What are the principles of corporate sustainability?
B The Change, an organization that shares the voices of Certified B Corporations, has answered this question in an easy-to-understand article. They say, "To contribute to sustainable development, businesses should create wealth to reduce poverty but do so without harming the natural environment. In this way, businesses help our world today and ensure that future generations also can thrive.
In practice, this means that business must consider three key things in their operations:"
Human rights and social justice.
B The Change shares with us that, "Sustainability requires businesses to recognize their impact on the people they employ and the communities around them. This recognition means committing to fair wages, just and ethical treatment, and a clean and safe environment."
Natural resource extraction and waste.
"Businesses often rely on natural resources such as land, water, and energy. While many natural resources can renew or “regenerate,” this takes time. Businesses need to respect these cycles by using natural resources at the speed at which they regenerate."
Short- and long-term thinking.
"Businesses face intense pressure for immediate profits, but sustainability requires investing in technologies and people for the future, even though financial benefits show up much later. Companies are used to longer-term thinking for capital investments, but a sustainability orientation applies this logic to investments in people and society."
How does corporate sustainability differ from corporate social responsibility?
Corporate social responsibility emphasizes a company’s ethical responsibilities. However, what is ethical for one person or company may not be seen ethical by another. Corporate sustainability emphasizes science-based principles for corporate action. Ultimately, both terms push businesses to consider the bigger picture, rather than just short-term self-interest.
Why is corporate sustainability important?
Business is a powerful force in society, with some businesses being larger than some governments. Businesses can accumulate enough power that executives have the choice to create a better life for all or just a few.
Society is now pushing companies to invest in sustainability. Governments, customers, and other stakeholders often want to see companies showing concern for their communities. Failing to do so can mean losing society’s trust in a company.
B The Change notes that “companies can benefit in the long term from being green and good. Evidence shows that financial benefits come in many forms. For example:
- Reducing waste, such as through energy efficiency investments, often produces savings.
- Investors increasingly look for companies that have higher ESG ratings as a way of managing risks.
- Creative and committed individuals seek out employers committed to sustainability and are even willing to take a lower salary if such a commitment is sincere.”
Adapted from B The Change article “A Primer on Corporate Sustainability: Meaning, Examples, and Importance” written by Tima Bansal and Devika Agarwal.
"B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab."