CSR Commitments: Unilever’s Sustainable Living Plan

An interesting, and highly controversial, illustration of corporate social responsibility (“CSR”) commitments was the introduction in 2010 of Unilever’s Sustainable Living Plan, referred to as the “USLP”.  The USLP was conceived and driven by Paul Polman, who began serving as the CEO of Unilever in 2009.  An Anglo-Dutch company launched in the 1880s near Liverpool, Unilever has grown to more than 300 factories across the world by 2017 and has developed and maintained more than 400 brands sold to around 2.5 billion customers (one in every three people on the planet).  The USLP has been described as a sweeping canvass of over 50 ambitious goals that include stopping all non-hazardous waste going to landfills, training 5 million women and cutting the water waste in the company’s factories by half (click here for more on the USLP).  Polman made the USLP, and sustainability in general, a core management principle with respect to his leadership of Unilever, not surprising given that the French government bestowed a knighthood on him in 2015 for his global campaigning to rein climate change and he was one of 26 people, the only business executive in the group, chosen in 2012 by then United Nations Secretary-General Ban Ki-moon to participate in the working group that eventually produced the United Nation’s Sustainable Development Goals.

Results from the Fortune list of the World’s Most Admired Companies for 2017 indicated that Polman’s emphasis on sustainability had bolstered its global reputation.  Unilever ranged No 38 among the “Top 50 All-Stars”, up from No. 41 in 2016, and it marked the sixth straight year that the company had made the list.  However, traditional financial measures were giving analysts and investors cause for concern.  While Unilever reported $58 billion in revenue and $5.7 billion in net profit for the year, sales growth was slowing, the company’s stock price had dropped 2% over the previous twelve months as the S&P 500 shot up 25%.  Analysts believe that most investors have little interest in the USLP and the analysts themselves wonder whether Polman has “morphed into the classic Davos Man, more intently focused on fixing global problems than the nitty-gritty details of operations”.  Other concerns include the ability of Unilever’s six research centers, disbursed all over the world and supported by more than $1 billion annually, to develop enough new products to keep up with the company’s growth requirements.  The answer appears to be “no”, since Polman has increasingly relied on acquisitions to grow the business, a strategy that makes integrating sustainability throughout the company more difficult.

Polman quickly understood that it would take years for the USLP to show concrete results, and that some of its targets could run counter to growth.  So he scrapped quarterly earnings guidance for investors, a system he called “absolutely ridiculous.” Polman sided with those who argue that the tyranny of quarterly goals traps public companies into continually trying to drive up share prices for investors, while downgrading more long-term, complicated missions, like improving working conditions and the environment.  This all may be true; however, stakeholders need to be able to follow a company’s journey along the path established in its sustainability plan, particularly since goals such as significant reductions in greenhouse gas emissions may take decades for a company as large as Unilever and it cannot reasonably be expected that the executive team will remain in place long enough to see everything through (a reality that illustrates the important of building a durable sustainability culture within the organization so that turnover and succession can be accommodated without “missing a beat”).

Source: V. Walt, “Selling Soap and Saving the World”, Fortune (March 1, 2017), 122.  For discussion of methodology used by Fortune to identify and rank the members of its annual list of The World’s Most Admired Companies, as well as the rankings for 2017 that cover over 40 industries and companies from 28 countries, see fortune.com/wmac.  Social responsibility is one of several criteria used when information is collected from 3,800 executives, directors and securities analysts, along with investment value, quality of management and products and ability to attract talent.  The result of the survey process is “The 50 All-Stars”, described as an elite assemblage that won votes from inside and outside their industries, and a “top five” in sectors across broader industry categories such as computers and communication, consumer products, contracted services, financials, media and entertainment, natural resources, power, precisions, shelter, stores and distributors and transport.

Alan Gutterman is the Founding Director of the Sustainable Entrepreneurship Project and further information and guidance on creating and implementing CSR commitments and goals is available through the Project’s website.

Relationship between Corporate Governance and CSR

According to Rahim, there is an evolving interplay between corporate governance and CSR, both of which hold economic and legal features that may be altered through socio-economic processes in which competition within the product market is the most powerful force.[1]  Rahim stressed that corporate governance and CSR are complimentary and closely linked with market forces and that while their objectives are not concurrent they may act as tools for attaining each other’s goals.  Winberg and Randolph also agreed that “CSR is related to and overlaps in some respects with the concepts of corporate governance and ethics”, however, they believed that: “it is nevertheless distinct….governance programs tend to be internally focused and generally retain heavy rules based favor. In contrast CSR tends to be more value-based and externally focused.”[2] The Australian Parliamentary Joint Committee on Corporations and Financial Services noted that the terms “corporate responsibility” and “corporate governance” were sometimes confused with each other and explained its position that corporate governance referred to broader issues of company management practices (i.e., the conduct of the board of directors;, the relationships between the board, management and shareholders; transparency of major corporate decisions; and accountability to shareholders) and that corporate responsibility is only one aspect of an organization’s governance and risk management processes.[3]

A somewhat contrary view of the relationship between CSR and corporate governance was taken by Walsh and Lowry, who wrote that “corporate governance is an increasingly important aspect of CSR…. to provide the more solid foundation on which broader CSR principles and business ethics can be further enhanced”.[4]  Their approach was based on the assumption that “corporate governance” was to be construed narrowly, thus limited to enhancement of shareholder value and the protection of the interests of shareholders, and that the obligations of corporations with respect to the environment, employees and consumers could be assigned to the separate domain of CSR even though some of those obligations were becoming based in law regulation.  All of this illustrates the importance of how corporate governance is conceptualized, narrowly or broadly, on the degree of overlap and convergence between CSR and corporate governance.

A number of commentators have suggested that there are actually two models of corporate governance.[5]  The first model, which is based in the economic tradition of Friedman, is the “shareholder governance” system in which the directors and managers of the corporation are the agents for the shareholders as the principals of the corporation and the responsibility of the agents is to maximize shareholder value.  The second model is the “stakeholder governance” system, which does not ignore shareholders but also extends the responsibility of directors and managers to different groups of stakeholders upon which the corporation is dependent for its operations and survival.  The second model has been used as the basis for the argument that CSR is, in fact, an extended corporate governance system whereby the responsibilities of corporations and their directors range from fiduciary duties towards the owners to the analogous fiduciary duties towards all of the firm’s stakeholders.[6]  Certain of these duties, primarily those that have been imposed by law, are enforced by litigation and activities of governmental regulators, while the “softer” duties associated with social and environmental issues are being enforced by self-regulatory codes of conduct and stakeholder activism (including pressure from institutional shareholders).

