Sustainability could be defined as an ability or capacity of something to be maintained or to sustain itself.

Its about
taking what we need to live now, without jeopardising the potential for people in the future to meet their needs.
If an activity is said to be sustainable, it should be able to continue forever.
Some people say it is easy to recognise activities that are unsustainable because we know it when we see it. Think of
extinction of some species of animals, often due to the activities of humans. Or salinity (salt) in our rivers due to
changed land management practices. And at home, the amount of packaging you put in the bin that has to go into
landfill.
Living sustainably is about living within the means of our natural systems (environment) and ensuring that our lifestyle
doesnt harm other people (society and culture). Its a big idea to get your head around, for all of us. Its really about
thinking about where your food, clothes, energy and other products come from and deciding whether you should buy
and consume these things. For example, you can buy timber imported from other countries to use in your home, but
do you know enough about the rules in place in those countries to prevent animals from being harmed during the
timber harvesting process, or if the local indigenous people support the harvesting, or how much they get paid?
Increasingly our lifestyle is placing more and more pressure on natural systems. Scientists continue to investigate
how human interactions with natural systems can be improved and sustained.
A good example of a sustainable practice is timber harvesting from native NSW state forests.
Native forests have many uses and values. They provide us with timber, clean water and air and we value the
biodiversity they contain, their beauty and links to Aboriginal culture. Timber is harvested from the same native forests
over and over again in NSW. These forests continue to provide us with timber. How? No more timber is cut than the
forest can regrow.
Also, many other factors are considered before any trees are cut down, including soil type, plants and animals and
cultural heritage sites. Timber harvesting in native forests is carried out so that erosion is minimised, threatened
species habitat and cultural heritage sites are protected, and trees remain to provide seed so the forest can regrow
naturally after harvesting

Introduction to Sustainable Development

Sustainability is related to the quality of life in a community -- whether the economic,
social and environmental systems that make up the community are providing a healthy,
productive, meaningful life for all community residents, present and future.
How has the quality of life in your community changed over the last 20 or 40 years?
How has your community changed economically?
o Are there fewer or more good-paying jobs -- are people working more and
earning less or are most people living well?

o Is there more or less poverty and homelessness?

o Is it easier or harder for people to find homes that they can afford?
How has your community changed socially
o Is there less or more crime?
o Are people less or more willing to volunteer?
o Are fewer or more people running for public office or working on
community boards?
How has your community changed environmentally?
o Has air quality in the urban areas gotten better or worse?
o Are there more or fewer warnings about eating fish caught in local streams?
o Has the water quality gotten better or worse?
These are traditional measures of communities. We use numbers to show progress:
"Unemployment rose 0.4 percent in January," or "The economy grew 2% last year."
However, the traditional numbers only show changes in one part of the community
without showing the many links between the community's economy, society and
environment. It is as if a community were made of three separate parts -- an economic
part, a social part and an environmental part that do not overlap like the picture below:

A view of community as three separate, unrelated

parts: an economic part, a social part and an
environmental part.

However, when society, economy and environment are viewed as separate, unrelated
parts of a community, the community's problems are also viewed as isolated issues.
Economic development councils try to create more jobs. Social needs are addressed by

health care services and housing authorities. Environmental agencies try to prevent and
correct pollution problems. This piecemeal approach can have a number of bad sideeffects:
Solutions to one problem can make another problem worse. Creating affordable
housing is a good thing, but when that housing is built in areas far from
workplaces, the result is increased traffic and the pollution that comes with it.
Piecemeal solutions tend to create opposing groups. How often have you heard the
argument 'If the environmentalists win, the economy will suffer,' and its opposing
view 'If business has its way, the environment will be destroyed.'
Piecemeal solutions tend to focus on short-term benefits without monitoring longterm results. The pesticide DDT seemed like a good solution to insect pests at the
time, but the long-term results were devastating.
Rather than a piecemeal approach, what we need is a view of the community that takes
into account the links between the economy, the environment and the society. The figure
below is frequently used to show the connections:

A view of community that shows the links among

its three parts: the economic part, the social part
and the environmental part.

Actions to improve conditions in a sustainable community take these connections into

account. The very questions asked about issues in a 'sustainable' community include
references to these links. For example, the question 'Do the jobs available match the skills
of the available work force?' looks at the link between economy and education.
Understanding the three parts and their links is key to understanding sustainability,
because sustainability is about more than just quality of life. It is about understanding the
connections between and achieving balance among the social, economic, and
environmental pieces of a community.

A better view of sustainable community

Rather than the three partially connected circles shown on the previous
page, a better picture of a sustainable community is the circles within
circles shown below:

A view of community as three concentric

circles: the economy exists within society,
and both the economy and society exist
within the environment.

As this figure illustrates, the economy exists entirely within society, because all parts of
the human economy require interaction among people. However, society is much more
than just the economy. Friends and families, music and art, religion and ethics are
important elements of society, but are not primarily based on exchanging goods and
services.
Society, in turn, exists entirely within the environment. Our basic requirements -- air,
food and water -- come from the environment, as do the energy and raw materials for
housing, transportation and the products we depend on.
Finally, the environment surrounds society. At an earlier point in human history, the
environment largely determined the shape of society. Today the opposite is true: human
activity is reshaping the environment at an ever-increasing rate. The parts of the
environment unaffected by human activity are getting smaller all the time. However,
because people need food, water and air to survive, society can never be larger than the
environment.
Sustainability requires managing all households -- individual, community, national, and
global -- in ways that ensure that our economy and society can continue to exist without
destroying the natural environment on which we all depend. Sustainable communities
acknowledge that there are limits to the natural, social and built systems upon which we
depend. Key questions asked in a sustainable community include: 'Are we using this
resource faster than it can be renewed' and 'Are we enhancing the social and human
capital upon which our community depends?

Sustainability is an issue for all communities, from small rural towns that are losing the
natural environment upon which their jobs depend, to large metropolitan areas where
crime and poverty are decreasing the quality of life. Indicators measure whether a
community is getting better or worse at providing all its members with a productive,
enjoyable life, both now and in the future. This web site is about ways to measure and
strengthen a community's long-range economic, environmental and social sustainability.

Definitions of Sustainability
There may be as many definitions of sustainability and sustainable development as there
are groups trying to define it. All the definitions have to do with:
Living within the limits
Understanding the interconnections among economy, society, and environment
Equitable distribution of resources and opportunities
However, different ways of defining sustainability are useful for different situations and
different purposes. For this reason, various groups have created definitions of:
Sustainability and sustainable development
Sustainable community and society
Sustainable business and production
Sustainable agriculture
If you know of a definition that would be useful, please let us know and we will add it as
time allows.

Key Terms
This section provides explanations for the following words and phrases that need to be
understood in order to fully understand sustainability. They are:
Sustain
Develop
Community

 Economy
Community Capital
Carrying Capacity
Equity
In addition, many different groups and individuals have defined sustainability in their
own terms. Follow the links below for basic definitions for the key terms listed above in
the context of sustainability.

How to get started

While sustainability needs to be considered at all levels of decision
making -- local, regional, national, and global -- this web site is
particularly focused on sustainable local communities. Local means the
area in which you live, work and shop. For some people this may be a
small town. For others it may mean a large metropolitan area.
The primary goal of a sustainable local community is to meets its basic resource needs in
ways that can be continued in the future. To do this, we need to figure out what our basic
needs are and how to meet those needs most effectively. Do we really need one television
set for every room in the house? Do we each really need to use 188 gallons of water
every single day? Or can we develop more effective, efficient ways to create a way of life
that is not only equally or more satisfying, but can also continue indefinitely into the
future?
Some communities have already started to work toward this goal. The most successful
projects have three characteristics in common: First, the community created a vision of its
future that balances economic, environmental and social needs. The community viewed
its future in the long term: not on the order of years, but on the order of decades or
generations. Second, the vision incorporated the views of a wide cross-section of the
community. Third, the community figured out how to keep track of its progress in
reaching that vision.
It is important for the community itself to become involved in the project. A sustainable
community needs to be developed by the people who make up the community. It cannot
be designed by a consultant. It cannot be implemented by experts hired specifically for

the project. It needs to be implemented every day by the people who live and work in the
community.
A sustainable community means many things to the different people who live there. To
business owners it means a healthy economy so that their businesses have a place in
which to create and sell their products. To parents it means a safe environment in which
to bring up their children. Everyone wants a secure, productive job to support themselves.
Everyone needs clean air to breathe and clean water to drink.
Discovering the needs of the community and finding ways to meet those needs is not
difficult but it does require some effort. It begins by deciding what your sustainable
community would look like. There are as many different ways to create a vision as there
are communities that have done so. What is most important is that the vision be created
by the entire community: the well-to-do and those living in poverty, business owners and
union workers, young and old. A number of organizations have developed guidebooks on
how to get a sustainability project started. See theRecommendations section of this web
site for more information about these materials.
Just as important as knowing what a community wants to become is knowing how to
reach that goal. We need ways to tell whether the decisions we make are increasing or
decreasing the overall community health of our communities. Indicators of sustainability
give us a practical way to measure our progress toward sustainable communities. That is
the main focus of Sustainable Measures's work.

Indicators of Sustainability
This web site is about indicators of sustainable community: ways to measure how well a
community is meeting the needs and expectations of its present and future members. One
of the primary goals of our site is to explain what indicators are, how indicators relate to
sustainability, how to identify good indicators of sustainability, and how indicators can be
used to measure progress toward building a sustainable community. Starting up an
indicators project can be a bewildering task. From our experience in working with
communities, we have found that everyone has the same set of basic questions. To help
you develop and use indicators of sustainability, we have prepared clear, practical
answers to these questions:
What is an indicator of sustainability?
What are the characteristics of effective sustainability indicators?

 Is there a checklist that a community can use to evaluate sustainability

indicators?
How can you organize indicators; how many and what kind do you need?
What data sources are available for indicators?
Can you show me examples of good sustainability indicators?
Are there any training materials that explain indicators and sustainability?
Sustainable Measures provides consulting services to communities and organizations
working on sustainability, but we cannot give you a quick solution. There isn't one. We
also cannot do all the work for you. Sustainability cannot be developed and imposed on a
community by someone outside that community. It needs to be developed and
implemented by the community itself or it will not work. Outside experts can provide
assistance at crucial points, or help to move the process along, but ultimately people in
the community are the experts on their community. Community members need to be the
driving force behind becoming a community with a sustainable quality of life for all
members, now and for future generations.
So, we cannot provide you with a complete set of ready-made indicators for your
community, but we can provide some basic information that is useful in developing
indicators. Here is some basic information to help you get started:
Free training materials,
A searchable database of indicators,
Explanations of indicators, and sustainability
A list of online and print resources, and
Answers to frequently asked questions about indicators and sustainability.
Sustainable Measures is committed to the development and growth of sustainable
communities. We want this web site to provide a focal point for dissemination, evaluation
and discussion of indicators of sustainable communities. Unlike sites whose subject is
"sustainability" in general, this site focuses on how communities can use indicators of
sustainability in a practical way to determine their direction and measure their progress
Our goal is to educate and inspire comm.unity members from diverse backgrounds, and

provide them with a forum for discussion. This site is not meant to be a forum for
"experts" to talk among themselves, though experts who wish to contribute are certainly
welcome. Instead, this site is dedicated to volunteers: the members of a community who
give their time and effort to serve on committees, support community government, and
organize at a grassroots level. By providing community members with information in a
clear, easy-to-use format, we hope to make this information available to a much broader
spectrum of people than would otherwise be possible.
We also encourage feedback about indicators. We welcome your comments about the site
and the information it contains. Contact us with your comments, experiences and
suggestions.

What is an indicator of sustainability?

An indicator is something that helps you understand where you are,
which way you are going and how far you are from where you want to
be. A good indicator alerts you to a problem before it gets too bad and
helps you recognize what needs to be done to fix the problem.
Indicators of a sustainable community point to areas where the links
between the economy, environment and society are weak. They allow
you to see where the problem areas are and help show the way to fix
those problems.
Indicators of sustainability are different from traditional indicators of
economic, social, and environmental progress. Traditional indicators -such as stockholder profits, asthma rates, and water quality -- measure
changes in one part of a community as if they were entirely
independent of the other parts. Sustainability indicators reflect the
reality that the three different segments are very tightly
interconnected, as shown in the figure below:

Communities are a web of interactions

among the environment, the economy and
society.

As this figure illustrates, the natural resource base provides the materials for production
on which jobs and stockholder profits depend. Jobs affect the poverty rate and the poverty
rate is related to crime. Air quality, water quality and materials used for production have
an effect on health. They may also have an effect on stockholder profits: if a process
requires clean water as an input, cleaning up poor quality water prior to processing is an
extra expense, which reduces profits. Likewise, health problems, whether due to general
air quality problems or exposure to toxic materials, have an effect on worker productivity
and contribute to the rising costs of health insurance.
Sustainability requires this type of integrated view of the world -- it requires
multidimensional indicators that show the links among a community's economy,
environment, and society. For example, the Gross Domestic Product (GDP), a wellpublicized traditional indicator, measures the amount of money being spent in a country.
It is generally reported as a measure of the country's economic well-being: the more
money being spent, the higher the GDP and the better the overall economic well-being is
assumed to be. However, because GDP reflects only the amount of economic activity,
regardless of the effect of that activity on the community's social and environmental
health, GDP can go up when overall community health goes down. For example, when
there is a ten-car pileup on the highway, the GDP goes up because of the money spent on
medical fees and repair costs. On the other hand, if ten people decide not to buy cars and
instead walk to work, their health and wealth may increase but the GDP goes down.
In contrast, a comparable sustainability indicator is the
Index of Sustainable Economic Welfare. In order to get a

more complete picture of what is economic progress, the ISEW subtracts from the GDP
corrections for harmful bases or consequences of economic activity and adds to the GDP
corrections for significant activities such as unpaid domestic labor. For instance, the
ISEW accounts for air pollution by estimating the cost of damage per ton of five key air
pollutants. It accounts for depletion of resources by estimating the cost to replace a barrel
of oil equivalent with the same amount of energy from a renewable source. It estimates
the cost of climate change due to greenhouse gas emissions per ton of emissions. The cost
of ozone depletion is also calculated per ton of ozone depleting substance produced.
Additionally, adjustments are made to reflect concern about unequal income distribution.
The correction for unpaid domestic labor is based on the average domestic pay rate.
Some health expenses are considered as not contributing to welfare, as well as some
education expenses. (See Indicator Spotlight for more on the ISEW as a sustainability
indicator.)
Like the GDP, the ISEW bundles together in one index tremendous amounts of
information, but the key difference is that the information takes into account the links
between environment, economy and society.
Indicators of sustainable community are useful to different communities for different
reasons. For a healthy, vibrant community, indicators help monitor that health so that
negative trends are caught and dealt with before they become a problem. For
communities with economic, social, or environmental problems, indicators can point the
way to a better future. For all communities, indicators can generate discussion among
people with different backgrounds and viewpoints, and, in the process, help create a
shared vision of what the community should be.

