In our discussion of alternative objectives of firm decision-making, we expanded the profit motive toconsider the goal of sustainability. As part of the motivation for studying the economics of sustainability,we identified
(a) the proliferation of definitions and uses of the term,
(b) increasing recognition ofsustainability concerns on the part of the business community, as evidenced by increasing rates ofvoluntary sustainability reporting, and
(c) a growing concern among consumers regarding thesustainability characteristics of the products they purchase and use.While at the macroeconomic level the concern over sustainability provides a unique objective forgovernment and society, namely the objective of optimal scale, at the microeconomic level sustainabilityprovides an objective that is unique, but related to, the more traditional and ubiquitous objective of profitmaximization. Some actions may further one objective at the expense of the other while others may paya double dividend, promoting sustainability while increasing profits.This semester's written assignment builds upon this discussion. You will conduct a case study on a firm,or perhaps a specific product of a firm (whichever seems appropriate), that is activelypromoting/concerned with the sustainability of their operations. While I leave the object of your casestudy open for you to choose, I advise choosing either
(i) a firm that is currently engaging in corporatesustainability reporting or
(ii) a product whose producer claims to be a 'sustainable' or 'green' product. The case study will take the form of a relatively short, but formal, research paper. The followingcomponents need to be addressed:
1) What is the company and what do they do? Provide some background into what the companyproduces, where they operate, etc.
2) What is the structure of the market that the company primarily participates in? Define the marketin which the company participates. Some companies may participate in many distinct markets. Ifthis is the case, discuss the market that you consider to be the primary market in which the firmparticipates. As part of this discussion, use the tools we developed in class to make a claim aboutwhat type of market this is. I suggest you use the concentration ratio as your guide.
3) Analyze three actions taken by the firm that affect the objective of sustainability. For each action,explain how it affects the environment and/or society, and how those impacts contribute to ordetract from the objective of sustainability. Then interpret each action's impact on the firm'sprofits. Is it a profit-maximizing action? Does it negatively impact the firm's profits? Explain and,where possible, use the tools and ideas that we have developed in class to back up yourdiscussion. Two of these actions need to address the following issues, and the third is left open:i. At least one of these actions should relate to the issue of climate change. Relate the actionto the science of climate change using the resources from the IPCC provided in class, anddescribe how the action's effect on climate change impacts . At least one should relate to the social issues of inequality and/or social justice.