Corporate sustainability

The concept of corporate sustainability is a very important paradigm in modern business management. This concept suggests that corporate growth and profitability of an organization are important. But for that business to be sustainable, it also needs to have a social objective relating to sustainable development, such as environmental protection, promotion of social justice and equality, and economic development for better income distribution.

In other words, business activities designed to fulfill the needs of people in this generation should not cause adverse impacts on the lives of people in the next generations. Business activities should therefore factor in the distribution of equitable benefits and fairness, the promotion of peoplersquo;s wellbeing, and the improvement of quality of life, either directly or indirectly.

The group of people in the society that businesses should share responsibility with is the stakeholders. The more the businesses can build good relations with these stakeholders through trust, mutual respect, and participation, the more acceptance those businesses will receive from the society and the longer they can maintain profitable operations. These stakeholders are those who can cause direct impacts on the businesses, or those who receive direct impacts from the businesses. These stakeholders include not only shareholders, but also employers, customers, trading partners, and the communities in the areas where those businesses are located.

Each group of stakeholders is likely to have different objectives and needs. For example, shareholders and investors are usually interested in the returns from business operations, while employers and staff would be enthusiastic about their career prospects, reasonable remuneration, and job security. Clients or consumers would naturally want high-quality products and services at the fairest or most reasonable price, while the communities would want businesses that not only create income for them, but are also responsible to the environment and do not cause pollution or adverse impacts on their living. Many businesses have tried to promote community engagement by having the communities participate in various activities.

Although the needs of stakeholders and the businesses may vary, it is well understood that each group shares a common desire for environmental protection, business development, enhancement of career prospects, and better income distribution. All stakeholders will also benefit from better equality and social justice. Businesses that violate these objectives usually face strong opposition from stakeholders in ways that would disrupt their operations. On the contrary, businesses that can fulfill the basic needs of most stakeholders and address the special needs of particular stakeholders at the same time will usually enjoy good relations with other businesses and stakeholders, which in turn would help them achieve their business objectives and continue their operations in a sustainable manner.

The measurement of business success using this new paradigm extends beyond the success in terms of revenues and profits, and includes other indicators that reflect corporate sustainability, such as employee satisfaction, employee resignation rate, trade partner satisfaction, community satisfaction, the correlation between community support and sales volume of products or services, the ratio between natural resource utilization and production units, the ratio between waste disposal or emission and production units, for examples. In other words, measuring the success of a business needs to take into account outcomes in areas other than the four dimensions proposed earlier in the concept of a Balanced Scorecard.

The trend of corporate social responsibility as a new focus for businesses in Thailand is one example of how corporate sustainability is being promoted as new business thinking. The increasing number during the past 4-5 years of businesses that conduct social activities is an indicator that the future business tendency is leaning towards corporate sustainability through co-sharing of social responsibilities and social development. Businesses that understand well the importance of this thinking and are the first to adapt themselves will naturally benefit from a strong foundation of future corporate sustainability.