Key Concepts in Sustainable Business and Corporate Responsibility

The Funnel Theory: Navigating Resource Scarcity

The Funnel Theory posits that businesses must innovate and adapt to declining resources and ecosystem services, coupled with increasing demand. This creates a challenging environment, a kind of funnel, through which businesses must navigate by being innovative, stakeholder-oriented, and long-term oriented.

Core Competencies for Sustainable Management

Effective sustainable management relies on several key competencies:

• Corporate Social Responsibility (CSR): This relates to enterprises managing stakeholder relationships and adhering to a code of conduct.
• Sustainable Development: This focuses on countries or global organizations addressing environmental concerns and the impacts of globalization.
• Business Ethics: This emphasizes citizens' responsibility for human behavior and moral conduct.

People, Planet, Profit: Measuring Organizational Success

The "People, Planet, Profit" (3Ps) framework serves as a set of values to measure organizational success, inherently incorporating the goal of sustainability. The criteria for this model include human capital, natural capital, and financial capital.

Arguments in Favor of the 3Ps Model:

• It becomes increasingly inevitable due to exponential growth, limited capacities, and systematic errors.
• The concept is gaining widespread awareness and acceptance.
• Adopting the 3Ps model can be profitable for businesses.

Arguments Against the 3Ps Model:

• It is inherently difficult to quantify the value of life or morality.
• The model may not be feasible in certain circumstances, such as during periods of poverty or recession.
• Its universal applicability is limited due to cultural or national differences.

Sustainable Development: Brundtland Definition and Critique

The widely accepted Brundtland definition states:

"Development is sustainable when it meets the needs of the present without compromising the ability of future generations to meet their own needs."

This definition implies that businesses must consider future resources, striving to create intergenerational equity where the "Now" is balanced with the "Then."

Critique of the Brundtland Definition:

• Businesses may find it challenging to precisely identify their current and future needs and wants.
• Organizations must decide whether immediate "wants" take precedence over long-term "needs."

Key Drivers for CSR Reporting: KPMG 2008 Survey

According to the KPMG International Survey of Corporate Responsibility Reporting from 2008, at least five significant drivers for CSR reporting include:

• Ethical considerations
• Economic considerations
• Reputation or brand enhancement
• Innovation and learning opportunities
• Employee motivation and engagement

Understanding the Tragedy of the Commons

The Tragedy of the Commons describes a dilemma where multiple individuals, acting independently and rationally pursuing their own self-interest, ultimately deplete a shared, limited resource. This occurs even when it is clear that such depletion is not in anyone's long-term interest.