what is corporate sustainability?


Corporate sustainability is a term that basically encompasses four key elements of sustainability that includes: sustainable development, corporate social responsibility, the stakeholder theory, and corporate accountability. These terms are often used in conjunction with one another, but how are they relatable? Why are they important to business leaders and academic leaders around the world?

What is corporate social responsibility?

Corporate social responsibility is an organizations responsibility and accountability in considering the impacts that its activities and decisions have on society, the environment and its prosperity. This is also known as the “triple bottom line” of people first, the planet second and prosperity last. Corporate social responsibility builds brand reputation and helps to strengthen communities, which then also strengthens the marketplace.

What is the stakeholder theory?

According to the stakeholder theory, a business’s primary purpose is to create as much value as it can for stakeholders. To ensure long-term success and profitable sustainability, executives must place the interests of their employees, customers, suppliers, shareholders and communities aligned in the same direction. It is also important to keep these key interests aligned with innovation rather than by taking the easy way out and trading off stakeholders interests against one another.

What is corporate accountability?

Corporate accountability is the entire performance of a publicly traded company in areas such as sustainability, social responsibility and environmental performance. When it comes to corporate accountability, profit should not be a company’s main priority or the only important goal. Corporate accountability ensures that a company’s employees and the members of the company’s community are just as important as shareholders to the company.

What is sustainable development?

Sustainable development has various definitions, but the most common definition regarding sustainable development is the definition quoted from the Brundtland Report. That definition basically states that sustainable development should meet the needs of the present without compromising future generations. All sustainable development definitions share the requirement that business leaders need to see the world as a system.

There are two key concepts to the Brundtland Report’s definition and those two key concepts include:

  • Needs – particularly the needs of the world’s poor.
  • Limitations – imposed by the state of technology and social organization to protect future generations.

Why are these things important?

Corporate social responsibility is important to corporate sustainability because it encourages corporations to help society move towards the direction of sustainable development. It provides ethical arguments to corporate managers as to why a fair society is a society that does not just favor the wealthy elite, but instead all people regardless of financial backgrounds.

Once the main stakeholders of an organization have been identified, corporate managers have to then develop strategies to communicate with them regarding sustainability issues. While most stakeholders recognize the importance of social justice, environmental protection and economic stability, each stakeholder has different goals regarding priority and urgency, therefore they require a different strategy.

Corporate accountability is important to corporate sustainability in that it helps to define the relationship between society and corporate managers. It’s also important because thanks to corporate accountability, arguments are laid out to encourage companies to report on any social, environmental and economic issues they may have, and not just its financial performance.

Sustainable development lays out the areas of sustainability that companies need to focus on. Basically, it shows companies areas that need improvement and sets goals to work towards, but it does not provide sustainability arguments. Corporate social responsibility and the stakeholder theory make those arguments.

Presently, while many companies do work towards the goal of improved corporate sustainability, there are still many companies that do not make corporate sustainability a priority. However, the future looks bright as the number of companies who do make it a priority continues to grow.

randy bowden –  t | g+ | in | f


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One thought on “what is corporate sustainability?

  1. Pingback: what is corporate sustainability? « Transformations Life Productions

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