Expectations for companies regarding corporate sustainability
At a minimum, companies engaging in sustainable business practices are expected, with respect to environmental sustainability, to prevent and minimise the negative environmental impacts of their business operations. This expectation is commonly labelled “do no significant harm”.
Responsible companies aim to prevent negative impacts arising from their business operations with regard to social responsibility as well as economic sustainability and good governance. This expectation is labelled “do no harm”.
A company can also actively generate positive impacts in all areas of sustainability, labelled “do good”, through its activities. Regenerative business practices, which are increasingly emphasised, aim to restore environmental and social systems or improve their ability to regenerate themselves.
Business benefits of corporate sustainability
Key business benefits of corporate sustainability efforts include:
- Risk management and regulatory compliance
- Employee attraction, engagement, and retention
- Cost reduction and operational efficiency
- Innovation and long-term growth
- Improved access to capital and investment
- Competitive advantage
- Stronger stakeholder relationships
- More resilient supply chains
- Enhanced brand reputation and trust
- Long-term value creation
Different expectations for companies and the role of regulation and contracts
The larger the company, the greater the expectations placed upon it. The sustainability measures expected of companies depend on factors such as company size and ownership.
Large companies are expected to do more than smaller ones, and companies owned by public authorities (such as the state or municipalities) are generally expected to do more than privately owned companies.
Regulation adopted by states is an important driver and framework setter for sustainable development and responsible business conduct. In addition, companies’ contracts play an important role in implementing sustainable business practices across companies’ value chains.