This chapter presents and discusses key developments in corporate sustainability reporting (CSRep). It shows that the nature of CSRep and its governance have been subject to fundamental changes over the last decades. The chapter introduces students to the rationales for and challenges to companies’ engagement in CSRep. At its core, the chapter explores different alternatives for governing CSRep, distinguishing between voluntary standards and legally binding measures such as disclosure requirements by governments and stock exchanges in European and other countries. Particular attention is given to the most widely used standard for CSRep, the Global Reporting Initiative (GRI) Standards, and the concept of materiality. Finally, countries and industries in which reporting has become a more institutionalised practice are described in more detail.

Companies engage in sustainability partnerships as a way to address complex social and environmental challenges that exceed the coping capacity of single organisations, even societal sectors (public sector, corporate and civil society). In this chapter, we examine corporate engagement in such sustainability partnerships along the questions of ‘what’, ‘when’, ‘why’ and ‘with whom’. We further guide you through the different stages of the partnering process and suggest critical questions to ask and best practices to consider. We address the key challenges involved and also look at the potential dark side of sustainability partnerships, before we close this chapter by exploring which individuals skills will help you successfully engage in these partnerships.

Chapter 1 provides an introduction to the book. Motivating the book with examples of various regulatory barriers to agricultural trade that have proven particularly contentious, this chapter asks what might explain these barriers and whether we should expect current international solutions to resolve them. The chapter provides a brief overview of the book’s argument regarding how producers leverage private information to acquire the sorts of regulatory barriers that the opening examples describe. In addition, it previews the book’s main contribution and gives a brief chapter outline.

This chapter introduces the debate about how a firm’s strategy and corporate sustainability are interrelated. Section 5.2 looks at the term ‘strategy’ and identifies some key characteristics of strategic decisions. Based on this, we discuss which characteristics a strategic approach towards corporate sustainability would entail. Section 5.3 introduces two types of approaches to link business strategy and corporate sustainability: outside-in thinking (based on the assumption that sustainability-strategy alignment starts with reflections on a firm’s competitive context) and inside-out thinking (based on the assumption that such alignment starts with reflections on a firm’s value chain). Section 5.4 extends this debate and shows how sustainability-strategy alignment can be achieved for companies with multiple business units (corporate strategy), as well as for firms that target only one market (business strategy). Section 5.5 demonstrates how firms can identify ‘material’ (i.e., strategic) ESG issues through so-called materiality assessments. Finally, section 5.6 distinguishes different stages of alignment between a firm’s strategy and its sustainability efforts, ranging from complete detachment and denial to companies that build their entire strategy around sustainability.

This chapter offers three main historical perspectives on corporate sustainability. First, it addresses the ‘what’, ‘how’ and ‘why’ questions of corporate sustainability. It investigates the ‘what’ question through the issues to which corporate sustainability has been addressed; the ‘how’ question through the modes which have been deployed to deliver corporate sustainability; and the ‘why’ question through the rationales that have been offered for corporate sustainability. Second, it investigates the ‘who’ question by unpacking the historical roles and relationships of society, business, government and the natural environment actors. Third, it examines the ‘when’ question through three key phases of corporate sustainability. It presents corporate sustainability in the contexts of: industrialisation in the late eighteenth and nineteenth centuries; the rise of the modern corporation and ‘managerial capitalism’ in the late nineteenth and early twentieth centuries; and rapid internationalisation in the late twentieth and early twenty-first centuries bringing wider impacts of corporate power and the greater awareness of the Anthropocene and human interdependency. This analysis of three historical phases is illustrated through the experiences of two long-standing companies: Boots, the UK pharmacist, and Tata, the Indian conglomerate.

Multinational corporations (MNCs) and small and medium-sized enterprises (SMEs) all over the world engage vividly in sustainable development and responsible management. It is important to know the very different ways in which they do so, as this will allow you to best support their progress for contributing to sustainability and societal improvement. We present five key features where MNCs and SMEs differ in their sustainability approach: motivation, communication, operations, organising and stakeholder scope. For many people, the default position when we talk about business and sustainability is to think of the large, MNCs which dominate media, stock exchanges and business school curricula. However, it is often under-acknowledged how the SME or ‘small business’ in fact is the dominant way of organising business. SMEs constitute over 90 per cent of private sector business and are perhaps even more important in developing economies than developed ones, where reliance on the economic benefits generated for individuals and communities is a fundamental part of poverty alleviation. This chapter aims to encourage you to consider how to support carefully the development and maintenance of sustainability and responsibility in the different contexts of MNCs and SMEs.

This chapter is devoted to the understanding of the emerging sustainability professional. We will discuss the development of the profession, detailing what it means to be a sustainability professional, the characteristics of this work, the required specific skill sets and competencies, motivations and values driving sustainability work, and tasks and practices that it involves. You will realise that implementing sustainability is an important but tricky job because sustainability is a complex phenomenon requiring sustainability professionals to address conflicting commercial goals and sustainability goals. Therefore, it is hard to implement and measure its success. Also, due to the emergent nature of the profession, sustainability professionals need to put extra effort into building their power within an organisation to acquire much-needed managerial support and often scarcely available resources to succeed in their sustainability work. At the end of the chapter, we discuss strategies that sustainability professionals can undertake to succeed in their tough job. In particular, we discuss how sustainability professionals can promote sustainability within an organisation while safeguarding their personal motivations and values, as well as how to execute their tasks and practices in a way that does justice to all the different stakeholders, organisational needs and job demands.

