LCA and Sabatier’s Framework

LCA is a largely known useful tools to assess the environmental impact of a product, a process or a service. Since it is a tool with a very wide potential, in order to proceed with my analysis, it is necessary to define in which sector the government wants to increase the use of LCA. Therefore I choose to analyze consumption goods sector at a national level.

I will propose some government’s strategies to reach its goal through 1) external control and 2) boundary conditions:

1) EXTERNAL CONTROL:

1.a) Establish a rule according to which big Companies [the government has to define the capital’s threshold in order to define a “Big Company”] have to provide an LCA analysis for their first three most sold products, every 3 years.
– For companies not included in the “Big Company” definition the LCA analysis remains optional;
– For “Big Companies’ ” other products [not included in the three most sold] the LCA analysis remains optional as well.

1.b) Creation of an official LCA Label given by the Government to products that had given the LCA analysis results.
– The results of the LCA in this step are not significantly important. At this point the goals are: the diffusion of the LCA tools in order to create more awareness of the real environmental impact of products, the creation of a national database and the environmental data’s transparency.

1.c) The Government has to create a Control Agency that has the right and the obligation to randomly verify the LCA results given by companies.
– In case that the results turn out to be false [marginal error percentage will be considered] the Control Agency has the power to immediately remove from the market the related product until a new and correct LCA analysis will be provided for it.

2) BOUNDARY CONDITIONS:

2.a) LCA courses supported by the Government for commodities sector;
– It is a chance for the companies to learn how to make an LCA or at least the useful aspects about it so that they can discover how to use its potentialities;
– It is also a chance to meet other similar companies and discuss together about the environmental impact in the common sector.

2.b) The Government has the right and the obligation to make public the LCA through official websites or publications.

2.c) The Government will subsidize companies that will provide LCA results: a bonus on taxes will be given for every provided LCA.

2.d) The Government will subsidize companies that will provide improved LCA results in comparison with the previous results.
– It is a way to encourage company in keep using LCA and moreover it’s a way to constructively use it to reduce GWP emissions.

SABATIER’S FRAMEWORK:

A – TRACTABILITY OF THE PROBLEM:
A.1 For the policies connected to the External Control a lot of work has to be done by the Government in order to have a sufficient understanding of the problem, to define and differ the problem and the approach to it that different target groups have. Therefore it is important to differentiate market sectors and create different departments that will focus on each (or 2 or 3 maximum) of them. In addition a big effort to diffuse the knowledge about LCA has to be done too. It is necessary indeed that companies (especially “Big Companies”) understand the goal of LCA, its strong points. The same understand is desirable for the companies about the policies of LCA implementation. If they are not really able to understand the theory behind the policy than the implementation process, especially because enforced through external control, will be hard to achieve.

A.2 For the policies connected to the setting of Boundary Condition the scenario is very similar. The target groups have to be divided in order to have to chance to work properly with them accordingly with their peculiarities.
Communication is one of the most important issue for the effectiveness of these policies. Since they are not rules therefore not mandatory they have to be appealing for companies and they must be able to show the positive personal effects for the companies.

B – ABILITY OF STATUTE TO STRUCTURE IMPLEMENTATION
B.1 The structure needed by External Control policies is expensive and complex. Therefore after the creation of a cultural and theoretical path other fundamental elements are necessary. Those are:  databases both for Companies (to divided them in the created categories and to have a useful tool to check on them accordingly to the policy and the relative LCA results given) and for LCA results [for policies 1.a and 1.b], economical supports [for policies 1.b and 1.c], creation of specialized departments in the government [for policies 1.b and 1.c], creation of new professions [for policies 1.b and 1.c], creation of feedback loops to verify the effectiveness of the policies [for policies 1.b], specific communication channels [for policies 1.a,1.b and 1.c].

B.2 The structure needed by setting the Boundary Condition is expensive and complex too and again very similar to the first one. The main difference is about time. In order to work with the External Control everything has to be settled before the policy became effective. On the contrary, working through the Boundary Condition offers the chance to enlarge the time framework necessary to settle everything while the policy is already effective. This is an important issue mainly for the economic costs. After the creation of the cultural and theoretical path the policy can become effective. Slowly the other steps can be built according to the financial liquidity at disposition.

