By Dr Leong Choi Meng
Revitalising Sustainability In Business
The United Nations’ 2030 Agenda for Sustainable Development, with its 17 Sustainable Development Goals (SDGs), serves as a significant driver toward achieving a more sustainable future. Carol Stanford, in her seminal work “The Responsible Business: Reimagining Sustainability and Success,” underscores the pressing need for substantive transformations in the operational paradigms of businesses, expressing a sense of anticipation for tangible shifts: “Once again I expected to hear about real change.” Customers, employees, the environment, communities, and investors are the key stakeholders in steering the trajectory of responsible business conduct for the real change collectively going forward.
In evaluating the impact of businesses, there’s a prevalent tendency to emphasize their economic contributions, particularly their role in driving national income growth. It’s essential to recognize that a business’s success isn’t solely contingent upon the economic value it creates; rather, it is shaped by a multifaceted array of factors. Consequently, the paradigm of business sustainability must transcend mere economic considerations to encompass a holistic assessment that incorporates societal and environmental impacts. This broader perspective is pivotal in fostering sustainable business practices that align with the needs of both present and future generations.
In contemporary discourse surrounding sustainable business practices, terms such as corporate social responsibility (CSR) and environmental, social, and governance (ESG) have become ubiquitous, serving as benchmarks to showcase a company’s dedication to responsible conduct. These concepts not only signify the level of importance a business places on fulfilling its obligations to society and the environment but also shed light on the integration of these responsibilities into the core operations of the business. Moreover, they provide a structured approach for evaluating and measuring the performance of businesses in terms of their impact on various stakeholders and the broader ecosystem. As such, the widespread adoption and utilization of CSR and ESG principles signify a significant shift towards more transparent and accountable business practices, aligning with the imperatives of sustainable development and long-term value creation.
As a result, numerous corporations are redirecting their attention towards addressing environmental and social concerns with increased emphasis. This dedication is notably reflected in non-financial reporting, which provides comprehensive insights into a company’s endeavors regarding responsible business practices. Over the years, there has been a noticeable trend among firms to include detailed accounts of their environmental, sustainability, and responsibility initiatives within their annual reports, emphasizing the seamless integration of sustainability principles into their fundamental operations. As we continue along this trajectory towards fostering responsible business practices, the pertinent question arises: What lies ahead in this ongoing journey?
Ditlev-Simonsen, a Professor at BI Norwegian Business School and Co-Director of the BI Centre for Sustainability and Energy, has revised stages toward responsible sustainable business characterizing businesses’ responses to social and environmental issues. The stages comprise of ignore, react, defend, accommodate, and proactive. Although not all businesses traverse each stage, it is imperative for them to adopt more proactive approaches towards sustainability to align with evolving customer expectations in today’s landscape. A collaborative study by McKinsey and NielsenIQ highlights this trend, revealing an increasing consumer preference for socially and environmentally responsible products in the US, signifying a growing emphasis on sustainability in purchasing decisions.
The impetus for responsible business practices saw a significant surge following the advocacy for responsible tourism in Cape Town in 2002. This fundamental call played a crucial role in bridging the gap between the conceptualization of sustainability and its tangible implementation. The Cape Town Declaration aimed primarily at reducing negative impacts on the economy, environment, and society. Harold Goodwin, an Emeritus Professor at Manchester Metropolitan University, played a pivotal role in leading initiatives that promote responsibility in the tourism industry. Yet, it’s crucial to understand that the shift toward responsibility should extend beyond tourism to encompass broader sectors.
Barack Obama, the 44th President of the United States, is widely recognized for championing the “New Era of Responsibility,” with a focus on domestic challenges. Yet, the significance of his appeal extends far beyond the confines of national issues, echoing powerfully across the international stage. The imperative to embrace this new era of responsibility arises from the imperatives of social justice and environmental sustainability. This calls attention to the urgent need to overhaul societal, economic, and political frameworks that impede fairness and equity. The responsibility at hand entails striking a delicate balance between safeguarding our planet’s resources and fostering sustainable economic growth. Consequently, it is now incumbent upon businesses to heed this call for responsibility and translate it into tangible action by reassessing their operational paradigms and business models.
In advancing business practices, one avenue for progress lies in embracing responsible product, which entails adopting practices such as utilizing green packaging, sourcing materials sustainably, and employing biodegradable materials. The commitment to sustainability reflects a broader trend towards transparency and accountability in reporting and business operations, aligning with concepts of CSR and ESG principles. Next, as leaders, top management provides the overarching vision for the organization and inspire employees to align with the company’s goals and values. Thus, the composition of the corporate board and the working environment they foster can significantly influence the company’s CSR, ESG, and sustainability performance—a factor deserving vigilant consideration. Following, in today’s technology-driven landscape, strategic management of social media communication has emerged as a crucial aspect, particularly given the rise of user-generated content. While the economic benefits of leveraging social media are undeniable, it’s equally important to explore its effectiveness as a marketing and branding tool.
