Corporate Sustainability
Definitions of 'Sustainability' vary, but the most universally accepted version is that by the Bruntland Commission of the UN in 1987 “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."
The key concept of Corporate Sustainability is that business goals are inseparable from the societies and environments within which they operate. Whilst short-term economic gain can be pursued, a failure to account for environmental and social impacts will make those business practices unsustainable.
The 'Triple Bottom Line'
Though not without its critics the concept of the 'Triple Bottom Line' has become all-pervasive since its original coinage by John Elkington in 1994. The success of the phrase comes as a result of its simple, even iconic, approach to the idea of Corporate Sustainability. Elkington argued that '… companies should be preparing three different (and quite separate) bottom lines. One is the traditional measure of corporate profit-the “bottom line” of the profit and loss account. The second is the bottom line of a company's “people account”-a measure in some shape or form of how socially responsible an organisation has been throughout its operations. The third is the bottom line of the company's “planet” account-a measure of how environmentally responsible it has been. The triple bottom line (TBL) thus consists of three Ps: profit, people and planet. It aims to measure the financial, social and environmental performance of the corporation over a period of time. Only a company that produces a TBL is taking account of the full cost involved in doing business.' (The Economist, 2009)
The Origins of Corporate Sustainability
Concerns about the environment and development are not new. More recently an ongoing global dialogue has formed around the strategies needed to address the inter-related challenges of building healthy societies, economies, and environments. This dialogue has its roots in the gradual merging of the environmental movement and the post- World War II international development community.
The idea of Corporate Sustainability emerged in the 1980s as chemical companies, stung by their poor public image, looked for radical root and branch solutions. At the same time, a number of ideologically committed SMEs began to explore the benefits of environmental management.
The concept was given more shape by a number of international conferences and business initiatives including the 'Rio Earth Summit' and the Business Council for Sustainable Development.
Corporate Sustainability moves into the mainstream
Within the last 10 - 15 years Corporate Sustainability has become a mainstream issue. In a report published by KPMG in 2010, 62% of companies surveyed had a strategy for Corporate Sustainability - up from 50% in 2008 - this throughout a global recession.
Further, the survey reported that 44% of companies viewed sustainability as a source of innovation and 39% considered it a source of new business opportunities.
In terms of reporting just over one out of every three companies had communicated their record on sustainability with their stakeholders - with another 19% planning to do so.
Drivers
Surveys have revealed that the key drivers behind the greater prominence of Corporate Sustainability are:
• Evolving laws and regulations
• Brand enhancement
• Managing risks associated with sustainability issues
• Cost reduction
Issues
There is no commonly agreed schedule of the issues that are apply to each and every company. This is partly because Corporate Sustainability is still relatively immature, but also because of the shear number of stakeholders involved - each of whom is likely to have a slightly nuanced take on the relevance and importance of each issue.
Recently though the much-anticipated ISO 26000 has started to bring a degree of order through its identification of the main themes:
• Environment
• Corporate governance
• Human rights
• Labour practices
• Fair operating practices
• Consumer issues
• Community involvement and development
The International Standards Organisation is at pains to stress that its standard is not a standard, merely guidance.
Which issues apply to a company will vary according, usually, to the nature of the industry it is involved in. For example, on the broadest scale, manufacturing industries will involve issues that account for supply, manufacturing and delivery, whereas service industries will focus on other issues entirely.
Results
The KPMG survey, cited above, found that companies already committed to Corporate Sustainability had been involved mainly in the following activities:
• Improving energy efficiency
• Reducing products' environmental footprint
• Cutting emissions or pollutants
• Improving environment around facilities
• Enhancing impact on local communities
Again, these outputs will vary from company to company, industry to industry and even country to country.
Standards
Though an attractive idea enabling stakeholders to have a consistent and measurable way of rating companies, there appear to be a number of obstacles to developing a Corporate Sustainability standard- not least the number of stakeholders that would have to be involved in agreeing one.
Corporate Sustainability is much more than a competition between companies. Above all Corporate Sustainability is the process by which each company sets out its ambition along with the strategy it devises to achieve it. The success of the strategy will be measured by the degree of progress made in achieving its own long-term targets.
GreenSpec Light
GreenSpec Light too is involved in the notions of process and progress as they relate to individual companies. Through involvement in the monitoring of progress, GreenSpec Light certifies that a company is committed to the Corporate Sustainability process.
