure since countries have different kinds of land
 "+" : if biocapacity exceeds our ecological footprint
 "-" : if ecological footprint exceeds our bio capacity
> overall we exceed our world's biocapacity by 1.7 global hectares per person
- Environmental Impact Sources:
> Renewable Resources
 Water, air, timber, wood, land, fish, sunlight
 these resources have a regeneration period, which if not accounted for will make the
resources scarce & exhaust them to the degree of their extinction
> Non-renewable Resources
 oil, fossil fuels, coal, gas, stone, uranium, rare minerals
 Peak Oil: the time where the oil extraction curve reaches its maximum because after it
the production of oil will decrease drastically; it is hard to determine because of the
dynamic nature of the situation
> global energy use is heavily reliant on oil and coal, despite the slow shift renewable sources,
an increase of energy use in general can be observed - Environmental Impact Sinks:
> waste and emissions are the major parts of the sinks water is being endangered through
pollution
> temperature rise due to emissions which is affecting the melting of the ice caps, that
endangers species and causes a loss in biodiversity
> consumption is currently linear and it needs to become circular where nothing is wasted
Corporate Sustainability is…
“…a concept whereby companies integrate social and environmental concerns in their business
operations and in their interaction with their stakeholders on a voluntary basis”

Different names, same principles:

 commitment to the triple bottom line (economic, environmental and social dimension)
 integrated in the business operations/ value chain
 stakeholder management
 voluntary basis (beyond regulation)

Spheres of corporate influence

 Innermost circle: direct relationships in the company
 Further out: Number of actors and power distance increase while immediacy of decisions by
company decreases
 A company’s influence and control are highest in the middle of the model: reflects the
company’s responsibility for its actions

Part III: Sustainability Strategies

3strategies:

- To achieve long-term sustainability, businesses have to manage economic capital as well as

their natural & social capitals
• economic sustainability: manages economic capital efficiently, cash flow presents & liquidity
of the company
• social sustainability: companies add value to the communities they operate in
• environmental sustainability: companies are able to consume resources below the natural
reproduction rate (source) and emit waste below the dissemination capacity of the environment
to avoid pollution (sink)

=> social & ecological capitals are both non-substitutable, irreversible & non-linear & they
cannot be exchanged for economic capital
=> need to integrate economic, ecological & social aspects in a triple bottom line
- 6x Criteria for corporate sustainability:
• Socio-Efficiency: input/output relative improvement/decline = The extent to which a company
improves or declines in terms of input and output efficiency in relation to social factors.

• Socio-Effectiveness: absolute positive social impact that a firm could achieve where the
benchmarks are whether everything that could be done to invoke an improvement was done
(ex Pharma) =The measure of the absolute positive social impact that a company can achieve,
considering whether all possible efforts were made to bring about improvement. This is
particularly relevant in industries like pharmaceuticals where maximizing positive social
outcomes is a benchmark

• Ecological Equity: fair distribution of natural capital between different societies

• Sufficiency
• Eco-Effectiveness: concerns absolute relationships of resources between natural & business
cases (~rebound effects) =Refers to the absolute relationships between natural resources and
business practices, taking into account phenomena such as rebound effects.

• Eco-Efficiency: connection between economic & environmental capital where the

input/output relative improvement or decline is viewed= Describes the relationship between
economic and environmental resources, focusing on the improvement or decline of
input/output efficiency.