Sustainability Projects for United States

This page lists many projects where people are working to make communities more
sustainable and to measure the results. The types of projects range from small groups of
volunteers to city and county agencies to large collaborative partnerships of nonprofits,
businesses, and government agencies. The projects also range in scale from
neighborhoods and individual towns and cities to metropolitan regions and multinational
efforts.
This list is not intended to be exhaustive, although we have tried to include examples of a
variety of sustainability efforts. Some projects provide data on indicators the
communities have developed, with detailed charts and graphs showing the trends in the
indicators over a number of years. Other reports provide information to help people lead

more sustainable lives. Since the emphasis of Sustainable Measures is on indicators, we

have tended to favor projects that have indicators that are updated on some regular basis.
In addition, because the emphasis of Sustainable Measures is on sustainability, we do not
include on this page those community indicator projects that are not specifically focused
on sustainability. This includes "quality of life" or "economic development" projects.
Because some of those projects are very instructive for groups just beginning to work on
indicators, we have included what we consider to be the best examples of other types of
community indicator projects which you will find under the heading "Other Indicator
Projects" in the menu at the left of this page.

Why is corporate social responsibility important today?

A strategic approach to CSR is increasingly important to a company's competitiveness. It
can bring benefits in terms of risk management, cost savings, access to capital, customer
relationships, human resource management, and innovation capacity. It also encourages
more social and environmental responsibility from the corporate sector at a time when the
crisis has damaged consumer confidence and the levels of trust in business.
Through CSR, enterprises can significantly contribute to the European Unions treaty
objectives of sustainable development and a highly competitive social market economy.
CSR underpins the objectives of the Europe 2020 strategy for smart, sustainable and
inclusive growth, including the 75% employment target. Responsible business conduct is
especially important when private sector operators provide public services.
CSR requires engagement with internal and external stakeholders so it enables enterprises
to anticipate better and take advantage of fast-changing expectations in society as well as
operating conditions. This means it can also act as a driver for the development of new
markets and create real opportunities for growth.
By addressing their social responsibility, enterprises can build long-term employee,
consumer and citizen trustas a basis for sustainable business models. This in turn helps to
create an environment in which enterprises can innovate and grow. The economic crisis
and its social consequences have to some extent damaged levels of trust in business, and
have focused public attention on the social and ethical performance of enterprises,
including on issues such as bonuses and executive pay.
Helping to mitigate the social effects of the crisis, including job losses, is part of the
social responsibility of enterprises. In the longer term, CSR offers a set of values on

which to build a more cohesive society and on which to base the transition to a
sustainable economic system.
By renewing efforts to promote CSR now, the Commission aims to create conditions
favourable to sustainable growth, responsible business behaviour and lasting job creation
for the medium and long-term.
What progress has been made at EU level and what challenges remain?
European policy on CSR to date has contributed to progress in the field of CSR.
Indicators of progress include:
The number of EU enterprises that have signed up to the ten CSR principles of the United
Nations Global Compact has risen from 600 in 2006 to over 1900 in 2011.
The number of organisations with sites registered under the Environmental Management
and Audit Scheme (EMAS) has risen from 3,300 in 2006 to over 4,600 in 2011.
The number of EU companies signing transnational company agreements with global or
European workers organisations, covering issues such as labour standards, rose from 79
in 2006 to over 140 in 2011.
The Business Social Compliance Initiative, a European, business-driven initiative for
companies to improve working conditions in their supply-chains, has increased its
membership from 69 in 2007 to over 700 in 2011.
The number of European enterprises publishing sustainability reports according to the
guidelines of the Global Reporting Initiative rose from 270 in 2006 to over 850 in 2011.
Despite this progress, important challenges remain. Many companies in the EU have not
yet fully integrated social and environmental concerns into their operations and core
strategy. Accusations persist of the failure of a small minority of European enterprises to
respect core labour standards and human rights. Only 15 out of 27 EU Member States
have national policy frameworks to promote CSR.
The new strategy introduces important new elements which can help further extend the
impact of European efforts to encourage corporate social responsibility.

What EU policy actions will cover corporate social responsibility?

The new CSR policy presented today puts forward an action agenda for the period 20112014 covering 8 areas:
Enhancing the visibility of CSR and disseminating good practices: this includes the
creation of a European award, and the establishment of sector-based platforms for
enterprises and stakeholders to make commitments and jointly monitor progress.
Improving and tracking levels of trust in business: the Commission will launch a public
debate on the role and potential of enterprises, and organize surveys on citizen trust in
business.
Improving self- and co-regulation processes: the Commission proposes work with
business and other organizations to develop a code of good practice to guide the
development of future self- and co-regulation initiatives.
Enhancing market reward for CSR: this means leveraging EU policies in the fields of
consumption, investment and public procurement in order to promote market reward for
responsible business conduct.
Improving company disclosure of social and environmental information: the new policy
confirms the Commissions intention to bring forward a new legislative proposal on this
issue.
Further integrating CSR into education, training and research: the Commission will
provide further support for education and training in the field of CSR, and explore
opportunities for funding more research.
Emphasizing the importance of national and sub-national CSR policies: the Commission
invites EU Member States to present or update their own plans for the promotion of CSR
by mid 2012.
Better aligning European and global approaches to CSR: the Commission highlights the
OECD Guidelines for Multinational Enterprises, the 10 principles of the UN Global
Compact, the UN Guiding Principles on Business and Human Rights, the ILO Tri-partite
Declaration of Principles on Multinational Enterprises and Social Policy, and the ISO
26000 Guidance Standard on Social Responsibility. The Commission aims to monitor the
commitments of large European enterprises to take account of internationally recognized
guidelines and principles. It will also present a report on EU priorities for the

implementation of the UN Guiding Principles on Business and Human Rights, and

develop human rights guidance for a limited number of industrial sectors and for small
businesses.
What is corporate social responsibility (CSR)?
In its new Communication, the European Commission has put forward a simpler
definition of CSR as "the responsibility of enterprises for their impacts on society" and
outlines what an enterprise should do to meet that responsibility.
Although there is no "one-size-fits-all" and for most small and medium-sized enterprises
the CSR process remains informal, complying with legislation and collective agreements
negotiated between social partners is the basic requirement for an enterprise to meet its
social responsibility.
Beyond that, enterprises should, in the Commission's view, have a process in place to
integrate social, environmental, ethical human rights and consumer concerns into their
business operations and core strategy in close cooperation with their stakeholders. The
aim is:
to maximise the creation of shared value, which means to create returns on investment for
the company's shareholders at the same time as ensuring benefits for the company's other
stakeholders;
to identify, prevent and mitigate possible adverse impacts which enterprises may have on
society.
Important features of the new definition are:
Recognition of the importance of core business strategy. This is consistent with the
approach taken by leading enterprises for whom social responsibility and sustainability
have become an integral part of the business model. The Commissions 2008
competitiveness report concluded that CSR is most likely to contribute to the long-term
success of the enterprise when it is fully integrated into business strategy.
Development of the concept of creating shared value. This refers to the way in which
enterprises seek to generate a return on investment for their owners and shareholders by
means of creating value for other stakeholders and society at large. This links CSR
strongly to innovation, especially in terms of developing new products and services that
are commercially successful and help to address societal challenges.
Explicit recognition of Human rights and ethical considerations in addition to social,
environmental and consumer considerations.

Corporate social responsibility concerns actions by companies over and above their legal
obligations towards society and the environment. Certain regulatory measures create an
environment more conducive to enterprises voluntarily meeting their social responsibility.
This is the first time in 10 years that the Commission has changed its definition of CSR.
Its previous definition was: a concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis. The new definition is consistent with internationally
recognised CSR principles and guidelines, such as the OECD Guidelines for
Multinational Enterprises, the ISO 26000 Guidance Standard on Social Responsibility
and the United Nations Guiding Principles on Business and Human Rights. It should
provide greater clarity for enterprises, and contribute to greater global consistency in the
expectations on business, regardless of where they operate.
Corporate social responsibility
The European Commissions new strategy on corporate social responsibility (CSR), part
of a package of measures on responsible business (see attached IP/11/1238), aims to help
enterprises achieve their full potential in terms of creating wealth, jobs and innovative
solutions to the
many challenges facing Europe's society. It sets out how enterprises can benefit from
CSR as well as contributing to society as a whole by taking greater steps to meet their
social responsibility.

The importance of
corporate social
responsibility
Corporate social responsibility (CSR) has become one of the standard business
practices of our time. For companies committed to CSR it means kudos and an

enhanced overall reputation a powerful statement of what they stand for in an

often cynical business world.
The establishment of a CSR strategy (sometimes referred to as a sustainability
strategy) is a crucial component of a companys competiveness and something
that should be led by the firm itself. This means having policies and procedures in
place which integrate social, environmental, ethical, human rights or consumer
concerns into business operations and core strategy all in close collaboration
with stakeholders.
For companies, the overall aim is to achieve a positive impact on society as a
whole while maximising the creation of shared value for the owners of the
business, its employees, shareholders and stakeholders. Not so long ago, the
European Commission defined CSR as the responsibility of enterprises for their
impacts on society, a succinct and distinct summation for sure.
A 2015 study by the Kenexa High Performance Institute in London (a division of
Kenexa, a global provider of business solutions for human resources) found that
organisations that had a genuine commitment to CSR substantially outperformed
those that did not, with an average return on assets 19 times higher. Additionally,
the study showed that CSR-orientated companies had a higher level of employee
engagement and provided a markedly better standard of customer service.
And yet, despite the positivity and optimism that CSR brings to the corporate
table, companies do not always accept their responsibilities in this area in good
heart, with a fair number admitting to having adopted CSR mainly as a marketing
gimmick. In some cases, firms may have been coerced into adopting CSR and did
so with insufficient enthusiasm and vigour, leaving many of them to ponder what
they could and should have done differently.
For those considering CSR as a strategic option the question to ask may very well
be this: is the CSR payoff always worth the outlay?
Establishing a CSR programme

The factors driving companies to pursue a CSR agenda are fairly consistent across
the corporate world; however, once a company makes the decision to adopt CSR
orientated activities, a plan (involving a lot of engagement with employees,
managers, suppliers, NGOs and others) must be implemented to carry out the
agreed CSR programme.
Within the pages of its CSR Implementation Guide the International Institute for
Sustainable Development (IISD) outlines what it considers to be the six key
components which go towards a coherent CSR plan: (i) CSR Assessment; (ii) CSR
Strategy; (iii) CSR Commitments; (iv) Implementation Plan and Actions; (v)
Verification and Evaluation of Results, and (vi) Refinement. Perhaps most
important, however, is an underlying commitment to multi-stakeholder
engagement as a foundational pillar to any credible CSR program, says Jason
Potts, a senior associate with IISDs sustainable markets and responsible trade
initiative. CSR is fundamentally about ensuring that companies forward broader
public objectives as an integral part of their daily activities and this can only be
ensured with the appropriate communication channels with stakeholders.
CSR policies need to be considered as a core and inseparable component of the overall service or
product offering.
For Klara Kozlov, head of corporate clients at the Charities Aid Foundation, every
companys situation is unique, with many different models in existence which can
help organisations to achieve their CSR aims. In turn, this preponderance of choice
has led to many companies recognising that they are defined by what they do, not
just what they give. Companies are not solely providing a financial contribution but
are increasingly unlocking their intellectual assets and the power of their people to
achieve a positive impact, claims Ms Kozlov. Ultimately, coherency comes from clear
purpose, programmes of work which are authentic to and valued in the business and
an acceptance that it is critical to business performance.

Tobias Webb, founder and managing director of the Innovation Forum, is clear on what
a CSR programme, or a sustainability strategy, should accomplish. It comprises reevaluating how the company thinks about its impact, engaging stakeholders beyond
shareholders and coming up with a plan to improve the impact of the business on

society and seize business opportunities and make cost savings as a result, he attests.
This would involve a lot of planning and engagement with employees, managers,
suppliers, NGOs, perhaps academics and others, to figure out where and how this is
best done.
CSR resistance
Cynics suggest that companies often develop a CSR agenda not because of an
altruistic desire to assist in curing the ills of society, but for reasons more akin to
a box ticking exercise. Whatever the consensus, some organisations either
implement their CSR programme with a distinct lack of heart or resist adopting a
CSR policy altogether.
In the opinion of Mr Potts, if a resistance to CSR policies does exist, it usually stems
from the notion of allowing external stakeholders to directly influence corporate
policies and strategies, an idea that is largely antithetical to the basic mindset under
which many, if not most, corporations operate. An honest adoption of CSR often
requires a serious reformulation of corporate purpose and decision-making
structures, advises Mr Potts. Such change also implies, and rests upon, the
adoption of a corporate culture which actively encourages employees to consider
how the company might be able to do better in the world. When CSR policies are
adopted without simultaneous tools for stimulating and allowing deep change, one
can expect similarly soft results in terms of CSR outcomes and impacts.

Avoiding ethical blowback

According to Mr Webb, many companies are shackled by an adherence to a 20th
century mindset imbued by the Milton Friedman paradigm of only shareholder
returns count. Instead, companies should be looking at business strategy
through the lens of sustainable supply or resilience a very different proposition
from the Friedman philosophy. Tesco suffered hugely because all their suppliers
hated them, and so did everyone else, says Mr Webb. This was because they
squeezed everyone and it backfired on them in the end. The Wharton Business
School professor Thomas Donaldson calls this type of scenario the ethical
blowback.

