Applying Ecological Economics principles at companies Environment

Management
Marcela Miranda Francisco
Adviser: Prof. Dr. Alexandre Toshiro Igari
University of So Paulo School of Arts, Science and Humanities

SUMMARY
Francisco, M. (2014). Applying Ecological Economics principles at companies Environment
Management. Thesis to obtain the Bachelor of Environmental Management title. School of Arts,
Science and Humanities University of So Paulo. So Paulo.
The actions focused on corporate sustainability are predominantly based on Environmental
Economics principles. This approach presupposes the substitutability between natural, social and
economic capital. In opposite way, the principles proposed by Ecological Economics presuppose the
existence of ecosystem boundaries to the operation of the economy. The Ecological Economics
supports the view that many natural assets cannot be replaced by produced capital and points out
limitations of eco-efficiency and technological development as a mechanism to achieve the
corporations sustainability goals.
The Natural Step (TNS) is an approach to corporate sustainability which contains the principles of
Ecological Economics. The non-profit organization called The Natural Step was founded by KarlHenrik Robrt in 1989 in Stockholm, in order to provide guidance and establish scientific guidelines
for sustainability, focused on non-scientists such as leaders of countries, towns, states, counties,
communities, private and public companies.
TNS sets four conditions (system conditions) based on ecosystem boundaries for decision-making
towards sustainability:
1) to promote a drastic reduction in the use of natural resources, which its sub products are deposited
in the biosphere in higher concentrations than the environment is able to process; 2) to reduce the
production of synthetic substances and instead use naturally produced substances aiming the usage
independence of persistent chemicals; 3) to manage ecosystems by setting limitations on its usage; 4)
allow society to meet their basic needs by efficient use of natural resources without wastage on
luxuries and vanities.
Having presented this scenario, the aim of the thesis is to evaluate the applicability of Ecological
Economics principles in corporates environmental management and identify the motivations and
outcomes from the implementation of TNS and the four system conditions.
The research methods consisted of a systematic review of a qualitative nature regarding the
implementation of The Natural Step Framework in corporate management through analysis of
articles and case studies. The method of systematic review allowed the examination of multiple case
1

studies in which TNS has been applied in companies worldwide. The research was based on key
words and predetermined criteria which include or exclude the searched articles.
The search for papers was performed by using the Scopus platform and has resulted in eleven articles
which were extracted through the process of practical screen. The qualitative analysis of these eleven
articles sought to identify which articles describe or analyse the TNS implementation in companies
and whose contents exhibit the required motivations, challenges and results. Subsequently, the
analysis resulted in five articles from companies that met the required criteria.
The companies names, the TNS system conditions, motivations and results were respectively: IKEA
(TNS 1, 2 & 4), the necessity of meet the regulatory standards with regards to presence of
preservatives in furnishings, as a result IKEA trained its employees based on TNS principles, has
developed chlorine-free brochures for consumers with information about the principles of TNS and
an has launched an eco-friendly furniture line. Interface Inc. (TNS 1 & 2), customers were
dissatisfied, as a result the company manufactured modular carpet, has recycled used carpet and
developed more environmentally friendly adhesives. Scandic Hotels (TNS 1, 2, 3 & 4), profits were
declining, as a result Scandic Hotels trained its employees based on TNS principles, has adopted
sustainable building materials, has developed of lower-impact cleaning products on human health
and environment, has collected recyclable residues and reduced waste generation. Electrolux (TNS
2), the influence of international requirements for environmental protection has affected the
company; as a result Electrolux started the production of refrigerators without CFCs. Hydro
Polymers Limited (TNS 2), non-governmental organizations campaigns regarding the negative
impacts of PVC on the environment, as a result the company developed PVC recycling process.
Based on this research it was possible to indicate that the application of TNS system conditions were
limited to isolated company actions and they were not embedded in the mission statement of four of
these companies: IKEA, Scandic Hotels, Electrolux and Hydro Polymers Limited. Conversely,
Interface Inc. extended the actions related to the TNS principles into deeper levels within the
company's operating areas, thus promoting a characteristic of continuous improvement. In
conclusion, the application of Ecological Economics principles and TNS conditions in companies is
feasible. However, there are still cultural and political barriers preventing the implementation of
TNS, especially in companies outside of Sweden. Of the five companies analysed, only two are not
Swedish. Nevertheless, this fact may be regarded as a challenge to open new research opportunities
and the development of skilled professionals in this field.

MAIN REFERENCES
Beder, S. (2011). Environmental economics and ecological economics: the contribution of
interdisciplinary to understanding, influence and effectiveness. Envir. Conserv. 38(02), pp.140-150.
Bradbury, H. and Clair, J. (1999). Promoting sustainable organizations with Sweden's Natural Step.
Academy of Management Perspectives, 13(4), pp.63-74.

Broman, G., Holmberg, J. and Robrt, K. (2000). Simplicity Without Reduction: Thinking Upstream
Towards the Sustainable Society. Interfaces, 30(3), pp.13-25.
Costanza, R. and Wainger, L. (1991). Ecological Economics. New York: Columbia University Press.
Daly, H. and Farley, J. (2004). Ecological Economics. Washington: Island Press.
Ekins, P. and Max-Neef, M. (1992). Real-life economics. London: Routledge.
Georgescu-Roegen, N. (1971). The entropy law and the economic process. Cambridge, Mass.:
Harvard University Press.
Gough, D., Oliver, S. and Thomas, J. (2012). An introduction to systematic reviews. London: Sage.
Henriques, A. and Richardson, J. (2004). The triple bottom line, does it all add up? London:
Earthscan.
Holmberg, J. and Robrt, K. (2000). Backcasting a framework for strategic planning.
International Journal of Sustainable Development & World Ecology, 7(4), pp.291-308.
o m erg
o rt, K., Eriksson, K. and Martinez Alier, J. (n.d.). Socio-ecological principles for a
sustainable society. [S.l.]: [s.n.].
Okoli, C. and Schabram, K. (n.d.). A Guide to Conducting a Systematic Literature Review of
Information Systems Research. SSRN Electronic Journal.
Pigou, A. (1932). The economics of welfare. London: Macmillan and Co.
Robrt, K. (2000). Tools and concepts for sustainable development, how do they relate to a general
framework for sustainable development, and to each other? Journal of Cleaner Production, 8(3),
pp.243-254.
Robinson, J., Burch, S., Talwar, S., O'Shea, M. and Walsh, M. (2011). Envisioning sustainability:
Recent progress in the use of participatory backcasting approaches for sustainability research.
Technological Forecasting and Social Change, 78(5), pp.756-768.
Samuelson, P. (1954). The Pure Theory of Public Expenditure. The Review of Economics and
Statistics, 36(4), p.387.
Santillo, D. (2007). Reclaiming the Definition of Sustainability (7 pp). Env Sci Poll Res Int, 14(1),
pp.60-66.
Upham, P. (2000). Scientific consensus on sustainability: the case of The Natural Step. Sustainable
Development, 8(4), pp.180-190.