Business Sustainability

Lewis Wilson, Andrew Cartledge, Chris Wainwright, Rebecca Jennings, Edward Stone, Malwina

Gmywrek, Khamlin Ibrahim

Business ethics• Acting in an ethical way involves distinguishing between

“right” and “wrong” and then making the “right” choice. It is relatively easy to identify unethical business decisions. For example, companies should not use child labour. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery etc.

Business ethics• However, it is not always easy to create similar definitions of good

ethical practice. A company must make a competitive return for its shareholders and treat its employees fairly.  A company also has wider responsibilities. It should minimise any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility.

Corporate Social Responsibility• Corporate Social Responsibility is the term given when

businesses consider the wider implications of their actions. This can increase business revenue, as well as have benefits for society. CSR means considering society (e.g. paying a living wage, investing in education) and the environment (e.g. water harvesting, replacing natural resources) as well as profit. This is referred to as the triple bottom line for businesses.

Corporate Social ResponsibilityThere are two main approaches to CSR: • Defensive – focuses on reducing risk and carrying out CSR in

order to protect organisational reputation• Offensive – this means using CSR as a way to expand into

new markets and find profitable ways of addressing social issues

Corporate Social ResponsibilityThe benefits of focusing on CSR include: • More public support – more customers• Long-term profits• Ethical obligation – it’s the right thing to do• Better environment for future generation• Discourages government regulation• Will improve business value

Corporate Social ResponsibilityHowever, CSR does have some disadvantages: • It may hurt a business’s main responsibility to make a profit• It may increase costs• Businesses people may not have the skills to implement a

CSR strategy

Corporate Social ResponsibilityWays that CSR and ethical behaviour can be encouraged: • Employee training and selection• A code of ethics to prevent corruption• Leading by example• Reinvesting in society (philanthropy)• ‘Green’ business behaviour, such as preserving natural

resources and moving to sustainable forms of energy

What makes a business sustainable?A sustainable business is any organization that participates in environmentally friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit.

Types of business sustainability• Community – with shifts in population size, it’s expected that

we will reach 9bn by 2050. This will mean that food production needs to increase by 70%. A sustainable business may adjust their behaviour in order to cope with this rise in population.

Types of business sustainability• Economy – more people are living in poverty than ever

before. It’s important that businesses investing in other countries pay fair wages to try to break this cycle. An example of a major corporation working with charities is Amazon with their very own Amazon Smile service whereby Amazon donates 0.5% of the price of a customers eligible Amazon Smile purchases to the charitable organization of the customers choice.

Types of business sustainability• Environment – climate change is affecting the way in which

we live. Global temperature rises will mean decreased crop yields, water shortages and extinction. Successful and sustainable businesses will look to have alternative methods of running their business if problems such as flooding, fires or extreme weather were to arise.