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Sustainable enterprise .

Sustainable development .

Corporate social responsibility (CSR).

Sustainability (interchangeable with corporate sustainability).

Corporate Sustainability

Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. Corporate sustainability leaders achieve long-term shareholder value by gearing their strategies and management to harness the market's potential for sustainability products and services while at the same time successfully reducing and avoiding sustainability costs and risks.

The quality of a company's strategy and management and its performance in dealing with opportunities and risks deriving from economic, environmental and social developments can be quantified and used to identify and select leading companies for investment purposes.

Leading sustainability companies display high levels of competence in addressing global and industry challenges in a variety of areas:


  • Strategy: Integrating long-term economic, environmental and social aspects in their business strategies while maintaining global competitiveness and brand reputation.
  • Financial: Meeting shareholders' demands for sound financial returns, long-term economic growth, open communication and transparent financial accounting.
  • Customer & Product: Fostering loyalty by investing in customer relationship management and product and service innovation that focuses on technologies and systems, which use financial, natural and social resources in an efficient, effective and economic manner over the long-term.
  • Governance and Stakeholder: Setting the highest standards of corporate governance and stakeholder engagement, including corporate codes of conduct and public reporting.
  • Human: Managing human resources to maintain workforce capabilities and employee satisfaction through best-in-class organizational learning and knowledge management practices and remuneration and benefit programs.

Corporate sustainability performance is an investable concept. This is crucial in driving interest and investments in sustainability to the mutual benefit of companies and investors. As this benefit circle strengthens, it will have a positive effect on the societies and economies of both the developed and developing world.


Sustainable enterprise

Corporate social responsibility (CSR) emerged in the UK in the 1990s as a developing agenda which was a reflection of growing public and governmental concerns about the effects of large corporations on society and the environment. The chief areas of CSR focus have been a company's marketing practices and communications, and also the impact of their operations on workers in their supply chain including their families and communities.

The CSR agenda is being replaced by the practices of sustainability. Such practices by corporations carries resonance with their stakeholders as well as their investors who see value creation opportunities and cost reduction opportunities in the strategic use of sustainability concepts, practices and innovation. However, investments in sustainability projects and innovation are frequently longer-term investments and economic returns on social and environmental investments may take up to three years or more.

Sustainable business or sustainable enterprise are terms that are now being used by firms who are integrating sustainable business practices into their corporate and brand strategies whilst seeking to address both shareholder and stakeholder interests within these strategies.


Sustainable development

Sustainable development is about maintaining an equilibrium between human activity and the natural environment over the long term. It involves a fine balance between the economic, social and environmental needs and expectations of various stakeholders.


Corporate social responsibility (CSR)

Movement aimed at encouraging companies to be more aware of the impact of their business on the rest of society, including their own stakeholders and the environment.

Corporate social responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.

CSR is a concept with many definitions and practices. The way it is understood and implemented differs greatly for each company and country. Moreover, CSR is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.

Although some companies may achieve remarkable efforts with unique CSR initiatives, it is difficult to be on the forefront on all aspects of CSR. Considering this, the example below provides good practices on one aspect of CSR – environmental sustainability.


Sustainability (interchangeable with corporate sustainability) :

As a term, sustainability has come into widespread use as a result of increased environmental awareness. However, sustainability is broader than just this one issue.

Within business practices, sustainability is closely related to corporate social responsibility. In the future, the two terms might become completely synonymous and some might argue that they already are the same. But as of now, there are a few key differences, which I highlight below.

Definition : Sustainability is a business strategy that drives long-term corporate growth and profitability by mandating the inclusion of environmental and social issues in the business model. Unlike corporate social responsibility, which retroactively addresses issues, sustainability implies a forward trajectory. In other words, CSR looks to the past actions of a company while sustainability looks forward by changing the nature of the company.

Purpose : to generate a maximum increase in company, consumer, and employee value by embracing opportunities and managing risks derived from environmental and social developments. 2


Attributes :

According to a recent study in the Ivey Business Journal, a business model must combine and continually maintain four elements to achieve sustainability 3 :


  • Sustainable development : this concept balances the corporate need for economic growth with environmental activism/protection and societal progress. With regards to sustainability, sustainable development sets the boundaries of the societal and environmental issues and defines the company's goal(s).
  • Corporate social responsibility : for a definition, see my previous entry. Corporations use CSR as tool to address societal and environmental issues. Sustainability incorporates societal and environmental issues as building blocks within a business model. Therefore, a sustainable business will use some CSR practices.
  • Stakeholders : while CSR primarily focuses on shareholders, sustainability focuses on stakeholders (don't worry! I will define these two terms later).
  • Corporate Accountability : This contributes to a sustainable business practice in that corporate accountability provides a legal and ethical basis for a company to report on its impact on society and the environment, in addition to their financial performance.
  • A company's societal and environmental impact as well as its financial returns is known as a company's Triple Bottom Line

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