Business and the Sustainable Development Goals

Measuring and Managing Corporate Impacts

Norma Schönherr, André Martinuzzi, Norma Schönherr, André Martinuzzi

• Publisher: Palgrave Pivot
• Year: 2019
• Print ISBN: 9783030168094
• eBook ISBN: 9783030168100
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

This innovative and engaging book discusses the contribution of business to the Sustainable Development Goals (SDGs) adopted by the United Nations in 2015. It critically analyses selected impact measurement and management tools to highlight their respective benefits and limitations, and also provides guidance on critical management decisions to support high-quality impact measurement and management. The analyses underlying this book are the result of a three year research project conducted by an international consortium in the EU-funded research project GLOBAL VALUE–Managing Business Impact on Development. The research is complemented by examples from corporate practice and expert interviews to demonstrate and measure the contribution of business to sustainable development in the context of the SDGs.

© The Author(s) 2019

Norma Schönherr and André Martinuzzi (eds.)Business and the Sustainable Development Goalshttps://doi.org/10.1007/978-3-030-16810-0_1

Begin Abstract

1. Introduction: The Sustainable Development Goals and the Future of Corporate Sustainability

André Martinuzzi¹ and Norma Schönherr¹

(1)

Institute for Managing Sustainability, Vienna University of Economics and Business, Vienna, Austria

André Martinuzzi

Email: [email protected]

Norma Schönherr (Corresponding author)

Email: [email protected]

Abstract

Martinuzzi and Schönherr provide a comprehensive summary of the evolution of corporate sustainability, spanning the range from philanthropy, via the systematic implementation of eco-efficiency and management systems, product differentiation and innovation, to contemporary strategies that directly link core business and sustainability impacts. They highlight successes and limitations of these strategies and discuss implications for the future of corporate sustainability, which they view as impact-oriented, collaborative, data-intensive, and systemic. The United Nations’ Sustainable Development Goals are introduced as a business-relevant, universally applicable framework that may guide companies in better measuring and managing their impacts on sustainability in light of this expanded understanding of corporate sustainability.

Keywords

Corporate sustainabilityCorporate strategiesSustainable development goalsImpact measurement

End Abstract

Business in general and multinational corporations (MNCs) in particular affect billions of people across the world through their products, operations, and value chains. Given their immense wealth and influence over people’s daily lives, the role and responsibility of business in society is a recurring topic of discourse in academia (Carroll 2015), and also in policy, civil society, and the private sector itself. This discourse has matured over the past 70 years, resulting in a comprehensive stock of literature under diverse headlines, such as corporate social responsibility (van Marrewijk 2003), business ethics (Ferrero and Sison 2014), corporate citizenship (Matten and Crane 2005), and, more recently, corporate sustainability (CS) (Montiel and Delgado-Ceballos 2014; Schaltegger 2011). Across the field, the conflicting priorities of, on the one hand, corporate aspirations, in terms of profits, growth, competitive advantage, and market shares, and, on the other hand, societal objectives, including prosperity, well-being, and sustainability, remain a recurring theme. Notwithstanding this tension, business has received increasing recognition for its potential to be a major driver of sustainable development (Blowfield 2012), and there is an emerging consensus that MNCs in particular can and ought to contribute to sustainable development in a substantial and measurable way (Kolk 2016). However, corporate strategies to fulfill this expectation have been only partially successful so far (Dyllick and Muff 2016).

A History of Corporate Sustainability in a Nutshell

Corporate strategies for CS have continuously evolved over the past century, spanning a range from philanthropic engagement, via the systematic implementation of eco-efficiency and management systems, product differentiation, and innovation, to contemporary strategies that directly link core business with sustainability (see Fig. 1.1).

