Essay: Is there an optimal degree of sustainability?
Corporate sustainability is not a one size fits all concept. Successful strategy balances all business pressures
In a recent paper – The Impact of a Corporate Culture of Sustainability on Corporate Behaviour and Performance – we reported on a study of a matched sample, two virtually identical sets of firms in terms of size, financial performance and growth prospects, of 180 US companies over the period from the beginning of 1993 to the end of 2010.
We classified 90 of these companies as High Sustainability firms because long ago they adopted corporate policies regarding commitments to enhance environmental and social performance, while the other 90 we classified as Low Sustainability firms because they had not. The Low Sustainability firms correspond to the traditional model of profit maximisation in which social and environmental issues are predominantly regarded as “externalities” created by the firm’s actions.
The High Sustainability firms, in contrast, take into account these externalities in their decisions and operations; this is...
For a free two week trial to Ethical Corporation online, please click here.