Sustainability is clearly important. More businesses are adopting a strategic

approach to their CSR policies because they are increasingly seeing the benefit
across their business and for their stakeholders. Many businesses have made
significant strategic advances in sustainability, affirms Ms Kozlov. CSR allows
businesses to demonstrate their values, engage their employees and
communicate with the public about how they operate and the choices they make,
to ensure a sustainable future. CSR helps pave the way for partnerships between
businesses and civil society that are based on common goals and shared actions
to deliver impact-driven outcomes.
Pressure to deliver strong financial results
As CSR programmes continue to evolve and extend their reach, it may well
become the case that companies find themselves under added pressure to have
their CSR initiatives deliver a strong financial result. If this is indeed true, many
would question whether this financially-orientated approach is not somewhat at
odds with what the core aims of a CSR programme are supposed to be. This
depends on your timescale, suggests Mr Webb. In three to five years, a good
CSR strategy will have delivered more engaged employees, better access to
talent, lower capital constraints and a better reputation. In the longer term it can
deliver serious business innovation and transformation of the company culture
and how the firm sees its role in the world. Companies attempting this not yet
successfully, but on the way include Unilever and Nestle, among others. Two
well-known examples of those that are already there are Interface and
Patagonia.
Others are not convinced that organisations are feeling extra pressure due to a
need to demonstrate stronger financial outcomes in conjunction with their CSR
activities. Significant pressure to bolster financial outcomes has always existed
and will continue to exist, says Mr Potts. There is no reason why CSR
commitments cannot deliver strong financial results, and it would be folly to
expect companies to throw this core corporate objective out the window
altogether.

The problem arises when companies attempt to measure the financial results of
their CSR policies independent of their other corporate activities. Rather, CSR
policies need to be considered as a core and inseparable component of the
overall service or product offering. Furthermore, the costs related to CSR should
not be expected to demonstrate traceable financial gains.
CSR policies should set the rules of the game which the company concerned has
established, and within which broader corporate financial returns need to be
secured. Basic CSR principles and commitments should be considered nonnegotiable parameters of business operations rather than being subject to
specific financial performance requirements, says Mr Potts.
Future embrace
At present, the incorporation of CSR programmes by businesses on a
fundamental level appears as prevalent as ever. However, the jury is still very
much out as to whether companies have it within them to embrace a broad or
multifaceted vision of CSR. It would be utopic to expect a sea change among
industries, says Mr Potts. While there are plenty of examples of companies
using strong CSR performance as a brand-building and product marketing
strategy, far too many corporate executives still rely on the old financial and
hierarchical models of yesteryear as the basis of their own planning. The biggest
and most influential companies also tend to be the most reliant on the
conventional way of doing business. What is happening, however, is a broad
transition to the adoption of external multi-stakeholder processes in the form
of multi-stakeholder sustainability standards and labels as a way of outsourcing
the stakeholder engagement process.
Ultimately, there are no hard and fast rules governing CSR. The more companies
understand the growing resilience, reputation and legal risk they face, the more
opportunities our globalised and connected world has to offer them. This often
depends on the sector, points out Mr Webb. If you make mining equipment,
your focus will be energy efficiency and perhaps new technology that is safer. If

you sell chocolate, your concerns are around the economic viability of your
supply chain.
With a number of recent legislative and behavioural developments, such as the
transparency of supply chains, sustainable development goals, the ramifications
of the Modern Slavery Act 2015 and the zero landfill initiative, all contributing to
the CSR melting pot, Ms Kozlov is in no doubt that companies are unifying their
CSR activities under an overarching, business-aligned strategy, and using them as
a tool to drive innovation, tackle material issues, strengthen community
engagement and mitigate risks.
Whether a force for good or an exercise in brand enhancement, what cannot be
denied is that CSR is very much an integral part of the global business landscape.

Why is social responsibility

important to a business?
Social responsibility is important to a business because it demonstrates to both
consumers and the media that the company takes an interest in wider social
issues that have no direct impact on profit margins. These issues may be local,
national or global, but a concern for the health and wellness of others that does
not involve sales can be seen as commendable if done well.
For this reason, evidence of a healthy social responsibility policy can impact
buying decisions where customers seek to make an ethical purchase. This, in
turn, can lead to greater profits for a business. However, building a highly
regarded and trustworthy reputation is more valuable in this instance, and
observers appreciate that social responsibility initiatives take time to establish
and manage.
Furthermore, being part of a scheme that helps disadvantaged people or those
otherwise in need can help boost morale for employees within the responsible

company. Along with other methods of morale boosting, this can lead to greater
productivity among the workforce. Knowledge that a product and service has a
great influence on social causes can be a genuine delight to employees,
customers and business owners alike. Over time, the business contribution to a
charity, cause or community can be a significant amount of charitable funds,
product donations or other ventures.
When the importance of social responsibility is recognized as part of a business's
foundation, the impact of such endeavors can have life-changing consequences
for recipients of aid and, equally, instill a sense of pride in the people who
support and work toward its growth. A business can grow with or without social
responsibility, but doing good for others allows a business to reap rewards in
many ways.

Six Reasons Companies Should Embrace CSR

Corporate social responsibility (CSR) is not going to solve the worlds problems.
That said, CSR is a way for companies to benefit themselves while also benefiting
society. When I define CSR to the uninitiated, I typically get three reactions. Some
say, Isnt that a bunch of greenwashing? Others use a non-so-nice word to
describe male bovine excrement instead of greenwashing. Still others say my
definition sounds like an inspiring call to action to soothe the ills of capitalism.
Then there are those who say CSR is like a begrudging call to Woodstock to sing
Kumbaya something only hippies could dream up.
So whats a CSR professional supposed to do when faced with such a varied
response? Typically, I step on top of my soapbox to declare the six business
reasons why companies should embrace corporate social responsibility.
Companies that get it are the ones that are using CSR (or sustainability as I
prefer to call it) as a way to push the following business processes into the
organization:

Innovation I know, I know, its an over-used term. Just typing the word into
Amazon will bring up nearly 150,000 items. But in the context of CSR, innovation
is a huge benefit to a company and society. For example, I recently watched
a video of a brief talk by Geoff McDonald who is the Unilever Global VP for HR,
Marketing, Communications and Sustainability. Using the lens of sustainability
as McDonald described it, Unilever was able to innovate new products such as a
hair conditioner that uses less water. Without sustainability, the companys
research and development efforts possibly wouldnt have led to such a product.
Cost savings One of the easiest places for a company to start engaging in
sustainability is to use it as a way to cut costs. Whether its using less packaging or
less energy, these savings add up quickly. For example, General Mills is on a path
to reduce its energy savings by 20% by 2015. According to its 2011 CSR report,
after installing energy monitoring meters on several pieces of equipment at its
Covington, Ga. plant, the company saved $600,000.
Brand differentiation In the past, brand differentiation was one of the primary
reasons companies embraced CSR. Companies such as Timberland were able to
find their voice and incorporate the companys values into their business model.
However, as CSR has become more commonplace, using it to differentiate your
brand is getting harder to do. For example, the Cola Wars is one of the longest
running rivalries in business. Coke and Pepsi are constantly looking to grab as
much market share as they can from each other. Yet they are both adopting
similar, although slightly different, approaches to CSR. Both Pepsi and Cokeare
pursuing strategies of zero net water usage. Both companies offer water bottles
made from sustainable packaging as well. In the end, although neither company
is necessarily going to see strong differentiation benefits, I see the diminishing
returns on brand differentiation as a sign that CSR is taking hold and is not just a
fad.
Long-term thinking The only reason were doing sustainability is to drive the
growth of Unilever, McDonald said in the video mentioned above. Indeed, CSR is
an effort to look at the companys long-term interest and ensuring that the
companys future is well sustainable. Hence, thats why I prefer the term

sustainability to CSR. It is a shift from worrying about the next fiscal quarters
financial results to the impact business decisions today have on financial (and
social) results ten years from now.
Customer engagement Whats the point of doing CSR if no one knows about
it? For the past few years, Walmart has established itself as a leader on
environmental efforts. Yes, you read that correctly, Walmart is a leader in
environmentalism. In 2008, Walmart ran an ad campaign designed to raise
awareness about the environment and the product choices consumers could
make. Using CSR can help you engage with your customers in new ways. Since
the message is about something good, it can often be an easier way to talk to
your customers. This is an underused tool for business-to-business company
communication.
Employee engagement Along similar lines, if your own employees dont know
whats going on within your organization, youre missing an opportunity.
Companies like Sara Leecreated a cross-functional, global Sustainability Working
Team to help create a strategy for sustainability. At a more grass roots level,
the Solo Cup Company created the Sustainability Action Network to activate
employees in community service focused on the companys CSR priorities.
To be clear, these are the reasons why most companies should enact CSR. In
truth, companies often become involved in CSR for different reasons, which Ill
write about in future posts.
This isnt to say that CSR is the panacea to the worlds problems. But it certainly
does start to move the needle toward an economy that is much closer to one
where I would like to conduct business.

WHY CORPORATE SOCIAL RESPONSIBILITY IS SO IMPORTANT

Published on February 4, 2013
In 2013 many companies are starting the New Year by examining exactly how
effective their branding is and how they are perceived by their customers and the

general public. With all else being equal, companies that take an active role in
promoting their corporate social responsibility programs are generally viewed
more favorably than those that do not have highly visible programs. Having goals
and a vision for your company that go beyond products and profits definitely
provides a warmer image of your business that consumers will be more eager to
engage with.
Understanding the Types of CSR
There are actually two different types of corporate social responsibility to
consider. The first one consists of corporations providing funding and resources
for worthwhile social causes, such as donating money or employee time to
charities. For many people, this is the definition used when thinking about
corporate responsibility. However, another type of CSR involves putting together
a real plan to produce products or provide services that are in the best interests
of society. These include things like using safe materials in design and
manufacture, corporate environmental initiatives, and other factors such as job
creation and economic development.
Showing a True Commitment
The most successful corporate social responsibility programs integrate these two
types of CSR together to show a true commitment to a cause. For example, a
company that uses sustainable materials in their products, donates financial
resources to environmental causes, and allows employees to take paid time off
for volunteering at environmental charities would be showing a true commitment
to the environment that goes beyond any single CSR initiative.
Social Media Visibility
One of the reasons that corporations should have visible CSR campaigns is due to
the importance and prevalence of social media. Corporations that want to protect
their brand understand that social media is an integral part of public perception.
When a corporation exercises social responsibility in the form of fundraising or
setting up employee giving programs, using social media to promote these
actions helps to create a positive branding environment and it is a great way to

engage with your audience on a deeper level that goes beyond your products or
services.
Public Relations Benefits
Public relations is a potent tool for shaping consumer perception and building a
companys image. Corporations that actively promote their social responsibility
activities often take steps to publicize these efforts through the media. Getting
the word out about corporate donations, employee volunteer programs, or other
CSR initiatives is a powerful branding tool that can build publicity for you in both
online and print media.
Government Relations
Corporations that place an emphasis on corporate social responsibility typically
have an easier experience when dealing with politicians and government
regulators. In contrast, businesses that present a reckless disregard for social
responsibility tend to find themselves fending off various inquiries and probes,
often brought on at the insistence of public service organizations. The more
positive the public perception is that a corporation takes social responsibility
seriously, the less likely it is that activist groups will launch public campaigns and
demand government inquiries against it.
Building a Positive Workplace Environment
Finally, one of the greatest benefits of promoting social responsibility in the
workplace is the positive environment you build for your employees. When
employees and management feel they are working for a company that has a true
conscience, they will likely be more enthusiastic and engaged in their jobs. This
can build a sense of community and teamwork which brings everyone together
and leads to happier, more productive employees.
Getting an effective CSR program off the ground isnt easy.All too often, a
program is received with enthusiasm at the beginning and then gets pushed off
to the side for other priorities. This doesnt have to be the case

Advantages of Corporate Social Responsibility

1. Satisfied employees.
Employees want to feel proud of the organization they work for. An employee
with a positive attitude towards the company, is less likely to look for a job
elsewhere. It is also likely that you will receive more job applications because
people want to work for you.
More choice means a better workforce. Because of the high positive impact of
CSR on employee wellbeing and motivation, the role of HR in managing CSR
projects is significant.

2. Satisfied customers
Research shows that a strong record of CSR improves customers attitude
towards the company. If a customer likes the company, he or she will buy more
products or services and will be less willing to change to another brand.
Relevant research:
IBM study Attaining Sustainable Growth through Corporate Social Responsibility:
The majority of business executives believes that CSR activities are giving their
firms competitive advantage, primarily due to favorable responses from
consumers.
Better Business Journey, UK Small Business Consortium: 88% of consumers said
they were more likely to buy from a company that supports and engages in
activities to improve society.

3. Positive PR
CSR provides the opportunity to share positive stories online and through
traditional media. Companies no longer have to waste money on expensive

advertising campaigns. Instead they generate free publicity and benefit from
worth of mouth marketing.

4. Costs reductions
Yes, you read this correctly. A CSR program doesnt have to cost money. On the
contrary. If conducted properly a company can reduce costs through CSR.
Companies reduce costs by:

More efficient staff hire and retention

Implementing energy savings programs

Managing potential risks and liabilities more effectively

Less investment in traditional advertising

5. More business opportunities

A CSR program requires an open, outside oriented approach. The business must
be in a constant dialogue with customers, suppliers and other parties that affect
the organization. Because of continuous interaction with other parties, your
business will be the first to know about new business opportunities.

6. Long term future for your business

CSR is not something for the short term. Its all about achieving long term results
and business continuity. Large businesses refer to: shaping a more sustainable
society

Top 5 benefits of Corporate Social Responsibility

Benefit 1: The ability to have positive impact in the community

Keeping social responsibility front of mind encourages businesses to act ethically
and to consider the social and environmental impacts of their business. In doing
so, organisations can avoid or mitigate detrimental impacts of their business on
the community. In some cases, organisations will find ways to make changes in
their services or value chain that actually delivers benefits for the community,
where they once didnt.

Benefit 2: It supports public value outcomes

Put simply, public value is about the value that an organisation contributes to
society. A sound, robust corporate social responsibility framework and
organisational mindset can genuinely help organisations deliver public value
outcomes by focussing on how their services can make a difference in the
community. This might happen indirectly, where an organisations services
enable others to contribute to the community, or directly through the
organisations own activities, such as volunteerism and philanthropy.

Benefit 3: It supports being an employer of choice

Being an employer of choice typically translates into the companys ability to
attract and retain high calibre staff. There are ways to approach being an
employer of choice, including offering work life balance, positive working
conditions and work place flexibility. Studies have shown that a robust corporate
social responsibility framework can also help a company become more attractive
to potential future employees who are looking for workplaces with socially
responsible practices, community mindedness and sound ethics.

Benefit 4: It encourages both professional and personal development

contribute to work and causes that they might feel passionate about, or learn
something entirely new which can Providing employees with the opportunity to be
involved in a companys socially responsible activities can have the benefit of teaching
new skills to staff, which can in turn be applied in the workplace. By undertaking

activities outside of their usual work responsibilities, employees have the chance to
help enrich their own perspectives. By supporting these activities, organisations
encourage growth and support for employees.