Fig. 1.1

The evolution of strategies for corporate sustainability

One of the most widely established embodiments of CS is corporate philanthropy (Gautier and Pache 2015) , best defined as the generous donation of money to good causes. The modern form of corporate charitable giving emerged in the first half of the twentieth century. It is not by accident that this period saw the emergence of some of the largest private charitable foundations that remain in existence today, including the Rockefeller Foundation (founded in 1913, in the United States), the Wellcome Trust (1936, United Kingdom), and the Robert Bosch Foundation (1964, Germany). Philanthropy is a highly visible way of returning some of the proceeds of business to society. As well as being of public benefit, the advantages of charitable giving are that it is easy to communicate and can make a real difference to the beneficiaries. However, it is also highly selective in terms of who benefits, and it is easily discontinued in times of austerity. In addition, philanthropy is frequently far removed from core business concerns—in the case of foundations, it may even be outsourced to another organization—and it provides very little incentive or opportunity to learn or develop innovative ways in which business itself may contribute to sustainability.

If the first half of the twentieth century was the age of philanthropy, the second half was the age of efficiency. Increasingly visible environmental deterioration, two oil crises, and the seminal Limits to Growth report (Meadows 1972) defined the problem of the period as “how to do more with less”. In other words, business began to strive for eco-efficiency in addition to economic efficiency. The concept of eco-efficiency fundamentally links some measure of value added with environmental impacts of economic activities. The higher the ratio of value added to ecological impact, the more eco-efficient a product or process is (Ehrenfeld 2005). The business case for eco-efficiency is easily made: the procurement of scarce inputs, wasteful production processes, and waste disposal all engender costs to businesses. Eco-efficiency provides a win–win situation in that such costs are reduced along with detrimental environmental impacts (DeSimone and Popoff 1997). However, where such win–win situations do not materialize, for example, in the case of freely available ecosystem services (such as clean air, water, or climate regulation by forests, all of which are frequently available to use for free), firms do not have incentives to act to reduce resource use. In addition, because rebound effects tend to reverse initial gains in eco-efficiency, this approach has not resulted in absolute resource savings in most sectors (Herring 2006).

The mid-1990s saw the rise of management systems as a systematic way of setting up targets and strategies, the assignment of dedicated roles for dealing with sustainability within companies, as well as certification systems to verify corporate environmental and social performance over time (Andrews et al. 2010). Arguably among the best-known examples are two standards established by the International Standardization Organization (ISO), namely, ISO 14001 standard for environmental management (first released in 1999; see Fig. 1.2¹) and ISO 5001 standard for energy management (first released in 2011).² Another prominent example is the Eco-Management and Audit Scheme, better known as EMAS. Implemented by the European Commission in 1993 (Iraldo et al. 2009), the scheme had registered around 13,000 certified organizations and sites by March 2018.³ As management systems for environmental, social, and quality concerns matured, hundreds of thousands of companies adopted them.

Fig. 1.2

Certified management systems according to ISO 14001

Management systems provide standardized and quality-assured processes for engagement with environmental and social issues. However, they tend to be viewed as bureaucratic exercises, thus failing to become part of organizational culture and practice (Boiral 2011). The rather static nature of management systems, once they are established, as well as the regular need for re-certification, may lead to audit fatigue. Furthermore, management systems have been shown to foster a checklist mentality (Boiral et al. 2018). This may prevent the development of innovative solutions to newly emerging sustainability issues and appropriate, timely responses to concerns outside the scope of the established system.

A more innovative approach that became firmly established around the same time as management system is sustainability by product differentiation. Previously relegated to specialized third-world shops, from the late 1990s, organic, Fairtrade, and other eco-friendly or ethically traded products began to routinely appear in mainstream stores. Figure 1.3⁴ illustrates the growth in sales and revenue of two of the most widely adopted labeling schemes for eco-friendly and ethically traded products between 1999 and 2016.

Fig. 1.3

Global sales of organic food and global revenues from Fairtrade International products (1999–2016) in billion US dollars

Today, eco-friendly or ethically traded products are available in almost all sectors, ranging from ethical fashion, organic and fair trade foods, eco-friendly cosmetics and detergents to “green” funeral services. The business case for offering eco-friendly ...

Table of contents

• Cover
• Front Matter
• 1. Introduction: The Sustainable Development Goals and the Future of Corporate Sustainability
• 2. The Corporate Toolbox
• 3. Scoping What Matters: An Introduction to Impact Mapping
• 4. Measuring What Matters: Standardized Versus Customizable impact Measurement Tools
• 5. Managing What Matters: Integrating Impact Measurement into Corporate Sustainability Management
• 6. Implementing Impact Measurement and Management
• Back Matter