Definitions of 'Sustainability' vary, but the most universally accepted version is that by the Bruntland Commission of the UN in 1987 “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."
The key concept of Corporate Sustainability is that business goals are inseparable from the societies and environments within which they operate. Whilst short-term economic gain can be pursued, a failure to account for environmental and social impacts will make those business practices unsustainable.
The 'Triple Bottom Line'
Though not without its critics the concept of the 'Triple Bottom Line' has become all-pervasive since its original coinage by John Elkington in 1994. The success of the phrase comes as a result of its simple, even iconic, approach to the idea of Corporate Sustainability. Elkington argued that '… companies should be preparing three different (and quite separate) bottom lines. One is the traditional measure of corporate profit-the “bottom line” of the profit and loss account. The second is the bottom line of a company's “people account”-a measure in some shape or form of how socially responsible an organisation has been throughout its operations. The third is the bottom line of the company's “planet” account-a measure of how environmentally responsible it has been. The triple bottom line (TBL) thus consists of three Ps: profit, people and planet. It aims to measure the financial, social and environmental performance of the corporation over a period of time. Only a company that produces a TBL is taking account of the full cost involved in doing business.' (The Economist, 2009)
The Origins of Corporate Sustainability
Concerns about the environment and development are not new. More recently an ongoing global dialogue has formed around the strategies needed to address the inter-related challenges of building healthy societies, economies, and environments. This dialogue has its roots in the gradual merging of the environmental movement and the post- World War II international development community.
The idea of Corporate Sustainability emerged in the 1980s as chemical companies, stung by their poor public image, looked for radical root and branch solutions. At the same time, a number of ideologically committed SMEs began to explore the benefits of environmental management.
The concept was given more shape by a number of international conferences and business initiatives including the 'Rio Earth Summit' and the Business Council for Sustainable Development.
Corporate Sustainability moves into the mainstream
Within the last 10 - 15 years Corporate Sustainability has become a mainstream issue. In a report published by KPMG in 2010, 62% of companies surveyed had a strategy for Corporate Sustainability - up from 50% in 2008 - this throughout a global recession.
Further, the survey reported that 44% of companies viewed sustainability as a source of innovation and 39% considered it a source of new business opportunities.
In terms of reporting just over one out of every three companies had communicated their record on sustainability with their stakeholders - with another 19% planning to do so.
Drivers
Surveys have revealed that the key drivers behind the greater prominence of Corporate Sustainability are:
• Evolving laws and regulations
• Brand enhancement
• Managing risks associated with sustainability issues
• Cost reduction
Issues
There is no commonly agreed schedule of the issues that are apply to each and every company. This is partly because Corporate Sustainability is still relatively immature, but also because of the shear number of stakeholders involved - each of whom is likely to have a slightly nuanced take on the relevance and importance of each issue.
Recently though the much-anticipated ISO 26000 has started to bring a degree of order through its identification of the main themes:
• Environment
• Corporate governance
• Human rights
• Labour practices
• Fair operating practices
• Consumer issues
• Community involvement and development
The International Standards Organisation is at pains to stress that its standard is not a standard, merely guidance.
Which issues apply to a company will vary according, usually, to the nature of the industry it is involved in. For example, on the broadest scale, manufacturing industries will involve issues that account for supply, manufacturing and delivery, whereas service industries will focus on other issues entirely.
Results
The KPMG survey, cited above, found that companies already committed to Corporate Sustainability had been involved mainly in the following activities:
• Improving energy efficiency
• Reducing products' environmental footprint
• Cutting emissions or pollutants
• Improving environment around facilities
• Enhancing impact on local communities
Again, these outputs will vary from company to company, industry to industry and even country to country.
Standards
Though an attractive idea enabling stakeholders to have a consistent and measurable way of rating companies, there appear to be a number of obstacles to developing a Corporate Sustainability standard- not least the number of stakeholders that would have to be involved in agreeing one.
Corporate Sustainability is much more than a competition between companies. Above all Corporate Sustainability is the process by which each company sets out its ambition along with the strategy it devises to achieve it. The success of the strategy will be measured by the degree of progress made in achieving its own long-term targets.
GreenSpec Light
GreenSpec Light too is involved in the notions of process and progress as they relate to individual companies. Through involvement in the monitoring of progress, GreenSpec Light certifies that a company is committed to the Corporate Sustainability process.