Benefit 5: It enhances relationships with clients

A strong corporate social responsibility framework is essential to building and
maintaining trust between the company and clients. It can strengthen ties, build
alliances and foster strong working relationships with both existing and new clients.
One way this can be achieved is by offering pro-bono or similar services where a
company can partner with not-for-profit organisations to support their public value
outcomes, where funds or resources may be limited. In turn, this helps deliver public
value outcomes that may not have been delivered otherwise.
The Business Benefits of CSR
CSR should not be viewed as a drain on resources, because carefully implemented CSR policies can
help your oragnisation:

Win new business

Increase customer retention

Develop and enhance relationships with customers, suppliers and networks

Attract, retain and maintain a happy workforce and be an Employer of Choice

Save money on energy and operating costs and manage risk

Differentiate yourself from your competitors

Generate innovation and learning and enhance your influence

Improve your business reputation and standing

Provide access to investment and funding opportunities

Generate positive publicity and media opportunities due to media interest in ethical business
activities

What is Corporate Social Responsibility (CSR) and Sustainable Business?

A Definition of CSR
Corporate Social Responsibility (CSR), Corporate Responsibility (CR) or Sustainable Business are
commonly heard, but rarely understood, phrases. So what does it all mean?

Beyond the Buzz Words

CSR is the process of assessing an organisation's impact on society and evaluating their responsibilities.
CSR begins with an assessment of a business and their:

Customers

Suppliers

Environment

Communities

Employees

The Power of CSR

Read our short guide on the benefits of CSR.

What does a CSR Policy Include?

Many organisations have a CSR Policy, which defines areas of concern and initiatives to improve
relations with the people and environments affected by business operations. CSR policies often dictate a
system for monitoring responsible performance. Read more about Simply CSR's approach to
developing CSR policies.

More than Compliance

Successful CSR initiatives take organisations beyond compliance with legislation and leads them to
honour ethical values and respect people, communities and the natural environment. CSR is sustainable involving activities that your organisation can maintain without adversely affecting your business goals.

More than Being Green

CSR is about more than environmental responsibility or having a recycling policy. CSR is about
considering the whole picture, from your internal processes to your clients, taking in every step that your
business takes during day-to-day operations.

CSR is...
A long-term approach to business that addresses the needs of communities, people and their employers.
CSR provides frameworks for successful enterprise that is harmonious with its surroundings. CSR is an
opportunity to generate honest, authentic good-news stories that a business and its community can be
proud of.
CSR must be sustainable - remaining a fundamental part of your business regardless of changing
fortunes.

What is sustainable business?

Sustainable business, Corporate Social Responsibility and ethical business

Sustainable Business is another way of referring to, and talking about, Corporate Social Responsibility
(CSR). But whether you call it Ethical Business, Corporate Social Responsibility or Sustainable Business,
you're talking about the same thing.
All of these terms refer to systems and strategies for businesses to operate in a responsible manner that
benefits their people, communities and environment.

Is there a difference?
Different countries, industries and government departments approach ethical business drives from slightly
different angles. So let's look at the subtle differences between Ethical Business, Corporate Social
Responsibility and Sustainable Business.

Corporate Social Responsibility (CSR)

CSR is the process of assessing an organisation's impact on society and evaluating their responsibilities.
Read our What is Corporate Social Responsibility (CSR)? page.

Ethical Business
When businesses focus on their code of ethics or a code of conduct they may label their approach
'Ethical Business'. Ethical Businesses often emphasise:

The source of products and services

Business conduct

Quality and service standards

Consumer-led organisations often adopt an Ethical Business plan in order to demonstrate and reassure
customers of their ethical credentials. But it is equally important that those businesses also assess and
report on all areas of their business activity, including social, economic and environmental impacts.

Sustainable Business
Sustainable Business essentially means being able to continue, or operating in a way that is conducive to
ongoing trading.
Sustainable Business is an important concept because it recognises the importance of businesses
continuing, particularly in respect of providing jobs and custom for suppliers.
Recently, Sustainable Business has expanded to become a more holistic view of business activity reporting on impacts to people, the planet and profit. People, planet, profit is also known as the Triple
Bottom Line.
The Small Business Need for CSR
Accounting for the Triple Bottom Line is known as full cost accounting - something that many large
corporations are committing to. When larger corporations examine their social responsibility, they assess

their supply chain, because to be truly accountable they need to understand the impacts that their
suppliers have on their people, environment and communities.
Therefore it is increasingly important for small to medium-sized businesses to demonstrate a commitment
to Corporate Social Responsibility and Sustainable Business, particularly when trying to secure contracts.

CSR Consultancy & Sustainable Business Planning

CSR Designed to Fit Your Organisation
Simply CSR understands the importance of coherent CSR policies, which is why we evaluate your
business carefully before making recommendations. Our bespoke CSR services are highly individualised
and reflect your business, your people, your environment and your industry. We never try to shoe-horn
one organisation into another's CSR policy.

CSR Consulting Services

Corporate Social Responsibility is an opportunity to genuinely reflect on your organisation's impact on
society. Your CSR policy can become the backbone of your business, guiding decision-making and saving
you money. CSR can help you win contracts, build positive relationships and gain a competive advantage.
CSR Consultancy Services include:
CSR Opportunity Profiles a diagnostic and audit of current activity, identifying areas for improvement
and activity to be proud of, resulting in a CSR action plan.
CSR Awards support and award submission to achieve recognition for your CSR activity Simply CSR
are specialists in achieving the BITC Community Mark.
Brokerage introduction to community partners, organisations and initiatives to improve and maximize
your CSR impact.
The CSR Re-Charge time to update and review your CSR programme top tips, case studies, action
planning

CSR Case Study

Developing a Corporate Social Responsibility (CSR) Policy for Octink
Contrary to common misconception, CSR is so much more than cheque giving. Our programme is about
local engagement, relationship building and sustainable business activities. The cost of our programme is
negligible compared to the business benefits we have experienced in the last six months. I would urge
others to gain competitive advantage and look at their CSR now rather than later."
Mike Freely, Managing Director Octink

Introduction
SimplyCSR helped Octink (formerly Allsignsgroup) develop their CSR activity. Their former policy was not
doing much for the business or their partners. Over a one-year period Simply CSR helped rejuvenate their
policy into an award winning programme.

Octink (formally Allsignsgroup) were working with several community partners on CSR initiatives, ranging
from work experience placements to charitable donations. While these are typical CSR activities, Octink
wanted their CSR to be more memorable and more inspiring than the usual CSR initiatives.

Embedding CSR Strategy

Octinks Managing Director Mike Freely wanted to reassess their CSR policy. His primary concern was
the level of in-house adoption of CSR initiatives. Rather than accepting 'window-dressing' CSR policies,
Octink were striving for bold, poweful plans that would make a real difference.
Octink wanted a sustainable CSR plan that built on relationships with community partners, reduced their
impact on the environment, made staff feel proud of their employer and strengthened relationships with
existing customers and suppliers. Oh, and they wanted a CSR policy that would win new business.
SimplyCSR began by conducting a short staff survey to identify what the 90-strong team thought about
the current CSR programme and what local issues were of concern to them.
Most of Octinks staff lives in nearby Brent, so community engagement was of interest to most people and
as many staff have families, children, education and extra-curricular activities were key interests.
Shooting Stars, a local childrens hospice was also surveyed as being the charity the business should
support.
The photo below shows Octink being presented the Community Mark:

From left to right: Stephen Howard, Chief Executive of Business in the Community. Angela Smith, Minister of State for the Third
Sector. Mike Freely, Managing Director Octink.

From this survey, SimplyCSR trained a team of Octink volunteers to act as CSR champions. Their remit
was to disseminate the CSR programme to all departments, feedback ideas from members of their teams
and encourage everyone to get involved.
Octink were recommended and encouraged to work with the 5 key principles of CSR as detailed by
Business in the Community and the Community Mark standard.
These principles were then applied to all the areas and people which the business impacts - Workplace,
Marketplace, Community and Environment.

Connecting CSR
Simply CSR helped introduce Mike and the Octink team to good CSR partners such as the local
Education Business Partnership and Business in the Community who were aware of local projects in
need of business partners and from there the CSR programme really excelled!
As a direct result of their new CSR policy Octink won new clients such as the Chelsea Flower Show and it
has started to open up doors to bigger customers with a similar CSR ethos.

CSR Awards
In June 2009 Octink achieved the Business in the Community, Community Mark national
standard www.bitc.org.uk
The CommunityMark is a national standard of excellence in community investment, which was first
launched in 2007 and endorsed by Prime Minister Gordon Brown, and HRH Prince of Wales.
Along with other CSR achievers including BskyB, Cadbury, EDF Energy, John Laing, Liverpool Football
Club and Microsoft (UK) - Octink have proved that Corporate Social Responsibility is not just for the big
players.
Octink have gone on to win Sunday Best Green Company as well as the Green Guardian award.

What is Corporate Social Responsibility?

Corporate Social Responsibility can also be considered corporate citizenship, or responsible
business. It is a business model adopted by corporations that wish to improve their company,
communities, and more. It is a self-regulating system that commits the corporation to following the
laws of business, maintaining a high ethical standard, and following international norms. Often,
Corporate Social Responsibility results in businesses committing themselves to certain social goods,
or even an attempt to improve the environment. Overall, Corporate Social Responsibility is a
companys promise to create a positive impact in the world; this does not mean they do not have a
profit motive, it merely means they care about the world while trying to make money.

Business
One of the main benefits of Corporate Social Responsibility is to the business itself. It creates a
positive image for the business, and will result in more customers. Often, customers will want to
support a business that does good for the community. This is because when the customer supports
that business, they are also helping themselves in the future. In addition, investors are more likely to
become a part of the business, because people want to invest in a business that has high ethical
standards and has a strong customer base. Also, energy-saving measures, or increasing

sustainability, will save the company energy and money in the long-run. Overall, Corporate Social
Responsibility will result in winning over customers and more investors, which will give the business
more money.

Employees
A survey conducted on Net Impact found that more than half of workers wish to be a part of a
company where they can make an impact, and that making an impact would make them happy. This
means that a corporation that practices Corporate Social Responsibility will have happier workers,
which benefits the company and the employees. In addition, 35% of the respondents said that they
would accept a pay cut in order to work for a company that practices Corporate Social
Responsibility. This statistic is very telling; to many people, money is less important than making a
difference in the world, and this indicates that a business that cares about the world will be more
successful as a whole.

Community and the World

The benefits of Corporate Social Responsibility to the local community and the world is selfexplanatory. A company committed to Corporate Social Responsibility will often support projects
that will do things like lower pollution, or lower energy output, or in some cases, companies will
even give portions of their profit to charities, or will have their employees volunteer for communitybuilding non-profits. Overall, a commitment to Corporate Social Responsibility will help the
community surrounding the corporation, but it will also have a larger impact on the world,
particularly if multiple companies commit to it.

Specific Example
An example of Corporate Social Responsibility is through The Body Shop. The Body Shop published
a full report on their Corporate Social Responsibility initiatives, and they were one of the first to do
so. The founder Anita Roddick was committed to protecting the environment, as well as protecting
the rights of both humans and animals. The corporation has even founded their own charity titled
The Body Shop foundation, which helps fund those pioneers in business. The Body Shop has also
started a fair trade program, with a strong anti-animal testing stance. Since then, it has made profits
of over $60 million a year.

The Body Shop is just a single example of a corporation that is committed to Corporate Social
Responsibility, but it is a trend that has been growing over the past few years. The benefits to
Corporate Social Responsibility expand past simply helping a charity, or giving the company a good
image. It affects everyone in the business, including shareholders, employees, and customers, as
well as everyone in the community, and in some cases, the world.

The Benefits of Building Your

Corporate Social Responsibility
Strategy
Corporate Social Responsibility (CSR) is at the forefront of business as it has
increasingly received global recognition. Although it cannot be clearly defined because
of its variations from company to company, CSR can be described as the management
of improving and mitigating a companys social, environmental and financial impact
through sustainable actions and methods. CSR is often associated with the terms
philanthropy, non-profit, NGOs and good-doers. However, although applicable, these
terms alone do not encompass CSR functions entirely, especially when considering how
CSR creates value for a corporation. As CSRs recognition continues to grow, people
are becoming aware of the lasting benefits it can bring not only to a company but also to
society. So how does CSR benefit companies?

Benefit 1: The ability to have positive impact in the community

Keeping social responsibility front of mind encourages businesses to act ethically
and to consider the social and environmental impacts of their business. In doing
so, organisations can avoid or mitigate detrimental impacts of their business on
the community. In some cases, organisations will find ways to make changes in
their services or value chain that actually delivers benefits for the community,
where they once didnt.

Benefit 2: It supports public value outcomes

Put simply, public value is about the value that an organisation contributes to
society. A sound, robust corporate social responsibility framework and
organisational mindset can genuinely help organisations deliver public value
outcomes by focussing on how their services can make a difference in the
community. This might happen indirectly, where an organisations services
enable others to contribute to the community, or directly through the
organisations own activities, such as volunteerism and philanthropy.

Benefit 3: It supports being an employer of choice

Being an employer of choice typically translates into the companys ability to
attract and retain high calibre staff. There are ways to approach being an
employer of choice, including offering work life balance, positive working
conditions and work place flexibility. Studies have shown that a robust corporate
social responsibility framework can also help a company become more attractive
to potential future employees who are looking for workplaces with socially
responsible practices, community mindedness and sound ethics.

Benefit 4: It encourages both professional and personal development

contribute to work and causes that they might feel passionate about, or learn
something entirely new which can Providing employees with the opportunity to be
involved in a companys socially responsible activities can have the benefit of teaching
new skills to staff, which can in turn be applied in the workplace. By undertaking
activities outside of their usual work responsibilities, employees have the chance to
help enrich their own perspectives. By supporting these activities, organisations
encourage growth and support for employees.

Benefit 5: It enhances relationships with clients

A strong corporate social responsibility framework is essential to building and
maintaining trust between the company and clients. It can strengthen ties, build
alliances and foster strong working relationships with both existing and new clients.

One way this can be achieved is by offering pro-bono or similar services where a
company can partner with not-for-profit organisations to support their public value
outcomes, where funds or resources may be limited. In turn, this helps deliver public
value outcomes that may not have been delivered otherwise.

