As part of this quarter’s theme of Sustainability and Ethical Business, we’re sharing the views from our academic community. Dr Adolf Acquaye is a Senior Lecturer in Sustainability, Kent Business School, University of Kent. Read his blog post, which summarises in his words, why sustainability is important in business.
Sustainable development and indeed sustainability was formally first put forward by the United Nation’s World Commission on Environment and Development in 1987 as an agenda to examine and guide the global environment and development. It has gradually moved on from what was a political rhetoric and it has now transcended into many fields of studies and business practice. However, if one is to ask, ‘why is sustainability important to businesses?’, this very simple question can be answered by two equally very simple answers: ‘Stakeholders’ and the ‘Business Case for Sustainability’.
Firstly, there is increased demands from a wide range of stakeholder groups (shareholders, employees, society, government, media, etc.) for organisations to adopt and implement responsible management practices. This is because these stakeholders now demand strong economic performance in addition to organisations being socially and environmentally sustainable as well as adhering to responsible business practices. It is, therefore, unsurprising that Corporate Social Responsibility, Business Ethics and Sustainable Management have become important parts of organisation’s strategy and their day-to-day operations and so it is also becoming a core part of the curriculum development and delivery in business schools.
“Stakeholders now demand strong economic performance in addition to organisations being socially and environmentally sustainable.”
The second main reason why businesses now recognise the importance of sustainability and the integration of social and environmental sustainability-related issues into core business activities as an essential part of developing business strategies is because of the Business Case for Sustainability. The Business Case for Sustainability emphasises how the links between voluntary social and/or environmental and corporate economic success can be integrated together, managed, advanced, or innovated. It underlines the fact that, if a business can achieve at least one of six business case drivers (Cost and Cost Reduction, Sales and Profit Margin, Risk Reduction, Reputation and Brand Value, Employer Attractiveness and Innovative Capabilities) by undertaking a voluntary social and/or environmental activity, then this will also indirectly allow the firm to capture economic value and so they will be more willing to engage in such activities.
“Many businesses across different sectors have been able to, directly and indirectly, derive value as a result of engaging in sustainability-related activities.”
It is undeniable that there has been overwhelming evidence to suggest that many businesses across different sectors have been able to, directly and indirectly, derive value as a result of engaging in sustainability-related activities. This can be done by designing a Sustainable Business Model that creates, delivers and captures value for various stakeholders across the Triple Bottom Line (Economic, Social and Environmental). What was once a political grandiloquence in now becoming mainstream practice.
Many thanks Adolf for sharing your views. Adolf teaches on both undergraduate and postgraduate programmes at Kent Business School, including The Kent MBA module on Corporate Social Responsibility and Sustainability Management. Find out more about The Kent MBA.
Dr Adolf Acquaye
Adolf’s primary multi-disciplinary research focuses on the development and application of sustainability frameworks and models used to inform business practice, research and policies for a sustainable and low carbon society.