General approach of eco-efficiency

 Aims for relative improvements through quantitative reduction of resources and emissions
 “Cradle to grave” principle
 If successful, fewer resources or emissions are produced compared to a previous status quo
 Respectively, more goods and services can be produced with the same amount of resources
and emissions
 Success with technological solutions and innovations: Factor “technology” of IPAT equation 
Eco-efficiency improvements usually based on existing technologies, not on radically new
innovations

General approach of eco-effectiveness (or consistency)

 Aims at an absolute decoupling of economic development from environmental impact
 Imitate natural ecosystems and create closed systems: “Cradle-to-Cradle“ principle
 Closed-loop systems can come in form of biological or technological loops
 Biological loops: Production of biological materials with subsequent processing into
goods; after consumption, recycling as biological waste products in the biosphere
 Technological loops: closing the loop through technological processes; considers the
recyclability of materials in the first stages of products
 Industrial symbiosis: Companies work collaboratively together; residual products or by-
products of one company become input for other companies

General approach of sufficiency

 Sufficiency as a behaviour-based concept aims for appropriate levels and forms of
consumption
 Influencing the IPAT´s affluence factor via the aspiration level of consumption
 Reduction or behavioural change in consumption
 Absolute resource savings through quantitative reduction: Downgrading the individual level
of aspiration
 Sufficiency in the sense of a qualitative change: Adjustment of needs or a substitution of non-
sustainable by sustainable forms of consumption

Classification of sufficiency approaches

The rebound effect

 Describes situations of stagnation or increasing overall impacts despite increased eco-
efficiency, ecoeffectiveness, or sufficiency
 Example: Original Volkswagen Beetle and New Beetle consume about the same amount of
fuel; overall consumption has not been reduced, improved efficiency used to improve comfort
and safety
 All three sustainability strategies can be subject to rebound effects
 Sustainability efforts always need to consider the larger picture of production and
consumption

Different types of rebound effects

Lecture 2: Stakeholder management

A stakeholder is any group or individual who can affect or is affected by the achievement of the
organization´s objectives” Robert Edward Freeman 1984, S.46

•Primary stakeholders are directly affected by company’s operations

• Secondary stakeholders are not directly linked to a company’s business activities
Stakeholder Theories

Legitimacy as prerequisite for companies to operate

Legitimacy is “a generalized perception or assumption that the actions of an entity are

desirable, proper, or appropriate within some socially constructed system of norms, values,
beliefs, and definitions” (Suchman, 1995, p. 574)

Legitimacy and social acceptance cannot be formally “acquired”  difficult to manage especially
if companies experience conflicting expectations. Consistent responsible business conduct
provides an “insurance

Stakeholder management as an instrument to manage legitimacy

1) Identify stakeholders
2) Prioritize stakeholders
3) Engage/ Dealing with stakeholders
2. Prioritization

 Power: degree to which a stakeholder can force a company into doing something,
originates from
 Legitimacy: the idea that something is socially accepted in a shared perception in society
 Urgency: asks whether or not a stakeholder claim calls for immediate attention

Stakeholder classes

3. Engage / Deal with stakeholders

STAKEHOLDER MAPPING.
3. Engage / Deal with stakeholders

Materiality Matrix - Template

Part II: Stakeholder Interests
Overview of sustainable investment approaches in the investment universe

The green purchase perception matrix according to Peattie (2001, p. 139), reproduced with
permission
Lecture 3: Sustainability across Functions: Leadership & Employees, Marketing & Innovation,
Supply Chain & Production

1. Leadership & Employees

- General Electric: Jeff Immelt

• CEO of GE for 16x years
• restructured GE extremely with the intention of realigning it with the prefocused areas such as
green energy, digital transformation, lean startup methods, etc.
• gave up some of GE's classical divisions to be able to move forward with these new areas
which caused a heavy loss in company value, which GE is still struggling with
• wanted to push the innovation culture of the company
• belief about leadership: needs to be latent & collateral, transparent & open
• He did something unique because only a few CEOs can transform such a historic company
towards newer, future oriented areas from a business & ecological logic

- Unilever: Paul Paulman

• CEO of Unilever for 10x years
• implementation of a radical transformation to achieve a consistent transformation that
improves sustainability -> "Sustainable Living Plan"
• one of the first leaders to directly address stakeholders & shareholders to clarify that if their
interests are purely focused on short term returns, they would need to invest somewhere else &
this changed the investor structure in the stock market