The value created through CSR activities is not solely tangible in the form of revenue.
For simplicity, the value created can be broken down into three categories:
environmental, social and financial value, each supporting growth, improvements on
capital, management quality and the reputation for a company.
Environmental benefits:
A major trend for CSR is implementing environmentally friendly models of operation in
which a company carefully facilitates its production and services. This focus produces
benefits for the environment using methods that are eco-friendly, while for the company,
reducing costs and increasing sales as the drivers. For example, Coca Colas innovative
environmental practices have significantly increased sales and delivered a sustainable
precedent to society. The company introduced new eKOfreshment coolers, vending
machines and soda fountains in addition to their PlantBottle packaged drinks. These
new devices eliminate greenhouse gases and also are equipped with an energymanagement device developed by Coca-Cola that reduces the energy consumed by

machines. A company that implements a CSR strategy and focuses on managing

sustainable projects also boosts the morale of its employees so they can see the true
impact of the companys core values and their own contributions. CSR projects directed
at environmental causes can produce numerous benefits for firms from higher income to
growth in customer base.
Social benefits:
Community outreach is a huge aspect of CSR which engages in philanthropic activities
and promotes NGOs and education, while it simply develops core values to guide the
behavior of a company. The core values that CSR helps emphasize lead firms to be
more organized and beneficial for society as well as more appealing to work with. The
incorporation of CSR into a business can benefit the ways that a company operates and
how it interacts with the community, other organizations including its customers, and the
society in general. Microsoft is listed as the leading company with the best CSR
reputation on Forbes and shows that what a company stands for is more valuable than
their product. In 2012, Microsoft engaged in a new social initiative called Microsoft
YouthSpark that created a connection for millions of students with education,
employment and entrepreneurship opportunities. The goal was to help young people
secure their futures and in return benefit the global economy. Microsoft was able to
make an impact in the lives of millions of young members of society and in 2012 the
company experienced an increase of $3.76 billion in revenue from the previous year.
Dan Bross, Microsofts Senior Director of Citizenship and Public Affairs claims, Our
CSR efforts have a direct and positive impact on people in our own backyard and
around the world, and in turn, their ongoing engagement with us contributes to
Microsofts business success. CSR proves to be a social investment that yields long
term benefits because of the positive impact it makes on society.
Financial benefits:
CSR projects lead to company growth resulting in more customers, higher revenue, and
a greater capacity to be more innovative. Employees and customers prefer to work with
a firm that they respect, thus leading to create a more stabilized staff and limiting the
costs of finding new employees. Among the benefits created by CSR activities, financial
returns are produced both directly and indirectly. Companies receive more recognition,

create new products, or simply become involved in new ways of both helping others and
making revenue. Investing in CSR can produce many benefits for the environment,
society and a companys well-being.
The benefits from CSR vary from company to company as each may focus on different
areas of improvement. As CSR continues to have a higher prevalence in China, more
and more companies are noting the benefits and positive outcomes of its value.

Pros & Cons of Corporate Social Responsibility

The concept of "corporate social responsibility" has become pervasive enough that it has
earned its own acronym in business circles: CSR. The term means that a corporation should
be accountable to a community, as well as to shareholders, for its actions and operations.
When a corporation adopts a CSR policy, it aims to demonstrate a goal of upholding ethical
values, as well as respecting people, communities and the environment. The corporation
undertakes to monitor its compliance with its stated CSR policy and report this with the
same frequency that it reports its financial results.
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Profitability and Value

A CSR policy improves company profitability and value. The introduction of energy
efficiencies and waste recycling cuts operational costs and benefits the environment. CSR
also increases company accountability and its transparency with investment analysts and
the media, shareholders and local communities. This in turn enhances its reputation among
investors such as mutual funds that integrate CSR into their stock selection. The result is a
virtuous circle where the company's stock value increases and its access to investment
capital is eased.

Customer Relations
A majority of consumers -- 77 percent -- of consumers think that companies should be
socially responsible, according to a survey by branding company Landor Associates cited by
the University of Pennsylvania's Wharton School. Consumers are drawn to those companies
that have a reputation of being a good corporate citizen. Research at Tilburg University in
the Netherlands showed that consumers are prepared to pay a 10 percent higher price for
products they deem to be socially responsible.

Related Reading: Corporate Social Responsibility & Ethical Leadership

Costs
The main disadvantage of CSR is that its costs fall disproportionally on small businesses.
Major corporations can afford to allocate a budget to CSR reporting, but this is not always
open to smaller businesses with between 10 and 200 employees. A small business can use
social media to communicate its CSR policy to customers and the local community. But it
takes time to monitor exchanges and could involve hiring extra personnel that the business
may not be able to afford.

Greenwashing
Some critics believe that corporate social responsibility can be an exercise in futility. A
company's management has a fiduciary duty to its shareholders, and CSR directly opposes
this, argues Aneel Karnani, Professor at the University of Michigan in a Wall Street Journal
article. The responsibility of executives to shareholders is to maximize profits. A manager
who forsakes profits in favor of some benefits to society may expect to lose his job and be
replaced by someone for whom profits are a priority. That is why some companies talk about
CSR but do nothing about it. This is called greenwashing, Karnani says.

Introduction of CSR
Today, corporate social responsibility is considered as part of business strategy, there are many
debates and reports about the nature and value or business opportunities that can be achieved
when implementing corporate social responsibility. Also as corporate social responsibility can be "a
source of opportunity, innovation, and competitive advantage" rather than just "a cost, a constraint, or
charitable deed". Along with the comprehensive the renovation of the country, the success in
accelerating economic growth rate are posing the country for many social and environmental
problems the urgent. The main issues that are demanding economic entities, including businesses,
are responsible for contributing to; if not itself economic growth will not be sustainable and will pay
the price too expensive environmental and social issues. Related to this report will evaluate the
benefits and problems when implementing corporate social responsibility. And to clearly understand
about these issues, this report will explain "what is the corporate social responsibility" (Porter and
karmen 2006).

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Definition of corporate social responsibility

Corporate social responsibility is known as a number of other names: corporate responsibility,
corporate accountability, corporate ethics, corporate citizenship, sustainability, stewardship, triple
bottom line and responsible business, to name just a few.
Corporate social responsibility is an evolving concept that currently does not have a universally
accepted definition. Generally, corporate social responsibility is understood to be the way firms
integrate environmental, social and economic concerns into their values, decision making, strategy
and operations in a transparent and accountable manner and thereby establish better conducts
within the firm, create wealth, material and improve society (Michael Hopkins, 2011)
The World Business Council for Sustainable Development has described corporate social
responsibility as the business contribution to sustainable economic development. implemented
based on compliance with legislation and regulations, corporate social responsibility typically
includes "beyond law" commitments and activities pertaining to: business management and ethics,
health and safety, environmental stewardship, human rights (including core labor rights), human
resource management, community involvement, investment and development , involvement and
respect for indigenous people, corporate philanthropy and employee volunteering, , anti-bribery and
anti-corruption measures, customer satisfaction and adherence to principles of fair competition,
accountability, transparency and performance, supplier relations, for both domestic and international
supply chains ( Richard E. Smith, 2011).
Generally, corporate social responsibility is understood to be the way firms integrate environmental,
social and economic concerns into their values, decision making, strategy and operations in a
transparent and accountable manner and thereby establish better practices within the firm, create
wealth, material and improve society. These elements of corporate social responsibility are often
interconnected and interdependent, and use to firms wherever they operate.
Since businesses play a pivotal role in job and wealth creation in society, corporate social
responsibility is a central management concern. It positions companies to both proactively manage
risks and take advantage of opportunities, especially with respect to their corporate reputation and
broad engagement of stakeholders (Leonardo B, Rocco, C and Hasan, 2007). The latter can include
shareholders, employees, customers, communities, suppliers, governments, non-governmental

organizations, international organizations and others affected by a company's activities (Cynthia D.

M. 2008).
Above all, corporate social responsibility is about performance: moving beyond words on a page to
effective and observable actions and societal impacts. Performance reporting is all part of
transparent, accountable and, hence, credible corporate behavior. There is considerable potential for
problems when stakeholders perceive that a firm is just engaging in a public relations exercise and
cannot demonstrate concrete actions that lead to real social and environmental benefits (Saeed
Khan, 2010).

The advantages and the tangible, intangible

benefits gained from the practice of corporate
social responsibility.
Corporate Social Responsibility is longer a familiar in the world but it is still a hot term to not only
enterprises, customers, entire society but also investors. Every day, there are many activities related
to corporate social responsibility. Enterprises use corporate social responsibility as a tool to develop
their reputation in the global market. Investors use corporate social responsibility as a main reason to
consider in decisions of enterprises to invest responsibility. Customers and entire society consider
corporate social responsibility as an important factor to decide the cost, quality and progress of an
enterprise. Because of important of corporate social responsibility, many corporations can pay a lot
of money for corporate social responsibility to become a perfect business model, responsible for
society, and have beliefs of community. In the current context of globalization, customers, investors,
policy makers and non-governmental organizations around the globe are increasingly concerned
over the impact of globalization on the rights of employees, the environment and community welfare.
These businesses do not make social responsibility can no longer access to the international market.
A typical example, Nike Corporation 1990 global boycott because of harsh labor conditions in
factories in East Asia and Southeast Asia. During that period, there were a large number of workers
demonstrated more and more on the implementation of Nike's labor regime, especially the countries
of the world as Vietnam, Indonesia, and China. Protesters against the company including organizing
a boycott of Nike products, on the media attention on the subject and create pages wed to decry the
implementation mode Nike's labor. In fact, there are more than 240 weds have talked about it as
"Anti-Nike". Nike companies were operating and employ about 500,000 people. Protestors who is the
claim, abused physically and mentally. Workers have to work in unsafe conditions and low wages or
salary is not enough. In addition to the salary is not enough for Nike factory workers, the protesters
also spoke about the poor working conditions of the factory Nike. Many Nike factories have found
poor air quality and dangerous conditions.

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Therefore, the product of Nike was ostracized throughout a period. So when Nike began to focus on
the implementation of the company's responsibility for employees. And Nike Corporation has
committed to the responsibility of the company to employees. Nike created working conditions for
laborers to work in better conditions and ensure the health of people do. Through Nike's annual
report on corporate social responsibility, and consumers begin to trust and Nike's business began to
recover. So far, Nike is one of the largest sellers of sports shoes and clothing in the world. Company
is currently active in over 110 countries, and other Nike products were people trust.
In fact the world has shown that, does good corporate social responsibility, their benefits are not only
not decreased but increased. The business benefits gained from implementation of social
responsibility include lower costs, increase revenue, increase brand value, and cut incidence of
employee severance, increased productivity and more opportunities to reach new markets.
Corporate social responsibility can be broken down into specific actions with objects are employee,
shareholder, supplier, consumer, community and environment ( UKessay, 2012).
Firstly, corporate social responsibility for employee, the evaluation criteria to performance of
corporate social responsibility to employees including compensated, without discrimination,
remuneration policy and good training, and acceptable working conditions. There basic conditions,
although simple, but not all enterprises can also perform complete. Most employees prefer their work
by good working conditions and reasonable salary regimes. Enterprises meet these requirements
also means creating team cohesion, love of work, proud of the company's image and determination
to work for the benefit of company. Benefits gained here are in addition to significantly improved
productivity, there is a cohesive culture in enterprise. Strong culture has a positive impact not only to
the business itself but spread very well in the business community. This is what every corporates
wants to build. Moreover, actual costs, opportunity cost, and energy plus the spiritual loss due to
constantly looking for new personnel and training (in the case of former the termination of
employment by the personnel policies of unsuitable) completely removed. Treatment policy and good
culture and work environment to attract qualified staff look to the company ( UKessay, 2012).
Secondly, corporate social responsibility for shareholder, information disclosure and transparency,
companies operating efficiency and rational use of capital to increase value for the product done for
any enterprise for sustainable development of the enterprise. Addition, create confidence for
investors, that belief is the emotional. These the decisive factors contributing to profit or destroy the
value of stock shares only narrowly ( UKessay, 2012).

Thirdly, corporate social responsibility for supplier and consumer, as for suppliers, shortened work on
the key is to pay on time and good communication. Once embarked on the business, keeping good
relationships with suppliers of strategic significance in ensuring a stable supply for production at
reasonable prices; since then, the product is classified distribution to consumers in time and quality
commitments. For customers, the corporate social responsibility shown in selling good products to
satisfy the needs, at affordable prices, delivered on time, and safe for use. In fact, if the products
meet the needs of consumers, product images and now kept in the minds of consumers. In business
"word of mouth" has spread very strong pervasive. To maintain and expand market share is the goal
of any business that reflects the spirit of "customer is God". Mrs. Lurita Doan, the first woman head
of Service Delivery and Technical Supervisor of the U.S. government (General Services
Administration) has also said "the customer is king, if you do not provide services well; you will not
have a second chance, and so will not be sustainable". To build a brand and customer confidence,
the business becomes much more favorable ( UKessay, 2012).
Fourthly, corporate social responsibility for community, for community in general, the first task is to
protect the environment (also the protection of public health) and then the charity. Environmental
pollution, natural resource depletion, climate change ... Business environment protection, in addition
to complying with government regulations is not been wasted costs negate the consequences or
damages litigation. Green investments are the hot issues in many developing countries ( UKessay,
2012).
Corporate social responsibility reporting has become important because it help the companies to
communicate with society, consumers, workers, investors. The corporate social responsibility
reporting will show the companies develop sustainably and protect environment or not. From the
information in corporate social responsibility reporting, investors will consider to invest or not. A good
corporate social responsibility report will increase the image and reputation of one business.

This essay is an example of a student'

Corporate social responsibility makes a difference, brand positioning for the company.
Corporate social responsibility has shown the role and responsibilities "citizens", has helped
build the image of a "good citizen" in the society. This is a contributing factor "position"
enterprise customer in mind, to make a difference with other businesses and bring
sustainable development of enterprises. Investors will also trust in the companys ability to
develop long-term and sustainable businesses develop strategies to optimize the interests of
stakeholders and the application of ethical standards in the process of decision business.
Benefits followed by binding workers, attract talent and motivate the staff. Many researchers
around the world to see, good people, often reputed to work in what they think is good in
society and feel proud; where they can achieve personal development and participation
contribute to community development.
An example about one of many companies is conducting good corporate social responsibly, that is
Starbuck Company. Starbucks is the largest coffeehouse company in the world, with about 20,891
stores in 62 countries. One of the factors that make up the success of Starbucks is considered
corporate social responsibility as a strategy for sustainable service business. Starbuck's success is
not only based on the quality of product or service but also based on the company's responsibility
towards society. There are many studies on the behavior of consumers and most of them question"
"Why do consumers buy?" and "what they buy?" the answer lies not with the product or service itself
but with the way a company conducts itself. Starbucks Coffee has made its mark in the global coffee
industry by not only delivering a quality product but also striving to benefit the local community and
the environment, as well as its employees and consumers in the process. Starbucks has run its
business by driving corporate social responsibility as a tool that covers the company in every sector
of their business. Lets take the environment, for example. Starbucks is really concerned about
affecting the environment. By utilizing innovative technologies to improve the effectiveness in its
processes, they reduce costs and at the same time they are preserving the environment. In terms of
social strategies, Starbucks has splendid strategies to cooperate with its partners and stakeholders.
Starbucks has created a lot of activities to encourage communities and to create long term
relationships with them, which reflects on their brand. In terms of economics, Starbucks is not only
thinking about its benefits but also for all parties related with their business, by following the laws of
each country. Starbucks has managed to create fair trade with its suppliers, customers, and even for
their competitors. It has made Starbucks very successful in its economic situation. Moreover,
corporate social responsibility can build competitive advantage over competitors that Starbucks gain
more competitive advantage by engaging in corporate social responsibility into every part the
company. Specially, the company focuses on their suppliers and partners which they have run
business as sustainable together.

