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1
Enterprise Sustainability Management
2
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
3
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
4
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
5
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.
7
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
10
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
14
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
15
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
17
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
18
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
19
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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