L10 - CSR Sustainability

What does sustainability mean in a business context?

The ability of a business to operate indefinitely without depleting social or natural environments, ensuring long-term viability.
Example: A company that uses renewable energy and maintains fair labor practices.

Why is sustainability important for businesses?

Without sustainable practices, businesses may collapse if they destroy their own social or environmental foundations.
Example: A fishing company depleting fish stocks to the point where it can no longer operate.

What is an example of a socially unsustainable business practice?

Walmart opening in small towns, undercutting local stores, causing job loss, poverty, and eventually closing due to a lack of customers.
Example: A large retail chain causing local businesses to shut down, leading to economic decline.

What is an example of an environmentally unsustainable practice?

Dumping chemicals into water sources, making them unusable and harming ecosystems.
Example: An oil company spilling crude oil into a river, affecting drinking water and wildlife.

What is single-bottom-line reporting?

A traditional accounting method where a business’s success is measured solely by profit.
Example: A company focusing purely on financial gain without considering social or environmental impact.

Why is single-bottom-line reporting problematic?

It ignores social and environmental impacts, rewarding businesses purely for profitability regardless of harm.
Example: A profitable company that pollutes the air without facing consequences for environmental damage.

What is triple-bottom-line reporting?

An approach that measures a business’s success by balancing three factors: profit, social responsibility, and environmental sustainability.
Example: A company that tracks financial performance, community contributions, and carbon emissions.

Why is triple-bottom-line reporting considered more sustainable?

It acknowledges that long-term success requires balancing economic, social, and environmental well-being.
Example: A manufacturing firm that not only tracks profit but also monitors waste reduction and community support.

What are some challenges with triple-bottom-line accounting?

Difficulty measuring social and environmental impacts objectively.

Balancing profitability with social and environmental goals can be complex.

Risk of greenwashing, where businesses falsely portray themselves as sustainable.
Example: A company reporting social initiatives without actual community impact.

Why might some businesses resist adopting triple-bottom-line practices?

Implementing sustainable practices may increase costs and require changing traditional business models.
Example: A factory upgrading to cleaner technology facing high initial investment.

Why do some argue that businesses have a moral obligation to be sustainable?

Because businesses are often seen as social actors that must balance profitability with their impact on society and the environment.
Example: A chemical plant investing in pollution control to protect public health.

What does it mean for a business to move beyond profit as the sole measure of success?

It involves integrating social and environmental considerations into business strategies.
Example: An energy company investing in solar power to reduce fossil fuel dependency.

How does sustainability benefit businesses in the long run?

Enhances reputation, reduces legal risks, attracts socially conscious consumers, and ensures long-term viability.
Example: A brand known for sustainability gaining customer loyalty and reducing regulatory issues.

What is a potential downside of focusing too much on sustainability?

Neglecting short-term profitability might affect competitiveness, especially in industries where margins are tight.
Example: An apparel company investing heavily in sustainable materials while competitors offer cheaper products.

How might a business struggle with sustainability decisions?

Balancing the cost of sustainable practices with the need to remain financially viable.
Example: Deciding whether to source cheaper, non-eco-friendly materials to cut costs.

How could a company address the challenge of measuring sustainability?

By adopting standardized metrics and reporting frameworks like the Global Reporting Initiative (GRI).
Example: Using carbon footprint calculators to measure environmental impact.