Illustrate Business Ethics, Social Issues, and Responsibility

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SAGE Brief Guide to Corporate Social Responsibility

Sustainability

Contributors: By: SAGE Publications

Book Title: SAGE Brief Guide to Corporate Social Responsibility

Chapter Title: "Sustainability"

Pub. Date: 2012

Access Date: August 19, 2020

Publishing Company: SAGE Publications, Inc.

City: Thousand Oaks

Print ISBN: 9781412997225

Online ISBN: 9781452243986

DOI: http://dx.doi.org/10.4135/9781452243986.n5

Print pages: 40-47

This PDF has been generated from SAGE Knowledge. Please note that the pagination of the online

version will vary from the pagination of the print book.

http://dx.doi.org/10.4135/9781452243986.n5

Sustainability

Sustainability is an evolving concept that expresses holistic thinking integrating society, economy, and ecology. This concept has been advanced to guide actions within present society to ensure continued existence and prosperity into the foreseeable future. Therefore, sustainability can be defined as an integrated understanding of the interconnectedness of human activity with all related man-made and naturally occurring systems. The goal of sustainability is often conflated with the approach needed to attain the goal— sustainable development. Understanding these two terms is an essential first step for addressing a set of global challenges embodied by sustainability. To that end, the Brundtland Commission, created through the United Nations, published a report in 1987 in which sustainable development is defined as seeking to meet the needs and aspirations of present society without compromising the ability to meet those of future generations.

Because of profound changes to our shared ecological systems, the question of sustainability is being considered around the world. From advancing ozone depletion, which leads to progressively higher levels of life-damaging radiation, to accelerating greenhouse gas emissions, which contribute to complex climate change, to habitat destruction, which results in decreased biodiversity, shared ecosystem resources are being depleted or damaged. Among the consequence of ecosystem damage and loss are that it can threaten and create social unrest in the future, while at the same time drive numerous species toward extinction. Abject poverty that attends the growing gaps between the rich and the poor is a proven driver of environmental degradation and fuels resource, trade, and policy disputes. This type of economic unrest has provided a source of motivation to address sustainability issues not only in organizations such as the United Nations but also at the World Bank and the World Trade Organization.

As our society wrestles with the meaning and actions implied by sustainability, it is helpful to consider that more than 400 years ago the Haudenosaunee (also known as the Iroquois) had their “Great Law,” which, in part, requires that leaders consider the impact of their decisions on the seventh generation following that decision. There are other such examples of statements regarding sustainability from the past that very clearly define our collective responsibility to protect and plan for the future. Understanding the recurrence of this theme in human society helps us to understand the centrality of sustainability. It is also instructive to note that thinking about sustainability is not the same as achieving a sustainable outcome. Many civilizations have risen only to prove unsustainable, the Haudenosaunee being among them. What is very different today is the accumulating metrics and resulting data that confirm the impact of human activity on global ecosystem services, such as water cycles, carbon cycles, and resource renewal cycles to name a few. Climate scientists are in general agreement that global warming is real, and it is the product of human activity. The main questions now are as follows: How bad will the consequences be? How fast will they manifest? What can be done to mitigate some of the damage already done?

Sustainability explores how we collectively and individually move into the future while learning to understand how global ecosystem services underpin the social and economic activity on the planet. Business organizations are human society's most efficient resource concentrators, transformers, and distributors; thus, they create what might be called a “corporate ecology” and, therefore, business-oriented solutions central to any working and attainable definition of sustainability.

A few business organizations have viewed increased emphasis on sustainability as an opportunity. If environmental and social costs are included as additional performance metrics, then those firms that comply early and set new standards may be able to create a basis for competitive advantage. For instance, when the California Environmental Protection Agency found that two-stroke engines (the type often used in lawn mowers and gas-powered gardening equipment) were causing a large amount of air pollution, it began to demand more stringent emissions standards for these machines. At first, these new standards were opposed by industry, but a few innovators not only were able to meet the new standards but exceeded them and

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used 33% less fuel with their more efficient motors. In this case, a sustainability effort, once embraced by these companies, provided the compliant companies with a competitive advantage and achieved a social and environmental objective simultaneously. Sustainability, when pursued by businesses with creativity and purpose, can achieve financial, social, and environmental objectives in an integrated and positively reinforcing manner.