The ability of business to meaningfully engage with those groups and individuals who it affects, and is affected by – its stakeholders – is a critical component in humanity’s pursuit of net zero, sustainable development for all. This chapter explores and unpacks stakeholder approaches to corporate sustainability and responsible business.

It starts off by framing the big picture of why a stakeholder approach – one that accounts for the interdependencies between business, society and nature – is increasingly pivotal during the uncertain and ambiguous times of the 2020s. Following on, the chapter introduces the core features of a stakeholder approach to corporate sustainability. The third section looks at different stakeholder models. It illustrates stakeholder model development in business settings over time, as well as the influence of the cultural context, such as the one found in the Nordic countries, to foster a stakeholder mindset in business.

The fourth and final section considers stakeholder theory in the age of sustainability, with particular coverage given to the implications of new Information Communication Technologies (ICT) for successful stakeholder engagement strategies.

Weaved in throughout this chapter, and parallel to the online case study, are a number of examples designed to illustrate how a stakeholder approach manifests in the ‘real world’.

In this chapter, we examine the role of NGO activism as a driver of sustainability. Such activism offers opportunities and poses challenges to firms; examining the role of activism is important to appreciate the broader question of what makes businesses more sustainable and more socially responsible. We provide an overview of what activist NGOs are and explore ways by which they seek to influence corporate policies, ranging from collaboration and partnerships to contestation and protest. We then discuss which firms are more likely to encounter NGO activism as not all firms are equally susceptible to NGO activism. Firm size, industry and visibility to consumers are important elements, as well as their historical record on CSR and sustainability issues. Finally, we discuss how firms may respond to NGO activism. For a firm to take responsibility implies that it moves beyond the defence of its own economic interests, to consider the questions of what kind of corporation the firm wishes to be, what role in society it aspires to fulfil and how to relate to its various stakeholders. Ultimately, these are questions of ethics.

This chapter discusses the relationship between corporate governance and corporate sustainability. We start by looking into the different components of the general corporate governance system. This allows us to revisit a central tension: shareholder- versus stakeholder-oriented governance. We then discuss how well-designed corporate governance can support firms’ sustainability efforts. We label this debate ‘corporate governance for sustainability’, and we discuss how sustainability topics can be integrated into the discussions of boards of directors. Next, we show that some aspects of corporate governance can themselves pose challenges that need to be discussed under the ESG umbrella. We label this debate ‘corporate governance as sustainability’, and we focus on topics that reflect the ‘G’ in ESG (e.g., executive compensation). Finally, we discuss elements of a possible reformed corporate governance system which would allow to better address sustainability-related debates.

We start by discussing what motivates investors to enter the sustainability field (section 11.2). We debate different reasons for their engagement, ranging from concerns for securing competitive returns to changes in the regulatory landscape and client demand. Next, we discuss how ESG factors are integrated into different asset classes. We first discuss how ESG considerations are integrated into equity investing (section 11.3). We then look at other ways to consider ESG-related information in investment decisions, focusing on impact investing and fixed income (section 11.4). Section 11.5 looks at how investors that already have invested in companies can improve these firms’ ESG performance, either via active engagement and dialogue or via voting on shareholder resolutions. Next, we discuss what different kinds of data can shape investors’ consideration of sustainability issues (section 11.6). Finally, we look at the new European legislation (Sustainable Finance Disclosure Regulation, SFDR) which requires investors to disclose the level of sustainability risks and adverse sustainability impacts associated with their investment decisions.

In this chapter, we examine the relationship between corporate sustainability and reputation. We show that sustainability in business moved centre stage in the reputation landscape and is a critical component that influences the overall reputation of a company. We start by introducing key terms, and by defining reputation alongside other related constructs such as identity, image and legitimacy. We then discuss Corporate Sustainability (CS) as an important part of a company’s reputation, and illustrate different ways in which companies engage in CS to enhance and protect their reputation. Specifically, we distinguish between walking and talking CS. Based on an overview of the involved risks and rewards, we advocate that companies ‘walk the talk’ and transparently communicate about and report on their commitments to, and progress on, substantial CS activities such as reducing their carbon emissions and enhancing worker welfare.

This chapter sets the stage for the remainder of the book by providing a broad overview of the sorts of information asymmetries that exist between producers of potentially dangerous products and those who are tasked with regulating them. Leveraging insights from a diverse set of industries -- aerospace, direct-to-consumer products, pharmaceuticals, and industrial chemicals -- and spanning a wide range of countries, this chapter establishes the surprising degree to which regulators not only are at a disadvantage relative to firms when it comes to acquiring information about product risk but also, as a result, depend on firms to be the primary source of information required to regulate. The chapter then investigates the conditions under which this might allow producers to influence the timing and direction of regulatory change. After establishing the pervasiveness of information asymmetries and dependencies at the domestic level, as well as the resulting opportunities for regulatory bias, the chapter demonstrates why we should expect the very same information asymmetries and biases to be replicated and even exacerbated at the international level.

This chapter starts by discussing the changing overall context in which business, nature and society operate. It is important to understand this context, because it shapes the problems that corporate sustainability aims to address, and it influences how firms can cope with these problems. We then introduce the concept of corporate sustainability. We discuss similarities and differences to related concepts such as corporate social responsibility and business ethics. Next, we review some of the main environmental, social and governance (ESG) issues that firms are asked to address as part of their corporate sustainability commitments. Finally, the chapter reviews four key motivations (instrumental, ethical, stakeholder-based and political) that underpin firms’ corporate sustainability commitments.