C – NON-STATUTORY VARIABLES AFFECTING IMPLEMENTATION
C.1 These variables have big influence on the positivity of the implementation through External Control. The variation regarding the constituency groups, the support from sovereign have a powerful impact because they are the main financial supporters for the policy. Without their stable support the policy is likely going to never become effective or quickly disappear. Commitment and leadership skill of implementing officials can help the implementation process through a good policies’ application and therefore reinforcing public opinion about their effectiveness.

C.2 The Non-Statutory variables affecting the implementation process through the setting of Boundary Conditions are principally the Variation in Socio-economic conditions and technology, the Media attention to the problem and the Public support.
The Variation in socio-economic conditions and technology because the settled conditions have to keep up with those variations and therefore be able to quickly update themselves. The media attention can be a strong driving force for the boundary conditions’ diffusion and accordingly public support too. Public support is an important incentive especially for private companies able to steer investments towards policy’s final direction.

The Harvest Game – seeking for a sustainable harvest

During the lecture about Culture as a Coordination Mechanism we played the “harvest game” based on the Tragedy of the Commons.

With this game we experience the exploitation of the natural resources after only 5 rounds, correspondingly to 5 years in the emulated reality. The behavior of the teams (boats) showed that at the beginning (for the first two rounds in our case) everyone tries to act in a sustainable way fishing only the right amount of fishes (4) that would have assure the sea to be sustainable for the next round. But after the second round some boats started to increase the amount of fishes that they want. This behavior is likely due to the game situation that is the attempt to don’t get bored and to win the game.
In conclusion after only 5 rounds the sea was empty and the game finished.

Below I will suggest a version of the game with the addition of some rules in order to create a game able to be both funny and both sustainable. The game’s dynamic is almost the same with one fundamental exception no boats will leave the bay.

THE FISHING:
At the beginning of each round every group has to select one component and send him as its delegate to the port. There all the delegates together will form the FISHING VESSEL, the only one able to go out to the sea and fish*. They will have to fish an amount of fishes sufficient to give at least one fish to every boat and have one more remaining. The suggestion is of course to fish 25 fishes per round.
(*Doing this a form of  external control is created. But the fact that it is formed by members of each of the other boats automatically assures that no one is able to cheat and that every boat gets the same amount of fish.)

THE DISTRIBUTION:
When the FISHING VASSEL is back to the port each delegate will go back to his boat to deliver the fishes.

THE REMAINING FISH (or fishes):
Before the end of the round the delegate still in charge will decide together a short game that the other boats will have to play. The game has to be a competition. The prize for the winning boat will be the remaining fish (or fishes)

NEXT ROUND:
After the awarding of the extra fish the FISHING VESSEL will be dismissed and new delegates will be selected by each boat to form the new VESSEL BOAT.

This is a very simple variation of the Harvest Game that in my opinion has the possibility to last forever maintaining the competition and the game aspects alive. Many rules can be added to this version in order to create a funnier game and to predict different external aspects that can interfere with the regular path of the game.

M**Bun as a Regional Network of Production

The regional Network of production I’ve chose to analyze is M**Bun, an innovative Slow-Fast Food born in Rivoli (Torino) in 2009 that is based on the Km0 (Zero Kilometer) Concept. The project is the result of a well-established and successful Regional Network.

In the following picture I tried to summarize all the Network’s Actor, and to define its structure.

M**Bun, the Slow-Fast Food is the result of the idea of Graziano Scaglia and Francesco Bianco.
The original name was Mac Bun an expression that in Piedmontese dialect means “simply good”, but the fast-food giant MacDonald’s contested the name because, according to it the name confused the consumers with its own label. The philosophy of the company is create a short production chain starting from the Graziano Scaglia’s family farm (SCAGLIA) a third generation farm breeding cattle that gained the Coalvi label, certifying the high quality and the protection of the Piedmontese cattle’s family. With this solid starting point the two entrepreneurs had selected carefully their suppliers, looking for the best quality, aware that it’s hard to get during the whole year the necessary quantities and that “bio doesn’t mean automatically excellence”. Beyond the quality the second requirement needed was the localization in the Piedmontese territory.

