Business Society: Corporate Sustainability

Corporate Sustainability

A comprehensive approach to business management that works to maximise long-term economic, social & environmental value.

Elements of Corporate Sustainability

Environmental

Social

Economic

Corporate Social Responsibility (CSR)

A business practice that considers the impact a company has on its stakeholders.

Aims of CSR

- Minimise harm

- Practice fair business

- Be responsible across the supply chain

- Exercise philanthropy

- Create self-orientated HR management systems

Rationales of Corporate Sustainability

1. Create wealth

2. Use wealth for business social ends

3. Be a vehicle for CSR & sustainability

4. Legitimise business

5. Be a vehicle for wealth creation

6. Contribute to societal welfare

Tragedy of the Commons (1968)

G.Hardin:

When individuals with access to a common pool resource act in their own interest and ultimately deplete the source.

Excludable Good

Others can be prevented from consumption or use of the good.

Non-excludable

Others cannot be excluded from the consumption or use of the good.

Rivalrous

The use of the good prevents others from using it.

Non-rivalrous

The use of the good does not prevent others from using it.

Private good

Excludable + rivalrous

E.g. ice cream, cars, clothing

Club good

Excludable + non-rivalrous

E.g. cinema, private park, gym

Common pool resource

Non-excludable + rivalrous

E.g. fish stock, timber, grazing land

Public good

Non-excludable + non-rivalrous

E.g. air, national defence, street lights

State of Nature (1651)

Hobbes:

Without any organisational government, mankind is to compete among themselves for things needed for survival.

Common Pool Resource Overuse (≈350 BC)

Aristotle:

"What is common to the greatest number has the least care bestowed upon it."

Sustainable Development

A development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Intra-generational justice

Justice between people of same generations.

Inter-generational Justice

Justice between people of different generations.

Sustainable Development Goals (SDGs)

2015-2030:

A universal set of goals, targets and indicators that UN member are expected to use to frame their agendas and political policies.

Sustainable Development Goal 1

No Povery

Sustainable Development Goal 2

Zero Hunger

Sustainable Development Goal 3

Good Health & Wellbeing

Sustainable Development Goal 4

Quality of Education

Sustainable Development Goal 5

Gender Equality

Sustainable Development Goal 6

Clean Water & Sanitation

Sustainable Development Goal 7

Affordable & Clean Energy

Sustainable Development Goal 8

Decent Work & Economic Growth

Sustainable Development Goal 9

Industry, Innovation & Infrastructure

Sustainable Development Goal 10

Reduced Inequalities

Sustainable Development Goal 11

Sustainable Cities & Communities

Sustainable Development Goal 12

Responsible Consumption & Production

Sustainable Development Goal 13

Climate Action

Sustainable Development Goal 14

Life Below Water

Sustainable Development Goal 15

Life on Land

Sustainable Development Goal 16

Peace, Justice & Strong Institutions

Sustainable Development Goal 17

Partnerships for the Goals.

How do organisations use the SDGs? (2021)

Heras-Saizarbitoria et al:

Businesses are selective with the use of SDGs for the purpose of impression management and legitimacy building.

Triple Bottom Line (1999)

Elkington:

A framework for businesses to assess sustainability, with the intention of making sustainable development more manageable.

Three Pillars of the Triple Bottom Line (1999)

Elkington:

1. People (social)

2. Planet (environmental)

3. Profit (economic)

SDG Drawback: Contentment over sustainability (2023)

Rasche et al:

The concept's meaning is debated across actors and contexts.

SDG Drawback: Diverging interests (2023)

Döbbe & Cederberg:

Contestations are often about how to respond to sustainability issues.

SDG Drawback: Symbolic usage (2013)

Christensen et al:

Sustainability can be used for aspirational or hypothetical signalling rather than attempting to make genuine change.

SDG Drawback: Ambiguity (2021)

Feront & Bertels:

Organisations often frame sustainability objectives vaguely, leaving room for interpretation to gain support.