Corporate Sustainability Practices: A Review on the Measurements, Relevant Problems and a Proposition (original) (raw)
Related papers
Journal of Management Accounting Research, 2016
Sustainability and sustainable development are clichéd terms widely employed in the business press but seldom defined unequivocally. The most commonly accepted definition of sustainable development is attributed to the Brundtland Commission. Dyllick and Hockerts (2002) draw on the Brundtland Commission and define corporate sustainability as ''meeting the needs of a corporation's current direct and indirect stakeholders without compromising its ability to meet the needs of future stakeholders as well.'' Along similar lines, Schaltegger, Burritt, and Petersen (2003) define corporate sustainability management as a business approach that is designed to shape the environmental, social, and economic effects of a company in such a way that, first, results in the sustainable development of the company and, second, provides an important contribution toward the sustainable development of the economy and society. The debate as to whether firms have social responsibility beyond shareholder wealth maximization has a long history, starting with Bowen (1953) who referred to the obligations of businessmen to pursue policies, decisions, and lines of action that are desirable in terms of the objectives and values of society. Friedman (1970), on the other hand, argued that corporations as legal persons do not have feelings and ethics. Corporations only have ''artificial responsibilities'' that can be defined explicitly by law or regulations and the only social responsibility of business is to maximize shareholder wealth. Others have argued that such dichotomy is moot since corporate social responsibility (CSR) is consistent with long-term shareholder value maximization; e.g., Davis (1960) who asserted that ''socially responsible business decisions can be justified by long, complicated processes of reasoning as having a good chance of bringing long-run gain to the firm, thus paying back for its socially responsible outlook.'' Since then a number of mechanisms through which sustainability efforts can add to firm value have been proposed, including better operational efficiency and cost reduction, reduced regulatory enforcement, increasing rival's costs, improved environmental risk and compliance cost management via emission reductions, superior social risk management through stakeholder engagement and legitimacy, preferential access to scarce resources, product differentiation and access to environmentally conscious markets, lower cost of capital and labor due to improved reputation, shared value creation and lower input supply disruptions due to improved sustainability and resilience of sources, and sustained innovation and growth by addressing big societal issues (
Journal of Business Ethics, 2012
Sustainability is concerned with the impact of present actions on the ecosystems, societies, and environments of the future. Such concerns should be reflected in the strategic planning of sustainable corporations. Strategic intentions of this nature are operationalized through the adoption of a long-term focus and a more inclusive set of responsibilities focusing on ethical practices, employees, environment, and customers. A central hypothesis, that we test in this paper is that companies which attend to this set of responsibilities under the term superior sustainable practices, have higher financial performance compared to those that do not engage in such practices. The target population of this study consists of the top 100 sustainable global companies in 2008 which have been selected from a universe of 3,000 firms from the developed countries and emerging markets. We find significant higher mean sales growth, return on assets, profit before taxation, and cash flows from operations in some activity sectors of the sample companies compared to the control companies over the period of 2006-2010. Furthermore, our findings show that the higher financial performance of sustainable companies has increased and been sustained over the sample. Notwithstanding sample limitation, causal evidence reported in this paper suggests that, there is bi-directional relationship between corporate social responsibilities practices and corporate financial performance.
Evaluation of Corporate Sustainability in Terms of Financial Performance: An Empirical Study
Journal of Commerce and Accounting Research, 2023
Sustainability is the new popular expression, creating a need to change business procedures across all undertakings. The significance of sustainable and mindful assumption methodologies has fundamentally increased because of the rising perception concerning natural strength and financial advancement of nations. This article aims to deal with basic idea of sustainability, core elements and inter-relationships between different significant factors of a particular company. This study considers six parameters: social; economic; environmental; product responsibility; labour practices and decent work; and human rights. To analysis the result of the study, last five years (2017–2021) data of Gas Authority of India Limited (GAIL), a Maharatna Company, have been taken. For the purpose of the study, four financial factors—turnover of the company, profit after tax, earnings per share (EPS), return on capital employed have been considered dependent factors. On the contrary, five sustainable factors, that is, total environmental expenditure, GHG emission, GHG savings, energy consumption and energy savings—have been taken as independent factors. Based on the analysis of these factors, impact of the sustainable performance of GAIL on its financial performance has been assessed. During this study, the COVID-19 pandemic hit the world, which had a great impact on the business of every company as reflected in their financial performance. To evaluate the interrelationship between two considerable factors, it is found that, to some extent, financial factors are dependent on sustainable factors, or that it is quite evident that financial factors change due to the changing trends of sustainable factors.