As shown in the picture, the Network’s structure is based on M**Bun centrality. Every company is directly connected only to M**Bun. Its concept in itself is connect high quality local suppliers directly to the consumers and by this fill the missing connection.
According to M**Bun values and criteria the two founders selected their food suppliers:
– for the MEAT: it’s mainly Piedmontese cattle meat (Fassone) raised by Scaglia and with the Coalvi excellence label. Chickens are raised free range; Pork is bred humbly without the use of an angled box. All processing is natural and without added preservatives.
– for the BREAD: it produced in the artisan bakery “Arte Bianca” (Rivoli-TO) and it is sourdough.
– for the FRIES and other VEGETABLES: they are provided and delivered by Agrocompany Chieri (TO).
– for the SAUCES: they are locally produced by Buon Gustaio (Santena-TO).
– for the CHEESE: the diary products are delivered by Cascina Fontana Cervo (Villastellone-TO).
– for the PLATES etc.: disposable plates, cutlery and cups are made by Huhtamaki (Settimo Torinese-TO) and are made from a biodegradable PLA.
– for the DRINKS: the biers are handcrafted in SORA’LaMA’s brewery. Also thhe Cola served is crafted in Turin with italian ingredients, and it is called “MoleCola”

According to my analysis there are two types of dependency in this Network.
1- The first is managed by M**Bun. The Network, as it is, exists only thanks to it. From this perspective it is the one with the biggest power, the major agent through which every other node has to pass to reach others agents. It is the values-creator and the biggest client for every suppliers.
2- The second dependency is managed by the suppliers, except for the Meat’s provider that is directly connected to M**Bun. They manage the “Resource Dependency” and this give them also a big power. Without their stable work and the regular supply M**Bun couldn’t work and serve its clients.
This analysis leads to establish that within the actors of this network there is a relationship based on TRUST.
Moreover, as I’ve already mentioned the resources shared in this network are Materials (food and beverages and plates) and Values (localization, high quality, environment protection).

Regarding non-local actor in this case study the only external connection possible is sharing the values and emulate the network model. It is not easy at all enter in this network for a non-local actor because to be located into the Piedmontese territory is one of the main requirement to be part of it. But the MoleCola case demonstrate that it has been possible for a non-local actor to enter. The MoleCola company is not based near Torino but it shares the values of the network and it has been able to fill a missing connection (“Bridging a structural hole”- R.Burt).

 

References:

– http://www.mbun.it
– Burt, R., “The network structure of social capital”, 2000
– Gordon, I.R., McCann, P., “Industrial Clusters: Complexes, Agglomeration and/or Social Networks?”

How Nokia and its Chinese Supplier are striving for Legitimacy

In order to understand and define how Nokia and its supplier are striving for legitimacy the first thing I need to do is to illustrate the context in which they operate. I’ve represented the general geographical context in figure 1

Figure 1
After having determined the general framework I’ve tried to define to which kind of Isomorphism process those dynamics belong to. According to Powell and DiMaggio (1983) while organizations strive for LEGITIMACY they tend to become more similar to each other. What Powell and DiMaggio (1983) argue is that this outcome is lead by three Isomorphic processes.

COERCIVE PROCESS: It “results from both formal and informal pressures exerted on organizations by other organizations which they are dependent and by cultural expectations in the society within which organizations function”. In some circumstances it can be driven by government mandate. Also, it has to do with the “existence of a common legal environment”.

NOKIA: Finnish Government, EU and other large scale telecommunications firms lean towards a more sustainable production and increase of awareness of the issues linked to outsourcing.
SUPPLIER: In the same sector such as in the same geographic boundaries many other firms, working as suppliers, compete to emerge. Given that the competition level is very high, it is common practice to take the shortcut and utilize “cheap” organization-models already existing.

MIMETIC PROCESS: It describes the modeling tendency as a response to uncertainty. Uncertainty happens to new organizations, or evolving ones, when they define goals and choose technologies that are badly understood by the organization itself and its employees. “Organizations tend to model themselves after similar organizations in their field that they perceive to be more legitimate or successful.”

NOKIA: At the beginning of the Documentary, it is shown that NOKIA’s central department has no knowledge of how their suppliers work. This could mean that the procedure to select their suppliers has been done not by looking for efficiency, but by just looking for the cheapness, according to other organizations’ practice.
SUPPLIER: In a scenario where this industry is striving for legitimacy and for reaching a high level of competitiveness we can imagine that its first goal is to keep working costs as low as possible. Therefore, it is likely that the company built its structure using existing models from other Chinese supplier’s companies. The evidence that the English managers haven’t got sufficient knowledge is well pointed out in the Documentary. They still don’t have proper contracts for their employees, they don’t respect minimum wage. This company is not a well studied and efficient model.