- PepsiCo: Indra Nooyi

• CEO of PepsiCo for 12x years
• idea was to match financial performance with a meaningful socially environmentally
supporting purpose
• tackled issues related to sugar content, changed the value chain of the company to be more
environmentally friendly & emphasized long term sustainable value creation
• formulation of public & private partnerships as wells thinking globally but acting locally

=> sustainability strategy of a company is closely related to its leadership

=> in established companies it is quite difficult to move from "Beyond Compliance" stage to
"Integrated Strategy" stage & provide the needed incentive for that development
- Challenge leaders face: CEOs often do not last longer than 5x year, and incentivizing these
managers to stay & plan for long term success that includes sustainability not short term
success is difficult
- Critical leadership competencies:

Which leadership competencies are hardest to develop and why?

-> understanding others -> political savviness -> managing diversity
=> all three are concerned with managing relationships

- Evolution of classic leadership over time:

Key Steps in Shifting from Challenge to Opportunity:
UN Leadership Model:

1. Develop an understanding of how global issues such as poverty, the environment,

demographic change, and globalization affect your company and sector.
2. Search for business opportunities that help to address them.
3. Establish core business strategies to align them with the opportunities that we have
identified.
4. Incorporate long-term measures targeting sustainable profitability, supported by social,
environmental and employment indicators.

What are (dis)advantages of having a CSO?

-> CSO focuses solely on corporate sustainability
-> board members focus on sustainable development in general

How can HR develop the skills and talents needed for sustainability?

Sustainable human resource management

2 perspectives:
1. Employees as a” means” to improve a company´s sustainability performance
2. Employees as an “end” of sustainable human resource management
1. Possible interventions to foster employees' sustainable behavior at work

2. Sustainable human resource management for employees

Part II: Marketing & Innovation

Definition Sustainability Marketing (I) “… building and maintaining sustainable relationships with
customers, the social environment and the natural environment.”
-> focus is on relationships not transactions (long term goals)

Definition Sustainability Marketing (II) “… planning, organizing, implementing and controlling

marketing resources and programmes to satisfy consumers’ wants and needs, while considering
social and environmental criteria and meeting corporate objectives.”

Towards Sustainability Marketing

- Marketing Mix (4x Ps):
=> sustainability marketing blends relationship marketing with ethical & eco-marketing
• it is ecologically oriented
• seeks to satisfy needs without compromising the ecosystem
• it is viable since it needs to make economic sense
• it is ethical because it promotes greater social justice

- Elements of Sustainability marketing (6x areas):

=> builds on classical marketing theory
• sustainability marketing is at the intersection of socio0ecological problems & consumer
behavior
• need to answer consumer needs while considering socio0ecological problems (that is the
differentiator compared to classical marketing)
• basis is focused on this intersection

• Elements:
> Values & Objectives
> Marketing Strategies
> (S. 43-44) Marketing Mix: the 4x Ps (product-promotion-price-place); sustainability marketing
is about the 4x Cs *Customer solution - communication - customer cots - convenience)
=> sustainability marketing takes the perspective of customers not the seller > Transformation:
involves companies actin beyond their narrow focus where they try to expand the area of
sustainability and affect political behavior for instance; the active participation of companies in
public & political processes that change institutions in favor of sustainability (macro
perspective) => try to mainstream sustainability marketing
Customer solution: Overview of product service systems

Customer cost: Total lifetime cost. Externalities

Communication: Credibility is key.

7 Sins of Greenwashing
1. Hidden trade-off: Advertising a product as sustainable based on a narrow set of attributes
while ignoring other sustainability-related issues
2. No proof: Making unsubstantiated sustainability claims
3. Vagueness: Referring to broad and poorly defined claims that are prone to misunderstanding
4. Worshipping false labels: Misleadingly using certification-like images or even fake certification
labels or wordings
5. Irrelevance: Making a sustainability claim that is not useful as a characteristic of a more
sustainable product
6. Lesser of two evils: Claiming to be more sustainable than a competitor’s products although
the entire product category itself is inherently unsustainable
7. Fibbing: Making sustainability claims that are plain false