Jamali et al. examined several models that have posited a relationship between corporate governance and CSR.[7]  The first model depicted corporate governance as a pillar of CSR and requires that an effective corporate governance system be in place to serve as a foundation for solid and integrated CSR activities.   This model could be illustrated by Hancock’s “Key Pillars of Corporate Responsibility”, which was based on the argument that investors and senior management should focus their attention on four core pillars that account for most of the company’s true value and future value creation[8]:

  • Strategic Governance: Strategic scanning capability; agility/adaptation; performance indicators/monitoring; traditional governance concerns; and international “best practice”
  • Stakeholder Capital: Regulators and policy makers; local communities/NGOs; customer relationships; and alliance partners
  • Human Capital: Labor relations; recruitment/retention strategies; employee motivation; innovation capacity; and knowledge development
  • Environment: Brand equity; cost/risk reduction; market share growth; process efficiencies; customer loyalty; and innovation effect

In this model, corporate governance is one of the basic building blocks of CSR and suggests that when boards are exercising their responsibility over CSR they need strategic good corporate governance practices in place in order to effectively leverage the company’s crucial sources of capital: human, stakeholder and environmental.[9]

The second model visualized CSR as being an attribute or dimension of corporate governance, thus widening the scope of corporate governance to incorporate non-financial risks into the risk mitigation dimension of corporate governance activities.  This approach could be illustrated by Ho’s depiction of the following attributes of good corporate governance and the activities and topics associated with each attribute[10]:

  • Strategic Leadership: Set corporate objectives, direct competitive focus, make major decisions, measure performance and determine executive pay
  • Stewardship: Legislative safeguards, governance policy and governance committee, director participation, regular reviews and “ask tough questions and demand answers”
  • Social Responsibilities: Adopt policies, enforce and audit and report on conformance
  • Board Structure: Separate supervisory and executive roles, nonexecutive directors, election procedure and committees (i.e., nomination, audit and compensation committees)
  • Capital Structure and Market Relations: Capital concentration, satisfy shareholders and research and development, continuous dialogue with investors and markets

Ho explained that her framework viewed corporate governance more holistically and Jamali et al. observed that this was consistent with the work of other scholars, such as Kendall[11], who considered good corporate governance as “ensuring that companies are run in a socially responsible way and that there should be a clearly ethical basis to the business complying with the accepted norms of the society in which it is operating”.[12]   It is interesting to note that Ho’s study provided evidence that higher commitments to CSR were strongly and positively related to the qualifications and terms of directors, boards that exercise strong stewardship and strategic leadership roles and the management of capital market pressures, all of which are also hallmarks of good corporate governance.[13]

The third model, suggested by Bhimani and Soonawalla, portrayed corporate governance and CSR as complementary constituents of the same corporate accountability continuum that could be illustrated as follows[14]:

Corporate                                                                                                      Corporate


Corporate              Corporate              Corporate              Stakeholder

Financial               Governance          Social                     Value

Reporting                                              Responsibility       Creation

Jamali et al. explained that “the continuum reflected varying degrees of compliance with laws and legally enforceable standards, with stress placed on corporate conformance on the left end of the continuum and attention shifting to corporate performance on the right end, where codes/standards are extremely difficult to apply, and oversight mechanisms are much less evident”.[15]  The continuum approach also illustrates that companies approach their expanding corporate governance responsibilities must understand and balance “binding” legal requirements that require formal compliance and reporting and the self-regulatory initiatives commonly associated with CSR that, while still technically “voluntary”, have increasingly become expectations of investors and other stakeholders.

This article is part of the Sustainable Entrepreneurship Project’s extensive materials on Sustainability and Corporate Governance.

[1] M. Rahim, Legal Regulation of Corporate Social Responsibility: A Meta-Regulation Approach of Law for Raising CSR in a Weak Economy (Berlin: Springer, 2013), 13, 21 (citing L. Mitchell, “The Board as a Path toward Corporate Social Responsibility” in D. McBarnet, A. Voiculescu and T. Campbell, The New Corporate Accountability: Corporate Social Responsibility and the Law (2007), 279).  See also M. Rahim, “Corporate Governance as Social Responsibility: A Meta-regulation Approach to Incorporate CSR in Corporate Governance” in S. Boubaker and D. Nguyen (Eds.), Board of Directors and Corporate Social Responsibility (London: Palgrave Macmillan, 2012).

[2] D. Winberge and P. Randolph, “Corporate Social Responsibility: What every In-House Council Should Know”, ACC Docket (May 2004), 72.

[3] Parliamentary Joint Committee on Corporations and Financial Services, Corporate responsibility: Managing risk and creating value (2006), 6-7.

[4] M. Walsh and J. Lowry, “CSR and Corporate Governance” in R. Mullerat (Ed.), Corporate Social Responsibility: The Corporate Governance of the 21st Century (Amsterdam: Kluwer, 2005), 38-39.

[5] See, e.g., C. Mayer, “Corporate Governance, Competition, and Performance”, Journal of Law and Society, 24 (March 1997), 152, 154.

[6] L. Sacconi, Corporate Social Responsibility (CSR) as a Model of “Extended” Corporate Governance. An Explanation based on the Economic Theories of Social Contract, Reputation and Reciprocal Conformism (UE Research Project, 2004).

[7] D. Jamali, A. Safieddine and M. Rabbath, “Corporate Governance and Corporate Social Responsibility Synergies and Interrelationship”, Corporate Governance, 16(5) (2008), 443, 447-448.

[8] J. Hancock (Ed.), Investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning & the UK’s Leading Companies (London: Kogan Page, 2005).

[9] J. Elkington, “Governance for sustainability”, Corporate Governance: An International Review, 14 (2006), 522.

[10] C. Ho, “Corporate governance and corporate competitiveness: An international analysis”, Corporate Governance: An International Review, 13 (2005), 211.

[11] N. Kendall, “Good corporate governance”, Accountants’ Digest: The ICA in England and Wales, 40 (1999).

[12] D. Jamali, A. Safieddine and M. Rabbath, “Corporate Governance and Corporate Social Responsibility Synergies and Interrelationship”, Corporate Governance, 16(5) (2008), 443, 447.

[13] Id.

[14] A. Bhimani and K. Soonawalla, “From conformance to performance: The corporate responsibilities continuum”, Journal of Accounting and Public Policy, 24 (2005), 165.

[15] D. Jamali, A. Safieddine and M. Rabbath, “Corporate Governance and Corporate Social Responsibility Synergies and Interrelationship”, Corporate Governance, 16(5) (2008), 443, 447.

Descriptions of Corporate Sustainability

While corporate social responsibility, or CSR, is generally associated with ensuring the corporations contribute to sustainable economic development at the macro-level, the concept of corporate sustainability can be seen as primarily concerned with the survival, or sustainability, of the corporation itself, something that is necessary in order for the corporation to make the contributions to society that are expected from being a “responsible corporate citizen”.[1]  Corporate sustainability goals and programs are focused on issues that not only impact society as a whole but must also be addressed by the directors and managers of a corporation in order for it to survive and thrive: climate change; resource scarcity; demographic shifts; and regulatory and political changes.[2]

Coblentz argued that “sustainability” in the context of a corporation or any other similar type of organization, means “continuation” through the acquisition and maintenance of the elements necessary for it to carry on and constantly enhance its activities in pursuit of a defined mission.[3]  According to Colblenz, there are actually three key aspects of organizational sustainability—institutional, financial and moral:

  • Institutional sustainability comes from having a mission, a process in place to develop long-term strategic plans, an annual planning process, a process for managing the operational activities included in the strategic and annual plans and, finally, processes for monitoring and evaluating the flow of work to ensure that it is contributing to the organization’s goals and objectives.
  • Financial sustainability means having access to the financial resources that the organization needs in order to collect the resources—human, physical and technological—necessary for it to carry out its mission. This does not mean that the organization is self-sufficient with regard to capital (i.e., it can fund operations out of its own cash flow), but rather that it can obtain needed funds from outside sources without compromising its mission.  A financially sustainable organization also practices prudent financial management to ensure that its resources are used efficiently.
  • Moral sustainability requires that organizational leaders have a clear vision of, and commitment to the mission, and communicate it effectively to all stakeholders; that all staff rally around the organizational leaders and become committed to the mission as well; that staff who are committed to the mission are rewarded by career development opportunities, adequate compensation and dynamic work environment, all of which improves morale and builds a unity of purpose and commitment that will overcome challenges; and that leadership, management and staff act ethically and are perceived as doing so.

