Sustainable business

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 sustainability³:

1. 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).
2. 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.
3. Stakeholders: while CSR primarily focuses on shareholders, sustainability focuses on stakeholders (don’t worry! I will define these two terms later).
4. 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.
   1. A company’s societal and environmental impact as well as its financial returns is known as a company’s Triple Bottom Line