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Mix sustainable development, corporate social responsibility, stakeholder theory and accountability, and you have the four pillars of corporate sustainability. It's an evolving concept that managers are adopting as an alternative to the traditional growth and profit-maximization model.
In recent years there has been significant discussion in the business, academic, and popular press about "corporate sustainability." This term is often used in conjunction with, and in some cases as a synonym for, other terms such as "sustainable development" and "corporate social responsibility." But what is corporate sustainability, how does it relate to these other terms, and why is it important? This paper addresses these questions.
What is corporate sustainability?
Corporate sustainability can be viewed as a new and evolving corporate management paradigm. The term 'paradigm' is used deliberately, in that corporate sustainability is an alternative to the traditional growth and profit-maximization model. While corporate sustainability recognizes that corporate growth and profitability are important, it also requires the corporation to pursue societal goals, specifically those relating to sustainable development -- environmental protection, social justice and equity, and economic development.
A review of the literature suggests that the concept of corporate sustainability borrows elements from four more established concepts: 1) sustainable development, 2) corporate social responsibility, 3) stakeholder theory, and 4) corporate accountability theory. The contributions of these four concepts are illustrated in Figure 1. Each concept, and its relationship to corporate sustainability, is discussed below.
1) Sustainable Development
Sustainable development is a broad, dialectical concept that balances the need for economic growth with environmental protection and social equity. The term was first popularized in 1987, in Our Common Future, a book published by the World Commission for Environment and Development (WCED). The WCED described sustainable development as development that met the needs of present generations without compromising the ability of future generations to meet their needs. Or, as described in the book, it is "a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations." Sustainable development is a broad concept in that it combines economics, social justice, environmental science and management, business management, politics and law....