While Coblenz’s model of organizational sustainability does not explicitly mention environmental and social issues, it does paint a picture of a deliberative process throughout an organization that operates on a vision of a mission that is clearly communicated and shared by everyone and which understands that results will take time and require steady and prudent general and financial management and a commitment to acting in an ethical manner.  Financial sustainability in the model includes engaging with investors that understand the company’s mission and do not place conditions on funding that will conflict with the mission.  For example, when the mission of the organization is to achieve environmental efficiencies that may not be realized for several years, investors will refrain from applying pressure for short-term economic returns provided that management is transparent about progress and acts in an ethical manner in its engagement and relationships with investors.

A 2017 article in The Economist described “sustainability” in the corporate context as follows:

“The term “sustainability” is often used interchangeably with CSR or viewed exclusively through an environmental lens. Thought leaders, however, generally describe it as a business strategy that creates long-term stakeholder value by addressing social, economic, and environmental opportunities and risks material to a company. It is integral to a company’s business and culture, rather than on the periphery. Optimizing waste reduction, or water or energy consumption, for example, can help a company reduce operational costs. Sustainability can drive innovation by reconceiving products and services for low-income consumers, opening new lines of business and boosting revenue in the process. Finally, being socially responsible can help a company earn license to operate in new markets, and attract and retain talent.”[4]

While the terms “CSR” and “corporate sustainability” are often used interchangeably, there are real and important distinctions between the two concepts; however, corporations can and should pursue both CSR and sustainability in order to generate the most value for all of their stakeholders:

  • Avoiding environmental harm from operational activities is not only a socially responsible way to conduct business but also ensures that the corporation has sufficient natural resources available to it to survive and thrive in the future;
  • Monitoring the environmental and social impact of the activities of members of the corporation’s supply chain not only protects natural and human resources it also ensures that the corporation will have reliable partners and a stable stream of inputs for its products;
  • Treating employees and their families fairly and providing them with a living wage not only enhances their wellbeing but also makes it easier for the corporation to attract and retain the talent necessary to create and commercialize innovative products and services needed to maintain long-term competitiveness;
  • Honest engagement with local communities and environmental and social activists promotes mutual understanding and problem solving while reducing potential distractions for directors and members of the management team; and
  • Products that are developed in an environmentally and socially responsible manner not only reduce the burden on natural and human resources but also improve the corporation’s reputation and brand and reduce the risk of consumer disenchantment and product recalls.

Porter and Kramer argued that sustainability and responsible business practices are integral parts of a corporate strategy that can create “shared value” for the company, its shareholders and other key stakeholders of the company.[5]   Porter, along with others such as McWilliams and Segal, has also maintained that companies should use the CSR initiatives as part of their business strategies to promote competitive advantage and, in fact, a large percentage of Global 250 firms have explicitly identified issues such as climate change and material resource scarcity as opportunities for the development of new products and services.[6]

One threshold issue for directors with respect to embracing “corporate sustainability” is that it remains a broad topic when the time comes to putting together a framework for implementation.  For example, when the subject is environmental responsibility, issues can range from climate change to carbon footprints, water and energy.  Social responsibility can involve issues and projects relating to supply chain management, product stewardship and consumer protection and human rights.  CSR and corporate sustainability requires attention to risk management and stakeholder engagement and investment of resources in new management and information systems that can generate data needed to track performance and prepare the reports necessary to meet expectations of investors and other stakeholders with respect to transparent disclosure of the nature and effectiveness of the company’s CSR and corporate sustainability initiatives.

This article is part of the Sustainable Entrepreneurship Project’s extensive materials on Sustainability and Corporate Governance.

[1] For further discussion of the various definitions and descriptions of corporate sustainability, see “Corporate Sustainability” in “Entrepreneurship: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

[2] RobecoSAM, Corporate Sustainability, available at sustainability-indices.com.

[3] J. Coblentz, “Organizational Sustainability: The Three Aspects that Matter” (Washington DC: Academy for Educational Development, 2002).

[4] J. Cramer-Montes, “Sustainability: A New Path to Corporate and NGO Collaborations”, The Economist (March 24, 2017), http://www.economist.com/node/10491124

[5] M. Porter and M. Kramer, “Creating Shared Value, Harvard Business Review (January-February 2011).

[6] See M. Porter and M. Kramer, “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility”, Harvard Business Review, 78 (December 2006); and A. McWilliams and D. Siegel, “Creating and Capturing Value: Strategic Corporate Social Responsibility, Resource-Based Theory, and Sustainable Competitive Advantage”, Journal of Management 37 (2011), 1480.

Determinants of Sustainable Entrepreneurship

Lawai et al. provided a summary of research that was relevant to identifying the key determinants of successful sustainable entrepreneurship[1]:

  • According to Koe et al., attitudinal factors (i.e. sustainable attitude) and perceptual factors (i.e. perceived desirability and perceived feasibility) were important in influencing a person’s level of propensity to sustainable entrepreneurship.[2]
  • Cambra-Fierro et al. argued that variables relevant to sustainable entrepreneurship included legal context, management’s personal values, socio-cultural context, market forces, ownership management structure, and industry-sector characteristics.[3]
  • Uhlaner et al. found evidence that indicated that larger firms, firms from more tangible products, family owned firms, and firms with a more innovative orientation have more inclination towards manifesting sustainable entrepreneurship behaviors.[4] Larger firms are able to bring more resources (financial and human) to bear on sustainability initiatives and have more to lose in terms of reputational damage due to irresponsible behavior.  The responsiveness of family firms is consistent with their stronger ties to the local communities in which they operate.[5]
  • Fedderke and Garlic opined that sustainable entrepreneurship was dependent on the adequacy and sufficiency of both the economic infrastructure (i.e., transport, communications, power generation, water supply and sanitation facilities) and the social infrastructure (i.e., educational and health-care facilities). They observed that improvements to infrastructure can contribute to reduction of income inequality, alleviation of poverty and improved economic growth.[6]

Lawai et al. noted that sustainable entrepreneurs are also subject to many of the same factors that influence commercial entrepreneurs and that the success of both types of entrepreneurs will be influenced by motivating factors, personality characteristics, family support, friend circle/peer group support, management skills and abilities, level of education and environmental forces.[7] Market conditions are also obviously very important and Rahman and Singh observed that the chances of entrepreneurial success increase substantially with competitive pricing, power supply, access to latest technology, access to market channels, and access to business associations.[8]  Researchers also frequently mentioned government support which can come in many forms: financing, infrastructure development, subsidies for accessing raw materials, and assistance with research and development and access to technology.  The government can also serve a valuable role as a customer, not only as a source of revenues for the venture but also as a means for the new venture to test and improve the quality of its products before broader commercial launch.

Ground Rules for Becoming a Sustainable Entrepreneur

In order to effectively pursue sustainable entrepreneurship and achieve some of the benefits associated with sustainable entrepreneurship policies and practices companies must continuously engage in dialogues with all interested stakeholders.  Shareholders must be educated on, and convinced of, the benefits of aspiring for social and environmental responsibility, even though pursuit and achievement of goals in those areas may have an impact on the financial bottom line.  For their part, stakeholders that are more focused on social and environmental performance must also acknowledge that the company needs to be financially sustainable in order to survive and thrive.