Disadvantages when implementing corporate

social responsibility
However, in addition, must admit that, many businesses have not done seriously its social
responsibility. It shows in the business scams, financial reporting, quality goods business,
production, labor safety, intentionally causing environmental pollution. besides, many companies that
violate the law of wages, insurance, labor safety issues for workers is no longer a rare phenomenon,
has been causing urgency for social .
Nowadays, there are different opinions about the cause of the non-implementation of social
responsibility of business. Some people believe that corporate social responsibility has not been
legalized in all businesses. For large enterprises with export markets, as required by the customer
should be forced to make social responsibility, also for small as well as medium enterprises, due to
financial difficulties and lack of legal constraints many businesses understand social responsibility as
"charitable contributions. Some others said that the implementation of social responsibility will
increase costs for businesses, thus reducing the initial competitiveness not immediately see the
immediate benefits, so that small and medium enterprises do not want to implement social
responsibility. The main reason any company would object to participating in corporate social
responsibility is the associated costs. With Corporate social responsibility, the companies have to
pay for environmental programs, more employee training and reduce waste management programs.
Proponents of corporate social responsibility agree that any expenses to businesses are ultimately
covered by stronger relationships with key customers. Though , David Vogel indicates in his Forbes
article "corporate social responsibility doesnt Pay" that investment in corporate social responsibility
programs may not necessary result in measurable financial results. Another challenge for companies
when considering corporate social responsibility is the possible negative perception of shareholders.
Historically, publicly-owned companies had a primary focus of maximizing shareholder value. Now,
they have to balance the financial expectations of company owners with the social and
environmental requirements of other stakeholders. Some shareholders are happy to invest in
companies that operate with high integrity. Some other may not approve of the aforementioned
expenses of operating under corporate social responsibility guidelines (Neil Kokemuller, eHow
Contributor, 2011). In summary, the implementation of social responsibility of business is relatively
difficult. The reason so primarily due to incomplete understanding of corporate social responsibility;
corporate social responsibility merely be understood as charitable contributions. Second, the
implementation of corporate social responsibility also caused difficulties for small businesses due to
lack of capital and technical resources to implement corporate social responsibility standards. The
causes listed above can be attributed to three main reasons, which cause cognitive, economic
reasons and legal reasons.
Provides a good example of the limited importance of corporate social responsibility to financial
performance. The firm enjoys a strong corporate social responsibility reputation due to its generous

labor policies and its commitment to improve the earnings and environmental practices of coffee
growers in developing countries.
Yet since the beginning of 2008, its shares have recently declined nearly 50% (at last glance the
S&P 500 is down "only" 36%). The stock's disappointing performance has absolutely nothing to do
with corporate social responsibility: It is entirely due to the firm's over expansion and, most recently,
the increasing unwillingness of consumers to pay as much for a cup of coffee as for a gallon of
gasoline (Kristin Todd, 2009).

Conclusion
In conclusion, social responsibility is existing enterprises in the world for a long time. This is an
important factor affecting the quality and reputation of the business in the competitive business.
Although the corporate social responsibility appears to generate more profit than the cost, many
commentators have criticized it on a number of social issues, and ethics. There are many people
advocate free market policies to advocate the notion that the only purpose of a company to maximize
profits for its shareholders, while it must comply with the law in countries where it is active. Others
even considered it more important and for that reason companies implement corporate social
responsibility policy is better, they do provide Corporate Social Responsibility policy to ensure that
the relationship business ethics. The success of Starbucks shows how companies can do well by
doing - that is, by issuing the practices of sustainable, profitable, and ethical. On the contrary, the
company Nike is one example for the implementation of corporate social responsibility, and social
criticism, boycott their products for a long time. And can clearly see that when Nike made corporate
social responsibility, customer response has become better and they have been successful in
business. Thus two examples above, we can see that the implementation of corporate social
responsibility is as important as how, and the benefits achieved when implementing it.
Corporate social responsibility or CSR is the idea or philosophy that corporations should behave
responsibly toward the environment and society. This means that none of the actions of corporations
should adversely affect the community or the environment and that they try to benefit the community
and environment. CSR has its pros and cons. Such activities reflect a commitment of the business to
the community where it operates and give it a better reputation in the eyes of the community. It also
presents a better image to the stockholders and analysts. However, such activities have their cost.
Environmentally friendly operations require capital and changes in work practices. Such investment
has no direct benefit or return to the stockholders. Investors invest money to earn profits and not to
see part of that investment being spent on non-productive activities. Also such costs may be an
issue for small and medium businesses. This often results in businesses failing to fulfill their
community and environmental commitments.

Corporate social responsibility or CSR is the idea or philosophy that

corporations should behave responsibly toward the environment and

society. This means that none of the actions of corporations should

adversely affect the community or the environment and that they try to
benefit the community and environment. CSR has its pros and cons. Such
activities reflect a commitment of the business to the community where it
operates and give it a better reputation in the eyes of the community. It
also presents a better image to the stockholders and analysts. However,
such activities have their cost. Environmentally friendly operations require
capital and changes in work practices. Such investment has no direct
benefit or return to the stockholders. Investors invest money to earn
profits and not to see part of that investment being spent on nonproductive activities. Also such costs may be an issue for small and
medium businesses. This often results in businesses failing to fulfill their
community and environmental commitments.

Meaning of sustainability

Sustainability could be defined as an ability or capacity of something to be maintained

or to sustain itself. It's about taking what we need to live now, without jeopardising the
potential for people in the future to meet their needs. If an activity is said to
be sustainable, it should be able to continue forever.
In ecology, sustainability is the capacity to endure; it is how biological systems remain diverse and
productive indefinitely. Long-lived and healthy wetlands and forests are examples of sustainable
biological systems. In more general terms, sustainability is the endurance of systems and processes.
The organizing principle for sustainability is sustainable development, which includes the four
interconnected domains: ecology, economics, politics and culture. [1] Sustainability science is the
study of sustainable development and environmental science.[2]
Sustainability can also be defined as the ability to be sustained, supported, upheld, or confirmed. [3]
Healthy ecosystems and environments are necessary to the survival of humans and
other organisms. Ways of reducing negative human impact are environmentally-friendly chemical
engineering, environmental resources management and environmental protection. Information is
gained from green chemistry, earth science, environmental science and conservation

biology. Ecological economicsstudies the fields of academic research that aim to address human
economies and natural ecosystems.

Moving towards sustainability is also a social challenge that entails international and
national law, urban planning and transport, local and individual lifestyles and ethical consumerism.
Ways of living more sustainably can take many forms from reorganizing living conditions
(e.g., ecovillages, eco-municipalities and sustainable cities), reappraising economic sectors
(permaculture, green building, sustainable agriculture), or work practices (sustainable architecture),
using science to develop new technologies (green technologies, renewable energy and
sustainable fission and fusion power), or designing systems in a flexible and reversible manner,[4]
[5]

and adjusting individuallifestyles that conserve natural resources.

Definition of business sustainability

Business sustainability is often defined as managing the triple bottom line - a process by which
companies manage their financial, social and environmental risks, obligations and opportunities.
These three impacts are sometimes referred to as profits, people and planet.
However, this approach relies on an accounting based perspective and does not fully capture the
time element that is inherent within business sustainability. A more robust definition is that business
sustainability represents resiliency over time businesses that can survive shocks because they are
intimately connected to healthy economic, social and environmental systems. These businesses
create economic value and contribute to healthy ecosystems and strong communities.
Business sustainability requires firms to adhere to the principles of sustainable development.
According to the World Council for Economic Development (WCED), sustainable development is
development that meets the needs of the present without compromising the ability of future
generations to meet their own needs. So, for industrial development to be sustainable, it must
address important issues at the macro level, such as: economic efficiency (innovation, prosperity,

productivity), social equity (poverty, community, health and wellness, human rights) and
environmental accountability (climate change, land use, biodiversity).
There are a number of best practices that foster business sustainability, and help organisations
move along the path from laggards to leaders. These practices include:
Stakeholder engagement: Organisations can learn from customers, employees and their
surrounding community. Engagement is not only about pushing out messages, but understanding
opposition, finding common ground and involving stakeholders in joint decision-making;
Environmental management systems: These systems provide the structures and processes that
help embed environmental efficiency into a firms culture and mitigate risks. The most widely
recognized standard worldwide is ISO 14001, but numerous other industry-specific and countryspecific standards exist;
Reporting and disclosure: Measurement and control are at the heart of instituting sustainable
practices. Not only can organisations collect and collate the information, they can also be entirely
transparent with outsiders. The Global Reporting Initiative is one of many examples of wellrecognised reporting standards;
Life cycle analysis: Those organisations wanting to take a large leap forward should systematically
analyse the environmental and social impact of the products they use and produce through life cycle
analysis, which measure more accurately impacts.
Firms that are sustainable have been shown to attract and retain employees more easily and
experience less financial and reputation risk. These firms are also more innovative and adaptive to
their environments.

Why Sustainability is Important to Your Business

Sustainability and business are not always seen as a good working pair. Businesses
often struggle to implement sustainability measures, as they think that it is taking
money from shareholders. However, as more pressure builds from the public,
businesses are being forced to look again at combining sustainability and good business
practice.

Sustainability and Business

For those working in business, sustainability will involve considering the long-term
consequences of industry and manufacture. Economic sustainability involves developing
long-lasting systems of trade, while ensuring that these systems have a lesser impact
on the environment than previous methods. Corporate sustainability, meanwhile,
focuses upon the environmental and social impact of business actions.

Sustainability and Investment

One reason for business becoming so interested in sustainability is that good business
practices are sought out by investors. Some investors look for a worthy project, so
improving sustainability measures can bring them in.
Investors may also look at the Life Cycle analysis of a business, which examines the
long-term environmental and carbon footprint of a product. Investors can decide not to
invest in a company if its footprint is too large. Companies with proven records in global
and local sustainability can make profit through employee productivity, better long-term
public following, and investments due to good public reputations. Global companies
such as Cadburys have made sustainability changes due to these economic reasons.

Sustainability and Competitiveness

There has been a lot of concern voiced by big industry about the negative effects of
sustainability, but recent research suggests that the two are not in opposition. In recent
years, as the public has become more aware of the pressure on the environment, it has
become clear that businesses that practice sustainability strategies are in fact getting
greater profits, and creating their own consumer path.
Sustainability regulation can also assist competitiveness in business, as it forces
industry to innovate and create new solutions, driving up profits for those companies
that provide the best products. Sustainability has also been shown to produce new
demands and markets for businesses.
The rise in consumer demand for sustainability improvements has led to businesses that
were not previously interested in green issues suddenly improving their sustainability
practices. Experts suggest that this is to improve their competitiveness against other
companies.

Sustainability and Government Grants

Another reason for improving sustainability is the recent raft of legislation from
governments across the western world, designed to encourage businesses to reduce

their environmental impact. Carbon emissions, water supply, and energy security are
now linked with business costs. Government bodies have also become more persistent
at prosecuting businesses that pollute water or air.

Sustainability and Business Practice

Sustainability is good for businesses both as a long-term strategy to improve employee
confidence, and as a short term response to government legislation. Businesses
responding to demands for clearly visible sustainability practices are also more
attractive to the new class of ethical investors, and regain the costs of managing
sustainability through government grants and increased sales to green activists and
other members of the community. Ethical business practices may also improve
competitiveness between businesses, encouraging growth and bigger profits.

What Is Sustainability and Why Is It Important?

Sustainability is a broad discipline, giving students and graduates insights into most
aspects of the human world from business to technology to environment and the
social sciences. The core skills with which a graduates leaves college or university
are highly sought after, especially in a modern world looking to drastically reduce
carbon emissions and discover and develop the technologies of the future.
Sustainability draws on politics, economics and, philosophy and other social
sciences as well as the hard sciences. Sustainability skills and environmental
awareness is a priority in many corporate jobs at graduate level and over as
businesses seek to adhere to new legislation. Therefore, Sustainability graduates
will go into many fields but most commonly civic planning, environmental
consultancy (built and natural environment), agriculture, not for profit, corporate
strategies, health assessment and planning, and even into law and decision making.
Entry-level jobs are growing and over the coming years, bachelors graduates can
expect more and more options and opportunities.
Sustainability is one the newest degree subjects that attempts to bridge social
science with civic engineering and environmental science with the technology of the

future. When we hear the word sustainability we tend to think of renewable fuel
sources, reducing carbon emissions, protecting environments and a way of keeping
the delicate ecosystems of our planet in balance. In short, sustainability looks to
protect our natural environment, human and ecological health, while driving
innovation and not compromising our way of life. Because of this growing
requirement, a master's will not necessarily be required for most jobs as bachelor's
programs (and in some cases lower than this) prepares people for a career in
sustainability. Read more about the various sustainability degrees and education.

What is Sustainability?
The definition of sustainability is the study of how natural systems function,
remain diverse and produce everything it needs for the ecology to remain in
balance. It also acknowledges that human civilisation takes resources to sustain our
modern way of life (1). There are countless examples throughout human history
where a civilisation has damaged its own environment and seriously affected its
own survival chances (some of which Jared Diamond explores in his
book Collapse: How Complex Societies Choose to Fail or Survive (10)). Sustainability
takes into account how we might live in harmony with the natural world around us,
protecting it from damage and destruction.
We now live in a modern, consumerist and largely urban existence throughout the
developed world and we consume a lot of natural resources every day. In our
urban centres, we consume more power than those who live in rural settings (2, p34) and urban centres use a lot more power than average, keeping our streets and
civic buildings lit, to power our appliances, our heating and other public and
household power requirements. That's not to say that sustainable living should
only focus on people who live in urban centres though, there are improvements to
be made everywhere - it is estimated that we use about 40% more resources every
year than we can put back and that needs to change (3, p2). Sustainability and
sustainable development focuses on balancing that fine line between competing
needs - our need to move forward technologically and economically, and the needs
to protect the environments in which we and others live. Sustainability is not just

about the environment (4), it's also about our health as a society in ensuring that
no people or areas of life suffer as a result of environmental legislation, and it's also
about examining the longer term effects of the actions humanity takes and asking
questions about how it may be improved (2).