The concept of sustainability is not without its detractors. Some notable scholars, such as Julian Simon, feel that the combined mental power of more people will solve whatever environmental or social problems further human activity produces. The Cato Institute in 2002 concluded that sustainable development is a dubious solution in search of a problem or that it is simply a restatement of a commonsense position of taking care of one's own productive resources that is already well addressed by the current free market policy. It has also been argued that the cost of taking action to comply with sustainability initiatives such as the Kyoto Treaty on Climate Change would cost the U.S. economy a disproportionate amount. These arguments were central to the Bush administration's refusal to become a signatory nation to that agreement on “greenhouse gas” reduction. Some climate scientists and ecologists argue that greenhouse gas damage to ecosystems services may be irreversible and this damage has real costs now that will grow in the future. A concept as complex and far-reaching as sustainability will always present business and society with very conflicted and ambiguous trade-offs.

Because business organizations are uniquely transformative institutions in modern society, how business approaches the concept of sustainability is of primary importance. This central role of business in modern society is also discussed in such topics as corporate social responsibility, corporate citizenship, and corporate ecology. A number of management efficiency approaches have been suggested for business organizations that could make important contributions to our societal goal of sustainability. Some of these include ISO14000, triple-bottom-line accounting, the balanced scorecard approach to strategic management, natural capitalism, the natural step, industrial ecology, Zero Emissions Research Initiative (ZERI), ecological footprinting, and eco-effectiveness (cradle-to-cradle model). In the following sections, these approaches will be discussed briefly.

ISO14000

ISO stands for the International Standards Organization. It is a nongovernmental organization that has grown out of the General Agreement on Tariffs and Trade. As the World Trade Organization pursues agreements on global trade, quality standards have become increasingly important. One of the outcomes of the 1992 Rio Summit on the Environment was the creation of ISO14000 to create a comprehensive set of standards designed to address the most pressing environmental issues for organizations in a global market. As it currently stands, these standards are voluntary for organizations to abide by. However, the ISO14000 is building on up-to-date environmental health and safety standards. These are important standards and make significant contributions to our understanding of sustainability. However, the ISO does not make specific mention of sustainability and states as its primary focus the application of best practices that are geared toward helping organizations come into compliance with globally accepted standards on environmental health and safety. Depending on the application, the ISO approach to standardized reporting and efficiency measures can lead a company to improvements or to follow an industry to the lowest common denominator of acceptable practice.

Triple-Bottom-Line Accounting

This term and approach originated with the publication of John Elkington's 1998 book Cannibals with Forks: Triple Bottom Line of 21st Century Business. In it, Elkington argues that accounting practice should be expanded to include environmental and social costs as well as financial costs. Some scholars argue that corporate social responsibility, or corporate social performance, must measure the social, environmental, and economic performance of the corporation for a firm to be consistent in its approach to these commitments to good practice. There are obvious problems associated with assessing the costs to society for various

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corporate actions. According to Elkington, the price of a product should include the cost of the ecological services consumed in the production of the product and embodied in the use and disposal of the product. Great strides in ecological economics and research in social capital have helped create metrics to fill in these gaps. The triple-bottom-line approach would have a substantial impact on how organizations operate and may advance our understanding of sustainability. But there are many scholars and practitioners who oppose this type of approach, arguing that it confuses the division of labor and would make firms inefficient and uncompetitive.

Balanced Scorecard

This systematic approach to enterprise management was developed in the early 1990s, by Robert Kaplan and David Norton, as a way to remove some of the vagueness out of strategic management. This approach was not developed specifically as a tool to achieve sustainability, but it has promise as such. Like the triple bottom line, the balanced scorecard approach requires that management look beyond financial measurement; it incorporates a more holistic systems perspective into organizational management. This system uses what has been referred to as a double-loop feedback: One loop is business process focused, and one loop is strategic outcome focused. Both loops are intended to use measurements to provide managers with data on which decision making is based. The application for sustainability comes from the reliance on internal and external data collection and an inherent acceptance of a systems approach.

Natural Capitalism

In 1999, Paul Hawkins, Amory Lovins, and L. Hunter Lovins published a book proposing the redesign of industry based on biological models. They argue that the living systems of the earth are in decline and that the next industrial revolution will be driven by corporations. Natural capitalism is built around the idea that business opportunities become more abundant as entrepreneurs recognize environmental resource limitations. Those that can do more with less will prosper. The advocates of natural capitalism propose four interlinked principles to unlock and ultimately restore natural capital: (1) radically increase resource productivity; (2) adopt closed-loop systems and zero waste in industry; (3) sell services in place of selling products; and (4) recognize that natural capital is the source of future prosperity, thus that businesses will be incentivized to invest in its maintenance. This approach is not only an explicit plan for the concept of sustainability but also a vision of what sustainable business practice might look like.