Groesbeek and Bos collectively offered the following list of ground rules for becoming a sustainable entrepreneur:

1.             The corporation should start reducing the environmental damage, respecting human rights and treating its employees with great care;

2.             Sustainable entrepreneurship has to be a self-initiated process and should not simply be a response to external pressure;

3.             If a corporation wants to practice sustainable entrepreneurship, it should identify clear aims and targets;

4.             The aims should be closely related to the corporation’s practice and should match the corporate values and its primary activities;

5.             The aims have to be closely related to the consumers’ needs;

6.             The corporation has to be capable of explaining the relationship between sustainability and its activities and production process;

7.             The corporation should adhere to these aims on a long term basis;

8.             Consumers and pressure groups should have a transparent overview of investments made by the corporation related to sustainable entrepreneurship;

9.             Sustainable entrepreneurship practiced by the corporation should not be shifted to the consumers via a price increase;

10.          A corporation should not attempt to overemphasize its efforts; and

11.          A corporation should make sure that its practices are shared by the corporation as a whole, and that they are not solely efforts of the management.

Sources: The first ten rules on the list were offered by Janssen Groesbeek in 2001 and the final rule was added by Bos a year later in another publication.  See M. Janssen Groesbeek, Sustainable Entrepreneurship–Theory, Practice, Instruments (Amsterdam: Business Contact: 2001); and A. Bos, “Sustainable Entrepreneurship in a Changing Europe: Pedagogy of Ethics for Corporate Organizations in Transformation”, in G.F. Simons, D. Min et al. (eds.), EuroDiversity: A Business Guide to Managing Differences (Oxford: UK and Woburn, USA: Butterworth-Heinemann, 2002), 16. 

This post is part of the Sustainable Entrepreneurship Project’s extensive materials on  Entrepreneurship and Sustainability and Entrepreneurship.


[1] F. Lawai, R. Worlu and O. Ayoade, “Critical Success Factors for Sustainable Entrepreneurship in SMEs: Nigerian Perspective”, Mediterranean Journal of Social Sciences, 7(3) (May 2016), 338, 342-343.

[2] W. Koe, R. Omar and J. Sa’ari, “Factors Influencing Propensity to Sustainable Entrepreneurship of SMEs in Malaysia”, Procedia Social and Behavioral Sciences, (2015), 172.

[3] J. Cambra-Fierro, S. Hart and Y. Polo-Redondo, “Environmental Respect: Ethics or Simply Business? A Study in the Small and Medium (SME) Context”, Journal of Business Ethics, 82 (2008), 645.  For discussion of sustainable entrepreneurship in Asia, see A. Racelis, “Sustainable Entrepreneurship in Asia: A Proposed Theoretical Framework Based on Literature Review”, Journal of Management for Global Sustainability, 2 (2014), 8-10.

[4] L. Uhlanar, M. Berent and R. Jeurissen, Family Ownership, Innovation and other context variables as determinants of sustainable Entrepreneurship in SMEs: An empirical research study (2010).

[5] L. Uhlaner, H. Goor-Balk and E. Masurel, “Family Business and Corporate Social Responsibility in a Sample of Dutch Firms”, Journal of Small Business and Enterprise Development, 11 (2004), 186; and W. Dyer and D. Whetten, “Family Firms and Social responsibility: Preliminary Evidence from the S&P 500”, Entrepreneurship: Theory & Practice, 30 (2006), 785.

[6] J. Fedderke and R. Garlic, Infrastructural development and Economic growth In South Africa: A review of accumulated evidences (2008).

[7] E. Dionco-Adetayo, Determinants of Small firms’ Entrepreneurial success In a developing economy (2004); and H. Rahman and H. Singh, “Entrepreneurial Support and its levels of Success”, Global Journal for Research Analysis, 3(11) (2014).

[8] H. Rahman and H. Singh, “Economic and Environmental factors leading to Entrepreneurial success”, Indian Journal of Applied Research, 4(12 (2014)).

Descriptions of Corporate Social Responsibility

Masuku briefly described the evolution of thought on the role of business in society, beginning with the observation that the traditional profit centered approach to management originated during the Industrial Age with the presumption that capital formation was the only legitimate role of business and that managers were obligated above all other things to pursue profits to enhance the wealth of their shareholders.[1]  The 1960s and 1970s saw the slow ascendency of the social responsibility approach to management which was based on the assumption that businesses were actors in a broader environment and thus had responsibilities to respond to social pressures and demands and treat their stakeholders in a manner that complied with both law and ethics.[2]  Writing in the 1970s, Davis defined CSR as “the firm’s considerations of, and response to, issues beyond the . . . economic, technical, and legal requirements of the firm to accomplish social benefits along with the traditional economic gains which the firm seeks”.[3]  By the 1980s, the notion that corporations had a duty to behave ethically had achieved broad acceptance and attention then began to turn to what ethical behavior actually entailed, how companies should respond to business-related social issues and how “corporate social performance” should be measured.  Beginning in the 1990s, a new economic theory of the firm, the “corporate community model:, put stakeholders at the center of corporate strategy. Masuku explained: “… the organization is viewed as a socioeconomic system where stakeholders are recognized as partners who create value through collaborative problem solving. It is the role of the organization to integrate the economic resources, political support, and special knowledge each stakeholder offers ‘not to do well’, but because it provides a competitive advantage.” [4]

The ISO 26000 standard for corporate responsibility, which was developed in 2010 by the International Standards Organization, defined “social responsibility as:

“the responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that contributes to sustainable development, including health and the welfare of society, takes into account the expectations of stakeholders, is in compliance with applicable laws and with international norms of behavior, and is integrated throughout the organization and practiced in its relationships.”

In 2011 the European Commission provided a simple, yet expansive and important, definition of CSR as being “the responsibility of enterprises for their impacts on society” and went on to explain that “[e]nterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders.”[5]  The World Business Council for Sustainable Development (“WBCSD”), an organization established and led by chief executive officers of companies focused on sustainability, has defined CSR as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”.[6]  This definition recognizes the traditional role of corporations in seeking economic benefits and then expands the responsibilities of corporations to include the voluntary pursuit, as a matter of ethical conduct as opposed to compliance with legal requirement, of wellbeing for a broad range of non-investor constituencies including employees and their families, the local communities in which the business is operated and society as a whole (e.g., environmental responsibility).

The World Economic Forum has identified the concerns for responsible business as follows:

“. . . To do business in a manner that obeys the law, produces safe and cost-effective products and services, creates jobs and wealth, supports training and technology cooperation and reflects international standards and values in areas such as the environment, ethics, labor and human rights. To make every effort to enhance the positive multipliers of our activities and to minimize any negative impacts on people and the environment, everywhere we invest and operate. A key element of this is recognizing that the frameworks we adopt for being a responsible business must move beyond philanthropy and be integrated into core business strategy and practice.”[7]

According to the Australian Parliamentary Joint Committee on Corporations and Financial Services, the concept of CSR should be examined from the following standpoints: (a) considering, managing and balancing the economic, social, and environmental impacts of companies’ activities; (b) assessing and managing risks, pursuing opportunities, and creating corporate value beyond the traditional core business; and (c) taking an “enlightened self-interest” approach to consider the legitimate interests of the stakeholders in corporate governance.[8]

Garriga and Mele´ suggested that it was possible and useful to create a classification of corporate social responsibility (“CSR”) theories based on the perspective of how the interaction phenomena between business and society are focused.  They argued that CSR theories could be classified into the following four groups[9]:

