What is Sustainability - Free Essay Example

Sustainability is the ability to meet the needs of present generations without compromising the ability of future generations. The most noticeable environmental issues are water, air pollution, deforestation, and climate change. Other sustainability issues involve agriculture, energy conservation, recycling, overfishing, and reducing the adding of chemicals into the environment. While children are taught in elementary school how to reuse, recycle and conserve, generalizing these practices into lifelong strategies are imperative to our future well-being. Companies address corporate social responsibility (CSR) as a way to enact self-regulation, compete with other companies, make public altruistic intentions, and appease various stakeholder groups such as nongovernmental organizations (NGOs). (Sprinkle Maines, p. 446) Corporate CSR can be seen as a cost of doing business that addresses profits (performance), people (social), and planet (environment). Triple bottom line is a term John Elkington, a business writer, claims responsibility for coining in 1994. Triple bottom line is an accounting framework that measures the results of a company’s CSR results in profit (financial), people (social) and planet (environment). Although there are is an accounting framework to measure social and environmental benefits, it is complex and monetizing non-monetary effor ts or using an index does not do justice to the activity. Triple bottom line measures the activity and the resulting benefits to the company, the consumer and to the cause. All businesses creating a CSR must choose the best way to meet the needs of the present without infringing upon the ability of future generations ability to meet the same needs in the future. A company’s CSR will show the public the results of choices made during the year, which pressures executive decision makers, to weigh these decisions carefully since they will be held accountable. This also applies to maintaining the business so that the business continues and provides for future generations of employees as well as for stockholders. Just as marketing campaigns measure positive improvements in business through sales, so can CSR and sustainability efforts be measured in many ways. There are also defined practices for how to measure the results of social efforts, environment efforts, and of course financial efforts, thus the three P’s again; profit, people and planet. (Sprinkles Maines, p. 448-451) The possibility of leaving the environment, generation after generation, with less species in the ecosystem is not something that is obvious to executive management, but poses a risk for the future ecosystem and therefore to the human race. For example, a species that is almost undetectable may seem relatively unimportant, but the complete absence of this species could in fact change the environment forever by permanently changing the ecosystem. No one knows if this will leave the ecosystem unaffected, or severely and irreparably damaged until the actual occurrence. Unfortunately, the change in the environment is the first warning that scientists receive to study how the ecology is interdependent and learn what is changing in the ecosystem. Business decisions must rely on superior knowledge to make the best decisions, to avoid a public relations nightmare and to perform this responsibly in their role. If corporations have the power to alter the ecosystem, they become stewards of the environment. â€Å"In 1970, Milton Friedman, a Nobel prize-winning economist, expressed his viewpoint that the social responsibility of business is to increase its profits.† (Sprinkle Mains, p.445) The opposite of this sentiment, that businesses are completely responsible for any damage they cause to the environment, is a contrasting opinion becoming popular in the early part of the twenty-first century. â€Å"Corporate sustainability focuses on increasing shareholder value by incorporating principles in nine areas: ethics, governance, transparency, business relationships, financial return, community involvement, product value, employment practices and environmental protection.† (Sprinkles Maines, p.446) CSR activities to be included are corporate donations of cash or products, allowance for employee time off (for volunteering), activities relating to employee health and welfare, improving the environmental profile of the products produced, the humane treatment of animals, and the eradication of product testing on animals. Also included is the incorporation of â€Å"green† production practices into the current business by acquiring a green business, architecting one from scratch or accentuating current practices that are green in nature already. (Unruh Ettenson, p. 96-98) Other activities affecting the CSR are the production and the whole value chain which should be reviewed for conserving energy, reducing emissions, using recycled materials, reducing packaging materials, and sourcing materials from vendors located geographically close to manufacturing facilities. (Sprinkles Maines, p.447) Manufacturing must include analysis of the environmental impact of the products entire lifecycle from development to disposal. Companies also should look into their value chain to calculate improvements for reducing transportation, energy waste, duplication of efforts, etc. For those companies who build, they should invest in becoming ‘leadership in energy and environmental design† (LEED) certified which aims at strategies to improve performance across all metrics. Attributions determine if the public is going to react positively to the company’s CSR efforts. Engagements must be aligned with the corporation as the customers must be able to reason why the company is involved in the activity in order for it to appear sincere. (Bhattacharya Sen, p. 14) Attachment is created internally by consumers when the identification to the cause and the company is powerful and taps into their needs for self–definition and social identity. (Bhattacharya