Labels

 Signal trustworthiness, reduce complexity

 Diverse content and procedures: single issues (e.g., energy efficiency of certain products), vs.
multiple sustainability aspects
 either positively framed or they provide information from a neutral perspective
 initiated and monitored by governmental institutions, NGOs, or the private sector  different
implications for credibility and reach
 Caveat: seemingly ever increasing quantity of sustainability labels
Convenience
 Sustainable products often come from innovative niche players, start-ups, or smaller
brands
 limited resources, access to markets, and distribution channels  Online retailing often
has fewer limitations
 Increasing trend toward sustainability has improved availability of sustainable products
in many countries
 New models. Share Economy, used-goods, PSS

Share economy

Sustainability-oriented innovations
CHARACTERIZATION OF AND DETERMINING FACTORS FOR SUSTAINABILITY- ORIENTED
INNOVATIONS
Innovation Process

=> sustainability innovations are a special type of innovations

• Stage 0: more requirements introduced & more targets are specified because next to
satisfying customer needs, it create a social benefit & positive environmental impact which
makes it more challenging for innovators
• t0: point of market introduction & plan for sustainability potentials
> sustainability potentials cannot be controlled or predicted
> an innovation can achieve sustainability potential after its introduction to the market (~ex-
post sustainability innovation)
• directional risk: evolution of sustainability effects in a market space & whether these effects
are even achievable
- Open innovation: an approach that uses networks & parts outside of the organization to
become more agile & flexible

Approaches of sustainability-oriented innovation

Three levels of innovations according to R. Adams et al. (2016)
1. Operational optimization : Product level: product miniaturization, redesign of packaging,
reduction of hazardous materials: DfE Organizational level: more resource-efficient processes,
improved waste management
2. Organizational transformation : Sharing economy Services that otherwise change
consumption habits such as replacing physical with electronic services Products specifically
designed to cater to need of poor populations
3.Systems building : Industrial symbiosis networks
Extensive cross-sector partnerships between companies and civil society organizations, if
respective projects go beyond narrow business mindset and focus on sustainable value creation
Social enterprises

Design for Environment - environmentally friendly designs are ones that for instance use
biodegradable materials, integrated products that use less energy & combine multiple functions
- need to keep rebound effects in mind
- Ecodesign Strategies Wheel
0. New Concept Development
5. Low-Impact Materials
6. Reduce Material
7. Optimize Production
8. Optimize Distribution
9. Optimize User Stage
10. Optimize Initial Lifetime: achieved with modular design
11. Optimize End-Of-Life System: closing the loop & stimulating the reuse of products for
instance, safe disposal of waste & waste management if recycling is not possible

- Modular design: could make products more sustainable & requires maintenance to be
cheaper than buying a new product
Product-Service Systems (PSSs)
- sustainability potentials of PSSs need to be analyzed (see Tukker p.257)
- Categories of PSSs:
A: add on services to the already offered product
B: product is used without ownership (3x types), and each type differs in terms of accessibility
C: defined physical product but the desired outcome is worked towards through activity
management (~outsourcing), pay-per use services, functional result
- Share Economy: product sharing; it is gaining importance in different areas due to its large
sustainability impact 14 30 of Time Technology Limit Technology Regime 1 Technology Regime 2
Performance Metric Technology Regime 3
- Biomimicry: a science or design approach concerned with getting inspiration from nature &
natural solutions that can be adapted to different situations
Industrial Ecology
=> not really individual approaches or organizations, instead more or less industrial perspective
& networking of first that are related in their value chains *~entire systems)
=> it means cooperation between companies & creating a system that has a positive societal &
environmental impact

-Interdisciplinary
-Natural systems as archetypes for industrial systems
-Material and energetic flows from industrial systems (“industrial Metabolism”)

Goals:
• zero energy consumed
• zero emissions produced
• zero waste generated

- application of this approach creates a form of an ecosystem that is similar to an industrial park
with different companies in a closed loop

