Since the Industrial Revolution, we have experienced tremendous growth in population, production, and consumption. We are on an unsustainable track considering today’s environmental degradation, poverty, climate challenges, overconsumption, and more. In this first chapter, I present key issues related to societal development over the course of the last decade and pinpoint what needs attention. The background, relevance, and purpose of this book’s 12 chapters are introduced.
- Sustainable development
- United Nations (UN) Sustainable Development Goals (SDGs)
- Our common future
Since the Industrial Revolution in late eighteenth century, there have been tremendous increases in both production and population growth. In the 1960s, the society began to consider the relationship between industrial development, environmental degradation, and the costs it imposed on everyone in one way or another. The United Nations (UN) initiated the World Commission on Environment and Development (WCED), later known as the Brundtland Commission, which issued a report in 1987 called Our Common Future. From there, the term “sustainable development” was born. Since then, society has been increasingly concerned with the topic. Yet, global production and consumption continue to grow at an unsustainable rate.
While today around one tenth of the world’s population lives in extreme poverty, people in industrialized countries are overconsuming (Si et al., 2020). If everybody in the world enjoyed the same lifestyle as people in the European Union (EU) we would need three planet Earths. Currently, according to the Global Footprint Network, we need an equivalent of 1.7 Earths to provide the resources we use and to absorb our waste. We are living in a world with major economic inequalities, over-pollution and resource depletion. There are currently over 40 million people enslaved in the world, greenhouse gas emissions (GHGs) are consistently increasing, and more than 20 percent of the world’s animal species are at risk of extinction. Clearly, continuing on this path will ruin our planet, both from a societal and an environmental perspective.
To respond to these global challenges, the UN Sustainable Development Goals (SDGs ) were officially adopted in 2015 by 193 UN member states. Efforts to achieve these goals by 2030 are well on their way and the role of business is crucial. Even though environmental and social problems are perceived as challenges, they can also be approached as opportunities. Companies are spending more time, focus, and money on the pursuit of sustainability. Today, 90 percent of CEOs state that sustainability is important to their company’s success, 88 percent of business students think social and environmental issues should be a priority, and almost 70 percent want to incorporate environmental issues in their next job (Hoffmann, 2018). Even though corporations are aware of the challenges and opportunities associated with sustainability and want to contribute, many of their efforts are inefficient, leading to time and money wasted.
New business models, sustainable business strategies, system and systemic change, circular economies are all examples of potential solutions, which together with a global change of mindset are necessary to achieve the SDGs. This book sets out to address the role of businesses and their responsibilities for reaching these goals. I have researched these topics associated with sustainability in corporations, organizations, and educational institutions—nationally and internationally—for almost 30 years. I worked for the Business Council for Sustainable Development, which played a key role in engaging the global business community to begin discussing how corporations can contribute and adapt to sustainability, an initiative leading up to the Rio Conference in 1991. Familiar with the realities companies are facing, I share my knowledge on how different corporate approaches to responsibility and sustainability lead to different results. This book builds on business theory and experience to recommend practical steps and strategies for corporations pursuing sustainability in an effective way that is good for business and financially sound. The following section provides a short overview of topics discussed in each chapter of this book.
1.1 A Description of the Content of the Book
This book consists of 12 chapters, which taken together provide guidance on how to move forward and change for a more sustainable future. Each chapter provides a comprehensive overview of different components related to sustainability. A particular challenge in today’s society is that so many of these topics have accumulated so much knowledge that research has become too narrow and specialized. Entire books are devoted to only cover small parts of the sustainability concept. This makes dialog between the different areas of expertise quite difficult. People know more and more about less and less, resulting in knowledge-silos. The structure of this book aims to bring cohesion to the body of knowledge in this domain and provide a big picture on the understanding of the topic.
To pursue sustainability, a variety of stakeholders have to be involved and collaborate across the different silos. The SDGs are a key contribution in the field, linking different areas of expertise together. While some criticize the SDGs as being superficial, others argue that the SDGs are the most efficient tool for international cooperation in identifying the key challenges confronting the world and how to approach them together. At any rate, the SDGs are the key references for sustainability worldwide and therefore crucial to refer to.
Along the same line of reasoning, this book puts together key issues and approaches that are relevant for corporations. In order to understand where to go from here and where we are now, we have to understand why we are where we are today. Learning about the past mistakes of other corporates can help others avoid repeating them. But there are also new opportunities which are even more important to focus on and capture.
