A Theoretical Framework for Sustainability in Business

WHAT IS SUSTAINABLE DEVELOPMENT?

 “Sustainable Development is the development that meets the needs of the present without
compromising the ability of future generations to meet their own needs.”- World
Commission on Environment and Development (Brundtland Commission 1987)
 Sustainability can be achieved by maintaining the balance/ harmony among
environmental, economic and socio-political aspects of a business.

THE CONCEPT OF SUSTAINABILITY

A program or activity is considered sustainable if it meets all of the following criteria:

 Creates economic value

 Increases public wealth with proper mechanisms for its distribution
 Socially justified
 Environmentally sound
 Ethically conducted
 Conforms to all applicable laws, rules and regulations

A SYSTEMS PERSPECTIVE IN SUSTAINABILITY

 Business and society operate within the natural environment. The abundant but finite
resources we use to thrive come from the environment.
 For businesses and societies to survive, they must operate in a way that does not destroy
or deplete these natural resources for future generations.
 This holistic perspective is a fundamental truth which business leaders consider as both a
challenge and an opportunity.

EGSEE DIMESIONS OF BUSINESS SUSTAINABILITY PERFORMANCE

THE SUSTAINABILITY PERFORMANCE AND ACCOUNTABILITY FRAMEWORK

 The Sustainability Performance and Accountability Framework consists of the 5 EGSEE

Dimensions with the corresponding goals, reports, and assurances used to assess
sustainable business operations.
 This framework is essential in assessing the degree to which business operations are
sustainable.

KEY PERFORMANCE INDICATORS

 Quantifiable, visible, and tangible measures that are critical to the success of an
organization and important in the assessment of its overall performance.
  KPIs vary depending on the type of organization and the industry/sector where it
operates.
 KPIs are crucial in assessing the extent of sustainability practiced by an organization.

THE ROLE OF BUSINESS IN SOCIETY

SUSTAINABILITY REPORTING

 Sustainability Reporting is a documentation of a company’s Environmental, Social, and

Governance (ESG) performance that may or may not be publicly disclosed.
 Most businesses follow criteria of Sustainability indicators to determine over-all
Sustainability Performance and to assess poor performing indicators needing
improvement plans.
 Sustainability strategies, initiatives and actions can be publicly disclosed via
Sustainability Reports that follows Global Reporting Initiative (GRI) framework.
 According to their website, Global Reporting Initiative is an independent international
organization that helps businesses, governments, and other organizations to understand
and communicate the impacts of business on critical issues.
 Issues such as climate change, human rights, anti-corruption and many others are being
reported
 GRI Sustainability Standards enhance the global comparability and quality of
sustainability information, resulting in greater transparency on economic, environmental
and social impacts

GRI STANDARDS CRITERIA & INDEX SAMPLE

REVIEW OF SUSTAINABILITTY FRAMEWORK - OPERATION'S PERFORMANCE

MATERIALITY ASSESSMENT

 “Materiality is a principle used in decision making to define whether an aspect or issue is

sufficiently important to warrant attention.”
 Remember the 3 P’s:
o Purpose
o Perspectives
o Process

 Key format in presenting materiality assessment is the materiality Matrix:

EXAMPLE OF SUSTAINABLE DECISIONS

 PEPSICO
 The food and beverage company presents its sustainability strategy and goals during its
annual shareholder meeting and identifies and discloses climate change, water scarcity
and public health issues as core sustainability challenges in its annual financial filings.

 NIKE

The sports-gear multinational integrates sustainable design across its product portfolio
and created the Making app in 2013, allowing the data in its materials sustainability index
to be public. This lets designers from across the industry and beyond make more
sustainable design decisions, and ultimately, lower-impact products.

 COCA-COLA

The drinks company has improved the efficiency of its water use by 20% and identified
the need for a rigorous third-party evaluation of its water management approach.

 DELL

The computer company's integrates alternative, recycled and recyclable materials in its
product and packaging design, improvements in energy efficiency, and design for end-of-
life and recyclability. One of the company's commitments is to reduce the energy
intensity of its product portfolio by 80% by 2020.

 ADOBE

The software company aims to achieve a 75% reduction, from 2000 levels, in company
emissions by 2015. It is using renewable energy technologies, including hydrogen fuel
cells and solar arrays, and is also focused on reducing energy needs by improving the
cooling efficiency of its data centers and "virtualising" many of its systems, platforms
and devices.