NORMATIVE PROCESS: it is primarily caused by professionalization. “We interpret professionalization as the collective struggle of members of an occupation to define the conditions and methods of their work, to control ‘the production of producers’ and to establish a cognitive base and legitimation for their occupational autonomy.” “Professions are subject to the same coercive and mimetic pressures as are organizations.”

NOKIA: At the beginning of the Documentary we saw that NOKIA is introducing “Sustainability’s Expert” and sustainability program in its environment. This is probably due to the increasing pressure coming from the European Governments regarding
pollution emission control of production firms. This is overall driven by the widespread attention to environmental problems related to production processes.
SUPPLIER: The business structure is highly common among down market suppliers’ system.

At the end of the Powell and DiMaggio’study (1983) some hypothesis are listed. One of those pictures the supplier firm as the one driving changes and acting as a model for linked firms. For my comprehension of the Documentary this is not the case. In NOKIA’s case it’s the central organization the one able to steer changes according to their own model.

Analyzing a SES using Ostrom’s framework

1_ As a SES in which I am an active part and in which private firms play a role I chose the GAS (internationally known as CO-OP) example.

A Co-op (Co-operative group) is “an autonomous association of persons who voluntairily cooperate for their mutual social, economic, and cultural benefit.” In particular I tried to describe the Agricultural Cooperative together with Consumer Cooperative. In Italy, in particular in Piedmont, the region I come from, they are becoming rather popular, and they’re known as GAS (Gruppo di Acquisto Solidale). For argument’s sake I’ll refer to them as GAS in my following description.

The GASes are highly flexible and elaborated structures. In the italian GAS outlook there are several both official and un-official associations. What they do in brief is to link local farmers and food producers with groups of consumers (or, as I prefer, prosumer). The purposes are to decrease the normal distance between producers and consumers, to know the source of the food and to support a more social, ethical and environmental sustainable food production/consumption.
I represented the GAS system using Ostrom’s framework like this:

FIGURE 1

As shown in the FIGURE 1, the Resource Unit (RU) is composed of those food that are produced (milk and cheese) or harvested (fruit and vegetables) in normal farms. The farms and the farmers are then the actors of the Resource System (RS). In the Government System (GS) are listed all the actors who normally regulate the transactions between those who manage natural resources and the market, like Italian Government, Regional Government, and National farmer’s Organization. In this sector can also be included the Associations organizing and managing the GAS in itself. Indeed every GAS has its own regulations, and they have to fit general criteria in order to belong to the Italian official GAS’ net. In the end in the User (U) sector are listed all the final consumers involved.

Using the directives given in the Ostrom’s article I analyzed the interaction between the sub-systems and what I’ve found out is that the GAS Social-Ecological System is strongly driven by the User’s system. In this particular case active consumers (prosumers) get together to pursue a more ethical, biological, environmental friendly food market. The general criteria driven the supplier’s choice are: highly qualified products, business ethics, environmental respect, local and biological production.
In order to reach the desired food market consumers started to get connected and to meet local farmers and producers. Together with them they created this co-operative system.

2_ Argue how the principle advocated by Friedman might be put to constructive use in the sustainable management of this SES.

The only connection I am able to see between Friedman’s principle and Ostrom’s study is the presence of Government as a regulator of the interactions between the systems. Ostrom’s model recognizes the importance of Government’s involving in the SES.
Therefore, in the GAS case, Friedman’s principle can here be put to constructive use visualizing a Government more actively involved in the support (financially and legally) of the GAS system. If it could be able to normalize, first of all, and then support and encourage the diffusion of GASes in the whole country this could represent an internal profit increase. It could also represent the beginning of a food market transformation.

References:

http://www.eventhia.com/
Toffler,A., The Third Wave (http://www.crossroadscounsellinggroup.com/resources/ebook/Toffler-ThirdWave-complimentsofCRTI.pdf)
http://www.eurocoop.coop/en/euro-coop/who-we-are
http://en.wikipedia.org/wiki/Coop

Post-reading position on Friedman’s “Business of business” theory

The first time I read this quote I lingered over the meanings of profit. Interperting it not only in the monetary way I agreed, more or less, with Friedman’s position.

