Corporate Sustainability

The Next Steps Towards a Sustainable World

Jan Jaap Bouma, Teun Wolters

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781317273264
• Edition: 1
• Topic: Economics
• Subtopic: Sustainable Development
• Index: Economics

This book focuses on corporate sustainability and how it evolves through innovation and new business models. Despite what has been accomplished to date, there is an urgent need for further steps to be taken and this book presents a nuanced but compelling plea for collaboration between businesses, government and civil society.

Drawing upon empirical research, the authors look at recent approaches to corporate sustainability, the circular economy and strategic corporate social responsibility. The book examines these issues from multiple viewpoints, including cultural, social and religious. More specifically, the book explores the freight sector (smart freight leadership), the banking sector (sustainable banking) and Islamic finance and sustainability, detailing the contribution of faith-based organizations to promoting sustainability and the greening of church buildings. Overall, this book captures the emerging new business models and capabilities firms need to implement sustainability.

This book will be of great relevance to students, scholars and professionals with an interest in corporate sustainability, social responsibility, environmental management and eco-innovation.

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INTRODUCTION

Corporate sustainability: requirements, realities and prospects

Jan Jaap Bouma and Teun Wolters

Corporate sustainability

Over recent decades, corporate sustainability and related concepts such as Corporate Social Responsibility (CSR) have gained in importance. Many companies have adopted policies that are based on them.

This book is dedicated to breaking new ground and following new paths. Many people who are aware of the importance of working on a sustainable world will welcome the growing attention that corporate sustainability is receiving. However, this book is not primarily written to applaud the state of affairs, but to help companies and others pave a path to the future.

Beside positive action and praise, there has been criticism of corporate sustainability, which can be a matter of either casting doubt on the intentions of companies (business as usual or almost as usual) or a critical consequentialist appraisal of what present-day corporate sustainability has achieved. To make a longer story short, as it stands now, there is underperformance, no matter how one looks at it. The dissatisfaction that follows is often invested in pleas for real transformation or a new paradigm. Corporate sustainability based on such relatively radical notions has been worked out in different publications and programmes. However, seemingly, there seems to be a lack of leadership needed to implement it broadly.

An evolutionary process

How one judges this predicament can be influenced by whether one accepts that companies have to go through an evolutionary process that starts with a rather defensive attitude and proceeds towards a proactive resolve to integrate sustainability in the company’s core business. This book takes that position. That does not mean the process is going fast enough. ‘Too little and too late’ often fits well with the progress made, at times evoking moments of cynicism or even despair.

To speeds things up and enhance sustainability strategies, this book discusses how corporate sustainability becomes embedded in wider processes of societal change and innovation. Interestingly, this involves both a focus on individuals, particularly senior staff members who are revealed to be leaders in sustainability and have an eye for the wider society. The latter can be a matter of co-evolution (society preparing for the adoption of new priorities and radical innovations) or a matter of selecting and associating the company with like-minded parties (but with complementary competences) to create inspiring collaborative innovation networks.

Sustainable value placed in a wider context

Today, both kinds of societal involvement are occurring in many places. The overall aim is to create sustainable value. For this to happen, there is a need for imaginative entrepreneurship, solid business planning and various forms of community-based collaboration. In the quest for sustainability, there is a place for:

• big business taking responsibility

• SMEs seeing the niches

• small-scale local endeavours

• central governments issuing adequate programmes and budgets

• local authorities working together with civilians to get things off the ground

• individual positive mindsets and inspirational leadership

• solid monitoring and controls.

Within this wide pallet of contributing parties, there is no need to see a contradiction between, on the one hand, the development of business-like Key Performance Indicators (KPIs) to monitor what is going on and the values and attitudes needed to be motivated and persevere, on the other. Both are required. Sustainability can be enhanced as it is motivated by the three constituent factors: external pressures, internal motivation and opportunities. There will be individual differences in emphasis but, where these factors reinforce each other, sustainability in society can move to the next level. Project management deserves special attention as many corporate decisions are implemented by means of special projects. It is of crucial importance that a company’s projects are executed in line with the existing corporate sustainability objectives. Project managers should not be fully dependant on those who commission a project when reaching established sustainability objectives is at stake; instead, they deserve a degree of autonomy when sustainability is at risk.

A special point is the need for broadening the scope of corporate sustainability. This book explores this area by means of two chapters focusing on a particular industry. The first of these is Chapter 5, on smart freight leadership. For a long time, the freight and logistics sector has been under the radar when it came to environmental monitoring and serious environmental policies. The chapter shows how that can be changed, making a convincing case for harmonizing the measurement of GHG emissions on which leadership in sustainability can be based.

The other chapter devoted to a particular industry is Chapter 6, Sustainable Banking. This chapter applies a model that shows the various phases traversed by a company on its way to becoming a fully integrated sustainable business. The chapter offers a remarkable insight into what this means in terms of ditching wavering policies and reaching crucial tipping points.

This book also pays attention to the influential role that religion can play in motivating people to be serious about nature and the environment. Part of this includes religiously inspired initiatives in the area of ethical trading. Chapter 7, on Islamic finance, shows how the ethical foundation of Islamic finance (banking and insurance) can inspire care for the social and ecological aspects of human activity. However, that effect can only be optimal if the ethical foundations, formulated a long time ago, keep up with the times. For instance, the concept of stewardship (present in both Christianity and the Islam) can be inspiring in pursuing sustainable practices only if it is updated in order to incorporate contemporary issues. Chapter 8, on faith-based organizations, shows how in the past such organizations have inspired key social activities while today these cannot be overlooked when considering what they contribute to areas relevant to implementing sustainability. It appears that the various religious sectors based in social peace, justice, equity, development, and stewardship also characterize, capture, and articulate sustainable acumen throughout its global and local networks. Part of this is a focus on the greening of churches and other religious buildings (Chapter 9). This chapter develops a model for this that not only facilitates the technical measurement of an ecclesiastical building’s energy use, but also includes the responsibility of the religious community to optimize the building’s energy use and, where possible, adopt sustainable energy sources.

