Environmental Sustainability in Business

Abstract

In recent years, some very large, established companies like General Electric have completely overturned their previous negligence of sustainability and now consider it a central aspect of their business strategy. However, many other companies still regard sustainability to be a side issue, and few act decisively in order to derive real value from it. The divide becomes evident in a recent global survey of business leaders: 68 percent of those who considered themselves to be experts with respect to sustainability said that their investments in sustainability aimed at financial returns, as opposed to only 32 percent among self-identified novices. The difference is even greater – 50 versus 10 percent – with respect to whether or not the company has developed “a compelling business case for sustainability” (Berns et al. 2009b, 8f.). Overall, improved company or brand image still represents the most important perceived benefit (Berns et al. 2009a, 58). This is somewhat conflicting with the results from an earlier survey with managers from US-based firms: the top three answers for the primary motivation of the firm for corporate citizenship were revenue growth (16%), increasing profit (16%), and cost savings (13%) (Economist Intelligence Unit 2008a, 24). The discrepancy may stem from the different demographics of the respondents, yet both surveys highlight the fact that sustainability in business is no longer a matter of philanthropy.

It is the goal of this chapter to substantiate the assertion that addressing sustainability, more precisely environmental sustainability, makes economic sense, too.

One of the first and most persistent challenges with respect to sustainability in business both to academics and practitioners is to define it (Schaltegger & Burritt 2005, 186ff.).