ENGT5219 - Sustainable Business Analysis: Approaches to Development

This essay provides a detailed analysis of various approaches to sustainable development, including the triple bottom line, the five capitals, natural capitalism, cradle to cradle, the circular economy, and the balanced scorecard. It focuses on the practical application of the triple bottom line and circular economy approaches to Alra Foods, a major dairy producer. The essay discusses the calculation of the triple bottom line using an indexing approach, considering economic, environmental, and social measures. It further explores the application of the circular economy approach, emphasizing waste reduction and resource reuse, while also addressing the challenges and opportunities associated with its implementation. Finally, the essay offers a comparison between the triple bottom line and circular economy approaches, providing a comprehensive understanding of sustainable development strategies within a business context. Desklib offers a wealth of similar solved assignments and study tools for students.

Approaches to Sustainable Development 1
APPROACHES TO SUSTAINABLE DEVELOPMENT
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Approaches to Sustainable Development 2
Introduction.
Sustainable development can be defined as an organizing principle geared toward the
realization of goals. It brings into perspective an aspect of sustaining the process of resource
provision by natural systems. It does not advocate for interference with the stability and form of
the natural systems from which resources are obtained. This paper brings into perspective a
summarized analysis of various approaches that are geared towards sustainable development.
These approaches include the triple bottom line, the five capitals, natural capitalism, cradle to
cradle, the circular economy, and the balanced scorecard. The study goes ahead to illustrate a
practical application of two approaches that is the triple bottom line and the circular economy
approach to sustainable development to a given organization. In this case, the subject
organization being Alra Foods. Under the triple bottom line approach calculation of the triple
bottom line is brought into perspective with a consideration on the indexing approach where
three measures are brought into perspective. The three measures include the economic measures,
the environmental measures, and social measures. The paper goes further to discuss the
application of the circular economy approach which brings an aspect of waste reduction. Here
the challenges and opportunities that are likely to emanate from the adoption of the circular
economy approach are brought into perspective. Finally, the study brings into perspective a
comparison between the two approaches adopted.
Approaches to Sustainable Development
The Triple Bottom Line.
The triple bottom line is an accounting framework that brings into perspective the three
dimensions of performance (University of Wisconsin, 2018). These dimensions include the
social, environmental, and financial. The triple bottom line differs from traditional reporting due
to the fact that it incorporates the environment that is environmental and social measures that
prove difficult to assign means of measurement that are appropriate. The three dimensions, in a
nutshell, can be defined as people, planet, and profits. Organizations adopt the triple bottom line
to analyze and evaluate performance on the basis of creating greater business value. The concept
brings into perspective the fact that the stakeholders are the bearers of company responsibility
and not the shareholders.

Approaches to Sustainable Development 3
The Five Capitals.
The five capitals model refers to a model that brings into perspective the
conceptualization of economic sustainability. It focuses on asset valuation apart from financial
asset valuation (Barclay, 2017). The key assets considered here include capital on an economic
perspective, the capital on a human perspective, natural capital, built capital, and capital on a
social perspective. This model facilitates the integration of management systems taking into
consideration the sector or industry. It can also be used as an analytical tool for sustainability
evaluation. This model is essential in providing for sustainability with a focus on wealth creation
economic concepts.
Natural Capitalism.
Natural capitalism is a concept that brings into perspective the interdependence of the
global economy and the natural resources. The concept critiques traditional industrial capitalism.
Natural capitalism believes that interdependence between the production of human-made capital
and its use (Hawken et al., 2013, p. 168). It also brings into perspective the natural capital supply
and maintenance. Natural capitalism is based on three key principles which include using
resources at 10 to 100 times more productively, redesigning production on biological lines, and a
shift from selling goods to leasing a continuous flow of services that meet the dynamic needs of
customers and clients.
Cradle To Cradle.
Cradle to cradle refers to a product design approach that takes into consideration a human
perspective of nature’s processes. It takes into consideration materials as an equivalent to
nutrients revolving in a health and safe metabolism (Haggar, 2010, p. 98). The model brings into
perspective sustainability and the consideration of the life of future generations. The model
suggests that protection must be offered to the environment and its ecosystem. The framework
can be described as economic and social. It seeks to produce systems that are effective and
efficient and are geared towards the production of minimal waste.

