I recently attended a marketing event where the speaker’s panel was made up of various executives from companies in the mining industry. In addition to their mining operations, most of these companies had retail outlets. Since the manufacturing part of the business has a significant impact on the environment, I asked what they were doing in terms of green marketing. They answered how they were contributing to the fight against AIDS in South Africa. While I applaud this effort, they did not respond to my question. Did they avoid answering my question or did they confuse corporate social responsibility and corporate sustainability?
To see if there is a difference between the two terms, we first have to define what sustainability or sustainable development is. The “Daly Rules” of sustainability are defined, as renewable resources, such as fish, soil and groundwater, should not be used faster than the rate at which they can be regenerated. Non-renewable resources, such as coal, oil and gas, should not be used faster than renewable substitutes to come into use, and pollution and waste should not be released faster than natural systems can absorb them , recycle or render harmless.
Thomas Dyllick and Kai Hockerts in Beyond the business case for corporate sustainability defines Corporate Sustainability as “meeting the needs of a company’s direct and indirect stakeholders (such as shareholders, employees, customers, pressure groups, communities, etc.) without compromising its ability to also meet the needs of future stakeholders” . The Australian government defines Corporate Sustainability a little closer to the “Daly Rules”. They see corporate sustainability as “strategies and practices that encompass the goal of meeting the needs of stakeholders today, while seeking to protect, support, and enhance the human and natural resources that will be needed in the future.”
Corporate Social Responsibility, according to the World Business Council for Sustainable Development, defines corporate social responsibility as “the continuous commitment of companies to behave ethically and contribute to economic development while improving the quality of life of the workforce. and their families, as well as the local population. community and society in general”. In Capitalism and Freedom Milton Friedman defines corporate social responsibility as. “There is one and only one social responsibility of the company, to use its resources and carry out activities aimed at increasing its profits as long as it remains within the rules of the game, that is, it engages in open and free competition without deception or deception. cheating.” None of the definitions of corporate social responsibility touch on sustainable development, which is the ability to renew natural resources at a rate equal to their regenerative capacity.
Looking at the definitions above, there is a difference between corporate responsibility and corporate sustainability. Corporate responsibility focuses more on the non-financial social activities to which a company contributes, while corporate sustainability focuses on both the impact of environmental factors on a company and the company’s impact on the environment. This was a point that Michael E. Porter and Forrest L. Reinhart made in their article A strategic approach to climate, “Companies that persist in treating climate change solely as a corporate social responsibility issue, rather than a business issue, will risk the greatest consequences.” Porter and Reinhart believe that companies need to look both “inside out,” which they define as a company’s impact on the climate, and “outside in” on how climate regulatory change may affect the business environment in which they operate. the company competes. (October 2007 Harvard Business Review).
If we take a look at the mining companies I mentioned at the beginning of this article, there are several ways a company can take action from a corporate sustainability perspective. First, mining companies would have to analyze their own mining operations. Their impact on mining the land, the fuel they use to run the mining equipment, and how they will restore the land once they have depleted the resources of the mines. From a retail store perspective, you would need to look at product packaging, transportation of goods and services, and store operations. These are just a few of the considerations this particular company should take into account in its corporate sustainability efforts. As you can see, the company’s corporate sustainability efforts are very different from their corporate responsibility efforts to combat AIDS in an area where they currently exploit. Both efforts are important, but each impacts the economic and strategic position of companies differently.
In the future, with the enactment of stricter legislation on the impact of companies on the environment, it is strategically imperative that companies know the difference between corporate responsibility and corporate sustainability.