Corporate Sustainability Part 1

Part 1: What is Sustainability

A simple question whose answer can result in numerous definitions (see side-bar information) or at times simply blank stares. The multiple definitions provided are not due to a miss-understanding of the topic; quite the opposite. In fact, the many definitions can simply be derived from the multiple uses of sustainability by individuals, groups or organizations. Sustainability can, therefore, have a variety of contextual meanings that relate to economic, agricultural, community and business development as well as personal life-styles. This is perhaps why there is a lack of a single definition that permeates the sustainability “industry”. Furthermore, the growing use of the term around the world is resulting in it being stretched to the limits of its interpretations by politicians, businessmen, and the popular media.

Sustainability Definitions

-Merriam-Webster Definition: “1. Capable of being sustained. 2. Of, relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged. 3. Of or relating to a lifestyle involving the use of sustainable methods.“

-Global Footprint Network: “It is based on the recognition that when resources are consumed faster than they are produced or renewed, the resource is depleted and eventually used up. In a sustainable world, society’s demand on nature is in balance with nature’s capacity to meet that demand.”

-Dow Jones Sustainability Index: “Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.”

– Pricewaterhouse: “Aligning an organization’s products and services with stakeholder expectations, thereby adding economic, environmental and social value.”

However, amongst the variety of practitioners and their inherent definitions, four common areas (4E’s) appear to be addressed: Environment & Ecology; Economy & Employment; Equity &Equality; and, Education. Within each of these areas are common themes relating to: living within limits; understanding interconnections amongst economy, society and the environment; and, equitable distribution and management of resources and opportunities are continually cited.

In terms of business, the definition of sustainability— or Corporate Sustainability— is seen as more of an evolution of the traditional ethical corporate behavior and/or practice known or defined as corporate social responsibility (CSR). Predominated by philanthropy and volunteerism, Corporate Sustainability is increasingly superseding these traditional definitions and practices to now include all business practices built around social and environmental considerations.

The road to defining Corporate Sustainability has been influenced by two key sources. The first was the World Commission on Environment and Development Report (Brundtland Commission) – Our Common Future. In 1987, this report related sustainability directly to corporations and the economy by coining and defining the term sustainable development:

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

The second was the Triple Bottom Line concept cited by John Elkington (1999):

“…business goals were inseparable from the societies and the 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.”

Though both these principles sound practical and even logical as they apply to helping define Corporate Sustainability, business has realized that they are not easy to apply to a workable definition because they are simply not easy to measure. They appear to be at times more qualitative than quantitative.

So, the definition of Corporate Sustainability is yet evolving as it pertains to businesses and industries. What can be rationalized, however, in terms of the evolving definition is that there appears to be two common camps in business as it pertains to application today. There are those who define and practice Corporate Sustainability as a program (3Rs: reduce, reuse and recycle). This can be construed as more of a feel good definition. Though there is economic and social value in these types of programs (usually marginal), – businesses that are program-driven do so more from the perspective “nice to do or have”.

On the other hand, there are those who do not want to just feel good but actually measure good as it pertains to business impact. Corporate Sustainability for these practitioners is more defined as a business process or strategy. For some in this camp, Corporate Sustainability is simply driving the concept of eco-efficiency through the reduction of costs and cost-structures. For others, Corporate Sustainability is aimed at creating long-term stakeholder value. This strategy is accomplished through consideration of the interrelationship between the environment, economy and society. Sustainability is defined and practiced as a basis from which to innovate, improve productivity, reduce risk, generate revenue, build brand, increase corporate valuation and positively impact society. This can be construed as more of a measure of good definition.

Though the definition of Corporate Sustainability may still be evolving, business practitioners are increasingly showing the value or business case for sustainability.

About the Author

John Meindl is a Senior Fellow in the Center for Corporate Learning and Development as well as an Adjunct Professor at Furman University. Mr. Meindl is a Board Member of several companies as well as a Managing Partner in a private investment firm wherein he actively educates and encourages the consideration and deployment of sustainable business initiatives to garner strategic advantage.

Program Sponsors and Speakers

Bank of America Mitsubishi Chemical The CIF Fund The CIF Fund Visionary LLC Owens Corning