  • Instrumental Theories: Theories placed in this group are based on the assumption that corporations are instruments for wealth creation and that this is their sole social responsibility. If this view is accepted, then CSR or any other social activity undertaken by the corporation is only a means to the end of profits and such activities should not occur unless they are consistent with wealth creation.
  • Political Theories: Theories placed in this group emphasize the social power of corporations and the obligation of corporations to accept social duties and rights and/or participate in certain social cooperation.
  • Integrative Theories: Theories in this group are based on fundamental argument that businesses, including corporations, depend on society for continuity, growth and survival and as such are obligated to integrate the demands of society into their operations.
  • Ethical Theories: Theories in this group see the relationship between business and society as embedded with ethical values and that corporations need to accept social responsibilities, such as CSR, as ethical obligations above any other consideration.
Instrumental CSR Theories: Reconciling Wealth Creation and Doing Good

Instrumental theories of corporate social responsibility (“CSR”) are based on the fundamental assumption that the sole social responsibility of corporations is wealth creation and that only the economic aspects of interactions between business and society should be considered when setting strategy and making operational decisions.  These theories do not necessarily prohibit CSR activities; however, CSR programs and initiatives are seen as a means to the end of profits and thus should not be undertaken unless they are consistent with wealth creation.  The questions below demonstrate how certain of the instrumental theories can be integrated into decision making relating to a particular CSR program or initiative:

·         Does the project involve investment in an activity would produce an increase in shareholder value acting without deception and fraud?  For example, it may be worthwhile for a company that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government if the investment will make it easier to attract desirable employees, reduce the wage bill, lessen losses from pilferage and sabotage or have other worthwhile effects.

·         Does the project involve investment in an environmentally- or socially-responsible activity that will result in long-term maximization of the value of the company and satisfaction of certain interests of people with a stake in the firm (i.e., the “stakeholders”)?  This criterion assumes that “enlightened value maximization” has supplanted the traditional goal of “shareholder value maximization”.

·         Does the project involve a philanthropic activity consistent with the skills and resources that is aligned with the company’s mission and may enhance the company’s competitive advantage?  For example, when a telecommunications company teaches computer network administration to students in the communities where the company operates it not only improves life in those communities and the company’s image in those communities but also provides the company with more skilled workers to choose from in the future.

·         Does the project involve the creation and/or maintenance of social and ethical resources and capabilities which can be a source of competitive advantage?  Competitive advantage can be derived from implementing processes of moral decision-making and capacity for adaptation and the development of proper relationships with primary stakeholders such as employees, customers, suppliers and communities.

·         Does the project involve the development of new capabilities and resources to overcome anticipated constraints and challenges posed by the natural biophysical environment?  Important strategic capabilities include pollution prevention, product stewardship and sustainable development, and critical resources include the capacity for continuous improvement, stakeholder integration and shared vision.

·         Does the project implement strategies that can serve the poor and improve the social and economic conditions at the “base of the pyramid” while simultaneously making profits and creating a competitive advantage for the company?  Companies may attempt “disruptive innovation” through the development of products or services that do not have the same capabilities and conditions as those being used by customers in the mainstream markets and introducing them only for new or less demanding applications among non-traditional customers, with a low-cost production and adapted to the necessities of the population (e.g., a telecommunications company inventing a small cellular telephone system with lower costs but also with less service adapted to the base of the economic pyramid).

·         Does the project involve cause-related marketing that can enhance the company’s brand and reputation for reliability and honesty while helping customers satisfy their own individual objectives?  For example, the company may offer to contribute a specified amount to a designated cause when customers engage in a revenue-providing exchange.  Making such an offer enhances the company’s reputation, causes customers to view the company’s products as being high quality and secures a competitive advantage for the company. 

‌Source: E. Garriga and D. Mele´, “Corporate Social Responsibility Theories: Mapping the Territory”, Journal of Business Ethics, 53 (2004), 51, 53-55 (see text of article for relevant citations for each of the questions above). 

One of the most important byproducts of their extensive survey of the approaches to CSR was the conclusion of Garriga and Mele´ that most of the current theories focus on four main aspects: “(1) meeting objectives that produce long-term profits, (2) using business power in a responsible way, (3) integrating social demands and (4) contributing to a good society by doing what is ethically correct”.[10]  Embedded in all of this are a number of duties and ideas that are finding their way into a new kind of corporate governance framework including long-termism, stakeholder engagement, transparency and disclosure, responsible consumption of natural resources, fair dealings with workers and consumers and attention to the needs of local communities and society as a whole.  In addition, many of the emerging approaches to CSR, particularly those falling within the ethical theories identified by Garriga and Mele´, argue, as referenced in the Caux Roundtable Principles for Business discussed below, that legal and market forces are necessary but insufficient guides for conduct, and that it is also incumbent upon businesses to take ethical and moral values into consideration in their decision making.

Another way to look at CSR was suggested by Jamali et al., who observed that many scholars had conceived of CSR as encompassing two dimensions: internal and external.[11]  On the internal level, companies “revise their in-house priorities and accord due diligence to their responsibility to internal stakeholders, namely employees, addressing issues relating to skills and education, workplace safety, working conditions, human rights, equity considerations, equal opportunity, health and safety, and labor rights”.[12]  On the external level, which has generally received the most attention, companies focus on assumption of their extended duties as “corporate citizens” and afford “due diligence to their external–economic and social–stakeholders and the natural environment”[13] Through initiatives to ensure that the corporate operations have a positive impact on the environment and initiatives to address community issues and foster social justice.[14]   Jamali et al. explained that “[t]he environmental component addresses primarily the impacts of processes, products, and service on the environment, biodiversity, and human health, while the social bottom line incorporates community issues, social justice, public problems, and public controversies”.[15]  Jamali et al. observed that “[a]ddressing these two CSR dimensions often implies difficult adjustments and willingness to consider multiple bottom lines … [and] … requires good communication of CSR objectives and actions, new standards, control and performance metrics, and the successful integration of CSR into the culture of the organization”.[16]

Hopkins argued that treating the stakeholders of the firm ethically or in a socially responsible manner is an economic responsibility of companies.[17]  Similarly, Marsden emphasized that “CSR is not an optional add-on nor is it an act of philanthropy. A socially responsible corporation is one that runs a profitable business that takes account of all the positive and negative environmental, social and economic effects it has on society.”[18]  Andersen’s definition of CSR was also based on a broader societal approach that called for firms to extend “the immediate interest from oneself to include one’s fellow citizens and the society one is living in and is a part of today, acting with respect for the future generation and nature”.[19]  Ward also had a broad understanding of CSR as a commitment by companies to “contribute to sustainable economic development—working with employees, their families, the local community and society at large to improve the quality of life, in way that [is] also good for business.”[20]  In 2013, Rahim summed up the results of a survey of definitions and conceptions with the following:

“. . . [T]here is no conclusive definition of CSR and that it can have different meanings to different people and different organizations as an ever-growing, multifaceted concept. Nevertheless, it may be said that the concept of CSR is consistent and converges on certain common characteristics and elements. More precisely, if CSR as defined above is examined from a practical and operational point of view, it converges on two points. CSR requires companies (a) to consider the social, environmental, and economic impacts of their operations and (b) to be responsive to the needs and expectations of their stakeholders.  These two points are also embedded in the meaning of the three words (i.e., ‘corporate’, ‘social’, and ‘responsibility’) of the phrase ‘corporate social responsibility’. The word ‘corporate’ generally denotes business operations, ‘social’ covers all the stakeholders of business operations, and the word ‘responsibility’  generally refers to the relationship between business corporations and the societies within which they act together. It also encompasses the innate responsibilities on both sides of this relationship. Accordingly, CSR is an integral element of business strategy: it is the way that a company should follow to deliver its products or services to the market; it is a way of maintaining the legitimacy of corporate actions in wider society by bringing stakeholder concerns to the foreground; and a way to emphasize business concern for social needs and actions that go beyond philanthropy.”[21]

