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Enterprise Sustainability Management Dissertation Essay

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Enterprise Sustainability Management

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Table of Contents

1. Introduction ................................................................................................................................. 3

1.2 Relevance to Sustainability ................................................................................................... 3

2. Sustainability Management ......................................................................................................... 4

2.1 Aim and Research Questions ................................................................................................ 4

2.2. Underlying management theories ........................................................................................ 6

2.3. Tools to solve the problem ................................................................................................... 9

2.4. Expected and Actual Results .............................................................................................. 17

3. Conclusions ............................................................................................................................... 18

4. References ................................................................................................................................. 19

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Enterprise Sustainability Management

1. Introduction

Sustainability can be defined literally as the capacity to maintain a desired state over time. Here

the desired state can be that of good revenue generations, investments, practices that will be

passed on to posterity and more. Sustainability used in the economic context will mean practices

that ensures that there is a better economic influx for a nation, society or a smaller entity of the

society. Similarly, sustainability in terms of social underpinnings can be defined as the social

practices or the beliefs and knowledge that are handed down from generation to generation

because of this use for society and the world in general. There can also be health practices and

more.

In this context environmental sustainability and social sustainability are some key terms that are

often being used in context of sustainability management. Sustainability management is a

broader discipline that includes the research and study of the sustainability development and

what it would mean towards reducing negative effects on enviroenmtnal, society, their mental

and physical health and more. The discipline is quite a broad and complex one and enterprise

sustainability is just one part of the equation. This paper critically discusses enterprise

sustainability with the lens of social responsibility as a part of environmental responsibility. It

also emphasizes on how corporate social responsibility will be ideal in reducing the Social

impact that is delivered by some enterprises that are not geared towards sustainable practices.

1.2 Relevance to Sustainability

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Enterprise sustainability management or EMS is quite a significant subsection under

sustainability management. The reason that it is relevant to sustainability is because of the

impact that enterprises deliver with respect to the environment and society. Enterprises and their

activity can destroy a sustainable practice that the rest of the society follows. In addition,

enterprises with their stakeholders are also a part of the society and as such have a responsibility

to make their business more structured to reduce their detrimental environment and social

impact.

While this is one reason to study sustainability in terms of the enterprise impact, the other is to

study what sustainability practices will mean for the enterprise itself. Only an enterprise that

develops sustainable practices will have more chances of success in the market. Enterprises will

have to work on predicting how their business practices will impact environment and society.

This is essential as it can have negative impact for the enterprise too. Enterprises will also have

to be focused on not only the prediction of impacts; they will also have to consider how their

impacts will affect their business enviroenmtnal. Sustainable practices within the business will

mean less wastage within the enterprise. Sustainable practices also means the enterprise will be

more geared towards the regulations within their countries. They will have a very competitive

edge over other enterprises that may still be struggling to establish enterprise management

sustainability, (Vanclay 2004). In this context it becomes necessary for enterprise to improve on

their sustainable practices.

2. Sustainability Management

2.1 Aim and Research Questions

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The main aim of this work is to discuss and critically analyze the issue of enterprise

sustainability management and recommend practices that can be used to augment its sustainable

environment. Here the enterprise sustainable management practices are critically analyzed using

the Triple Bottom Line theory. The Triple Bottom Lines social and environmental concepts have

been used here. While analyzing using theory of the TBL and the tools of assessment the EIA

and SIA, a recommendation is made for enterprises to use towards developing sustainable

practices. The recommendation is to use the management entity of ‘Corporate Social

Responsibility’ as a base framework for starting the development of sustainable practices in the

business. Some of the research questions that that will be answered in arguing and presenting

the aim of this study are as follows

To understand why ESM is challenged in the real world enterprises

To evaluate why the Triple Bottom Line or the TBL is an effective theory for

sustainable management in general

To evaluate and present the relevance the theory holds with respect to enterprise

sustainability

To critically analyze and present the tools associated with the theory

To indentify for the relevance of tools the EIA and SIA and what it means for

enterprise sustainability

To critically analyze and present corporate social responsibility as one way for

enterprises to use to develop sustainable practices

To analyze CSR in terms of the components of EIA and SIA

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2.2. Underlying management theories