Part III: Supply Chain & Production

Strategies to increase sustainability in supply chains

Two prototypical strategies:
1. Supplier management for risks and performance
2. Supply chain management for sustainable products
Core steps in supplier management for risk and performances

S-Rating
Waste Hierarchy

Overview of scope 1, 2, and 3 emissions according to WRI and WBCSD (2011)

Climate change potential
The climate change potential describes the emission of greenhouse gases (GHG), which lead to
an increase of heat absorption of solar radiation within the atmosphere and thus can contribute
to an increase of global average temperatures. The reference substance for the global warming
potential is carbon dioxide. All other greenhouse gases (e.g. CH4, N2O, PFCs) are calculated in
relation to carbon dioxide (CO2 equivalents). In the fig. the total lifetime GHG emissions for the
vehicles are presented, aggregated per life cycle phase. The use phase has been divided into
well to tank (WtT) and tank to wheel (TtW). Total life cycle GHG emissions presented as tonnes
of CO2eq per life cycle phase. The use phase is divided in well-to-tank and tank-to-wheel. Even
though the impact from production phase is almost doubled for the BEV compared to the ICEV,
it is the use phase that is the clearly dominant phase for both ICEV and BEV. In the base line
scenario (EU baseline), the BEV can reduce the total life cycle GHG emissions with 38% in
comparison to ICEV.
Introduction to sustainable entrepreneurship

1.Sustainable Development: ”Sustainable Development is development that meets the needs of

the present without compromising the ability of future generations to meet their own needs”

Three Ring View of Sustainable Development. vs Nested View of Sustainable Development

Energy is very central to life on earth

2.Entrepreneurship: “Entrepreneurship as a scholarly field seeks to understand how

opportunities to bring into existence future goods and services are discovered, created and
exploited by whom and with what consequences.”

Key Elements of Entrepreneurship:

• Entrepreneurial opportunities
• Process of discovery, creation and exploitation
• Individual(s) who discover, create and exploit

Opportunity Recognition

Entrepreneurial opportunities arise from individuals’ differential access to information (Kizner,

1973)
“Entrepreneurship is at the nexus of two phenomena: the presence of lucrative opportunities
and the presence of enterprising individuals” (Shane, 2000)
3.Sustainable Entrepreneurship
“Sustainable entrepreneurship as the scholarly examination of how opportunities to bring into
existence future goods and services are recognized, developed and exploited by whom and with
what economic, ecological and social gains.”

Sustainable Entrepreneurship & Related Concepts

• Social Entrepreneurship
• Environmental Entrepreneurship
• Green Entrepreneurship
• Eco-preneurship
• Conventional Entrepreneurship

Sustainable Entrepreneurship & Related Concepts

=> the discovery, creation & exploitation of opportunities to create future goods & services that
sustain the natural &/or communal environment & proved development gain for others
- Social Goals => NGOs
- Ecological Goals => NGOs
- Economic + Social Goals => Social Entrepreneurship
- Economic + Social + Environmental Goals => Sustainable Entrepreneurship
=> entrepreneurship requires profits to ensure self maintenance of the venture & its sustainability
=> NGOs lose the innovation aspect & expect people to give instead of them doing which is why
sustainable & social enterprises are preferred since they have larger impacts
- Sustainable entrepreneur: tries to build a venture that has economic, social & ecological gains
that alleviate problems in their environment & community through the creation of this enterprise
- Sustainable entrepreneurship process to create sustainable ventures:

Sustainable Enterprise: PowerGen

PowerGen: geographical coverage
PowerGen Partners (including investors) Source: https://www.powergen-renewable-energy.com •
What do you notice?

- Types of Entrepreneurship: • corporate entrepreneurship • family entrepreneurship • serial

entrepreneurship • women's entrepreneurship • environmental entrepreneurship • social
entrepreneurship • sustainable entrepreneurship

What are the differences and similarities between Corporate Sustainability and Sustainable
Entrepreneurship?