Sen, p. 15) â€Å"Cause-related marketing is the process of†¦marketing activities that are characterized by an offer†¦.to a designated cause when customers engage in revenue providing exchanges that satisfy organizational and individual objectives. (Varadarajan Menon, 1988, as cited in Berglind Nakata, p.444) The benefits of cause related marketing (CRM) go hand-in-hand with CSR initiatives; assisting a nonprofit will also have the desired effect of increasing customer lifetime value (CLTV) as well as improve brand recognition with brand building for new customers. An example of this is the results that American Express calculated of an increase in card use of up by 28% when it sponsored the Statue of Liberty Campaign. (Berglind Nakata, p.447) If the CSR initiative helps a noteworthy cause, and the cost involved is not greater than the calculated spend for total customer cost it will be a worthwhile cost. Other benefits include improving the corporate reputation, generating more r evenues, goodwill, and enhancing employee morale and retention. Also the CRM increases funding of nonprofit organizations (NPOs), heightens NPOs exposure and message efficacy. It also provides much needed non-financial resources to the NPOs. (Berglind Nakata, p.447-8) Just as there are unlimited activities to participate in CSR there are also many different reasons why companies participate in CSR. Because of altruism, to appease various stakeholders groups such as nongovernmental organizations (NGOs), focusing on environmental concerns could lower the cost of production, easing legal or regulatory constraints. (Sprinkles Maines, p.448) The costs associated with CSR can be measured by identifying the activities chosen by the company that are intended for CSR purposes, the estimated cost of activities the company refrained from doing due to the involvement with CSR, and the estimated revenue that would have been derived from company activities. Another factor is the company must consider the opportunity cost of doing not performing another charitable or different activity and estimate what exposure are they losing from that activity. Measuring the cost inflows or outflows, tax credits, sales tax exemptions, property tax abatements, free advertisi ng, as CSR attracts, motivates and retains talent, turnover is reduced and can be estimated. â€Å"Firms can translate increased retention rates†¦ to the costs of employee turnover.† (Sprinkles Maine, p.450) The United Nations’ developed seventeen Sustainable Development Goals to achieve by 2030 that is considered a blueprint for a better tomorrow. This comprehensive list is referenced by companies in their own CSR to ensure they are not overlooking the recognized goals to achieve and must look into their own value chain to achieve these goals if possible. Of the 17 issues some are the eradication of poverty and hunger, making vaccinations available, cleaning the ocean and social issues such as gender equality, and reduced inequalities among people. There is back up for every item, for example, if you explore poverty eradication, it says that â€Å"by 2030 167 million children will be living in extreme poverty if the world doesn’t take action†¦Ã¢â‚¬  (un.org, sustainability). This and other facts about children are heart-breaking and reach people with a more powerful message which work well for CSR initiatives. Fortune 500 companies spend $15 billion on CSR activities and companies who increased their giving by more than ten percent noticed an increase in revenue and pretax revenue. All companies should be doing CSR work, not only to perform charity, but to compete, since it is expected by the public. Companies shrewdly foster brand development and awareness to improve customer loyalty and customer lifetime value with CSR initiatives. Companies should want to create an employer brand as well to turn their employees into brand ambassadors. â€Å"A strong employer brand attracts and retains workers and turns them into advocates for the company. It differentiates their organization from the next.† (Gallup, p.23) The Gallup Study introduces the idea of allowing remote workers to contribute to savings which are financial but also a benefit to the environment with an unexpected tradeoff of, increased employee engagement. Employees save on transportation costs, lunch costs, and business attire and laundering while employers save on energy (heat or air conditioning), electricity, and space savings on the workspace. The savings for the city is on congestion from employees traveling to and from the city either in personal vehicles or on the city buses or trains. Fewer people translates to less traffic congestion. Under Obama’s leadership, the Federal Government allowed employees who weren’t executive leadership to work remotely at least one day a week, in an effort to reduce emissions and reduce the agency’s carbon footprint. This was very progressive when the Federal Government acknowledged that people are happier, more fulfilled and productive when given a flexible work sched ule and allowed to telecommute regularly. According to the 2017, State of the American Workplace Study, by Gallup, 37% of employees would switch to a job that gives the kind of flexibility that remote working affords. The study found that working remotely positively influences employee engagement and employee engagement climbs when employees are able to work remotely and also come into work to a home base part of the time. Surprisingly, the optimal gain was when employees were remote 60-80% of the time. (Gallup, p.153) Another surprising fact is â€Å"fully remote workers are 17% more likely than employees who work in the office 100% of the time to strongly agree they have a clear job description. (Gallup, p.157) These findings should change the view of the office and employment of the future. People should be given a chance to work remotely to see if productivity increases as the Gallup Study suggests; this is what companies need to survive and thrive in the future.