After reading Friedman’s article I do not agree anymore with his final position.
His theory may work in a system where there aren’t global important issues to take care of. Where companies deserve to have complete freedom because they will behave according to people and planet needs in addition to their own profit.
I still believe profit is one of the main business of every company, and of every human being actually. But HOW companies define and obtain their profit it’s what really makes the difference.

There are two sentences from Friedman’s article I really don’t agree with.
“And, whether he wants to or not, can he get away with spending his stockholders’, customers’ or employees money? Will not the stockholders fire him?“. I think this is just an attempt to manipulate readers’ thought. Managers continuously spend consumers’ and shareholders’ money according to what THEY believe it’s better for the company or maybe just for the managment department. So this is not really an issue at all. They always must decide how to spend someone else money according to their beliefs so this simply isn’t something that we can discuss. Furthermore the environmental impact it’s not a belief, it’s a fact. And it’s a fact that companies have to take it into account as they normally do for their profit.

The second sentence is: “They can do good–but only at their own expense.” (where “they” means private enterprises). This is extraordinarily false. For this to be true also the reverse should be true. But it is not. If a private enterprise “does bad”, the expenses, in terms of consequences, are not only at its own. The society and market are affected by its actions, and the bigger is the company, the greater are the consequences, of course.

I don’t want to be naive but I think that every human being has social and environmental responsibilities and so do the companies. Some common responsibilities can be estabilished, and this is probably a Government’s task, but then companies have the duty to take them into account as they do for their profit.

Facebook’s App give free internet access in Zambia

At the end of July 2014, Facebook launched in Zambia its new application “Internet.org”. It is the result of a partnership among some of the biggest companies in the smartphone sector and Airtel, which is the local service provider and also the main supporter of the project.

The app offers the chance to use services like Facebook, Google, Wikipedia, AccuWeather and some local platforms to look for a job, read government news or health services, without paying any internet cost.
The few things needed in order to access to Internet.org are a smartphone and an Airtel simcard. The data costs are not charged for those services, included in the app. Besides, through Internet.org it’s also possible to click on links on Facebook or to visite other websites not included for free in the app. However in order to access to these additional contents it’s necessary to buy a data plan.

Interpreting the Facebook’s strategy as a completely rational behavior I think it is driven mainly by monetary profit reasons.
First of all entering in a new market, as the African one, means reaching a wide new customers number and this will automatically lead to an increase in the company’s profit. Expand the geographical boundaries and reach new customers is really important for Facebook also because the market in which it is operating so far is almost saturated. Moreover it is also important because it represents a new end market for the advertisment, that is the main profitable feature of Facebook itself. This represents again an increasing of profit for the company.

By creating and promoting this application, Facebook is also guaranteeing itself a leading position among African social networks. It is likely indeed that the persons (consumers?) involved in the Internet.org utilization will use Facebook, even if they already use and prefer other social networks, at least because it’s for free.
Moreover, I think the company is also trying to gain a positive public coming back image, in terms of visibility and social commitment.

From the bounded rationality point of view, Facebook’s strategy can be the result of the belief that the African market will act in the same way of “old” markets, like the European and American ones, and of the impossibility to take into account future changes on the market or of the actors.
However this market is very different from the previous ones, and in order to be successful maybe some fundamental changes in the original Facebook concept could be necessary.
Moreover it seems that the company didn’t really considered the possibility of a complete success for the app. Let’s suppose that the app reach its goal to bring internet to people who hadn’t the access to it before. What could happen then is that people will have a better comprehension of what internet represents and how data plans work. This will likely mean that an always growing amount of people will pay for data and for a full internet access.
This prospect is not suitable for Facebook because in this case people will have the chance to choose which social networks use (they will have now acess to all the others) and also wether to use one.

Sources:
http://www.networkworld.com/article/2460122/facebook-app-gives-free-internet-to-mobile-users-in-zambia.html#tk.rss_all
http://www.ilsole24ore.com/art/tecnologie/2014-09-08/facebook-africa-quota-cento-milioni-183119.shtml?uuid=ABQBUhrB&fromSearch
http://techcrunch.com/2014/07/31/internet-org-app/
http://www.theverge.com/2013/8/22/4643706/internet-org-facebook-charity-or-business

“The business of business is to increase its profit” What do I think about it?