The Natural Step

This approach is the outcome of a series of studies initiated by Karl-Henrik Rob, who established principles for sustainable society based on thermodynamics and natural cycles. Since 1989, the Natural Step Foundation has been refining and promoting its four-phase program. These phases are (1) aligning key decision makers and stakeholders around a common understanding of what it takes to be a sustainable society, (2) creating baseline data that detail the resources necessary for an organization to be sustainable, (3) creating a vision-driven strategic plan based on the data gathered through the study of the organizational system, and (4) recognizing that success depends on step-by-step implementation and continued support. While this approach is comprehensive and holistic, an organization's implementation of this approach seems dependent on the Natural Step Foundation and may be self-limiting because of restrictive access. Here again, as in natural capitalism, the emphasis and essence of the approach to sustainability is on systems thinking, confronting natural resource and cycles dependence, and creating strategies to support the health and continuation of these processes.

Industrial Ecology

The idea of industrial ecology, which has grown rapidly over the past decade, originated in a 1989 publication by Robert Frosch, and a book by this title was published by Graedel and Allenby in 1994. Very simply,

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industrial ecology is the idea that an industrial system should function like an ecosystem. There is no waste product in nature; the end of one process is the beginning of another. Some scholars have defined industrial ecology as the science of sustainability. Yet others would argue that this overreliance on science is the weakness of industrial ecology. It has been said that the answer to the question of sustainability will not be engineered; society must come to an understanding of the interdependence of natural systems and their limitations. These writers advocate caution regarding industrial ecology and suggest that technological fixes help human populations extend their overconsumption of resources, whether they are renewable or fixed in quantity. However, all would agree that industrial ecology will be at least part of the solution, because it provides the engineering solutions that can teach us to do much more with less consumption and helps eliminate waste and pollution.

Zero Emissions Research Initiative (Zeri)

ZERI is a concept and a network started by Pauli and deSouza at the United Nations University in Japan. The ZERI network has more than 50 projects worldwide that are applying the ZERI sustainability ideas regarding biodiversity, waste elimination, creativity, and efficient design. ZERI is similar to the Natural Step in that it employs systems thinking to address business, production, and consumption problems. ZERI seeks to create a global network of participants to create alternative organizations that produce goods and services in ways that alleviate poverty and reduce environmental degradation. ZERI is another holistic, systems-based approach to sustainability—one that seeks to model human organizations based on our understanding of naturally occurring systems.

Ecological Footprint

Ecological Footprint is a tool created in 1993 by Mathis Wackernagel and William Rees to help quantify human demand on natural systems relative to the planet's ability to meet those demands. By showing that these demands are consistently in excess of the planet's ability to sustainably provide for these demands, the Global Footprint Network seeks to get business, government, and communities to adopt more sustainable behaviors. Unlike most of the other approaches presented here, the footprint concept is a tool that helps individuals and organizations get a sense of what their actions cost in terms of ecological services. This is an important place to start when considering the meaning and application of sustainability. Our current global ecological footprint overshoots ecosystem capacity by almost 20%, which can be absorbed for a time but not without damage and not indefinitely. Tools such as ecological foot printing are important for people to map our current trajectory and to be able to measure change when action is taken.

Eco-Effectiveness (Cradle-To-Cradle Model)

This is a management consulting and sustainability model that is similar to the approach of natural capitalism. It was developed by Michael Braungart and William McDonough in 1995. The idea of eco-effectiveness is not simply doing more with less but designing products and services in ways that are systemically appropriate. Such products and services are designed to produce no waste and to support rather than disrupt natural systems. By studying the industry as a natural system, this concept seeks to design business processes that mimic metabolic systems both biological and mechanical. Like natural capitalism, this approach envisions the next industrial revolution as one where the end of a product use cycle is the beginning of the next nutrient cycle—where waste equals food and ecological intelligence drives profitability and competitive advantage.

As this brief survey of approaches for addressing sustainability illustrates, many scholars and practitioners have expressed urgency and insight about the global need for sustainability. A successful approach to sustainability will not be engineered. Simply building better, more efficient products will not on its own yield a sustainable future. Along with the efficient use of resources, sustainability requires some fundamental changes in how organizations work on all levels, from the individual action to international coordination. These are not insignificant changes. This fact alone captures the profound difficulty in even defining

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sustainability—sustainability will have different meanings depending on the level of analysis; ultimately they must all contain the understanding that a sustainable world cannot support irresponsible and inequitable resource use.

—David H.Saiia