With the time, how the companies look at their business strategy has changed. And, the society, stakeholders of organizations and the governments are the influencers of this shift. They expect the companies to be concerned more about the people and the environment. This is mainly because of the environmental threats we face globally.
Corporate sustainability is about building long-term value for stakeholders by focusing on environmental, social, ethical, and cultural aspects and implementing a business strategy. Companies nowadays are adopting the best strategies that work in harmony with the environment and society.
Corporate sustainability is not just protecting the environment. It has three pillars. And they are:
This means measuring business performance against environmental, social, and governance performance with financial returns. A huge number of investors who are interested in the company are using this to identify the risk and make profits.
Environment: company effects on nature like pollution management, climate change, and environment-related policies.
Social: how the company manages its stakeholders and how the company reacts to social causes.
Governance: transparency in accounting, corporate integrity, and diversity of the executive committee and board of directors.
Focusing on the above is important and helpful for organisations, as it will eventually help
- build their brand name faster.
- reduce cost
- mitigate risks
- Attract investors
ESR and CSR
The difference between ESR and CSR is that CSR holds the company accountable and is linked to internal operations and culture, whereas ESR measures the company’s impact and investment potential.
Corporate sustainability and CSR
CSR is a broader term that shows actions that the company has taken to advance social and environmental causes, or what the company has achieved.
Corporate sustainability shows the strategy of the company that makes a positive impact on the environment and communities, or how a business is going to achieve environmental, societal, and economic goals.
Corporate sustainability is not corporate social responsibility.
Yes, it’s closely linked, but not the same!
The impact of sustainability
It is important for businesses as the current challenges they face focus on social and environmental impact, and they can survive in the business world if they are concerned about sustainability.
Corporate sustainability: What is it and where does it come from? 2017
Sustainability Examples
- Renewable energy
- Recycling programmes
- Reducing carbon emissions
- Waste reduction
- Employee engagement
Corporate sustainability and HRM
HR managers are responsible for creating a culture that values ESG and sustainability, which involves communicating clearly about sustainability behaviours among employees.
“Sustainable HRM is closely related to corporate social responsibility initiatives. However, according to Stahl, Brewster, Collings, and Hajro (2020), HRM has not taken ownership of social responsibility issues and is uncomfortable with how to approach these concerns. Additionally, HRM is more likely to offer operational support in executing and implementing internal social responsibility initiatives than strategic input in developing a corporate social responsibility strategy (Sarvaiya, Eweje, & Arrowsmith, 2018). Bonner and Friedman (2013) also found that HRM does not play a key role within organisations for corporate social responsibility decision-making; the key influencers are members of the board of directors, followed by the legal, public relations, sales, and marketing departments. Additionally, according to Deloitte (2021), millennials and Gen Zs want businesses to shift their purpose, focus more on people (employees, customers, and society), and focus less on profits. 62% of the respondents agree that businesses “have no ambition beyond wanting to make money” (p. 47)”.
(Corporate sustainability 2024)
“Sustainability in people management goes beyond HRM policies and practices by including a broad and critical perspective of leading people responsibly and ethically to accomplish the first building block of the ROC model, proposed by Prins et al. (2014), “respect.” A primary prevention perspective involves the psychology of sustainability and sustainable development (Fabio, 2017).
(Proença, 1970)
Examples of corporate sustainability initiatives from 2020.
Chr.Hansen Holding: sustainability around food yields, reducing food waste, and eliminating antibiotics in animal production.
Neste Corporation: oil refineries and markets out of Finland; they invest heavily in biofuels and commit to developing that revenue stream.
Prologis: real estate builders who focus on sustainable buildings and developments.
Banco de Brazil: is the most environmentally sustainable bank in the world and gives green loans to businesses that focus on environmentally focused projects.
GlaxoSmithKline: commitment to gender divergence and reducing the environmental footprint, as well as waste and emissions.
Everlane: is a clothing brand that uses reused plastic, fibres, and fashionable outerwear.
Apple: replanted mangrove trees alongside the coastline in Columbia.
Lego's : plan is to reduce packaging, source 100% renewable energy by the end of 2020, and also aim for a 90% recycling rate.
Google: focus on greening their supply chain
(DMI, 2024)
Conclusion
Consumers nowadays are conscious of green environmental facts, so companies find every way to reduce their impact on our planet and their communities.
Sustainability practices help companies highlight their social benefits while running their own businesses.
This article discusses the growing importance of corporate sustainability in today's business environment, emphasizing the need for businesses to balance social and environmental concerns with financial performance.
ReplyDeleteIts really important organisations should think about not only the profits but about the environment as well if not the business wont be able to survive in the competitive world.
DeleteThank you Samudra....
This blog post emphasizes the growing importance of corporate sustainability in today's business landscape. It highlights how companies are shifting their strategies to align with environmental and social concerns, not just for reputation but also for reducing costs, attracting investors, and mitigating risks. Overall, it shows how sustainability initiatives are becoming integral to business success and consumer perception.
ReplyDeleteThank You Thushari hope you gained more insights on corporate sustainability from this.
DeleteThis post discuss the impact on sustainability with some real life examples. In today's interconnected world, corporate sustainability is no longer a choice but a business imperative. Companies that embrace sustainability not only mitigate risks and enhance their reputation but also create long-term value for shareholders and contribute to a more sustainable and prosperous future for all.
ReplyDeleteThank You Romaine as you said corporate sustainability is no longer a choice but a business imperative so doing corporate sustainability as well as profits are important to live in the business world.
DeleteThanks for highlighting corporate sustainability and its importance in today's business world! It's great to see companies taking action to address environmental and social issues while also building long-term value for stakeholders. Excited to see more organizations prioritize sustainability in their strategies! Great work
ReplyDeleteThank you Anjali as you emphasised without doing corporate responsibility its really hard to survive in the competitive business world.
DeleteCorporate sustainability is becoming increasingly important as a society, stakeholders, and governments push for companies to prioritize people and the environment. HR managers play a main role in promoting sustainability within companies by fostering a culture that values environmental, and social.
ReplyDeleteThank you Ruwini lets take this as an base to our future learnings.
DeleteCorporate sustainability is very important and crucial in today's dynamic business environment. Prioritizing environmental, social, and governance aspects not only builds long-term value but also fosters trust among stakeholders. A great article highlighting the vital role sustainability plays in shaping successful businesses today.
ReplyDeleteThank you Ishani hope you understood the importance of corporate sustainability is more important as well as profits.
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