Chapter 2, “Sustainable Corporate Responsibility”, starts by reflecting on the origins and historical context of terms related to sustainability and business, including but not limited to Corporate Social Responsibility (CSR), Corporate Citizenship, and so on. I discuss what they mean, their purpose, and limitations. I explore different, multilateral initiatives and frameworks pertaining to sustainability, in particular ones adopted by UN member states and how these apply to businesses. The role of corporate involvement and contribution, moving from a reactive to proactive sustainability engagement, is addressed. The responsibility of corporations from a philosophical perspective including key ethical schools of thoughts is also addressed.
Chapter 3, “Economic Theories and Sustainable Development”, provides a brief introduction of some of the key economic theories and how and to which extent they apply to sustainable development and corporate responsibility. How economics, international trade, organizations, tax, values, banks, governments and so on work today can all be attributed to one or more of the economic theorists introduced in this chapter. Still, these theories were developed at the time when environmental challenges such as climate change and resource depletion were not pressing issues, and therefore not considered. I conclude with an overview of the key economists and philosophers who explicitly consider sustainability and corporate responsibility in their assessment of society and business. This chapter will conclude with discussing new trends and theories capturing the sustainable element of business models.
Chapter 4, “Key Tools for Social and Environmental Performance and the UN Sustainable Development Goals (SDGs )”, starts with reflections on the role of corporations in a sustainability setting. Corporate responsibility provides the foundation for sustainable development. It is a complex sphere since there are several confusing initiatives intended to help companies incorporate sustainability. From an international perspective, the UN initiatives have had the most impact. I provide a short introduction to the history of key UN initiatives associated with environmental and social issues and how they relate to business and corporations. As the UN Sustainable Development Goals (SDGs ) have a key global framework for sustainable development, they will be discussed in detail with special attention to challenges and practical relevance for corporations. Well known and widely applied initiatives to evaluate corporate performance like Fair Trade Certificate and ISO 14001, Greenhouse and climate reporting initiatives, like the greenhouse gas (GHG) Protocol, CDP, Task Force on Climate-Related Financial Disclosures (TCFD ), Sustainable reporting frameworks, like Global Reporting Initiative (GRI ) and International Integrated Reporting Council (IIRC ), and Supply chain guidance and due diligence like the OECD Guidelines for Multinational Enterprises, and new laws on transparency, will be presented.
Chapter 5, “The Business Case for Sustainability”, discusses how companies address sustainability challenges. First, the chapter begins with examples of different corporate approaches to taking responsibility for sustainability. Second, I explore how companies are viewed from the stakeholder perspective, so how others outside the company view the managers’ motivations for engaging in corporate responsibility. Although most companies are still motivated by risk reduction and/or marketing in their sustainability work, this chapter will reframe the motivations into something more positive—a business opportunity. Four cases will be presented, Nike, Arthur Andersen, Volkswagen , and companies involved in the Raana Plaza tragedy, and the companies’ approaches relative to the following strategies will be discussed: reacting, defending, accommodating, and finally, a proactive approach in which a business’s profitability is anchored in sustainability. This chapter will conclude with reflections on business models for sustainability.
Chapter 6, “Circular Economy: New Business Models”, begins with an overview of the key challenges faced by society with a linear economy and proceeds to the concept of circular economy, its potential and associated challenges. Key elements in circular economy will be addressed including issues like “refuse”, “reduce”, reuse”, “refurbish”, and “recycle”. I provide numerous examples to illustrate the different approaches in practice. The role of different stakeholders in the process of achieving a circular economy is discussed. Lastly, the transition from selling products to providing services is addressed.
In Chap. 7, “Strategy to Approach Sustainability in Companies: A Step by Step Model”, I present a strategy for approaching sustainability in a corporation. It emphasizes the importance of anchoring the approach in top management and integrating it throughout the company; getting an overview of the current situation via mapping social and environmental impact, benchmarking relative to the SDGs, and a framework for a materiality assessment. This chapter continues on how to develop a sustainability plan, test among key stakeholders, launching, communicating, and implementing the plan, and finally, reporting on progress. This chapter includes practical advice on progress as well as concrete examples based on experience.
Chapter 8, “Stakeholder Management”, addresses the key role of stakeholders in the corporate world, and especially related to sustainability. Even peripheral stakeholders can have great impact on companies. This is an important consideration that companies need to be aware of and consider. In this chapter, I explore the roles of different kinds of stakeholders such as owners, investors, employees, governments, suppliers, customers, NGOs, and the media, and how to communicate and involve these stakeholders in a constructive manner. I address the function of each respective stakeholder as well potential areas for positive collaboration. The power and impact of NGOs on corporations will receive special attention as they often act as representatives for environmental and social interests—and bring such issues to the attention of others. Cases are provided to illustrate the issues presented.