Differences
Depending on Sustainability positioning in the organization:
Sustainable Entrepreneurship Process

Process Model of New Sustainable Enterprise

Regenerative Business Models compared to Sustainable and Circular

Lecture 2: Sustainable Entrepreneurs: Intentions & Behaviour

Entrepreneurship in Management Research

Entrepreneurship

Entrepreneurship is defined as the “Creative Destruction” of the old into the new across markets
and industries;
Entrepreneurship emerges from innovation and is the sole driver for economic growth.
(Schumpeter 1942)

Back to basics: What is an Entrepreneur?

Entrepreneur is defined as: “an agent who buys means of production at certain prices to combine
them into a new product” (Cantillon 1755);

In another definition, an entrepreneur is: “someone who shifts economic resources out of an area
of lower into an area of higher productivity and greater yield” (Say 1803).

Definition of a “Sustainable Entrepreneur”

A Sustainable Entrepreneur is an individual who participates in the development of a venture

which pursues the triple bottom line of ecological, social and economic goals (Muñoz and
Cohen, 2017);
and
Sustainable entrepreneurship is the discovery, creation and exploitation of opportunities to create
future goods and services that sustain the natural and/or communal environment and provide
development gain for others (Patzelt and Shepherd, 2010).
- Opportunity Recognition (first step in the entrepreneurial process)
• entrepreneurial opportunities arise from individuals' differential access to information (~related
to the concept of asymmetric information where individuals have exclusive access to information
that opens up more opportunities)
• recognition of the value of new information they get exposed
• through active search which is related to entrepreneurial awareness

Recognition of sustainable development opportunities (Model): => framework for individuals

who want to tackle socio-ecological issues in opportunity recognition
- motivation is related to the threat perception & feelings towards the others
-> stronger for individuals who have any form of entrepreneurial knowledge

Motivation and Intention: different constructs

Motivation refers to the reasons why individuals initiate, continue or terminate a certain
behaviour; it is linked to a mental state that could be:
• Desire to accomplish an action (Mele, 1995)
• Intention to perform a behaviour (Mele, 1992)
• Beliefs as what should be done or not (Ajzen,1985)
Intention is the cognitive infrastructure that lies temporally and causally prior to action” (Dennett
1987)
Intention refers to the willingness to perform a given behaviour (Ajzen,1985)
Theory of Planed Behavior

Weaknesses of the Theory of Planned Behavior

This theory omits an important consideration
• People perform behaviors usually to achieve certain goals
• ”I exercise to promote fitness” Being fit is the goal
• “I study to advance my career” An advanced career is the goal
• Most behaviors are goal-driven

Theory of Reasoned Goal Pursuit

• This theory overcomes the TPB weakness by considering the behaviour-relevant goals

Intention Theories in Entrepreneurship Research

Entrepreneurial Intention
Entrepreneurial Intention represents individuals’ intention to start a new business (Krueger,
2017);
Intention is considered the single best predictor of behaviour (Ajzen, 1991, 2001; Fishbein &
Ajzen, 1975).
Characteristics of Entrepreneurial Intention
- Intention happens before behaviour;
- Intention is causally linked to behaviour;
- Intention is the single best predictor of behaviour.

- Entrepreneurial intentions => represent the intent to start a business, to launch a new venture
• Intention: trying to perform a given behavior rather than the actual performance of it
• Sustainable entrepreneurial intentions:
> 2x theories applied in the creation of this model (right)
> attitude: how much someone is attracted to do something in sustainability
> desire to be an entrepreneur
> feasibility: how easy it is to become an entrepreneur with a certain skill set

How do we measure Entrepreneurial Intention?

