Organizing for Sustainable Development

Addressing the Grand Challenges

Federica Angeli, Ashley Metz, Jörg Raab

• Publisher: Routledge
• Year: 2022
• ISBN:
  9780429516313
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

The Sustainable Development Goals (SDGs) recognize the increasingly complex, interdependent nature of societal and environmental issues for governments and business. Tackling such "grand challenges" requires the concerted action of a multitude of organizations and multiple stakeholders at different levels in the public, private, and non-profit sector.

Organizing for Sustainable Development provides an integrated and comparative overview of the successes and failures of organizational efforts to tackle global societal issues and achieve sustainable development. Summarizing years of study by an interdisciplinary board of authors and contributors, this book provides readers with an in-depth understanding of how existing businesses and new hybrid organizations can achieve sustainable development to bring about an improved society, marking a key contribution to the literature in this field.

Combining theoretical views with empirical approaches, the chapters in this book are highly relevant to graduate and undergraduate (multidisciplinary) programs in sustainable development, organization studies, development economics, development studies, international management, and social entrepreneurship.

The Open Access version of this book, available at www.taylorfrancis.com, has been made available under a Creative Commons Attribution-NonCommercial (CC-BY) 4.0 license.

1Corporate Responsibility An Overview

Julia Bartosch and Jörg Raab

DOI: 10.4324/9780429243165-2

Why Should We Deal with the Question of Corporate Responsibility?

Corporate Responsibility refers to corporate policies, practices and outcomes related to issues including employee well-being, climate change, human rights or diversity. It can include changes in the production process to reduce greenhouse gas emissions, changes in labour relations to secure and improve working conditions both within the firm and its supply chain or contributions to the local community such as infrastructure or philanthropy (Aguilera et al., 2007) Therefore, corporate responsibility tackles issues relevant for human day-to-day life and the constitution of the natural environment.

Why should we address and deal with the question of the responsibility of corporations? In light of the sheer extent of ecological and social challenges, the urgency to fundamentally change the way our economy operates is apparent (Klein, 2014; Wright & Nyberg, 2015) The aim for this development is stated in the definition of sustainable development, defined as meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Commission, 1987, p. 24). For corporations, this has been translated into the so-called triple-bottom line. The core idea states that business firms should address sustainable development via integrating economic, social and environmental goals at the same time (Elkington, 1998). Therefore, corporate responsibility in principle connects to all 17 Sustainable Development Goals. While governments are essential in setting the legal frameworks to create a more sustainable economic system and societies, it is corporations that have to implement the necessary changes in production, transportation, and consumption as well as (co-) develop and deploy new technologies in this process. In addition, it is impossible to regulate everything in detail. Therefore, addressing the responsibility of corporations also implies that they should not try to find the potential loopholes but act in the spirit of the regulation. Given the enormous social and environmental challenges and the role that especially big corporations both play in causing them but also their crucial role in tackling them, we use the term “corporate responsibility” instead of corporate social responsibility. With this terminological choice, we indicate that corporations have a broad responsibility towards society with regard to economic prosperity, social equity and environmental integrity (Montiel, 2008). They must go beyond treating these issues as just one part of their activities or even only for the sake of appearances (Roberts, 2003). Rather, in the understanding of corporate responsibility, corporations have to integrate economic prosperity, social equity and environmental integrity in all their structures and processes, i.e. in their strategic thinking as well as their daily operations. However, we do not deny that there can be real tensions between financial and ethical imperatives and that engagement in corporate social responsibility activities can serve different functions (see also Roberts, 2003).

However, and despite a growing urgency for change towards more sustainability (e.g. Rockström et al., 2009; United Nations Environment Program, 2018), scientific results demonstrate that the business world has achieved only little in this regard to date (Whiteman et al., 2013; Wright & Nyberg, 2015). Yet, the current pandemic shows how relevant it is that the business world is taking its responsibility, e.g. towards its workers:

The Companies Putting Profits Ahead of Public Health – Most American restaurants do not offer paid sick leave. Workers who fall sick face a simple choice: Work and get paid or stay home and get stiffed. As the new coronavirus spreads across the United States, the time has come for restaurants, retailers and other industries that rely on low-wage labor to abandon their parsimonious resistance to paid sick leave. Companies that do not pay sick workers to stay home are endangering their workers, their customers and the health of the broader public. Studies show that paying for sick employees to stay home significantly reduces the spread of the seasonal flu. There’s every reason to think it would help to check the new coronavirus, too. A federal law mandating paid sick leave is necessary because the coronavirus is just an instance of a broader problem. Norovirus, a major cause of food poisoning cases, sickens some 20 million Americans each year, and kills several hundred. Outbreaks often are traced back to sick food service workers, prompting the C.D.C. to recommend paid leave as a corrective. The spread of seasonal flu and other diseases is also greatly exacerbated by sick workers. If we work sick, then you get sick, Chipotle workers chanted during a recent protest.

(The New York Times, March 14, 2020).

Covid outbreak exposes dire conditions at Guatemala factory making US brands – A garment factory supplying Gap, American Eagle and Amazon was at the centre of one of the worst Covid-19 outbreaks in Guatemala, the Guardian can reveal. When all 900 workers were tested, 201 positive cases were reported. The virus outbreak went on to cause the death of at least one KP Textile garment worker. In statements to the Guardian, Gap, American Eagle and Amazon said their suppliers had been issued with detailed guidance on Covid-19 preparedness and mitigation and they are committed to rigorous labour standards. Despite the billions of dollars generated in the zones, Guatemala’s garment workers have been left particularly vulnerable to coronavirus, and are unable to save for times of sickness or unemployment. The minimum wage for the sector is 2,831 Quetzales (£330) a month, although unions report that some workers are paid as little as £181. The living wage in Guatemala is £680. Only two maquilas in the country have trade unions as attempts to organise have been met with violence and dismissal. The pandemic has exposed the brutal conditions workers have to endure.

(The Guardian, August 6, 2020)

These two examples demonstrate the urgency and relevance to engage in discussions about corporate responsibility – within the scientific community, among management practitioners, politicians and students.

This is a timely discussion given that “not only government officials and social activists but also millennials (Deloitte, 2019), global investors (Mudaliar & Dithrich, 2019), and even CEOs of corporate giants (Business Roundtable, 2019) are calling upon companies to account for their effects on people and planet and to take actions that positively impact society in addition to serving their shareholders” (Battilana et al., 2020, p. 3). The topic is also gaining more and more relevance for the scientific community of organization studies and the management literature more generally. Whereas the topic has long been discussed in specific sub-communities in their respective journals (such as “Journal of Business Ethics”, “Business and Society”), it has become a mainstream topic with publications in highly ranked journals, encompassing areas such as strategic management, accounting, or entrepreneurship. Moreover, the annual meetings of the large scientific associations ...