The Three Pillars of Sustainability

In 2005, the World Summit on Social Development identified three core areas that
contribute to the philosophy and social science of sustainable development. These
pillars in many national standards and certification schemes, form the backbone
of tackling the core areas that the world now faces. The Brundtland Commission
described it as development that meets the needs of the present without
compromising the ability of future generations to meet their own needs" (6). We
must consider the future then, in making our decisions about the present.

Economic Development
This is the issue that proves the most problematic as most people disagree on
political ideology what is and is not economically sound, and how it will affect
businesses and by extension, jobs and employability (2, p4). It is also about
providing incentives for businesses and other organisations to adhere to
sustainability guidelines beyond their normal legislative requirements. Also, to
encourage and foster incentives for the average person to do their bit where and
when they can; one person can rarely achieve much, but taken as a group, effects in
some areas are cumulative. The supply and demand market is consumerist in
nature and modern life requires a lot of resources every single day (6); for the sake
of the environment, getting what we consume under control is the paramount
issue. Economic development is about giving people what they want without
compromising quality of life, especially in the developing world, and reducing the
financial burden and red tape of doing the right thing.

Social Development
There are many facets to this pillar. Most importantly is awareness of and
legislation protection of the health of people from pollution and other harmful

activities of business and other organisations (6). In North America, Europe and the
rest of the developed world, there are strong checks and programmes of legislation
in place to ensure that people's health and wellness is strongly protected. It is also
about maintaining access to basic resources without compromising the quality of
life. The biggest hot topic for many people right now is sustainable housing and
how we can better build the homes we live in from sustainable material. The final
element is education - encouraging people to participate in environmental
sustainability and teaching them about the effects of environmental protection as
well as warning of the dangers if we cannot achieve our goals (7, p7-12).

Environmental Protection
We all know what we need to do to protect the environment, whether that is
recycling, reducing our power consumption by switching electronic devices off
rather than using standby, by walking short journeys instead of taking the bus.
Businesses are regulated to prevent pollution and to keep their own carbon
emissions low. There are incentives to installing renewable power sources in our
homes and businesses. Environmental protection is the third pillar and to many,
the primary concern of the future of humanity. It defines how we should study and
protect ecosystems, air quality, integrity and sustainability of our resources and
focusing on the elements that place stress on the environment (6). It also concerns
how technology will drive our greener future; the EPA recognized that developing
technology is key to this sustainability, and protecting the environment of the
future from potential damage that technological advances could potentially
bring (1).

What are the Primary Goals of

Sustainability?
The sustainable development professional network thinks, acts and works globally.
In 2012, the United Nations Conference on Sustainable Development met to discuss
and develop a set of goals to work towards; they grew out of the Millennium
Development Goals (MDG) that claimed success in reducing global poverty while

acknowledging there was still much more to do. The SDG eventually came up with a
list of 17 items (8) which included amongst other things:

The end of poverty and hunger

Better standards of education and healthcare - particularly as it pertains to water

quality and better sanitation

To achieve gender equality

Sustainable economic growth while promoting jobs and stronger economies

All of the above and more while tackling the effects of climate change, pollution and
other environmental factors that can harm and do harm people's health, livelihoods
and lives.

Sustainability to include health of the land, air and sea

Finally, it acknowledged the concept of nature having certain rights - that people
have stewardship of the world and the importance of putting people at the
forefront of solving the above global issues (9) through management of the
environment and of consumption (for example, reducing packaging and
discouraging food waste as well as promoting the use of recyclable materials).

History of Sustainability
Humans have, since the Neolithic Agricultural Revolution and maybe even before
then, been a consumer rather than a replenisher of environmental resources. From
hunter-gatherer societies that moved into an area to use up its resources in a
season before setting up camp or moving on, only to return the following year to
do the same, the development of a surplus economy saw permanent settlements.
Slash and burn farming replaced natural wilderness often with uniform crop
plantation (11, p2483) and camps gave way to settlements, then eventually villages,
towns and cities which would put pressure on the environment.
Sometimes, the environmental pressures forced people into making these changes
in the first place (growing human population being one of those pressures) and

often eventually they had to move on to somewhere new where the environmental
could better sustain them and their practices, or make further changes to their
existing environment. There was no real concept of sustainable living, even if the
people of the distant past understood that soil had a maximum fertility that could
be exhausted and replenished with livestock.
It is widely acknowledged that many societies collapsed due to an inability to adapt
to the conditions brought on by these unsustainable practices (10). Whether that
was introducing alien species that upset the balance of the ecosystem, cutting
down too many trees at once or even a failure to adapt to natural fluctuations in
the climate, we are far more aware in the modern world about the potential
damage caused by human action. Cultural change often led to survival of those
societies beyond what might have been expected under the circumstances (11,
p2485).
Though some Renaissance and Enlightenment philosophers would express concern
about resources and over-population and whether these were sustainable in the
long term, these people were not taken seriously at the time other than as a
hypothetical question. It would take until the 20th century before we would
understand the impact that we could have on our environment. Environmental
damage, pollution, destabilising soils by cutting down trees, fossil fuels and other
environmental issues led to a growing concern about the environment and whether
we were or could damage our own ecosystem. The United Nations was founded
after World War II and in 1945, UNESCO was established to promote the
importance of human culture and of science (14). Today, their remit is "to
contribute to the building of peace, the eradication of poverty, sustainable
development and intercultural dialogue through education, the sciences, culture,
communication and information" (15).
By the late 20th century, the science of climate change was firmly established. We
knew by the 1980s about the problems of the greenhouse effect and the
destruction of the ozone layer (12) and coming very late in the century, an
awareness of the notion that some of our resources - particularly fossil fuels - were
finite and that we should make efforts to move to renewable methods of power. It
was then that we saw the the social, economic and scientific birth of the
environmental movement.

A Sustainable Future
It is not yet clear what our sustainable future will look like but with emerging
technologies and the improvement of older cleaner fuel sources, many people now
look to a post fossil fuel world - including businesses. Since the 1950s, we have
experienced unprecedented growth including intensive farming, a technological
revolution and a massive increase in our power needs (13, p2) putting even greater
pressure and strain on the planet's resources. We are also far more aware of the
plight of the developing world and that facing our planet as we now observe both
natural and human-caused disasters and the effects that these can have on the
ecosystems and on human population. It's vital that we develop new, cleaner
technologies to cope with our energy demands but sustainability is not just about
the environment.
The biggest social activism movement related to the social development side of
sustainability, has been programs such as Fair Trade and the Rainforest Alliance in
encouraging good farming practices while ensuring farmers who produce luxury
goods such as coffee and cocoa receive a decent living wage (14). Activist and
sustainability professionals hope to remove trade barriers in future so that they
may benefit everyone, contributing to the economic and social development core of
sustainability while promoting good environmental practice
Is sustainability now the key to corporate success?

The broader societal concern about sustainability has grown from almost
nothing in the early 1990s to a dominant theme today. Meanwhile, leaders of
major corporations worldwide are increasingly facing the challenge of
managing organisations that meet the expectations of a broad range of
stakeholders (often themselves in conflict), while still delivering a return to
shareholders. As a result, sustainability is now an essential ingredient for a
company's long-term success and we have been able to provide solid evidence
for this in a rigorous empirical study.
We compared a matched sample of 180 US-based companies, 90 of which we
classify as high-sustainability and another 90 as low-sustainability. Our
classification was based on the adoption of environmental, social, and

governance (ESG) policies in the 1990s that reinforced a cultural commitment

to sustainability. Examples of environmental policies included carbon
emissions reduction policies, green supply-chain policies and energy and
water-efficiency strategies. Social policies included diversity and equalopportunity targets, work-life balance, health and safety improvement, and
favouring internal promotion. Policies related to community included
corporate citizenship commitments, business ethics, and human-rights
criteria. Finally, other policies we accounted for related to customers, product
risk and customer health and safety.
The high-sustainability companies had adopted an average of 40% of these
policies early on, while their counterparts had adopted only 10%. We selected
these two sets of companies to be identical in terms of financial performance
in the early 1990s, in order to examine the long-term performance effects of a
culture of sustainability.
We found that high-sustainability organisations were characterised by a
governance structure that explicitly and directly took into account the
environmental and social performance of the company, in addition to financial
performance. They were significantly more likely to assign responsibility to
the board of directors for sustainability and to form a separate board
committee for sustainability. They were also are more likely to make executive
compensation a function of environmental, social, and external perception (eg
customer satisfaction) metrics.
Secondly, we found that high-sustainability companies paid particular
attention to their relationships with stakeholders such as employees,
customers and NGOs representing civil society through active processes of
engagement. This begins with reaching agreement with stakeholders on how
the process should be conducted, continues through the management of the
process itself and ends with providing feedback to the board obtained from
stakeholders, and reporting the results of the process to stakeholders and the
public in general.
Thirdly, high-sustainability companies are more likely to measure and report
on environmental and social metrics in addition to their financial results.

Their external communications are also more long-term oriented. Not

surprisingly, the high-sustainability organisations have more long-term
investors every company's desire than their low-sustainability
counterparts.
These differences in behaviour are reflected in differences in financial
performance. Over an 18-year period, the high-sustainability companies
dramatically outperformed the low-sustainability ones in terms of both stock
market and accounting measures. The annual above-market average return for
the high-sustainability sample was 4.8% higher than for their counterparts
and with lower volatility. The high-sustainability companies also performed
much better as measured by return on equity and return on assets.
Our research provides convincing evidence that sustainability pays off. Critics
of sustainability argue that it destroys shareholder value. We found exactly the
opposite. Companies that manage their environmental and social performance
have superior financial performance and actually create more value for their
shareholders. They do this by attracting and keeping better and more
committed employees and have more loyal customers. Over the long term,
they will preserve their licence to operate, something which is deeded to them
by society. As societal expectations for responsible environmental and social
practices by companies continue to increase, the performance advantage of
high-sustainability companies will increase too, because they will be
contributing to a sustainable society. Failure to have a culture of sustainability
is quickly becoming a source of competitive disadvantage. The argument
about sustainability is over. It is the key to creating value for shareholders and
all other stakeholders over the long term, thus ensuring the sustainability of
the company itself.
Robert G. Eccles is professor of management practice at Harvard Business
School. Ioannis Ioannou is assistant professor of strategy and
entrepreneurship at London Business School. George Serafeim is assistant
professor of business administration at Harvard Business School
1. The bad news climate change is now.
The subtitle of this years summary could be reports, reports, reports, with
important and fascinating (no, really) studies from economists, government

agencies, scientific bodies, and business coalitions all making a

compelling case for action on climate change.
Over the last two years, the Intergovernmental Panel on Climate
Change issued its fifth, multi-thousand-page assessment of global climate
science. But some new, more layman-friendly voices are telling the science
story and explaining how costly to business a hotter world already is. The
American Association for the Advancement of Science (AAAS) issued the
clearest document from scientists Ive ever seen, a pithy report telling us
that What We Know is the following: (1) Climate change is happening here
and now, (2) the risks of irreversible, highly damaging impacts are high, and
(3) the sooner we act, the lower the cost. Another report, the U.S. National
Climate Assessment, led with the statement that climate change has moved
firmly into the present.
Adding a business perspective, a group of heavy hitters, including billionaire
Michael Bloomberg and former U.S. Treasury Secretaries Hank Paulson and
Robert Rubin, issued the persuasive Risky Business Report. This short paper
outlines how climate is already costing local economies billions and
describes how hundreds of billions of property are at risk.

What is corporate sustainability?

Corporate sustainability can be viewed as a new and evolving corporate management
paradigm. The term paradigm is used deliberately, in that corporate sustainability is an
alternative to the traditional growth and profit-maximization model. While corporate sustainability
recognizes that corporate growth and profitability are important, it also requires the corporation
to pursue societal goals, specifically those relating to sustainable development environmental
protection, social justice and equity, and economic development.
A review of the literature suggests that the concept of corporate sustainability borrows elements
from four more established concepts: 1) sustainable development, 2) corporate social
responsibility, 3) stakeholder theory, and 4) corporate accountability theory. The contributions of
these four concepts are illustrated in Figure 1. Each concept, and its relationship to corporate
sustainability, is discussed below.

1) Sustainable Development
Sustainable development is a broad, dialectical concept that balances the need for economic
growth with environmental protection and social equity. The term was first popularized in 1987,

in Our Common Future, a book published by the World Commission for Environment and
Development (WCED). The WCED described sustainable development as development that
met the needs of present generations without compromising the ability of future generations to
meet their needs. Or, as described in the book, it is a process of change in which the
exploitation of resources, the direction of investments, the orientation of technological
development, and institutional change are all in harmony and enhance both current and future
potential to meet human needs and aspirations. Sustainable development is a broad concept in
that it combines economics, social justice, environmental science and management, business
management, politics and law. It is a dialectical concept in that, like justice, democracy, fairness,
and other important societal concepts, it defies a concise analytical definition, although one can
often point to examples that illustrate its principles.
In Our Common Future, (Oxford University Press, 1987) the WCED recognized that the
achievement of sustainable development could not be simply left to government regulators and
policy makers. It recognized that industry had a significant role to play. The authors argued that
while corporations have always been the engines for economic development, they needed to be
more proactive in balancing this drive with social equity and environmental protection, partly
because they have been the cause of some of the unsustainable conditions, but also because
they have access to the resources necessary to address the problems.
Industrys response to the WCEDs call came in stages as everyone wrestled with what
sustainable development in action should look like. The first serious sign of support came from
the International Chamber of Commerce when it issued its Business Charter for Sustainable
Development in 1990. This was followed in 1992 by the book Changing Course, by Stephen
Schmidheiny and the Business Council for Sustainable Development (now the World Business
Council for Sustainable Development; MIT Press, 1992). Both publications focused on the role
of corporations in sustainable development, and the authors argued that supporting sustainable
development was as much an economic necessity as it was an environmental and social
necessity. Since then, many business leaders and corporations have come forward to show
their support for the principles of sustainable development.

The contribution of sustainable development to corporate sustainability is twofold. First, it helps

set out the areas that companies should focus on: environmental, social, and economic
performance. Second, it provides a common societal goal for corporations, governments, and
civil society to work toward: ecological, social, and economic sustainability. However,
sustainable development by itself does not provide the necessary arguments for why companies
should care about these issues. Those arguments come from corporate social responsibility and
stakeholder theory.