Hacking and Guthrie (2008) in their "Framework for clarifying the meaning of Triple Bottom-

Line" type of sustainability assessment presents features of assessment techniques of

sustainability uses as Sustainability development promotion techniques. The use of a

measurement technique as a development technique is nothing new. There is much that a

measurement technique can bring to the development arena. A triple bottom line integrated

assessment will help bring in a more comprehensive coverage of SD than just one of them alone

will do. Triple bottom line derives its name from what are considered the minimal dimensions

needed for assessment and development. The minimal requirement or dimensions are that of

biophysical, social and economic dimensions. There has been research recommendations made

to include for five capital framework of natural human, social, manufactured and financial and

some have suggested for governance to be added to the triple bottom line, (Hacking and Guthrie,

2008).

Triple bottom line is a concept that includes both social, environmental and economic

performance standards into sustainable development practices. Enterprises are fats becoming

aware of what these practices means for their economic and brand strength sustenance, (Vanclay,

2004). The triple bottom line has different interpretations based on the area that it is used in.

Some have considered the TBL to be social, enviroenmtnal and economic performance concepts,

some view it as sustainable development, sustainable environment and sustainable communities

and others see it as just economy, environment and equity. In the context of sustainable

development for a corporate organization, it makes sense to view it through the lens of social,

enviroenmtnal and economic performance.

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Impact assessment is one way to understand how an issue affects sustainability. Impact

assessment as a tool for developing sustainable management practices is useful in that it help

predict and then estimate the changes that policy or a developed practice will bring to an

enterprises. Different types of Impact assessments are possible and this is a tool that directly

takes up from the TBL. The types of impact assessment that can be derived with the TBL are that

of the enviroenmtnal impact assessment, social impact assessment and the health impact

assessment (Vanclay, 2004).

Environmental impact assessment is a process in which the impact to environment is measured.

Here the impact to environment is triggered by the policies or actions of the decision makers.

With respect to enterprises, it can be said that it is the environmental impact caused by a

enterprises business decisions. The business decisions can be made anywhere from the sourcing

end to the end product delivery at point of sales POS (Vanclay, 2004).

Here the environment is considered to be all the ecosystems, the people and communities. In

terms of the people and communities what end products that an enterprise sells should meet

enviroenmtnal standards. It should not be harmful to the people. Similarly the product must be

manufactured at minimum expense to the ecosystem and the local community must not be

disturbed where it is being manufactured. The natural and physical resources are also part of the

environment. An enterprise in its business must not deplete a resource indefinitely. The resources

can be energy or it can be some source material that it processes and sells. It has to source and

use with responsibility any resources needed for the business (Vanclay, 2004).

In addition to the sourcing the qualities and characteristics of the land will also be impacted,

(MMSD , 2002). The biological diversity of the land may suffer because of some of the sourcing

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practices that may be used by an enterprise. The Oil Sands of Alberta is one such issue, where

the production of oil needed to satisfy for different enterprises leads to an increased amount of

GHG emissions. The GHG emissions are directly affecting the land and water quality near

Alberta in Canada. This is pretty much the local impact on environment. However in addition the

over production of GHG will be inducing adverse climatic changes for all. The biodiversity of

the place is changed and the value associated with the land also goes down. This form of an

enterprise activity will lead to decline of other enterprise contenders. The people near the land

are affected socially and economically as well (Vanclay, 2004). Environment does not only

include people that live in the area. It also includes for all the biological organisms and more in

the area. In this context it becomes necessary for an enterprise to concentrate on all (Vanclay,

2004).

