Sustainability and corporate responsibility are becoming too important for businesses to ignore. There are pressures from governments introducing legislation and ‘green taxes’ in order to protect the environment, consumers want to know the provenance of the goods they are buying and employees are becoming more concerned about the values of the organisations for which they work. On top of this, investors are increasingly concerned about an organisation’s sustainability and environmental impact. Indeed, there is research to show that investors’ wealth is harmed when businesses behave in a socially irresponsible way, as described by Frooman (1997). All these pressures are forcing businesses to consider the impact of their activities on the environment and on the communities in which they operate.
Measuring sustainability is not exactly like measuring customer satisfaction or employees. It is more complex and all-embracing. Of course you can and should measure practical initiatives such as reduction in energy usage, recycling and time devoted to community projects. These are relatively easy to measure and the act of measuring them demonstrates to employees how important they are. However, important though these factors are, sustainability is also about ensuring your organisation has a sustainable business model, and that is often more difficult to measure.
17.2 WHAT ARE ‘SUSTAINABILITY’ AND ‘CORPORATE RESPONSIBILITY’?