Simply by asking individuals to rate statements such as: (Example from Liñan and Chen (2007)):
- I am ready to do anything to be an entrepreneur –
My professional goal is to become an entrepreneur - I will make every effort to start and run my
own firm - I am determined to create a firm in the future - I have very seriously thought of
starting a firm

Sustainable Entrepreneurial Intention

Definition: Sustainable Entrepreneurial Intention is defined as the Entrepreneurial Intention
towards Sustainable Entrepreneurship (Vuorio et al. 2017)

What are the drivers of Entrepreneurial Intention in the case of starting new Sustainable
Ventures?
Is it values (personal), sustainability orientation, future orientation, work values, or attitude
towards sustainability, or is it something else?

Sustainable Entrepreneurial Intention (SEI)

Key elements to answer the question:
• Sustainable Entrepreneurs strive to create sustainable development via commercial
entrepreneurial activities (Schaltegger and Wagner 2011);
• They engage in venturing that is pro-social and pro-environmental (Shepherd and Patzelt 2011);
• They generate two types of values: self-enhancing and self-transcending (Shepherd and Patzelt
2011; Dean and McMullen 2007).

Do Values and Future Orientation impact the formation of Sustainable Entrepreneurial

Intention?

Values, Future Orientation and SEI

Empirical Results: Values, Future Orientation and SEI

Main contributions on SEI (Thelken and Jong 2020)

• Utilizing values system and considerations of future consequences by differentiating between
altruism towards others and towards the natural environment;
• Unpacking the relative importance of individual and social level factors; SEI comes as actor
centred and independent from approval of social norms;
• Authors claim to be the “first” to analyse the role of future orientation, e.g., consideration of the
future in Sustainable Entrepreneurship.

Sustainability Orientation
• Sustainability Orientation refers to: “the management’s attitude and conviction that the firm
should act in ways beneficial for the environment and social welfare” (Kuckertz & Wagner,
2010; Muñoz and Dimov, 2015)
• Individuals’ interests are important to understand the emergence of organizations (DiMaggio
1988);
• If entrepreneurially driven individuals have interest in sustainability, such interest “could”
influence the kind of organizations (entrepreneurial ventures) they would create.

Hypotheses
• H1: There will be a positive relationship between individuals' sustainability orientation and
their entrepreneurial intention;
• H2: The positive relationship between an individual's sustainability orientation and
entrepreneurial intention will be stronger for individuals inexperienced in business matters than
for experienced individuals.

Contributions on SEI (Kuckertz and Wagner 2010)

• Individual Sustainability orientation can explain “to some extent” entrepreneurial intention;
• There is potential for exploiting sustainable development-oriented entrepreneurial opportunities
among students, BUT the potential vanishes as business experience is gained.

Entrepreneurial Action
• Entrepreneurship requires action and to be an entrepreneur is to act by either:
o Creating new products or processes (Schumpeter, 1934);
o Creating new ventures (Gartner, 1985).
o Entering into new markets (Lumpkin and Dess, 1996)
f.
Characteristics of Action and Entrepreneurial Action:
• Action takes place overtime; • Action is anchored in uncertainty;
• Uncertainty of entrepreneurial action is magnified by the novelty of what is to be created (new
products, services, ventures, etc.)

Uncertainty plays a key role in Entrepreneurial Action

Entrepreneurial Action in the context of Sustainable Entrepreneurship
“In Sustainable Entrepreneurship, the uncertainty of Entrepreneurial Action is not only carried
by the economic output of the new products, but also by the social and environmental outputs it
is designed to have”

Chapter 3. Funding of New Sustainable Ventures

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Entrepreneurial Finance

• New ventures require resources to succeed, and financing is one of the most critical resources
(Gomper and Lerner 2014);
• New ventures need to fund the costs associated with developing, producing, marketing and
selling new products and/or services;

Definition “Entrepreneurial Finance” encompasses how entrepreneurs raise money, from whom,
in what quantities, based on what start-up valuation, towards what investors’ exit directions and
within what public policies and legal frameworks (Cumming 2012a)

• There are two main sources to raise funds: Debt and Equity;
• Funds are used either for investment in an existing business, or the start of a new venture.

Entrepreneurial Finance: debt versus equity