2) Corporate social responsibility

Like sustainable development, corporate social responsibility (CSR) is also a broad, dialectical
concept. In the most general terms, CSR deals with the role of business in society. Its basic
premise is that corporate managers have an ethical obligation to consider and address the
needs of society, not just to act solely in the interests of the shareholders or their own selfinterest. In many ways CSR can be considered a debate, and what is usually in question is not
whether corporate managers have an obligation to consider the needs of society, but the extent
to which they should consider these needs.

As a concept, CSR has been around much longer than sustainable development or the other
concepts discussed in this paper. A 1973 article by Nicholas Ebserstadt traced the history of
CSR back to ancient Greece, when governing bodies set out rules of conduct for businessmen
and merchants (Managing Corporate Social Responsibility, Little, Brown and Company, 1977).
The role of business in society has been debated ever since. According to Archie B. Carroll, one
of the most prolific authors on CSR, the modern era of CSR began with the publication of the
book Social Responsibilities of the Businessman by Howard Bowen in 1953. Since then, many
authors have written on the topic. For the first few decades after 1953, the main focus of these
writings was whether corporate managers had an ethical responsibility to consider the needs of
society. By 1980 it was generally agreed that corporate managers did have this ethical
responsibility, and the focus changed to what CSR looked like in practice.

The arguments in favour of corporate managers having an ethical responsibility to society draw
from four philosophical theories:

Social contract theory. The central tenet of social contract theory is that society
consists of a series of explicit and implicit contracts between individuals, organizations,
and institutions. These contracts evolved so that exchanges could be made between
parties in an environment of trust and harmony. According to social contract theory,
corporations, as organizations, enter into these contracts with other members of society,
and receive resources, goods, and societal approval to operate in exchange for good
behaviour.

Social justice theory. Social justice theory, which is a variation (and sometimes a
contrasting view) of social contract theory, focuses on fairness and distributive justice
how, and according to what principles, societys goods (here meaning wealth, power,
and other intangibles) are distributed amongst the members of society. Proponents of
social justice theory argue that a fair society is one in which the needs of all members of
society are considered, not just those with power and wealth. As a result, corporate
managers need to consider how these goods can be most appropriately distributed in
society.

Rights theory. Rights theory, not surprisingly, is concerned with the meaning of rights,
including basic human rights and property rights. One argument in rights theory is that
property rights should not override human rights. From a CSR perspective, this would

mean that while shareholders of a corporation have certain property rights, this does not
give them licence to override the basic human rights of employees, local community
members, and other stakeholders.

Deontological theory. Deontological theory deals with the belief that everyone,
including corporate managers, has a moral duty to treat everyone else with respect,
including listening and considering their needs. This is sometimes referred to as the
Golden Rule.

CSR contributes to corporate sustainability by providing ethical arguments as to why corporate

managers should work toward sustainable development: If society in general believes that
sustainable development is a worthwhile goal, corporations have an ethical obligation to help
society move in that direction.

3) Stakeholder theory
Stakeholder theory, which is short for stakeholder theory of the firm, is a relatively modern
concept. It was first popularized by R. Edward Freeman in his 1984 book Strategic
Management: A Stakeholder Approach(Pitman Books, Boston, Mass, 1984). Freeman defined a
stakeholder as any group or individual who can affect or is affected by the achievement of the
organizations objectives. The basic premise of stakeholder theory is that the stronger your
relationships are with other external parties, the easier it will be to meet your corporate business
objectives; the worse your relationships, the harder it will be. Strong relationships with
stakeholders are those based on trust, respect, and cooperation. Unlike CSR, which is largely a
philosophical concept, stakeholder theory was originally, and is still primarily, a strategic
management concept. The goal of stakeholder theory is to help corporations strengthen
relationships with external groups in order to develop a competitive advantage.
One of the first challenges for companies is to identify their stakeholders. There appears to be
general agreement among companies that certain groups are stakeholders shareholders and
investors, employees, customers, and suppliers. Beyond these, however, it becomes more
challenging because there are no clear criteria for defining stakeholders. Most authors agree
that if the term stakeholder is to be meaningful, there must be some way of separating
stakeholders from non-stakeholders. Some authors have suggested that stakeholders are those
that have a stake in the companys activities something at risk. Other authors have suggested
that if you consider the global impacts of industry such as climate change or cultural changes
due to marketing and advertising everyone is a stakeholder. The issue of qualifying criteria for
stakeholder status is currently being debated.

Assuming that the main stakeholders have been identified, the next challenge for corporate
managers is to develop strategies for dealing with them. This is a challenge because different
stakeholder groups can, and often do, have different goals, priorities, and demands.
Shareholders and investors want optimum return on their investments; employees want safe
workplaces, competitive salaries and job security; customers want quality goods and services at
fair prices; local communities want community investment; regulators want full compliance with
applicable regulations. However, there is a general acknowledgement that the goals of
economic stability, environmental protection, and social justice are common across many
stakeholder groups. Few groups would argue against these goals, although they may debate
the level of priority or urgency.
The contribution of stakeholder theory to the corporate sustainability is the addition of business
arguments as to why companies should work toward sustainable development. Stakeholder
theory suggests that it is in the companys own best economic interest to work in this direction
because doing so will strengthen its relationship with stakeholders, which in turn will help the
company meet its business objectives.

4) Corporate Accountability
The fourth and final concept underlying corporate sustainability is corporate accountability.
Accountability is the legal or ethical responsibility to provide an account or reckoning of the
actions for which one is held responsible. Accountability differs from responsibility in that the
latter refers to ones duty to act in a certain way, whereas accountability refers to ones duty to
explain, justify, or report on his or her actions.
In the corporate world, there are many different accountability relationships, but the relevant one
in the context of this paper is the relationship between corporate management and
shareholders. This relationship is based on the fiduciary model, which in turn is based on
agency theory and agency law, wherein corporate management is the agent and the
shareholders the principal. This relationship can be viewed as a contract in which the principal
entrusts the agent with capital and the agent is responsible for using that capital in the
principals best interest. The agent is also held accountable by the principal for how that capital
is used and the return on the investment.
Corporate accountability need not be restricted to the traditional fiduciary model, nor only to the
relationship between corporate management and shareholders. Companies enter into contracts

(both explicit and implicit) with other stakeholder groups as a matter of everyday business, and
these contractual arrangements can serve as the basis for accountability relationships. For
example, companies that receive environmental permits and approvals from regulators to
operate facilities are often held accountable by the regulators for whether the terms of the
approval are being met. Proponents of social contract theory often argue that corporations are
given a licence to operate by society in exchange for good behaviour, and as such the
corporations should be accountable to society for their performance.
The contribution of corporate accountability theory to corporate sustainability is that it helps
define the nature of the relationship between corporate managers and the rest of society. It also
sets out the arguments as to why companies should report on their environmental, social, and
economic performance, not just financial performance. In 1997, John Elkington of the UK
consultancy, Sustain Ability, called this type of accounting on environmental, social, and
economic performance as triple bottom line reporting.
Corporate sustainability is a new and evolving corporate management paradigm. Although the
concept acknowledges the need for profitability, it differs from the traditional growth and profitmaximization model in that it places a much greater emphasis on environmental, social, and
economic performance, and the public reporting on this performance.
Corporate sustainability borrows elements from four other concepts. Sustainable development
sets out the performance areas that companies should focus on, and also contributes the vision
and societal goals that the corporation should work toward, namely environmental protection,
social justice and equity, and economic development. Corporate social responsibility contributes
ethical arguments and stakeholder theory provides business arguments as to why corporations
should work towards these goals. Corporate accountability provides the rationale as to why
companies should report to society on their performance in these areas.
Not all companies currently subscribe to the principles of corporate sustainability, and it is
unlikely that all will, at least not voluntarily. However, a significant number of companies have
made public commitments to environmental protection, social justice and equity, and economic
development. Their number continues to grow. This trend will be reinforced if shareholders and
other stakeholders support and reward companies that conduct their operations in the spirit of
sustainability.

Benefits
Over 530 participants are saving a combined $85 million a year through the program, which
helps to identify and implement projects that enable them to:

Save money and improve productivity.

Integrate environmental strategies with business planning.
Use resources more efficiently.
Engage and train staff.
Enhance relationships with customers, suppliers and communities.
Measure their carbon footprint and manage their emissions.
Manage environmental risk and ensure compliance.
Gain government support and resourcing.
Receive the latest advice from business and government specialists.
Broaden their network by meeting and sharing ideas with others in the same industry
and region.

6 Business Benefits of
Sustainability
License to Operate (Speed to Market)
In business, the old adage "time is money" takes on new meaning. Every delay, whether
it be in permitting, construction, recruiting or training employees has an associated cost
in lost revenue, particularly in a competitive situation when the preferred company can
use the time advantage to establish itself in the market, cherry pick the local talent pool
and build relationships with customers and suppliers.
Each day that a store remains vacant or a commercial lot lies undeveloped is a day of
lost sales revenue for the company. The community does not realize the benefits of
having those goods or services available, workers are denied employment, and the
community cannot collect sales and income taxes.
A company that has a positive reputation has a competitive advantage. While
communities may not actively facilitate approval of a permit, myriad of examples exist
where community opposition has resulted in substantial delays and requiring a greater

investment of time and money. In short, the community needs to 'buy' you before you
get a chance to sell them anything.
This is a lesson that some sometimes more clearly demonstrated by its failure. "We
recognize that we need a 'license' to operate in any community that we enter," says
David Weidman, President and CEO of Celanse Corp. in NYSE magazine's
August/September 2006 issue. "Some of those licenses have been lost because of
social irresponsibility on the part of some companies within our industry. So this license
to operate demands that we be actively involved in the community."
Whether you define it as enhanced goodwill or reduced opposition, sustainability
programs that position the company as a positive corporate citizen can impact the
speed with which the company enters or grows within a market.
Cost Reduction or Avoidance
Most businesses know the importance of investing in preventive maintenance to keep
equipment in good working order. In fact, these 'expenses' are not considered optional.
Those who do not invest in this manner are considered foolish and viewed with
contempt. But there are other, direct ways that businesses can save money through a
longer-term approach.
Market Opportunity/Advantage
Brand reputation or 'goodwill' is arguably the most valuable asset a company has over
the long term. Jack Welch talked about 'walking the talk' but the concept goes back to
the very dawn of democracy and the concept of an empowered populace. Socrates said
that "the way to gain a good reputation is to endeavor to be what you desire to appear."
It is important to note that he acknowledges that people attribute values based on acting
in accordance with aspirations. In other words, people judge based on the impact of
actions, and not intentions. It is unlikely that anyone (individual or company) can truly
achieve perfection. The best case is that when outlying behavior or actions take place,
they are more likely to be viewed as aberrations rather than symptomatic of a greater
and negative truth.

The lessons for corporations are clearly transferable. A company that is viewed as a
positive and favorable member of the community is likely to have less opposition, and
when -- as is almost inevitable -- a misstep does occur, it is less likely to be perceived
negatively. Like any other business expense, a clear case can be made that
"reputational" capital, is an investment, built over time and as a long-term strategy.
Employee Engagement
One of the often-overlooked stakeholder groups is a company's employees. Beyond the
"feel good" aspect that is often cited as one of the softer (less business focused)
benefits of sustainability, employee morale and culture are linked to productivity,
recruitment and retention. While many companies talk about how their employees are
their most valuable assets but those that consider employees as integral partners in the
organization's future and success recognize the power of true employee engagement.
Employees who are passionate about the company and its products are the best
advocates and can counteract threats to brand image simply by talking to their
neighbors and friends.
Robert Lawless, chairman, president and CEO, McCormick & Co. Inc. explains in the
same NYSE magazine article that "being socially responsible allows you to attract
talent, because good people will align with the company that really cares about
employees and communities. We link social responsibility to talent retention."
A failure to consider employees as vital in the organization's overall success can
compromise a company's competitive position. One company discovered that
employees who had not been informed of the corporate strategy of maintaining a visible
presence their market through the routine upkeep of idle equipment were unwittingly
compromising the effort by publicly complaining about the "stupid" manager forcing
them to paint a non-working production facility. This unintentional sabotage of the
company strategy demonstrates the importance of engaging employees in the strategy
and the power that they have to impact the success -- or failure -- of its efforts.
This failure to include employees results in behavior that can damage profitability

directly. Poor morale can lead to passive sabotage in the form of reduced productivity,
shoddy workmanship and quality control and increased absenteeism. At its worst,
unhappy employees can and do engage in behavior that deliberately hurts the company,
such as an employee who shares information about a corporate problem. This can
result in damage to corporate image, credibility and the bottom line ranging from lost
sales to increased costs due to fines and penalties.
Ability to Seize the Innovation High Ground
Companies that are looking for ways to be more environmentally, socially and
economically responsible are driving innovations in products, services and sourcing as
well as financial acumen. In the first months of 2012, electric (including hybrid, extended
range and 'pure' electric) vehicles sold in the United States reached 4,637,337 vehicles
or 3.39 percent market share -- according to the Electric Drive Transportation
Association. Sales of compact fluorescent bulbs initially faltered due to the color of the
light emitted.
Today's bulb not only provide the same light spectrum as classic incandescent bulbs,
they use 75 percent or 80 percent less electricity to do so -- paying for themselves in
about half a year in energy savings. In 2006, Wal-Mart, the world's largest retailer,
announced plans to sell one bulb to every consumer in its 100 million customers. Not
only does the planet benefit from the reduction in energy use, but companies like
General Electric that produce the bulbs also benefit from increased sales (and
reputation). Companies that are seen as innovative tend to attract innovative employees,
and the cycle accelerates. And that is good for business.
In the area of reputation and brand management, companies that source their products
from supplier that engage in sustainable business practices are protected from damage
to their brand and reputation from issues such as child labor and living wages. And they
are helping prevent these practices by providing a financial incentive -- their business -for acting in a socially responsible manner.
Access to Investment Capital
One out of every eight dollars under professional management in the Unites States in

involved in socially responsible investing. That $3.07 trillion represents a huge pool of
money that is being invested in companies that have been found to be sustainable.
When the world imposed economic sanctions against the Apartheid government of
South Africa, that nation lost access to capital. The Calvert Group was the first mutual
fund to leave South Africa when apartheid was instituted but also the first to return after
Nelson Mandela was elected and asked the world to reinvest in the country. Businesses
can find themselves in the same situation.
From 1995 to 2003 assets involved in social investing have grown 40 percent faster than
all professionally managed investment assets in the U.S. Investment portfolios involved
in SRI grew by more than 240 percent from 1995 to 2003, compared with the 174
percent growth of the overall universe of assets under professional management over
the same time period.