This writing is based on my knowledge regarding sustainability and triple bottom line concepts and focuses on the issues which are faced by companies regarding implementation of sustainability practices in their company. This writing provides an idea of the various forms of business capitals and provides an account of various sustainability approach phases which according to me can be adopted by business organizations.
Based on the lectures that I had attended in the class and based on my secondary research I can say that the triple bottom line (TBL) can be considered as one of the most important technique which can be used by business organizations to analyse the profits that they are making through their businesses by virtue of their corporate sustainability solutions. As stated by Ruzzier, Petek & Ruzzier (2015) the TBL directs to look beyond the usual bottom line of business to the profits which businesses make socially, environmentally and economically. Measuring businesses through the TBL are perceived as one of the most effective and best indicators of how sustainable businesses actually are and how profitable are our businesses.
I feel that business organizations are facing various challenges regarding incorporating sustainability in their company and according to me the various challenges can be in the form of:
Measuring and reporting sustainability- As opined by Kiron, Kruschwitz, Rubel, Reeves & Fuisz-Kehrbach (2014) as a result of proliferations of rankings of sustainability and standards of reporting, businesses needs to know in context of streamlining their reporting for sustainability in order to lower reporting redundancy, inconsistencies and accordingly creating an impact which is positive in nature.
Collaborating for sustainability- As stated by Maniora (2018) most of the sustainability issues of businesses requires systematic changes and the process of systematic changes requires collaboration with all of the stakeholders of businesses and therefore in my opinion businesses requires speaking with a single voice with competitors and the other stakeholders who are affected by businesses in order to tackle sustainability.
Creation of a long term orientation- According to Shields & Shelleman (2015) the dynamic financial markets, the unstable purchasing patterns of the customers, change in trade agreements and inconsistent public policies make it very difficult for companies to act for a long term and therefore in my opinion the businesses needs to find a way in order to reconcile short term as well as long term perspectives..
Based on the class learning on concepts of sustainability, I can identify six forms of capitals which are used by businesses and they are as follows:
Internal Economic capital- in my view the internal economic capital includes capital such as funds available including the debt and equity finance of the company which are financial in nature and also capital such as the value of the brand which are non-financial in nature.
External economic capital- As opined by Hahn & Reimsbach (2014) the external economic capital considers the impact which an organization exerts on capital, both financial and non-financial in nature of separate bodies such as a new factory which may decrease or increase value of nearby real estates.
Natural capital- based on my learning I can say that natural capital are sources of natural resources like soil, water etc and some of these natural capital gives people with free goods/services called ecosystem service like clean water and fertile soil which supports the foundation of economy, society and makes human existence possible. This as per my view is add on to economic capital as some of the natural capital enables production of other resources that are offered through natural environment.
Human capital- in my view the human capital comprises of skills, experiences, knowledge health, attitudes and individual motivation.
Social and relationship capital- Based on my learning I can say that the social and relationship capital comprises of teams, networks and group of individuals who work collectively which also includes intellectual capital which are shared.
Constructed capital- as per my knowledge the constructed capital comprises of material objects, systems, ecosystems which are made and used by humans.
Based on my secondary research regarding sustainability I can say that the phases of business approaches towards sustainability are:
Rejection- in my understanding the rejection strategy demonstrates a view of the society, employee and nature which is exploitative in nature. In this phase the ultimate aim of the organizations is to earn profit. In this phase I feel that the pressures regarding sustainability are always declined by organizations.
Non-responsiveness- Based on my knowledge I can say that the non-responsiveness strategy is based more over ignorance of sustainability issues. I feel that, in this phase, environmental and community related issues are ignored whenever possible and in this phase sustainability related actions and strategies are perceived as an un-necessary costs.
Compliance- as per my knowledge the compliance strategy focuses on the reduction of risks which arises due to failure to meet quality standards. In this phase, focus is diverted to those issues of sustainability which possesses highest litigation risks. In this phase I feel that strict restrictions on various issues which are social and environmental in nature are mostly opposed with any action call by organizations which are created within a self-regulatory approach which is voluntary in nature.
Efficiency- In my opinion the efficiency strategy shows a greater understanding regarding practices which are sustainable in nature. In this stage an organization mostly focuses on efficiency and the consequence cost savings advantages to the organization.
Strategic proactivity- I feel that in the strategic proactivity stage, sustainability transforms as a core organizational strategy and the main focus of an organization in this phase remains to gain competitive advantage and profitability which are long term in nature from various initiatives regarding to sustainability within the company.
Sustaining corporation- As stated by Pashaei Kamali et al. (2014) in the sustaining corporation stage the sustainability values remain fully internalized within an organization and the organization actively follows ecological renewal, social equity and welfare of human resources at the industrial, social and political levels. In this stage, an organization values people and the nature for their own sake and benefits.
There are various examples of businesses which I can recall who have successfully engaged in sustainability business such as Fair Harbor, an apparel company which manufactures sustainable men’s swimwear. The company produces each pair of men’s boardshorts and swim trunks from 11 recycled plastic bottles which are sourced from mass recycling facilities all round the world. Another example of such business which I can recall is Paladino and Company, which is a sustainability consulting firm, who have found an ideal way to make a significant and positive environmental impact by helping other companies in reducing their carbon footprint and as buildings account for more than 40% of carbon emission, the company works with other architects, designers, developers and companies who aim to create a significant difference to the environment through their real estate.
Based on the above writing I can state that though businesses are paying attention towards incorporating sustainability practices in their organization they are facing various challenges which are intersecting with their sustainability approaches. Therefore I strongly feel that businesses must focus on developing an alternative approach in order to promote sustainability in their organizations.
References
Hahn, R., & Reimsbach, D. (2014). Are we on track with sustainability literacy? Journal of Global Responsibility, 5(1), 55-67. doi:https://dx.doi.org/10.1108/JGR-12-2013-0016
Kiron, D., Kruschwitz, N., Rubel, H., Reeves, M., & Fuisz-Kehrbach, S. (2014). Sustainability next frontier. MIT Sloan Management Review, 55(2), 1-25. Retrieved from https://search.proquest.com/docview/1475566525?accountid=30552
Maniora, J. (2018). Mismanagement of sustainability: What business strategy makes the difference? empirical evidence from the USA. Journal of Business Ethics, 152(4), 931- 947. doi:https://dx.doi.org/10.1007/s10551-018-3819-0
Pashaei Kamali, F., Meuwissen, M. P., M., De Boer, I. J., , M., Stolz, H., . . . , M. (2014). Identifying sustainability issues for soymeal and beef production chains. Journal of Agricultural and Environmental Ethics, 27(6), 949-965. doi:https://dx.doi.org/10.1007/s10806-014-9510-2
Ruzzier, M. K., Petek, N., & Ruzzier, M. (2015). Incorporating sustainability in branding: I feel Slovenia. IUP Journal of Brand Management, 12(1), 7-21. Retrieved from https://search.proquest.com/docview/1691586283?accountid=30552
Shields, J., & Shelleman, J. M. (2015). INTEGRATING SUSTAINABILITY INTO SME STRATEGY. Journal of Small Business Strategy, 25(2), 59-75. Retrieved from https://search.proquest.com/docview/1733170172?accountid=30552
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