Now corporations must worry about more than pleasing their shareholders;
they must answer to other stakeholders, such as government regulators,
their customers, their employees, and activist groups. Companies that fail to
act as good citizens now face substantial risks. They can squander consumer
goodwill and undermine their own viability. They are accountable to cus-
tomers at home and workers in Asia, Latin America, or Eastern Europe. If the
latter are mistreated, the former may boycott. Similarly, corporations can’t
look at the environment as a local issue. It’s no longer just a question of how
a factory impacts local groundwater; now it must consider how its emissions
might effect global warming.
CSR has become part of big business. More than 1,800 companies in 60 coun-
tries publish sustainability reports that detail nonfinancial areas, such as their
employment in local communities and environmental impacts. About 1,000
companies around the world follow the sustainability reporting guidelines
of the Global Reporting Initiative. In 2005, the Economistmagazine declared,
“Corporate Social Responsibility is now an industry in its own right.”
Here are just a few examples:
Automaker Toyota has an “Earth Charter,” a worldwide environmental
policy affecting every aspect of its operations.
GE, the fifth largest U.S. company, launched its “ecoimagination” campaign
to develop cleaner technologies such as solar energy, hybrid locomotives,
fuel cells, lower emission aircraft engines, lighter and stronger materials,
efficient lighting, and water purification technology. It vowed to reduce its
own emissions by one percent and report publicly on meeting its sustain-
ability goals.
Interface, a floor covering and fabric manufacturer, has committed itself
towards ambitious goals: eliminating waste, eliminating toxic substances,
and moving toward renewable energy. The company issues an annual
sustainability report following the standards from the Global Reporting
Initiative.
Getting the Lowdown on Sustainability ....................................................
The idea of sustainability has evolved over the last two decades. The first
major milestone came in 1987 with the World Commission on Environment
and Development. The U.N. created the commission to address growing con-
cern “about the accelerating deterioration of the human environment and
natural resources and the consequences of that deterioration for economic
and social development.” The commission was chaired by former Norwegian
Prime Minister Gro Harlem Brundtland and the report “Our Common Future”
came to be known as “The Brundtland Report.” It established what continues
to be the classic definition of sustainability:
Chapter 13: Sustainability and Corporate Social Responsibility 247