Corporate sustainability performance: methods and illustrative examples
International Journal of Sustainable Development and Planning, 2008
The concept of sustainable development is of increasing importance for societies. Corporations are as relevant societal actors in an essential role for the realization and implementation of sustainable development. Therefore, it is necessary to assess the performance of corporations in the light of sustainable development. In this paper, basic methods and instruments for the assessment of corporate sustainability performance are compared. Sustainability assessments can be divided into two groups: The fi rst group consists of methods based on monetary units; the second group consists of methods based on non-monetary units. The methods of Sustainable Value Added, Composite Sustainable Development Index and Integrated Sustainability Assessment are discussed in detail and evaluated regarding the criteria applicability, contribution to basic goals of sustainable development and completeness. The methods are used to assess the sustainability performance of BP and Royal Dutch/Shell Group.
Measuring Corporate Sustainability Performance
Sustainability, 2015
The aim of the present study is to examine and evaluate the evolving character of sustainability management in corporations, the significance of environmental protection and sustainability, and barriers to carrying out an incorporated and strategic firm-wide advance of social responsibility. In the present paper, we focus on the contribution of sustainability undertakings towards enhancing corporate performance, the financial involvements of sustainability position and operation, and the chief function of values in corporate policy. Our paper contributes to the literature by supplying proof of elements that lead to the triumph of business patterns for sustainable development, processes through which stakeholders are affecting corporate sustainability conduct, and the link between economic growth and the environment.
EcoProduction, 2013
In the last 20 years, from the Rio Summit, has been a growing concern for global sustainability in all sectors of society. The business organizations do not escape this trend and seek more sustainable ways to generate value. This phenomenon has been driven primarily by the associated legislation arising from the need to conserve natural resources and reduce impacts across economic, social and environmental dimensions, associated with organizations performance. This research proposes a structured approach for sustainability performance evaluation trough Corporate Index of Sustainability Performance (CISP) in Cuban organizations, combining different tools like: ISO 14031, Sustainability Reporting Guidelines of Global Reporting Initiative, Balanced Scorecard and muticriteria methods. Also is exposed the design of a web application that enable the management, storage and integration of sustainability indicators and CISP calculus for assessing the business sustainability performance. Were used, as study case; four small power plants of distributed generation in electric sector of Villa Clara, Cuba.
Corporate sustainability: historical development and reporting practices
Management Research Review, 2012
Purpose -The purpose of this paper is to compare the sustainability disclosure methods-instruments practiced by the two most widely employed indexes/instruments (DJSI World and GRI-G3 Guidelines). The paper suggests that the newly created triple bottom line (TBL) reporting practices need to undergo further standardization and enforcement to avoid, or give early warnings about, future corporate mismanagement that leads to socio-economic consequences detrimental to investors and consumers in general. Design/methodology/approach -This paper utilizes sample firms from the DJSI World Index and the GRI-G3 Sustainability Guidelines membership list to draw inferences on sustainability indicators of performance. The authors compare the GRI reporting guidelines with the disclosure indicators of the DJSI World. Findings -The authors' findings suggest that TBL reporting has made enormous progress over the last two decades. However, the two widely used sustainability reporting instruments/indexes (DJSI World and GRI-G3 Guidelines) differ in disclosure practice-methods and the authors recommend that further standardization and enforcement is necessary. The authors' view is that the Securities and Exchange Commission (SEC) and Financial Accounting Standards Board (FASB) should become actively involved with the issue of standardization and enforcement of corporate socio-environmental disclosures. The paper presents evidence that investors have neither rewarded nor penalized firms for adhering to or violating sustainability matters in their corporate decisions. Practical implications -The authors argue for further standardization and enforcement with regard to the disclosure methods of the two widely used (GRI and DJSI) sustainability indicators in order to avoid future corporate mismanagement that leads to (systemic) economic and socio-environmental consequences detrimental to citizen investors and consumers in general. Originality/value -The research is of interest to academicians and practitioners who are interested in the theory and practice of sustainability reporting or TBL reporting. The findings suggest that this newly created disclosure instrument needs to undergo further standardization and enforcement for meaningful and accurate disclosure of economic-social and environmental performance. The authors' view is that the SEC and FASB should become actively involved with the issue of standardization and enforcement of socio-environmental disclosure of corporate sustainability.