CSR is clearly a global phenomenon.  Rahim surveyed steps that had been taken around the globe to integrate the core principles of CSR into the policy objectives of different economies and global companies.  Global companies in Europe have been guided by the EU Commission’s Green Paper on Promoting a Framework for CSR and the European Code of Conduct Regarding the Activities of Transnational Corporations Operating in Developing Economies.  A number of individual countries in Europe have also taken action driven, at least in part, by a series of resolutions adopted by the European Parliament to facilitate the development of the incorporation of CSR principles in its member economies: the UK established a post of CSR Minister to encourage greater social responsibility in UK companies and the UK’s Companies Act of 2006 included specific reporting requirements on environmental and social issues; Belgium passed legislation requiring pension fund managers to disclose the extent to which they consider ethical, social and environmental criteria in their investment policies; France required listed companies to disclose their impact on social and environmental issues in their annual reports and accounts; and each of the Scandinavian countries mandated environmental disclosures.  There have also been a number of important quasi-legal initiatives for the promotion of CSR at the national level throughout Europe including the International Business Leaders Forum, the Ethical Trading Initiative and Partnership for Global Responsibility.[22]

Rahim noted that, in contrast to Europe, the US has been slower in using formal regulation to incorporate CSR into the business strategies and operations of corporations, an approach that is consistent with the preference in the US for minimal legislative control of business.  According to Rahim, the US has emphasized developing specialized organizations that set rules and standards, and provide enforcement regimes, for certain aspects of CSR including the Occupational Safety and Health Administration, Equal Employment Opportunity Commission, Consumer Product Safety Commission and the Environmental Protection Agency.  A variety of industry and other non-governmental organizations have also contributed guidelines that can be referenced for the self-regulatory initiatives of individual companies including the US Model Business Principles and the work of the Center for Corporate Ethics and the Fair Labor Association.  Trade associations in specific sectors, such as automobile manufacturing and paper products, have promulgated guidelines for their members on environmental management practices for themselves and their suppliers.[23]

Principles of CSR have been important in Japan since the post-war reconstruction period, during which the resolution “Awareness and Practice of the Social Responsibility of Business” was adopted and stated the fundamental principal that businesses should not simply pursue corporate profit, but must seek harmony between the economy and society, combining factors of products and services, and that social responsibility is a better way to pursue this goal.[24]  Various cabinet ministries have undertaken initiatives to promote and achieve CSR including the Cabinet Office;, the Ministry of Agriculture, Forestry, and Fisheries; the Ministry of Health, Labor, and Welfare; and the Ministry of Environment.  For example, the Cabinet Office issued its “Corporate Code of Conduct” in 2002 to build consumer confidence in businesses and set guidelines to promote the establishment and implementation of corporate codes of conduct.[25]  The influential Ministry of Economy, Trade and Industry collaborated with the Japanese Standards Association on the creation of a working group to develop CSR standards in Japan and Japan has been an active participant in the development of intergovernmental initiatives relating to CSR.  The result of all this activity has been that Japanese companies have been global leaders in disclosures of CSR activities, investment in internal resources to oversee CSR commitments and adoption of codes of conduct based on international standards.[26]

A 2017 article in The Economist succinctly described the evolution of CSR up to that time as follows:

“Between the 1950s and 1970s, CSR took shape in the form of pre-corporate philanthropy, a largely disparate approach involving support for domestic nonprofits at the discretion of CEOs with little transparency or oversight. In the 1980s, intense foreign competition and a greater focus on shareholders led many publicly traded corporations to adopt more stringent quality and cost controls. This created greater demands to tie corporate philanthropy to financial performance through efforts like cause-related marketing and practices more aligned with a company’s business. Throughout the 1990s, CSR became more international in scope, but was typically reactive in nature and often a response to negative publicity. During this time, a holistic, triple-bottom-line accounting framework of sustainability also began to emerge. Since the 2000s, CSR has grown increasingly strategic, and a broader concept of sustainability has gained ground.  Public pressure to address negative corporate externalities, and pressing social, economic, and environmental issues drove the evolution of these practices. Over time, they have blurred the lines between the public, private, and civil sectors, and redefined traditional roles and structures in the process.”[27]

This article is part of the Sustainable Entrepreneurship Project’s extensive materials on Sustainability and Corporate Governance.

[1] C. Masuku, Corporate Social Responsibility Literature Review and Theoretical Framework, available at https://www.academia.edu/2172462/CORPORATE_SOCIAL_RESPONSIBILITY_LITERATURE_REVIEW_AND_THEORETICAL_FRAMEWORK

[2] For further discussion of the evolution of corporate social responsibility and the various definitions and descriptions of the concept that have been suggested, see “Introduction to Corporate Social Responsibility” in “Corporate Social Responsibility: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

[3] K. Davis, “The Case For and Against Business Assumption of Social Responsibilities”, American Management Journal, 16 (1973), 312.

[4] C. Masuku, Corporate Social Responsibility Literature Review and Theoretical Framework, available at https://www.academia.edu/2172462/CORPORATE_SOCIAL_RESPONSIBILITY_LITERATURE_REVIEW_AND_THEORETICAL_FRAMEWORK (citing W. Halal, “Corporate community: a theory of the firm uniting profitability and responsibility”, Strategy & Leadership, 28(2) (2000), 10).

[5] European Commission, A Renewed European Union Strategy 2011-14 for Corporate Social Responsibility, COM (2011) 681, ¶ 3.1.

[6] World Business Council for Sustainable Development, Corporate Social Responsibility: Meeting Changing Expectations, 3, available at wbcsd.org.

[7] World Economic Forum, Global Corporate Citizen: The Leadership Challenge for CEOs and Boards (2002) http://www.weforum.org/pdf/GCCI/GCC_CEOstatement.pdf at 21 February 2009.

[8] Australian Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into Corporate Responsibility and Triple-Bottom-Line reporting for incorporated entities in Australia (2005). http://www.philanthropy.org.au/pdfs/advocacy/pa_jpicr_0905.pdf at 31 October 2013.

[9] E. Garriga and D. Mele´, “Corporate Social Responsibility Theories: Mapping the Territory”, Journal of Business Ethics, 53 (2004), 51, 52.

[10] E. Garriga and D. Mele´, “Corporate Social Responsibility Theories: Mapping the Territory”, Journal of Business Ethics, 53 (2004), 51, 65.  The various CSR approaches are described, including key references, in Table 1 (“Corporate social responsibilities theories and related approaches”) included in the article at 63-64.

[11] D. Jamali, A. Safieddine and M. Rabbath, “Corporate Governance and Corporate Social Responsibility Synergies and Interrelationship”, Corporate Governance, 16(5) (2008), 443, 446.

[12] Id. (citing P. Jones, D. Comfort and D. Hillier, “Corporate social responsibility and the UK’s top ten retailers”, International Journal of Retail and Distribution Management, 33 (2005), 882).

[13] Id. (citing L. Munilla and M. Miles, “The corporate social responsibility continuum as a component of stakeholder theory”, Business and Society Review, 110 (2005), 371).

[14] S. Deakin and R. Hobbs, “False dawn for CSR: Shifts in regulatory policy and the response of the corporate and financial sectors in Britain”, Corporate Governance: An International Review, 15 (2007), 68.