Overview of the chapters

This section gives an overview of the various chapters of the book by providing brief abstracts.

Chapter 2. Sustainable value creation

This chapter argues that many organizations have begun to make sustainability a part of their strategies and innovation efforts. Because of sustainability, the value to be created by businesses needs to go beyond business-as-usual. Various concepts that can help to make sustainable value creation concrete are discussed, such as Corporate Social Responsibility, shared value, the sustainable city, the sharing economy and the circular economy. The chapter also goes into the contribution of innovation to sustainability by discussing the concepts of responsible innovation, social innovation and sustainability innovation. The chapter is rounded off by asking whether today’s business schools are sufficiently preparing our future managers for the transformation that is to take place. Millennials appear visibly interested in responsible and purpose-driven businesses. A future-oriented approach in business curricula is within reach.

Chapter 3. Sustainable strategies and accounting needs

Many companies have introduced strategies and practices that relate to sustainability. That explains the continuous attention in research given to the development of new strategies and related business models in which sustainability is given a prominent place. Consequently, there is also research in the area of management accounting that can support the strategies and management control in the area of corporate sustainability. This chapter explores various avenues to promote sustainability as a major strategic management issue and how these call for supporting accounting information. Special attention is given to the following areas:

• business continuity and environmental management

• corporate governance and sustainability

• responsible Management

• hyper-competitive markets, strategies and organizational adaptation

• business models and sustainability

• the rise of community-based strategies, innovation and management accounting.

Chapter 4. Sustainability in project management: making it happen

Based on the available literature, this chapter identifies the areas of impact of sustainability on project management such as selection of the project team, context, stakeholders, project objectives and specifications, dimensions of project success and communication. The chapter emphasizes the pivotal role of the project manager in realizing an organization’s sustainability; in this, the project manager not only takes orders but accepts special responsibility for the inclusion of sustainability in the projects he or she manages. Sustainable project management involves managing a project’s social, environmental and economic impacts by an approach that considers flexibility, complexity and opportunity.

Chapter 5. Towards smart freight leadership

Smart or green freight represents the efforts to transform the freight and logistics sector in order to reduce its greenhouse gas emissions and air pollution. This is to be achieved by improving its fuel efficiency across the global logistics supply chain without mitigating its vital economic functions.

Multinational firms and their brands undergo growing pressure to reduce their carbon footprint. This market pressure cascades down the global supply chain. Green freight programmes respond to these business needs.

The chapter emphasizes that the world needs genuine smart freight leadership. Studies show that only a fraction of cargo owners takes up that role. A major barrier is a lack of standard methodologies to calculate their carbon footprint and define emission reduction targets.

To create and implement a universal method of calculating logistics emissions, the Smart Freight Centre established the Global Logistics Emissions Framework (GLEC). If this framework is accepted by industry, governments and NGOs, it will be possible to harmonize the various green freight programmes around the world and make it possible to measure and compare their effects.

Chapter 6. Sustainable banking: the mysterious role of commercial banks in achieving a sustainable economy

In the wake of the economic crisis of 2008, conventional banking seems to be giving a higher priority to sustainable policies and practices. A new generation of bankers called for a serving, diverse, outspoken and sustainable banking sector. Many banks have made some progress in this area but the task is certainly not finished. To enlighten this mysterious area, this chapter focuses on how a bank can be evaluated and positioned in terms of corporate sustainability.

To address this area, this chapter uses a phase model of corporate sustainability. This model describes various phases through which companies traverse in the transition towards corporate sustainability. A major part of the research is about adapting and applying this model to the commercial banking sector. Moreover, the model was applied to a major commercial bank in The Netherlands, leading to interesting observations and conclusions.

Chapter 7. Islamic finance and sustainability

This chapter discusses Islamic finance and how it can contribute to sustainability. The chapter connects Islamic finance with what Islam teaches us about the world and how to sustain it. Islamic finance can be considered as a framework for a type of banking and insurance that meets certain criteria that may be helpful in promoting sustainability. However, to strengthen the bond between Islamic finance and sustainability, Social Responsible Investment (SRI) could be a useful reference rather than focusing on conventional banking and finance and how to emulate them.

Chapter 8. Faith-based organizations and corporate sustainability

Faith-based organizations (FBOs), along with forms of ‘religious capital’, appear to have a role in corporate sustainability. This role is contextually bounded and manifests itself through leadership, responsible investments and dialogues within and between different communities. Various entrepreneurs accept FBOs as community problem solvers. From the 1970s to the present, religious organizations’ economic approaches and social networks have played key roles in implementing and managing sustainability-led projects by individuals and organizations. Methodist and Quaker immigrants introduced the concept of social responsibility in investing to the USA; for more than 200 years, this faith-based practice is still extant. In a broader context, large religious organizations with billions of ad...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• List of boxes
• About the authors
• Preface
• 1 Introduction. Corporate sustainability: requirements, realities and prospects
• 2 Sustainable value creation
• 3 Sustainable strategies and accounting needs
• 4 Sustainability in project management: making it happen
• 5 Towards smart freight leadership
• 6 Sustainable banking: the mysterious role of commercial banks in achieving a sustainable economy
• 7 Islamic finance and sustainability
• 8 Faith-based organizations and corporate sustainability
• 9 The greening of churches: a maturity framework based on policies and measures
• Subject Index
• Author Index