The Corporate Sustainability and Responsibility Proposition: A Review and Appraisal
CSR 2.0 and the New Era of Corporate Citizenship, IGI Global, Hershey, PA, USA., 2016
Businesses are capable of implementing responsible behaviours as they pursue their profit-making activities. The subject of corporate sustainability and responsibility (CSR 2.0) is a promising theoretical concept in social science and humanities. Its roots within the academic literature can be traced back to Bowen's book entitled, 'Social responsibility of the businessman' (Bowen, 1953). There have been numerous reviews of the business case for corporate social responsibility (CSR) as there were also some distinguished authors who criticised the notion altogether. Many academic articles have dedicated their energies on organising and evaluating the evidence to establish a link (usually through regression analysis) between corporate social performance and corporate financial performance. Other authors referred to similar concepts as corporate citizenship which evolved following the concept of stakeholder engagement. In the light of the past empirical work and theoretical underpinning throughout the last years, this conceptual paper sheds light on many constructs of the corporate sustainability and responsibility agenda. This paper shows how CSR practices can differentiate firms from their competitors. In conclusion, it maintains that strategic approaches to CSR may lead towards a competitive advantage for the business in the long run.
Investigating the Relationships Among the Three Dimensions of Corporate Sustainability Performance
CERN European Organization for Nuclear Research - Zenodo, 2021
The concepts of corporate sustainability performance (CSP) calls for a convergence between the three overlapping aspects: economic development, social equity, and environmental protection. Integration of sustainable business practices (SBPs) (i.e. economic, environmental and social) in businesses has gained extensive attention in recent times owing to the escalating pressures from different stakeholder groups. To investigate this phenomenon, this study developed a conceptual framework to explore the impact of environmental and social performance on a firm's economic bottom line, based on a largescale questionnaire survey in the Bangladeshi RMG industry. A total of 255 responses were analyzed using Structural Equation Modelling (SEM) to identify the relationships among the different performance dimensions of CSP. This study confirmed that there is a positive impact of both environmental and social performance on economic performance. It is worth noting that environmental performance has a more significant positive effect on a firm's financial performance than social performance. The results of this study offer valuable insights into the managerial decision-making process by informing corporate managers, as well as policymakers, the interlink among all three dimensions and how the improved environmental and social performances positively influence a firm's economic performance.
Sustainability in the Companies Practices
European Journal of Marketing and Economics, 2022
The sustainability topic is present in our everyday life. No matter if we are traveling in the public transport, we are having coffee with friends or watching tv we hear something related to green economy, sustainable usage of resources or smart energy saving devices. All ads that we see around us, in one way or another, also are calling to be environmentally friendly and sustainable. On national and international level, there are a lot of regulations and requirements developed and enforced both for the business and for the citizens. In the general case, it is commonly accepted, that the companies are taking actions in the field of sustainable development only because they are forced to do so by legislative requirements and penalties. But is it always the case? The paper discusses the main idea standing behind the sustainable development and presents some of the models that summarizes this idea. Further, by reviewing the practices of three large companies in different economic field...