[15] D. Jamali, A. Safieddine and M. Rabbath, “Corporate Governance and Corporate Social Responsibility Synergies and Interrelationship”, Corporate Governance, 16(5) (2008), 443, 446.

[16] Id. (citing D. Jamali, “Insights into triple bottom line integration from a learning organization perspective”,   Business Process Management Journal, 12 (2006), 809; J. Hancock (Ed.), Investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning & the UK’s Leading Companies (London:,Kogan Page, 2005); G. Lantos, “The boundaries of strategic corporate social responsibility”, Journal of Consumer Marketing, 18 (2001), 595; and J. Elkington, “Governance for sustainability”, Corporate Governance: An International Review, 14 (2006), 522).

[17] M. Hopkins, Corporate Social Responsibility: An Issue Paper (Working Paper No. 27, Policy Integration Department, World Commission on Social Dimension of Globalization, 2004).

[18] C. Marsden, “The Role of Public Authorities in Corporate Social Responsibility” (2001) in A. Dahlsrud, “How Corporate Social Responsibility Is Defined: An Analysis of 37 Definitions”, Corporate Social Responsibility and Environmental Management, 15(1) (2008), 1, 9.

[19] K. Andersen, The Project (2003) in A. Dahlsrud, “How Corporate Social Responsibility Is Defined: An Analysis of 37 Definitions”, Corporate Social Responsibility and Environmental Management, 15(1) (2008), 1, 11.

[20] H. Ward, Public Sector Roles in Strengthening Corporate Social Responsibility: Taking Stock (2004), 3.

[21] M. Rahim, Legal Regulation of Corporate Social Responsibility: A Meta-Regulation Approach of Law for Raising CSR in a Weak Economy (Berlin: Springer, 2013), 13, 24 (citing A. Gill, “Corporate Governance as Social Responsibility: A Research Agenda” (2008), 464).

[22] Id. at 34-38.

[23] Id. at 38-39.

[24] Id. at 40 (citing M. Kawamura, The Evolution of Corporate Social Responsibility in Japan (Part 1)—Parallels with the History of Corporate Reform (NLI Research institute, 2004), 156).

[25] Id. (citing Asian Productivity Organisation, Policies to Promote Corporate Social Responsibility (Report of the Asian Productivity Organisation Top Management Forum, 2006)).

[26] Id. at 41-42.

[27] J. Cramer-Montes, “Sustainability: A New Path to Corporate and NGO Collaborations”, The Economist (March 24, 2017), http://www.economist.com/node/10491124

Transparency and Disclosure

As interest in CSR and corporate sustainability has grown, companies have found that they are subject to heightened scrutiny and that the traditional disclosure practices that focused primarily, if not exclusively, on financial information and performance and related risks are no longer adequate.  Companies must now be prepared to provide disclosures that address the specific concerns and expectations of multiple stakeholders beyond investors including customers, employees, business partners, regulators and activists.  This means that the board of directors must understand existing and emerging disclosure requirements and ensure that the company has the necessary resources to collect and analyze the required information and present it in a manner that is clear and understandable.  At the same time, however, the directors need to be mindful of the risks of expanded disclosure include the possibility of providing too much strategic information, exposing the company to heightened risk of litigation from stakeholders that believe the company has not vigorously pursued its promised CSR and corporate sustainability goals and the need to invest additional time and resources in creating and maintaining the internal reporting process necessary to support CSR and corporate sustainability disclosures.[1]

While, as discussed below, certain CSR and corporate sustainability disclosures have now become minimum legal requirements in some jurisdictions, in general such disclosures are still a voluntary matter and directors have some leeway as to the scope of the disclosure made by their companies and how they are presented to investors and other stakeholders. Some companies continue to limit their disclosures to those are specifically required by regulators; however, most companies have realized that they need to pay attention to the issues raised by institutional investors and other key stakeholders and make sure that they are covered in the disclosure program.  At the other extreme, there are companies that have embraced sustainability as integral to their brands and have elected to demonstrate their commitment by preparing and disseminating additional disclosures that illustrate how they have woven sustainability into their long-term strategies and day-to-day operational activities.  These companies understand that not only are investors paying more attention but that more and more people everywhere are considering ESG performance when deciding whether to buy a company’s products and/or work for a particular company and that it is therefore essential to lay out their specific CSR and corporate sustainability goals and the metrics used to track performance and provide regular reports to all of the company’s stakeholders on how well they are doing against those goals.[2]

Williams noted that to the extent that governments have regulated corporate responsibility per se, such regulation has focused on disclosure and during the period 2000-2015 over 20 countries enacted legislation to require public companies to issue reports including environmental and/or social information.[3]  Many of these countries are in Europe and the EU has implemented a directive that requires approximately 6,000 large companies and “public interest organizations,” such as banks and insurance companies, to “prepare a nonfinancial statement containing information relating to at least environmental matters, social and employee-related matters, respect for human rights, anti-corruption and bribery matters.”[4]  In addition, several stock exchanges around the world require social and/or environmental disclosure as part of their listing requirements including exchanges in Australia, Brazil, India, South Africa and the London Stock Exchange.[5]  Also, pension funds in countries such as Australia, Belgium, Canada, France, Germany, Italy, Japan, Sweden and the UK are required to disclose the extent to which the fund incorporates social and environmental information into their investment decisions.[6]  All things considered, surveys show that more and more jurisdictions are implementing mandatory ESG disclosure requirements and that “there is a clear trend towards an increasing number of environmental and social disclosure requirements around the world”.[7]

As of 2013, over 90% of the Global 250 companies had decided to voluntarily disclose more environmental, social and governance information than required by law[8] and Williams noted in 2016 that “[v]oluntary, transnational standards of best social and environmental practices are proliferating in virtually every industry, many with associated certification schemes and requirements for third-party attestation or auditing … [and] … [t]hese voluntary initiatives are increasingly being supplemented by domestic and multilateral government actions to encourage, or in some cases require, companies to pay closer attention to the social and environmental consequences of their actions and to disclose more information about those consequences.[9]

The US, which has comprehensive reporting requirements relating to a broad range of corporate governance matters, has been a notable laggard with respect to establishing a comprehensive general ESG disclosure framework; however, there are certain specific federal and state disclosure requirements in certain contexts such as releases into the environment, management through recycling, median employee pay, mine safety disclosure and “conflict minerals” disclosure.[10]  Public companies in the US are required to make certain of their CSR and corporate sustainability disclosures in their SEC filings, which means that those disclosures are being made with a higher potential risk of liability.  Apart from mandatory disclosure, several studies have found that about 80% of larger US public companies have voluntarily provided some form of disclosures on their CSR and corporate sustainability initiatives in the form of published CSR/sustainability reports and/or disclosures on the company website; however, the quality of these disclosures has been criticized by the Sustainability Accounting Standards Board, which found that 52% of a sample of almost 600 companies that had made disclosures of CSR-related risks had done so using boilerplate language and has failed to disclose their plan to address such risks.[11] Directors need to be involved in decisions regarding placement of CSR and corporate sustainability disclosures including links in SEC filings to online sustainability reports and adding sustainability information to proxy statements as part of the company’s investor-focused communication efforts.  Companies can, and often do, rely on communications professionals to prepare sustainability reports; however, even when such reports are not included in the company’s SEC filings they should be subject to the same level of scrutiny applied in procedures established by the board’s disclosure committee.