Approaches to Sustainable Development 4
The Circular Economy.
The concept of the circular economy gives a response to sustainable growth. It focuses on
the growing pressure of production and consumption on the resources available in the world
(Charter, 2018, p. 125). The concept offers a solution to the take-make-dispose model where
every product has an expiration period or end life. The model can be understood better by taking
into consideration natural living systems that function effectively because each of its components
operates with others as one.
The Balanced Scorecard.
A balanced scorecard refers to a tool that is used by organizations to effect strategic
planning and management (Balanced Scorecard Institute, 2018). It is essential in communicating
what organizations intend to achieve, alignment of day to day operations and activities in an
organization, project, products and service prioritization. It is also essential I the measurement
and monitoring strategic target achievement progress. The concept acts as a link between
organizational goal s and objectives and operational objectives. The tool brings into perspective
four elements which include the financial, customer or client, internal organizational processes,
and organizational capacity.
Practical Application
Subject Organization.
The subject organization in this study will be Arla foods, an international organization
located in Viby in Denmark. The company has been identified as the largest producer of products
related to dairy. The company arose as a result of a merger between two companies that is Arla
and MD foods in the year 2000. The company produces products such as Lurpak and Castello
cheese which both have attracted the international market and are sold all over the world. The
company qualifies to be both a corporative brand and one that stretches across all product
categories. The company prides itself in understating corporate social responsibility and
sustainability. In achieving the sustainability objective, the company may employ the use of the
triple bottom line approach to sustainable development and the circular economy approach to
sustainable development.

Approaches to Sustainable Development 5
The Triple Bottom Line Approach to Sustainable Development.
Sustainability has been a fundamental goal of organizational performance, yet measuring
the degree of organizational sustainability has been quite difficult. The triple bottom line
approach is an accounting framework that brings into perspective three dimensions of
performance. These dimensions revolve around social factors, environmental factors, and
financial factors. When evaluating the level of sustainable development in Arla Foods, the
company, needs to take into consideration this three dimensions brought into perspective by the
triple bottom line approach. The framework brings in perspective ecological and social measures
which are quite difficult to assign performance measurement metrics (Henriques, 2013, p. 24).
In a nutshell, the three dimensions that are critical in this framework include the people, profits,
and the planet.
Figure 1the dimensions of the triple bottom line.
Calculating the Triple Bottom Line.
Calculating the triple bottom line can be a hectic undertaking for the company this is due
to the fact that the units of measurement are not uniform. The unit for measuring profits is
definite since it takes the country’s currency unit. However measuring social capital and
Sustainability.
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People
People
Planet Profits
Environmental
performance
Social performance
Economic
performance

Approaches to Sustainable Development 6
environmental and ecological health do not have definite units of measurement (Szekely et al.,
2017, p. 56). Therefore, in establishing the right metrics for evaluating the performance of the
company Arla Foods should ensure that they use an approach that will raise minimum questions
but yield maximum results. For the company to effectively calculate the triple bottom line, it
should ensure that an index approach is adopted. Indexing eliminates incompatibility and allows
for comparison between two aspects. The company may also opt to measure the three
dimensions as stand-alone aspects. However, this approach is quite cumbersome and hectic.
Measures Applicable To the Indexing Approach.
The triple bottom line does not have a standard approach to calculation. Therefore the company
is at liberty to use an approach that it deems suitable. Taking into consideration the fact that the
approach does not have a universal measure of standards, it provides room for application in any
organization. Arla Foods is one such organization. The approach provides room for
customization, that is, an organization may able to tweak the generic framework in order to fit its
needs. Therefore in adopting this approach, Arla foods will be able to customize it so as to fit its
needs and requirements. In establishing what measures to be included in the calculation of the
triple bottom line, the stakeholders of the company have to chip in in order to exercise their
responsibilities. The measures that Arla Foods might use include economic measures,
environmental measures, and social measures (Boubaker et al., 2018, p. 108).
Economic measures.
In relation to the triple bottom line, economic measures are those dealing with the flow of
money. Taking into consideration the Arla Foods Company, these measures may include income
expenditures, company taxes, climatic factors with a financial implication on operations, and
business diversity factors with implication on the flow of money in the company. To be specific,
they may include aspects such as the cost of the company having few employees than is required,
the size of the company, the revenues in the sector that contribute to company revenues.
Environmental measures.
These are factors that represent the measurement of natural resources and their
implications on the viability of the triple bottom line approach (Savitz, 2013, p. 213). In this
area, the measures may include aspects such as air and the quality of water available to the

