Sustainable Development and the Business Case for
Corporate Social Responsibility (CSR)

Introduction

Succinctly phrased, sustainable development is meeting the demands of the present without creating a societal shortfall for future generation’s ability to meet their needs. Over the past two decades the concept of sustainable development has evolved to encompass the perennial sustainability of environmental and social concerns with global development. Conceived from the World Commission on Environment and Development (1987) and promulgated through The 1992 Rio Earth Summit, the Convention on Biological Diversity (CBD), the World Summit on Sustainable Development and the UN Millennium Development Goals (MDG), sustainable development underpins the successful interdependence of economic growth, ecological balance and social progress practiced in developed and less developed regions by governments, industry, bilateral and multilateral institutions.

Sustainable Development and Corporate Responsibility

The globalization of commence through the ratification and of GATT and the WTO has meant that businesses operate and interact with communities by means of their supply chains, products and services. As a result their operations can have an impact either directly or indirectly on communities and ecosystems. Society’s increased awareness of environment and social issues has engendered businesses to internalize their ecological and social footprints.
Fundamentally, Corporate Social Responsibility (CSR) is about incorporating public values and concerns into daily corporate practice. Through a socially responsible management framework a company’s corporate responsibility, expressed by its corporate strategy, should reflect the key attributes of environmental protection, employee rights, community involvement and supplier relations. A socially responsibly strategy is one of the key factors underlining a company’s success in the current global competitive market.
A CSR framework must be transparent and address the risks, externalities, and benefits of its business operations in light of enhancing economic wealth, environmental improvement and social responsibility. Coined the triple bottom line approach, CSR operates to add value to the environment, economy and society while holding future generations needs ceteris paribus.

Biodiversity and CSR

Within the context of environmental improvement, biodiversity plays an important role by providing an array of ecosystem services (water, timber, plant extracts for medicines) to businesses and communities for their sustained growth. Biodiversity is also an indicator for assessing environmental health as well as environmental risk to a company. The diagram illustrates the triple bottom line approach and integrates CSR objectives with the CBD in the environment-economy-society nexus.

For more information on CSR and the business process please visit
Defra's Sustainable Development Initiative
Business and Sustainable Development Guide
World Business Council on Sustainbale Develpment (WBCSD)

In the context of environmental improvement, ecosystem services such as water and forestry resources can be monitored by an integrated CSR management system with particular focus on a company’s supply chain. Using biodiversity risk to highlight and remove fiscal, policy and regulatory market barriers to entry companies can address and mitigate existing externalities in their supply chain and prevent future ones from becoming an issue. Some important barriers posed by biodiversity risk to businesses are:

Brand Penetration
A company with a good Biodiversity Action Plan (BAP) will benefit from consumer confidence and will be able to penetrate its brand into emerging markets
Strengthening stakeholders
A company with strong stakeholder relations will be much less scrutinized by internal reviews and steering committees
Access to Capital
A company’s credit risk can be affected by a poor biodiversity track record and may result in difficulty to secure future loans from Banks
Regulators
A company with an unsatisfactory biodiversity management plan or inadequate environmental assessments can lead its future permits being denied or delayed incurring negative costs
Supply chain
A lowering of ecosystem services (water resources, forests etc) can drastically affect a company’s output and competitive advantage. A company that is oblivious about its supply chain behaviour exposes its operations to several risks that can cause a shortfall or stoppage in supply.

For a full list of Biodiversity risks and what how companies should operate in a socially accountable framework please visit:
The F&C Report on An Assessment of the Exposure of FTSE Sectors to Biodiversity Risk

The UK Context

The Department for trade and Industry (DTI), and DEFRA both address the role of CSR as being good for business and society and offer resources companies can use as a launching pad to understand the business case for CSR. Please click on the links below for more information.

For clear and straightforward guidance on successfully identifying, prioritizing and managing the impact of sustainability issues on business please visit Defra's work on Sustainable Business and Enhancing Business Success

For guidance on CSR and best practices identified by The Department of Trade and Industry (DTI) please visit DTI website on Sustainable development and CSR

Photo Credit: Mark Howson/Rio Tinto