Integrating sustainability into business practices: learning from Brazilian firms.
| Autor | Petrini, Maira |
| Cargo | Report |
INTRODUCTION
The concepts of sustainability and corporate social responsibility [CSR] have been among the most important themes to emerge at the global level in the last decade. Sustainability and CSR are seen as comparable concepts in this paper, since both take into consideration environmental, social and economic dimensions and both refer to a long-term perspective based on meeting the needs of the present with responsibility and without compromising the ability of future generations to meet their needs. In light of this, managers have to take into consideration not only increased sales and profits and/or decreased costs, but also the sustainable development of the business itself and the surrounding context. A growing number of companies worldwide have engaged in serious efforts to integrate sustainability into their business practices (Jones, 2003). However, most firms have kept the question of sustainability separate from considerations of business strategy and performance evaluation, areas that are often dominated by purely economic performance indicators (Clarkson, 1995), and more research is needed to promote theoretical and practical advances in that management field.
Although corporate efforts to integrate sustainability into their business practices have begun to be reported in a growing number of publications worldwide, most of them have focused on North American and European contexts. A logical and salutary vector extends to scrutiny of the experiences of firms located in other regions, particularly Africa and Latin America. Our research aims to propose a model to facilitate the incorporation of sustainability into business practices, learning from the context of companies operating in Latin America--more specifically, in Brazil--that excel in terms of sustainability initiatives.
DEFINING CSR AND SUSTAINABILITY
From a historical point of view, the seminal work of Bowen (1953) was one of the starting points for the field known as corporate social responsibility [CSR]. In our study, we define CSR as a comprehensive set of policies, practices and programs that are integrated into business operations, supply chains and decision-making processes throughout a company, aiming to inculcate responsibility for current and past actions as well as future impacts (Business for Social Responsibility [BSR], 2008). Similarly, the long history of issues surrounding sustainable development notwithstanding, the predominant definition of sustainability was that introduced by the Brundtland Commission's 1987 report: meeting the needs of the present without compromising the ability of future generations to meet their own needs. A sustainable enterprise genuinely contributes to sustainability by delivering economic, social and environmental benefits simultaneously, i.e., achieving the triple bottom line (Dyllick & Hockerts, 2002; Elkington, 1998). Triangulating with the state and civil society, organizations have been developing new strategies, policies and arrangements and redefining their respective roles, action domains and interdependency (Marrewijk, 2003).
Those two terms--sustainability and CSR--have progressively converged and today they encompass similar dimensions and are often applied as synonymous or comparable terms (Emerson, 2003; Mazon, 2004). First, both concepts involve multiple levels of analysis (individual, group, firm, community, etc.) and multiple stakeholders (employees, shareholders, clients, suppliers, partners, community members, etc.). Secondly, CSR and sustainability deal with issues related to three distinct spheres that sometimes overlap: social, environmental and economic. It is important to note that the economic sphere is not limited to short-term performance indicators such as return on investment [ROI], but also refers to elements that contribute to long-term financial success, such as a firm's reputation and relationships. Consequently, managing sustainability and CSR implies seeking a balance between short- and long-term considerations, and among the interests of a larger group of stakeholders than those addressed by traditional management (Raynard & Forstarter, 2002).
CSR and sustainability have come to represent an important dimension of corporate strategy, with an increasing number of firms trying to determine, monitor and improve the social and environmental impacts of their operations. Despite such an explosion of interest, effective incorporation of sustainability into business practices and management faces serious obstacles, raising the need for more research.
INTEGRATING SUSTAINABILITY INTO BUSINESS PRACTICES
Organizations are increasingly inclined to integrate society's expectations into their business strategies, not only to respond to rising pressure from consumers, employees and other stakeholders but also to explore opportunities for creating competitive advantage (Bielak, Bonini, & Oppenheim, 2007; Bonini, Mendonca, & Oppenheim, 2006). To this end, management researchers are seeking to identify a set of factors with the potential for facilitating effective integration of sustainability into organizational practices.
Leadership has been recognized as an important factor, promoting the commitment of organizations as a whole (United States Environmental Protection Agency [USEPA], 2001), driving cultural values towards such commitment rather than a form of control (Higgins, 1995). Likewise, Marrewijk (2004) describes a set of ideal types of organizations, and for each type elaborates a system of values and related institutional structures, such as governance and the role of leadership. Fineman (1996) discusses the role of leadership in the process of change, pointing out that green practices take place when managers cultivate employee commitment to belonging to a socially responsible organization. In short, leadership appears to play an important role in the corporate adoption of sustainability practices.
Other factors recognized as promoters of sustainability initiatives are institutional mechanisms such as communication and training. Stone (2006) points out that, in order to achieve a high degree of organizational commitment and to remove obstacles to changes of attitude and involvement, well-defined training and communication plans are key factors in promoting a clear understanding of the role and importance of sustainable practices for organizational strategy and goals.
In a different approach, Tregidga and Milne (2006) analyze corporate reports with a view to understanding the emergence and development of the discourse of sustainability. They discuss the role of communication and reporting mechanisms in building and legitimizing corporate sustainability initiatives and helping to reduce the sense that sustainability and businesses are incompatible. From this standpoint, corporate reports may be seen as a tool for promoting adequate education and information, as pointed out by Stone (2006).
Bansal (2003) proposes that organizational commitment to sustainability is facilitated when top management buy the concept, but also when lower organizational levels engage in sustainability, i.e., when there is congruence between employees' concerns and organizational values. Agents of change can be internal, like those noted so far, or external, such as investors, suppliers, regulatory agencies, and even customers. Henriques and Sadorsky (1999) associate management's perception of stakeholders' pressures with more proactive undertakings towards environmental commitment. Broadening this study, Sharma and Henriques (2005) propose a typology linking different types of stakeholder influence strategies with various sustainability practices adopted by organizations. They not only confirm that stakeholders do have an influence on sustainability practices, but also point to different pressures exerted by stakeholders that affect such practices. Table 1 provides a summary of the influential factors involved in integrating sustainability into business practices identified in the literature review.
Our literature review suggests that although researchers are attempting to identify and understand factors that might influence the integration of sustainability by today's firms (Table 1), very few studies, if any, have proposed a more integrated view of these factors. The recent article by Basu and Palazzo (2008) is one of the rare few that go further in this direction, considering internal and external influences, proposing a group of cognitive, linguistic and conative dimensions in order to identify an organization's intrinsic orientation toward the adoption of CSR (Table 2).
The cognitive dimension has to do with aspects involving corporate identity, orientation and legitimacy, organizational beliefs and values regarding the adoption of sustainability (Henriques & Sadorsky, 1999; Higgins, 1995; USEPA, 2001). The linguistic dimension involves organizational modes of justification and is directly related to considerations of transparency and communication (Marrewijk, 2004; Stone, 2006; Tregidga and Milne 2006). The conative dimension concerns the way organizations tend to behave, involving coherence among (and by means of) practices and strategic policies and degrees of commitment (Bansal, 2003; Fineman, 1996; Marrewijk, 2004; Sharma and Henriques, 2005).
While the three dimensions of Basu and Palazzo (2008) encompass a collection of factors that have garnered support in previous research, we still identify a gap when it comes to understanding better exactly how these factors interact as an influence on the incorporation of sustainability into business practices. Furthermore, the bulk of research into sustainability focuses on developed countries. Our research has, therefore, two aims: firstly, to make conceptual advances in the area of the integration of sustainability into firms' business practices through a model that identifies and interconnects influential factors...
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