Approaches to Sustainable Development 7
company, energy that the company consumes, solid and toxic waste, and land use cover. It is
ideal for the company to have long-range trends available to monitor each environmental trend
so as to be able to gauge the impact that the company will have on that given area. To be
specific, in this area the company will consider aspects such as consumption of electricity, solid
waste management, Change on land use cover, and excessive nutrients.
Social measures.
These aspects refer to issues relating to the community within which Arla Foods is
situated. Measures here may include measurement of education, the equity, and access to social
resources, health and well-being, quality of life and social capital (Savitz, 2012, p. 201). In this
area, corporate social responsibility will be greatly considered. Questions such as what has the
company done for the community will be raised here. To be specific, the company will consider
aspects such as the rate of unemployment in the society, the rate of female labor participation in
company affairs, company involvement in matters education in the community, company
involvement in matters relating water in the community and the number of people employed in
the company from its environs.
The Circular Economy.
The circular economy provides solutions to the aspiration of sustainable growth. It
concentrates on the ever-increasing pressure of production and consumption of the world’s
resources (Lacy & Rutqvist, 2016, p. 64). Arla Foods uses various materials in its quest to
produce food substances. When the product they use is finally worn out or are of no value to
them, the products are discarded as waste material. That is it is no longer required by the
company. A continuous cycle of this approach may lead to resource depletion. Adaption of the
circular economy approach shifts the focus of the company from disposal as waste to aspects
such as reusing, repairing, refurbishing, and recycling existing materials and products. What the
company regarded as waste in the recent past is now be referred to as a resource.
By adopting the circular economy approach, the company will be able to take into
consideration natural and living systems that operate as a whole. This is because all components
are effectively and efficiently synchronized with each other. Therefore the company’s products

Approaches to Sustainable Development 8
will be effectively designed to suit the various material cycles in a way that advocates for value
addition for the longest time possible (Brears, 2018, p. 98).
Design for a Circular Economy.
The company business is the key to transition and success of a circular economy.
Therefore, through the adoption of the circular economy, Alra Foods will be able to grasp new
opportunities and extend the lifetime of their products in an effort to create long-lasting
competitive products (Charter, 2018, p. 108).
Sustainable Consumer Choices.
By adopting the Circular economy approach, the company should be able to make
sustainable choices. The choices are characterized by ease, attractiveness, and affordability.
Policy for the Adoption of the Approach
Adoption of the approach by Arla Foods requires that the company puts in place various
policies that are geared towards enduring for its success. The company should consider
establishing integrated global supply chain networks.
Challenges Likely To Be Encountered By the Company
The transition and adoption of the circular economy bring into perspective new
challenges that Arla Foods is more likely to encounter. They revolve around factors such as
political factors, social factors, economic factors and technological factors (Webster, 2017, p.
126). To be specific Arla Foods is likely to face problems such as lack of employee awareness,
knowledge, and capacity to pursue the solutions that circular economy adoption provides. The
systems that the company operates on currently might lock the company in the old linear model.
The company may incorporate insufficient investment to facilitate measures geared towards the
improvement of efficiency and innovative business models. Finally, the demand for sustainable
products may remain low.
Opportunities That Are Likely To Come Up.
By adopting and implementing circular economy measures such better eco-design and
waste prevention can help the company increase their net savings and reduce costs likely to be

Approaches to Sustainable Development 9
encountered. Resource productivity is also likely to be boosted a great deal while the number of
jobs created by the company will so increase (Benton et al., 2015, p. 58).
Comparison between Approaches Used.
Regardless of the fact that the approaches discussed are all geared to sustainable
development, they depict various differences. The triple bottom line approach focuses on an
accounting framework that focuses on three dimensions of performance which include the social
environmental and financial aspects. The aspects are further divided into three aspects which
include the people, profits and the planet. The approach does not have a standard unit for
measurement. Therefore, various approaches can be adopted including the indexing approach
which brings into perspective three measures which include the environmental measures, the
economic measures, and the social measures.
On the other hand, the circular economy brings into perspective the aspect on disposition
approaches. The approaches are geared towards waste minimization. It brings into perspective an
aspect of value addition. What was once considered useless is transformed into something that
can be referred to as a resource. Regardless of the fact that the two approaches differ in both
approach and concept, they are interrelated. This is because both approaches are geared towards
ensuring for sustainable development of an organization. Finally, they both have financial
implications for an organization.

Approaches to Sustainable Development 10
Appendixes
Appendix I
User Survey on the measures to be used in index calculation.
Centre: Enquiry No:
Title:
Please fill in the form below with the information required regarding appropriate measures in
each category.
Category Specific measures
Economic measures 
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Social measures 
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Environmental measures 
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Please write any further comments overleaf
Appendix II

Approaches to Sustainable Development 11
User Survey on Bottom line calculation approach
Centre: Enquiry No:
Title:
Please fill in the form below with the required information regarding the approaches to bottom
line calculation approach.
approach Reasons why it is preferable
Indexing. 
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Taking each component individually 
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
Please write any further comments overleaf
Thank you for your help
References
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[Accessed 28 October 2018].

Approaches to Sustainable Development 12
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