The Importance of Corporate Sustainability

Sustainability is a concept that has recently taken the corporate world by storm. Individual sustainability as well as corporate sustainability will help you better your business and our environment. At Clean Conduit Inc, we hope to provide you with the tools necessary to make your business more sustainable

Corporate sustainability is an approach that aims to create long-term stakeholder value through a business strategy that implements ethical, social, environmental, cultural, and economic ideals. See below Figure 1 for the evolution of Corporate Sustainability.

The four pillars of Corporate Sustainability are: There is Sustainable Development, Corporate Social Responsibility, Stakeholder Theory and Corporate Accountability.

Stakeholder Theory suggests that the stronger your relationship is with other external parties, the easier it will be to meet your corporate business objectives; the worse your relationships, the harder it will be. Corporate Accountability is a theory that suggests corporations must hold themselves to a higher standard. Beyond making a profit for its shareholders, a company must also be accountable to its employees and community members.

On the other hand, Sustainable Development is a broad, dialectical concept that balances the need for economic growth and environment protection and social equity, while Corporate Social Responsibility deals with the role of business in society. Corporate managers have an ethical obligation to consider and address the needs of society. Entrenched in this pillar are 4 theories. Social Contract Theory, Social Justice Theory, Rights Theory, and Deontological Theory.

Social Contract Theory explains how society consists of a series of explicit and implicit contract between individuals, organizations, and institutions. Social Justice Theory focuses primarily on fairness and distributive justice – how, and according to what principle, society’s goods are distributed amongst the members of society. In this case, goods include wealth, power, etc. Rights Theory is concerned with the meaning of rights, including basic human rights and property rights. Lastly, Deontological Theory is the belief that everyone, including corporate managers, have a moral duty to treat everyone with respect.

Understanding what corporate sustainability is and where it comes from is very important to understand how to implement these strategies into a business. In the article entitled How Corporations are Approaching Sustainability and the Global Goals written by George Ingram, Mai Nguyen, and Milan Bala in 2019, three mechanisms are discussed. Those mechanisms are strategic integration, operational integration, and organization integration.

Strategic integration is the transition of a business strategy from focusing just on creating shareholder value to creating shared value. Operational integration involves identifying and communicating specific, measurable, time-bound goals to hold the company accountable for the strategy. Lastly, organization integration involves strong thought