Corporate sustainability

Corporate sustainability is a business approach that creates long-term consumer and employee value by creating a "green" strategy aimed toward the natural environment and taking into consideration every dimension of how a business operates in the social, cultural, and economic environment. It also formulates strategies to build a company that fosters longevity through transparency and proper employee development.

Corporate sustainability is an evolution on more traditional phrases describing ethical corporate practice. Phrases such as corporate social responsibility (CSR) or corporate citizenship continue to be used but are increasingly superseded by the broader term corporate sustainability. Unlike phrases that focus on "added-on" policies, corporate sustainability describes business practices built around social and environmental considerations.

The phrase is derived from two keys sources. The Brundtland Commission's Report, Our Common Future, described sustainable development as, "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". This desire to grow without damaging future generations' prospects is becoming more and more central to business philosophies. Within more academic management circles, Elkington (1997) developed the concept of the Triple Bottom Line which proposed that business goals were inseparable from the societies and environments within which they operate. Whilst short-term economic gain could be chased, a failure to account for social and environmental impacts would make those business practices unsustainable.

Measuring corporate sustainability is possible through composite indicators which aggregate environmental, social, corporate governance and economic measures, e.g. Complex Performance Indicator (CPI).[1]

Strategy for corporate sustainability

Business case for sustainability

The challenge for many businesses in this new field is to quantify the positive impacts of sustainability. Sustainability can increase revenue, reduce energy expenses, reduce waste expenses, reduce materials and water expenses, increase employee productivity, reduce hiring and attrition expenses, and reduce strategic and operational risks.[2] Furthermore, sustainable business practices may attract talent and generate tax breaks.[3]

Transparency

Transparency deals with the idea that by having an engaging and open environment in the company as well as the community will improve performance and increase profits. It is an open culture that promotes employee involvement in the innovation and creative processes. Reaching out to the community creates a much bigger team is extremely cheap and provides evaluation from all angles. Companies are looking inward and realizing changes must be made to fulfill environment needs such as energy efficiency, limiting product waste and toxicity, and designing innovative products. One way for companies to accomplish this is through open communications with stakeholders characterized by high levels of information disclosure, clarity, and accuracy.[4]

Stakeholder engagement

Sustainability requires a company to look internally and externally to understand their environmental and social impacts. This requires the engagement of stakeholders to understand impacts and concerns. A business can address sustainability internally by educating employees and seeking to reduce impacts through waste reduction, energy efficiency, etc. Employee engagement can be a powerful motivator by having a philanthropy committee or a green team. As a company looks externally, stakeholders include customers, suppliers, community, and non-government organizations.

Thinking ahead

Companies have adapted by implementing new creative ideas related to sustainability, such as preparing upgraded technology that can transform the product rather than throwing away old materials. New solutions that improve recycling and waste redirecting can ultimately reduce costs and increase profits. For example, Wal-Mart has redirected more than 64 percent of the waste generated by stores and Sam’s Club facilities. In 2009 alone, they recycled more than 1.3 million pounds of aluminum, 120 million pounds of plastics, 11.6 million pounds of mixed paper and 4.6 billion pounds of cardboard. Annually, they expect to save around $20 million and prevent 38 million pounds of waste being sent to landfills.

Professionals

Companies focused on sustainability are appointing chief sustainability officers leading a department with a mandate to proactively develop and implement a corporate sustainability strategy.[5]

See also

References

  1. ↑ Dočekalová, M. P.; Kocmanová, A. (2016). "Composite indicator for measuring corporate sustainability". Ecological Indicators. 61: 612–623. doi:10.1016/j.ecolind.2015.10.012.
  2. ↑ Book Review: The New Sustainability Advantage
  3. ↑ "Improve Your Reputation, Bring You Better Talent, and Get You a Tax Break... by Going Green?". eFax. 29 April 2014. Retrieved 19 May 2014.
  4. ↑ Schnackenberg, A.; Tomlinson, E. (2014). "Organizational Transparency: A New Perspective on Managing Trust in Organization-Stakeholder Relationships". Journal of Management. doi:10.1177/0149206314525202.
  5. ↑ E. Curry, B. Guyon, C. Sheridan, and B. Donnellan, "Developing an Sustainable IT Capability: Lessons From Intel’s Journey," MIS Quarterly Executive, vol. 11, no. 2, pp. 61–74, 2012.

External links

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