In recent years, discussions about corporate sustainability have significantly increased among business, academic, and mass media outlets. Corporate sustainability is often synonymous with words such as corporate social responsibility and sustainable development, but what do those mean and why are they important? Given the influence that corporations have on environmental quality, resulting especially from the production process, a keen understanding of how to implement sustainable business practices is vitally important. Generally, corporate sustainability relates to the notion that companies should seek alternative growth and profitability strategies that pursue specific societal goals, including: sustainable development, environmental protection, social equity and justice, and economic development. To further break down what corporate sustainability entails, four definitions are provided below.
As aforementioned in a previous post on Natural Ecosystem vs. Economic Growth, there must a balance between environmental protection and the need for economic growth. Given the contributions that corporations provide to society, sustainable development is vitally important to the growth of environmental, social, and economic performance.
Corporate Social Responsibility
Fundamentally, corporate social responsibility relates to the premise that corporations have the obligation to consider and address the needs of society, rather than self-interest or the interest of shareholders. The obligation stems from an ethical standpoint that states that corporations should consider sustainable development because of its impact on the economic, environmental, and social aspects of society.
As a strategic management concept, the stakeholder theory identifies the relationships between companies and stakeholders (i.e. consumers, shareholders). The stronger the relationship with stakeholders, the more likely they are to develop a competitive advantage. The opposite is true as well, underlining the extent to which corporate sustainability can help increase the profitability of a company. A company that promotes sustainability in its production, such as General Electric (GE), will have a stronger consumer following than a company without sustainable practices in place.
In this concept, the actions of a company are accountable to the public, thus, emphasizing the company’s duty to explain and report its actions. Corporate accountability determines the performance level of a company’s sustainable efforts in terms of investment and implementation into business practices, as a means of ensuring the sustainable development.
As more and more companies seek to implement sustainable business practices, the importance of understanding corporate sustainability will significantly increase. Examining the four different components of sustainability will help ascertain how a company can seek to become sustainable. It is important to reiterate that the corporate sustainability does not just impact business operations, but has a very immediate and lasting impact on all aspects of society.
Everblue’s corporate sustainability training course was created to educate individuals from all backgrounds on the theories and values of sustainable business. Our course will give you the certification you need to become a leader in this up-and-coming industry. Please visit the ISSP Sustainability Associate page or call us at (800) 460-2575.