In my opinion this quote is inevitably true and I do think so because of what I consider profit.
Proceding step by step, I think that the meaning of business has to be clarified. The word business states any economic activity, and going backwards in the word economy are included every kind of organizations or interactions that involve use of resources in order to satisfy personal and common needs.
Any economic interaction implies the use of scarce resources in order to gain a desired target. For example for a consumer is to purchase a desired amount of goods and for a firm to maximise profit. In my perspective profit is not only the money that a firm gets by selling its output and definitely not even something gained in disfavor of someone or something else. In fact every company has its own target. Some of them may actually only try to gain as much money as they can, basically a short term strategy. But others may do be interested in a long term target, like improving their public opinion or obtaining a recognition for their works and good practices. This strategy is as much profit-oriented as the first one. According to my point of view every behavior that can be seen as ethically good or driven by moral values is at the end an economic strategy that aims to a profit.
Therefore, rephrasing the original quote I would say that the goal of an economic interaction is to reach an objective in order to gain a profit. Moreover having goals to reach, goals that can someway improve the current situation is an essential part of the human nature. The improvement itself is a sort of profit, even if not strictly correlated to an economic activity.
In the end, summarizing my ex-ante opinion on this quote, every human activity it’s been done to make a profit, not only an economical one but either personal, social or ethical. That’s what we, as Industrial Ecologist, actually have to deal with. To understand the targets of a company and figure out how to achieve those targets together with social, environmental and ethical ones.

Looking for clues about GREENWASHING

For our first assignment,  we (future Industrial Ecologist) had to choose one IE-inspired puzzle and then find out three different explanations for it. What came in my mind is the Greenwashing phenomenon. According to “The sins of greenwashing” website the definition of this phenomenon is

Green-wash (green’wash’, -wôsh’) – verb: the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.

As a consumer this practice makes me feel powerless and so skeptical that I hardly trust completely any products. That is the reason why I chose this “puzzle”. Greenwashing procedure has become a very popular and widespread practice for many companies, so I presume we all are familiar with it. And that’s my first explanation for this event. In the last 25 years the environmental movements have been increasing and so did the awareness of the problems caused by savage industrialisation and by globalization among people. It has become mainstream and somehow directed the global market toward a more sustainable production and consumption. Responding to that companies needed to find a quick and cheap solution in order to keep their position in the market and to adapt their products to the new trend. The Greenwashing procedure has been definitely the easiest and cheapest way to solve the problem for companies. The second explanation I gave to this practice concerns the definition of “green product”. It is really hard to define the characteristics that make a product environmentally friendly, it depends on too many factors and it is different for every product sector. Therefore in order to evaluate the product’s level of sustainability many different eco-labels have been created (Blu Angel, Ecolabel, The Swan, Milieukeur,…). In order to obtain an eco-label a company has to voluntarily ask for it, to a specialized institute. So what we have so far is that getting an eco-label is still not compulsory and moreover there are a lot of eco-labelling programs around the world that create its own label with its own standard. This redundancy gets as result the total disorientation of the consumers; and the ineffectiveness of regulations doesn’t drive industries toward the full transparency of their products and more sustainable and responsible production decisions. In this scenario it is easy enough for a company to choose the Greenwashing shortcut and just put a fake label on their products instead of an approved one. This strategy misleads consumer’s decisions with false information and it is allowed as long as eco-labeling is not a mandatory practice for companies. The third and last explanation takes into account the case of products that effectively have few ecological and sustainable characteristics.Those are often only a marginal aspect of the whole product. Despite that it’s a common marketing strategy to emphasize those few aspects able to capture public attention and gain their favor neglecting the whole ecological rucksack. For instance, several “green logo” are created by companies to highlight small positive aspects, like the packaging made from recycled paper. Likely the reason why those companies can not obtain the real label is because the percentage of recycled paper in the whole product is not suffcient. Obtaining the real label for them will mean spending money and time that can just be saved adopting a Greenwashing approach. Once again this practice is supported by ineffective regulations and the abundance of different labels not clear for consumers.