While environmental impact assessment concentrates on the surroundings, there are more

induced in the form of social consequences. Social impact assessment is not that different from

environmental impact assessment. It can be said Social impact assessment SIA actually derives

form EIA. When the concept of environment is considered in a more broader sense it only points

towards the society and hence the social impact comes in the picture. What affects the

environment therefore affects the society. This is a vital area for enterprises to make note of. Any

form of business practice that affects the environment will also affect society. So where a

business does not improve it business practice to be productive for society it will end up

projecting a bad social image and will consequentially suffer in terms of losing its stakeholders

to other competitors, (Coombs, & Gilley, 2005). Social impact assessment dissects for the

pathology of the impacts that have been handed out into the environment. The impacts will be

health impacts which will be dealt with in the Health Impact assessment. Here the social

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pathology or the chain that is created from when the environmental detriment is pushed out into

the society to what the society’s reaction is to it is studies. SIA can therefore be called the study

of social impact as triggered by environmental impact or the study of social impact in

environmental impact.

The definitions for social impact assessment and environmental impact assessment are however

not restricted to the above discussions alone. The definitions have to be broadened to include

more . The social impact assessment is particularly useful in the enterprise context in that it

socially responsibility and sustainable practices will directly be dependent on this. In addition

the prediction of impacts will be like a market study for the enterprise. Where an enterprises

launches market studies to understand how its product or services will be received, now

enterprises will have to study how its policies will impact on the environment and the society in

terms of how sustainable they are (Vanclay, 2004).

2.3. Tools to solve the problem

Different tools are available in the context of measuring for sustainability. Sustianbility

indicators measurement and impact assessment are two such tools. There have been many issue

in resolving for the debates surrounding sustainable development and which have been mostly

theoretical. The natural capital concept as developed by Victor (1991) brings in some unique

insights into the economy, business and environment connectivity (Victor, 1991); however, more

work is needed in this sector. Victor’s work opened up a stage on sustainability indicators that

can be used to measure for how sustainable a nation is. Consequentially sustainability indicators

also have use for businesses, (Pearce, & Atkinson, 1993). Pearce, & Atkinson's (1993)

sustainability indicator can be used to show for if a country is moving on towards a sustainable

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development path or not. Using a neoclassical stance it can be said that a nation is more

sustainable when it saves more in comparison to the combined depreciation of capitals. Here the

capitals considered are natural capital and man mande capital. This approach towards

understanding the sustainability of a nation is applicable to more smaller entities also, like an

enterprise. What sustainability measure that can be applied to the nation can also be applied onto

an enterprise because there are but small variation in the governance and running of a nation and

an enterprise. Both concentrate just as much on people, practices and policies. Also in the present

century it can be said that both are involved in the sustainable practices that they want the

organization or the state to be involved in. When considered in the context of an enterprise the

sustainability of an enterprise is decided based on how much more it saves when compared to the

combined depreciation of the two capitals., (Pearce, & Atkinson, 1993). The measurement of

natural capital is however not an easy task. What constitutes natural capital and what constitutes

its sustainability or its savings for an enterprise cannot be easily defined. Measuring natural

capital is problematic. It needs to be done based on very careful evaluation of environmental

damage estimates, resource depreciation and more. The market price based on these evaluations

will also vary from country to country. An enterprise even when having a fixed market price

within country will have trouble measuring for their natural capital across nations. In this

scenario Walter & Atkinson's weak sustainability indicator is found based on what they term as

marginal sustainability. Where many nations are unlikely to even pass a weak sustainability rule

it makes sense that the use of weak indicators are just as adequate, (Pearce, & Atkinson, 1993).

The concept of weak sustainability indicator is created as opposed to a stronger one. A strong

sustainability indicator would measure for critical natural capital, where any small positive

depreciation will be noted. This small positive depreciation will be a sign of non-sustainability. It

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differs from the weaker indicator in that; the weaker indicator is not comprehensive and will not

be a complete accumulation of the "economic functions of ecological systems", (Pearce, &

Atkinson, 1993, p.106). In this context using an impact assessment tool will provide for a more

qualitative study for enterprise to develop its sustainable practices and management than that of

sustainability indicators.

