This essay elaborates on the role of the corporation in creating sustainable societies. It draws on different concepts, such as Corporate Social Responsibility (CSR) and benefit corporations, and argues for a systemic change regarding the relationship between private sector, societies and the natural environment to create an environment for sustainable societies to thrive.
In 1972, the simulation study Limits to Growth issued a warning on perpetual economic growth within the system of finite resources of planetary boundaries. Since the threats of ceaseless growth have been recognized, the pursuit of sustainability has been high on the global agenda. The term is premised on the definition of sustainable development from the report Our Common Future, which limits the satisfaction of present needs to the extent it hampers future generations to satisfy their own. It triggered an accruing plethora of diverging definitions, each taking a different angle on the concept in order to meet the manifold prerequisites of its convoluted nature.
Due to the ambiguous interpretations of sustainability, there is no objective ‘ideal state’ societies can aim for. Coomer (1981) elaborates that sustainable societies seek to find "an equitable relationship with the physical environment (…) [and] will not generate changes that may seriously impair that which sustains [them] […]", which emphasizes the notion of development rather than achievement. Paired with the ‘Brundtland+’ definition by Van de Kerk and Manuel (2008), sustainable societies effectuate sustainable development while "each human being has the opportunity to develop itself in freedom, within a well-balanced society and in harmony with its surroundings" and "looking for alternative ways of growing".
Table of Contents
1 Introduction
2 The Responsibility of Businesses
3 Beyond Corporate Social Responsibility
4 Businesses as Harbingers of Sustainable Development?
Research Objectives and Key Topics
This essay explores the evolving role of corporations in fostering sustainable societies, specifically examining how current voluntary business practices interact with broader sustainable development goals. It critically assesses whether existing corporate social responsibility (CSR) models are sufficient to drive meaningful change or if a fundamental paradigm shift in business strategy is required to address global socio-political and ecological challenges.
- The limitations and criticisms of traditional CSR and voluntary business initiatives.
- The role of industry associations and their impact on policy and sustainable practices.
- The concept of 'shared value' and the potential of benefit corporations as alternative business structures.
- The challenges of navigating complex, "wicked" sustainability problems within existing economic frameworks.
- The necessity for a shift toward qualitative sustainable development and new management paradigms.
Excerpt from the Book
2 The Responsibility of Businesses
Advocates of Milton Friedman’s approach to the responsibility of businesses argue, that social and environmental aspects should only be considered when contributing to a company’s fiduciary obligation to maximise shareholder value; otherwise, they should be dealt with by politicians and non-governmental organizations (NGOs) (Friedman, 2007; Porter and Kramer, 2011). However, Scheyvens et al. (2016) reason that due to failure of governments to combat environmental degradation and social injustices, sole shareholder precedence as the only premise of economic activity has long become obsolete. Blowfield (2012) even defines businesses as ‘development agents’ and therefore as proactive participants in the international development arena.
At least since the publication of the United Nations 2030 Agenda for Sustainable Development, the private sector has been given an important role in the international development process and is called upon to pave the way to a sustainable future (Coomer, 1981; Pedersen, 2018; Scheyvens et al., 2016). However, environmentalists and human rights activists have voiced criticism about their self-interested and careless relationship to the social environment and the planet (Hiller, 2013). Numerous natural disasters, such as the Exxon-Valdez oil spill, or human right violations, e.g. in deplorable working conditions in factories supplying big fashion brands, originate from unsustainable business behaviour (Utting, 2005).
Businesses are now under constant pressure to demonstrate their contributions towards sustainable development and therefore sustainable societies (Atkinson, 2000). The number of voluntary initiatives implemented by companies to improve their business practices is therefore increasing (Utting, 2005). Since the 1980s, business leaders, government officials, and academics have participated in the design and mobilization of the CSR agenda (Reinhardt and Stavins, 2010; Utting, 2005). The growing interest in CSR activities can be attributed to both external pressure of stakeholders as well as intrinsic motivation of business managers to maintain and shape the environment they operate in (Utting, 2005).
Summary of Chapters
1 Introduction: This chapter introduces the historical context of sustainability and outlines the essay's aim to investigate the role of businesses in creating sustainable societies and the limitations of current CSR practices.
2 The Responsibility of Businesses: This section examines the shifting expectations towards corporate responsibility, the prevalence of voluntary CSR initiatives, and the criticism surrounding their effectiveness in addressing social and environmental issues.
3 Beyond Corporate Social Responsibility: This chapter explores the need to move past standard CSR toward concepts like 'shared value' and benefit corporations, while highlighting the inherent difficulties in solving complex sustainability challenges.
4 Businesses as Harbingers of Sustainable Development?: The concluding chapter synthesizes the need for systemic change, arguing that responsible business is necessary but insufficient without a broader re-evaluation of the relationship between the private sector and the natural environment.
Keywords
Corporate Social Responsibility, CSR, Sustainable Development, Sustainable Societies, Shared Value, Benefit Corporations, Business Ethics, Corporate Sustainability, Global Governance, Stakeholder Management, Environmental Degradation, Voluntary Initiatives, Industry Associations, Sustainable Business Models, Economic Growth.
Frequently Asked Questions
What is the core focus of this research?
The research investigates the role of corporations in creating sustainable societies and evaluates how existing voluntary business practices contribute to, or fail to achieve, sustainable development.
What are the central themes discussed in the paper?
The main themes include the limitations of current CSR, the influence of industry associations on environmental regulation, the transition to new economic paradigms, and the legal aspects of benefit corporations.
What is the primary research question?
The essay asks what role corporations play in creating sustainable societies and determines whether current voluntary activities are sufficient for real progress in global sustainable development.
What methodology does the author utilize?
The author employs a literature-based analytical approach, synthesizing various academic theories and case studies regarding CSR, management paradigms, and sustainability governance.
What does the main body of the work cover?
The main body critically assesses CSR practices, the role of industry consortia, the concept of corporate sustainability, and the fundamental shift required to align business activities with ecological and social necessities.
Which keywords best describe the paper's scope?
Key terms include Corporate Social Responsibility, Sustainable Development, Shared Value, Business Ethics, and Corporate Sustainability.
How does the author view the 'benefit corporation' model?
The author views benefit corporations as an interesting attempt to bridge the gap between profit motives and public benefit, but notes significant limitations, such as legal vagueness and the risk of being used merely for competitive advantage.
What is the author's stance on 'wicked' problems in sustainability?
The author argues that sustainability issues are complex, often ill-defined, and cannot be 'solved' in the traditional sense, but must be continuously managed through adaptive strategies.
What conclusion is drawn regarding current business models?
The author concludes that current business models are largely incompatible with the systemic changes required for a sustainable future, as they often treat sustainability as a mere expense rather than a core mission.
- Quote paper
- Giulia Neuhaus (Author), 2019, What is the Role of the Corporation in Creating Sustainable Societies?, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/991967