Chapter 9, “Sustainability and Finance: Environmental, Social and Governance (ESG)”, addresses the key role and function of finance in the business world. From being included in small and specialized funds, Environment, Social and Governance (ESG ), and socially responsible investment (SRI) have become part of the mainstream for investors and analysts. In this chapter, I will address what ESG, SRI, environmental and social risk assessment, and ethical investment are about, as well as different investment strategies taking these into account. Further, dilemmas that arise are introduced such as what is a sustainable sector or product and how this differs based on the values of individuals. The move from addressing sustainability issues as a risk reduction activity to a business opportunity is discussed. Finally, the Norwegian Pension Fund the world’s largest sovereign wealth fund, is used as an example to illustrate product-based and conduct-based exclusions in practice.
Chapter 10, “Anti-corruption”, is anchored in the challenges associated with sustainability when corruption exists. Representing at least five percent of world GDP, corruption is a great challenge in general, and especially associated with sustainable business, both nationally and internationally. In this chapter, I reflect on how to address corruption and anti-corruption practices. Typical forms of corruption include bribery, facilitation payments, gifts, hospitality and expenses, political contributions, charitable contributions, sponsorships, voluntary community contributions, trading in influence, and conflict of interest and impartiality. Corruption leads to weak institutions and injustice, less respect for rights, denial of basic services. And much of the world’s environmental damage and tragedies are associated with corruption. Studies show that almost half of the companies have experienced fraud over the past two years. This chapter addresses the corruption challenges, how they are addressed by corporations and key international laws as well as challenges associated with norms and behaviors. How to detect and avoid corruption receives key attention. As anti-corruption is a huge topic and challenge, yet it is limited space available in the book, the topic is presented from a more general perspective. Even though anti-corruption is often left out when talking about sustainability, it cannot be excluded from a book on sustainability and responsibility.
Chapter 11, “Sustainability in Developing Countries: Case Sub-Saharan Africa”, is anchored in Goal #1 of the SDGs : No poverty. In 1995, 10 percent world population lived in extreme poverty . More than one billion, almost 13 percent of the world population, live in Sub-Saharan Africa. This area accounts for two-thirds of global extreme poverty. At the same time, Africa has the fastest growing population with a median age under 20 years, and about 30 percent of the Earth’s remaining mineral resources. This dynamic calls for special attention and sustainable development in Sub-Saharan Africa is the focus in this chapter. The chapter begins with an analysis of Africa’s current situation in terms of development; it details challenges and opportunities, and through concrete cases and examples summarizes what has worked and what has not worked. Based on this foundation, key issues for a sustainable future in Sub-Sahara Africa is addressed. Examples of businesses built on sustainable resources and business opportunities are also presented.
Chapter 12, “The Way Forward: Is Sustainable Development Realistic?”, addresses the future of sustainable development. Given the fact that current consumption in developed countries is unsustainable, and a similar level of consumption in developing countries would be devastating from an environmental perspective, a shift in development is necessary. This chapter touches upon peoples’ human needs and discusses to which extent unsustainable consumption is a necessity for a happiness. Alternative approaches to GDP in measuring a country’s success, like Gross National Happiness (BNH), and the Happy Planet Index (HPI), are discussed. Shifting focus from increased consumption of natural resources to more attention on development associated with social issues like well-being, health, and happiness will be addressed. This chapter concludes with how sustainable development and happy people is realistic, but it will require a shift associated with revised business models, metrics, and goals.
Hoffmann, A. J. (2018). The next phase of business sustainability. Stanford Social Innovation Review, 16(2), 34–39. https://ssir.org/articles/entry/the_next_phase_of_business_sustainability
Si, S., Ahlstrom, D., Wei, J., & Cullen, J. (2020). Business, entrepreneurship and innovation toward poverty reduction. Entrepreneurship & Regional Development, 32(1/2), 1–20. https://doi.org/10.1080/08985626.2019.1640485. https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=140851015&site=ehost-live&scope=site
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Ditlev-Simonsen, C.D. (2022). Introduction. In: A Guide to Sustainable Corporate Responsibility . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-88203-7_1
Publisher Name: Palgrave Macmillan, Cham
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