Impact assessment as a tool is relevant to the problem because of the various components

associated with it which can be used to develop sustainable practices. Jeremy Moon's study on

Corporate social responsibility and sustainability indicates the motivations necessary for a

corporation to invest in corporate social responsibility (CSR) as a means for sustainability. CSR

it can be seen is one of the significant entities that carries across sustainability. Enterprises and

their businesses have to be mobilized to motivate them into sustainable development (Wade

2005; Moon, 2007). Corporate social responsibility offers a solution to the increasing its

sustainable development. The reason is that CSR offers incentives for the organization to make

and follow more sustainable practices. In this way it enhances an enterprises corporate agenda

(Moon, 2007).

CSR in the agenda for developing the sustainability of a enterprise is critiqued because it is more

involved in the well being of corporation and social responsibility to the public is restricted to

only its shareholders and stakeholders. Only the Government as an enterprise is more concerned

with social well being irrespective of stakeholder segmentations. However, Moon (2007) in his

article ‘The Contribution of Corporate Social Responsibility to Sustainable Development’ have

shown that CSR is also just as much involved in the are of increasing sustainability of

governance of enterprises. Here CSR is viewed in the same context as that of the societal

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responsibility the Government will hold for its people (Moon, 2007). To understand the context

of CSR with respect to sustainable management practices it is necessary to define for how

enterprise activity can be viewed with the natural capital and capital conservation scenario as

introduced by Victor. However, this theory and the techniques that are developed on it are not

without challenges (Victor, 1991). Corporate Social responsibility CSR is the responsibility that

a corporation has to meet as minimal requirements for running its business. This is responsibility

with respect to its workers, its stakeholders and more. It has some form of a strategic purpose

also. The strategic purpose will be with respect to business competitive, name, brand value and

more. These are important when it comes to an enterprise. The financial state of the company

will also affect the responsibility related measures that a company undertakes (Carroll, 1991).

While giving much emphasis on the company, these enterprises also reach out to community

where they sell their products. Responsible community relations are also induced. Where the

company fulfills stakeholder practices and needs it also becomes relevant that the company looks

thorough strategizing with a more global outlook (Clarkson, 1995). An enterprise’s social

responsibility therefore begins to look into the form of social image that it wants to project to the

community. The social image that it projects will be perceived by the impact of its business

operations on society and the enviroenment. Here starts the first interaction with acknowledging

sustainable practices as part of its CSR. CSR starts to take a step away from profit making and

now looks into societal benefits (Moon, 2007). Management theories for interconnecting CSR

and sustainable development are often debated for what each bring to the table. Using an Impact

assessment approach the modification of CSR and the development of sustainable practices can

be accessed from time to time.

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Corporations face the brunt in that they are more concerned with the well being of the

corporation and not the society. However it cannot be said that the goals of an enterprise and

sustainable development do not intersect. Sustainable practices for the society will also mean

greater support for the enterprise among people. So indirectly enterprise sustainability is also

linked with sustainable development practices that they elect to include in their strategies.

European Business education in fact uses ‘sustainable development’ as a label for their

Corporate Social Responsibility programs and research. While the concepts are connected they

also show similarities in that both can be measured. There are complexities in measurement, but

they can be evaluated and measured to a certain extent. This enables easier understanding of how

CSR is used by enterprises to make their social and environmental strategies (Moon, 2007).

Enterprises cannot make sustainable development without incorporating it somehow into their

business practices. Therefore, while CSR is being critiqued on some basis, there are other forms

of similarity, which serve as a starting point. Using these starting point enterprises will be able to

make sustainable development practices. Since CSR here is being used as a form of vehicle for

the sustainable development practices, they will help workers and stakeholders get attuned to it

easily as they would have already been attuned to the CSR of enterprise (Moon, 2007).

Sustainable development initiative with respect to the enterprise is challenged based on varying

sectors. Some nations may demand sustainable development as part of the governance system

that it has established nationally. Some nations may make sustainable development entirely the

responsibility of the enterprise. This is especially true of nations that have more private

companies and whose agendas cannot be controlled only by the Government regulations and all.

