Business Sustainability, Corporate Governance, and Organizational Ethics

CHAPTER 5Sustainability Principles, Theories, Research, and Education

1. Introduction

Companies today face the challenges of adopting proper sustainability strategies and practices to effectively respond to social, ethical, environmental, and governance issues while creating sustainable financial performance and value for their shareholders. The goal of firm value maximization under business sustainability can be achieved when the interests of all stakeholders are considered. The main focus is on long-term shareholder value creation while considering trade-offs among other apparently competing and often conflicting interests of all stakeholders including society, creditors, employees, suppliers, customers, and the environment. The relative importance of the five economic, governance, social, ethical, and environmental (EGSEE) dimensions of sustainability performance with respect to each other and their contribution to the overall firm value creation is affected by whether these sustainability performance dimensions are viewed as competing with, conflicting with, or complementing each other, and what sustainability theory or theories are applied to define tensions among EGSEE sustainability performance dimensions. This chapter examines several principles, theories, and standards relevant to all five EGSEE dimensions of sustainability performance in explaining the tensions between them as well as the associated risk. This chapter also presents sustainability research and education. ...