In such situations enterprise sustainable development must be more emphasized. It becomes

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significant in the context that the management of human and environmental resources now falls

on the shoulders of enterprises. The sustainable practices development also becomes a critical act

now as the financial state of the enterprise must also be considered now. Enterprises will have to

balance economy and environmental resource management and more. Similarly enterprise

stakeholders will also have increasing responsibility in terms of having production and

consumption, making community sustainable and more. So the problem of making enterprises

sustainable becomes more significant when considering the impact they have on their

stakeholders and the society, (Moon, 2007).

Mark and Spencer’s five year plan is one example of how enterprises are entering this arena of

sustainable development. Calling it the Plan A, the company is involved in addressing issues of

climate change, raw material sourcing, and more in a responsible way, (Moon, 2007). Raw

material sourcing is one area where enterprises have increasingly come under criticism for. Raw

material sourcing has to be responsible. An enterprise that sources its materials by irresponsible

practices in its own nation or in some other international nation will invite criticisms. Even if the

company does not adapt for sustainable practices on its own ethical initiative it will be forced to

do so to cater for business reasons. In addition this is an age where an enterprise’s supply chain

management is divided between nations. The nation may source in one country, it will

manufacture the end product in another country and might sell in another. In this context the

sustainable practices will have to be ensured at all levels of the supply chain management to

show its commitment, it will not be enough for the enterprise to adopt initiatives that are only

within the nations where its HQ is situated. The manufactory of products will involve much

production of wastes depending on the commodity. These wastes should be addressed in a

responsible manner. The enterprise with the help of its local manufactory units should ensure

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that the production of wastes is minimized. In addition, the material dump sites etc must be

ethically monitored such that it does not contribute to environmental biohazards. A few things

that an enterprise will have to consider here are that corporate social responsibility might not

extend to include its sustainable practices and that it will have to address the issue as a more

separate one , (Moon, 2007). An environmental impact assessment done at the sourcing and

manufactory site will help reveal areas where the enterprise will have to develop further. The

enterprise based on the assessment will be able to develop better practices leading to a more

integrated and sustainable supply management.

The drivers of change that has emerged in the market further interconnect CSR and

sustainability. These drivers of changes are both of the macro and microenvironment.

Considering from the consumer end it can be said that consumer demands with respect to

products that are delivered by an enterprise has changed. They look at cost and other competitive

aspects as usual but also look into how socially responsible to product is, (Porter & Kramer,

2002). Research has shown the consumers might even be willing to pay more for products that

are produced by enterprises that are have more sustainable development practices and social

responsibility , (Moon, 2007). For instance consumers that buy cosmetics these days are more

interested in products that are not tested on animals. They understand the impact that products

have on the environment. They understand that these forms of testing upset the natural ecology.

Here there is a sociological change seen in consumers towards rejecting the product, (Robinson,

& Tinker, 1998). These forms of changes are the social impact. Similarly, they opt for organic

food that helps preserve the land that it grows on from getting degraded with time. Bothe

consumers and employees are increasingly becoming aware of working for companies that divest

their CSR to also included for sustainable practices.

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NGO have pointed out through media and other sources the socially irresponsible practices of an

organizations. They have pointed out both flaws in existing CSR of the enterprise and also have

pointed out the lack of sustainable management practices of the enterprise. This has lead to some

amount of lack of faith in enterprises by local and national community. In particular this has also

affected they way other businesses will enter into partnership with one that has got a black name

with respect to CSR and also with respect to its sustainable management. Where the CSR gets

into a negative limelight, the issues of sustainable development that the enterprise faces will also

come into the limelight, these two issues are more often sharing the same stage in current affairs.

So the social impact that an organization non-sustainable practices invoke is not only for the

society its impact also is felt across the enterprise.

The concept of Globalization has made standards for CSR to include for sustainable practices

also. Where some nations are in the forefront when coming to implementing for sustainable

practices, some others are still catching up. Some are not even aware of the concept of

sustainable management practices. But with globalization leveling the field enterprises from

different nations irrespective of their national level policies will have to address sustainable

practices to stay competitive. Other businesses may not collaborate up with them for the bad

reputation they may end up facing in their own nation. CSR has therefore become a vehicle of

social governance in the world. (Moon, 2007) and as such should strategically use EIA and SIA

as techniques to adjust to the world’s expectations for sustainable practices.

The social approach to sustainability development in enterprises is important because the

governance of different nations is now fast realizing what sustainable development means for

their nations and people. In this context it becomes necessary for enterprises to also adapt to

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sustainable development. The key driver to sell a product these days is based on the natural

resource perspective. Enterprises these days differentiate the product based on how natural the

product is and how it also does minimal damage to nature. Societies both developing and

developed have taken up to up to this social phenomenon. Both internal and external

stakeholders also demand the same (Moon, 2007).

2.4. Expected and Actual Results

Sustainable development is riddled with challenges. In their capital theory and weak

sustainability, Pearce and Atkinson (1993) discuss how sustainable development can meet

challenges by deducing for weak sustainability indicators. Where a strong sustainability indicator

will help measure for the critical capital evolutions, the presence and the measurement of a weak

indicator will help identify areas where sustainability has to be addressed, (Pearce and Atkinson,

1993). Weak sustainability indicators are sometime enough as most nations and enterprises have

not even woken up to addressing the issue as of now. However this case scenario is not prevalent

everywhere. There has been more proactive change in some circles.

In some nations employees in fact are demanding changes be made not only when it comes to

HR policies, they also seem to include for CSR policies these days (Singh and Point, 2004).

These forms of sustainable management awareness is not only restricted to multinational

enterprises it is just as much relevant when it comes to small and medium sized companies.

Some of the social drivers of change that have made enterprises adapt to sustainable management

and practices are that of NGO’s, media and more. Some of the current issues that have been

connected with sustainable development practices based on the CSR initiative are that of the

following

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o The stakeholder lead project reduces the import of coal and oil to Philippines. This

project independently researched, verified and audited the practices of importing coal and

oil that were deemed to be non-sustainable to increased sourcing, (Wade, 2005). The coal

and oil were being bought in from Nigeria.

o On a similar note the oil sands industry of Alberta, Canada has also been under much

scrutiny for what the oil sands mean in terms of GHG emissions. externally verified

projects are working to increase CSR to make practices more sustainable.

o Sustainability practices also include what it means for the society. In this context Titan

has partnered with an NGO in India. The NGO is a social cause one and through it Titan

provides for employment for women in specific. This initiative in addition to

empowering women and therefore adding value to society is also a sustainable practices;

‘Titan’ has also been applauded by the local stakeholders in the nation for their corporate

social responsibility and their development practices. They have created a sustainable

supply chain practices for their enterprise.

This shows both environmental assessment and social assessments have been quite radical in

bringing the change. Similarly, the changes also show how enterprises have stepped up their

corporate social responsibility to include for sustainable development practices.

3. Conclusions

Economic activity of the enterprise and the environment is linked. These days an enterprise that

still is involved in practices that does much harm to environment will also lose much in terms of

ales. Sustainable competitive advantage will deliver enterprises financial success more than

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turning to other strategies. Sustainable development as a competitive strategy will add more to

the enterprise and will be able to transform its productivity. It will engage with stakeholders

better and will also give it a better societal governance. So here it can be said that CSR serving as

a base for the making of more sustainable practices will give more societal governance. Here

there is a flow of governance, ethics and responsibility from the company internally to outside.

The flow is not only restricted to stakeholders but also the society (Moon, 2007).

Different theories have addressed the problem. Some have looked at it from a natural capital

basis and some others have addressed it from the impact that the absence of practices will have

on environment, society and health. The TBL proposed impact assessment techniques are of

better use here as they will help the enterprise built development practices as part of its corporate

social responsibility in a testable way. The changes and the inclusion of newer practices will be

tested to check how they impact society and environment and the enterprise can permanently

adapt to these.

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