Proposals from shareholder activists often help create the list of CSR and corporate sustainability topics that garner the most attention from companies and trigger movement toward greater transparency and disclosure.  In recent years, companies have frequently been required to respond to call for changes in corporate policies and activities with respect to political and lobbying activity, sustainability reporting, gender pay gap reporting, and child labor issues.[12]  In many cases, companies have been able to calm the concerns of activists, sometimes getting them to withdraw their proposals, by promising to provide fuller disclosure; however, once a commitment is made to expanded disclosure the company needs to fulfill its promises and allocate sufficient resources to the effort since activists will be watching closely to ensure that their expectations are satisfied.  When formulating voluntary CSR-related disclosures it is important to engage with activists to ensure that they understand the approach that the company is willing to take and the company’s need to balance disclosure against the need to protect sensitive and strategically important information.

A large number of parties providing non-form comments to the Securities and Exchange Commission (“SEC”) on its April 2016 concept release on disclosure required by Regulation S-K, the prescribed regulation under the Securities Act of 1933 that provides the framework for mandated disclosures in filings with the SEC, recommended that CSR disclosure be expanded and strengthened.[13]  While it is not likely that more CSR-related disclosures will be formally mandated in the immediate future, companies must nonetheless give greater consideration to CSR and corporate sustainability when responding to several current items in Regulation S-K include those related to describing the business activities of the company (Item 101); legal proceedings (Item 103); disclosures of material known events and uncertainties in the Management’s Discussion and Analysis (Item 303) and risk factors (Item 503(c)).  Public companies must also be mindful of the SEC’s guidance regarding disclosures relating to climate change, which was issued in 2010[14], and Rule 13p-1 under the Securities Exchange Act of 1934 relating to conflicts materials disclosure.

In addition, companies may be subject to disclosure requirements under the laws of foreign countries in which they operate as well as various state and local laws.  For example, under the California Transparency Supply Chains Act of 2010[15], which went into effect on January 1, 2012, every retail seller and manufacturer doing business in California and having annual worldwide gross receipts that exceed $100 million is required to disclose its efforts to eradicate slavery and human trafficking from its direct supply chain for tangible goods offered for sale.  The disclosures must be posted on the retail seller’s or manufacturer’s website with a conspicuous and easily understood link to the required information placed on the business’ homepage. In the event the retail seller or manufacturer does not have a website, consumers must be provided the written disclosure within 30 days of receiving a written request for the disclosure from a consumer.  At a minimum, the disclosures should disclose to what extent, if any, that the retail seller or manufacturer does each of the following:

  • Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure must specify if the verification was not conducted by a third party.
  • Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure must specify if the verification was not an independent, unannounced audit.
  • Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.
  • Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
  • Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

The exclusive remedy for a violation of the disclosure obligations is an action brought by the California Attorney General for injunctive relief.

When companies were first attempting to provide voluntary disclosures relating to their CSR and corporate sustainability initiatives they often struggled with the format and depth of their reporting.  Fortunately, as time went by, a consensus began to emerge about the benchmarks that companies should use for guidance in preparing their CSR and corporate sustainability reports.  Of particular note is the Global Reporting Initiative (“GRI”), which is a multi-stakeholder developed international independent organization that helps businesses, governments and other organizations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others.  The Global Sustainability Standards Board (“GSSB”) issues and maintains the GRI Standards for organizations to use in their “sustainability reporting”, described by the GSSB as “an organization’s practice of reporting publicly on its economic, environmental, and/or social impacts, and hence its contributions–positive or negative–towards the goal of sustainable development”.[16] GRI has pioneered sustainability reporting since the late 1990s, transforming it from a niche practice to one now adopted by a growing majority of organizations.  The GRI Standards are the world’s most widely used standards on sustainability reporting and disclosure and available for use by public agencies, firms and other organizations wishing to understand and communicate aspects of their economic, environmental and social performance.[17]

The International Integrated Reporting Council, or IIRC, which was founded in August 2010, released its International Integrated Reporting Framework in December 2013 as a guide that companies could use to describe how their governance structure creates value in the short, medium and long term; supports decision making that takes into account risks and includes mechanisms for addressing ethical issues; exceeds legal requirements; and ensures that the culture, ethics and values of the company are reflected in its use of and effects on the company’s “capitals” (described to include financial, manufactured, intellectual, human, social and relationship, and natural (i.e., the environment and natural resources) forms of value) and stakeholder relationships.[18]  Guiding principles for preparation of integrated reports include strategic focus and future orientation, connectivity of information, stakeholder relationships, materiality, conciseness, reliability and completeness and consistency and comparability, and integrated reports prepared using the Framework are expected to include the following common elements[19]:

  • Organizational overview and external environment: What does the organization do and what are the circumstances under which it operates?
  • Governance: How does the organization’s governance structure support its ability to create value in the short, medium and long term?
  • Business model: What is the organization’s business model?
  • Risks and opportunities: What are the specific risks and opportunities that affect the organization’s ability to create value over the short, medium and long term, and how is the organization dealing with them?
  • Strategy and resource allocation: Where does the organization want to go and how does it intend to get there?
  • Performance: To what extent has the organization achieved its strategic objectives for the period and what are its outcomes in terms of effects on the capitals?
  • Outlook: What challenges and uncertainties is the organization likely to encounter in pursuing its strategy, and what are the potential implications for its business model and future performance?
  • Basis of presentation: How does the organization determine what matters to include in the integrated report and how are such matters quantified or evaluated?

Other helpful resources are available from the Sustainability Accounting Standards Board, or SASB, which publishes the SASB Implementation Guide for Companies that provides the structure and the key considerations for companies seeking to implement sustainability accounting standards within their existing business functions and processes.[20]  The Guide helps companies to select sustainability topics; assess the current state of disclosure and management; embed SASB standards into financial reporting and management processes; support disclosure and management with internal control; and present information for disclosure.  The SASB’s online resource library also includes annual reports on the state of disclosure, industry briefs and standards and guidance on stakeholder engagement.  Companies should monitor CSR disclosures by their peers and the SASB library has examples of disclosures made by companies in annual reports filed with the SEC on Form 10-K.  Companies can also follow the reporting practices of competitors by reviewing sustainability reports that have been registered with the GRI.

While the efforts of the GRI and the SASB indicate that some progress has been made regarding the development of measurement and disclosure frameworks relating to corporate sustainability and ESG practices, companies and their stakeholders are not yet able to rely on universally accepted guidelines.  Hurdles that still much be overcome, and which may never be totally resolved, include variations in ESG rating methodologies and a lack of uniformity in disclosure expectations and requirement across jurisdictions.  For the time being, the most effective approach for directors and their companies may be engaging with their own key investors and other stakeholders to understand how those parties view and prioritize ESG issues and their preferences regarding measurement and disclosure with respect to the initiatives taken by the company relating to those issues.  Such an approach not only reduces the likelihood of misunderstanding between the company and its primary stakeholders but will also contribute to the improvement of measurement and disclosure tools and the development of best practices that can be widely disseminated.  In the meantime, work continues among corporate governance groups and consulting to develop performance measurement tools and disclosure frameworks that integrate traditional measures of financial value with new metrics that afford proper weight to projects launched primarily to pursue and achieve long-term value creation.

This article is part of the Sustainable Entrepreneurship Project’s extensive materials on Sustainability and Corporate Governance.

[1] For further discussion of non-financial disclosures and reporting, see “Sustainability Reporting and Auditing” in “Corporate Social Responsibility: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

[2] As mentioned above, expansive disclosure of this type increases the risk of litigation and/or adverse market reaction in the event that the company fails to meet its stated CSR and corporate sustainability goals, even if the disclosures are accompanied by appropriate disclaimers and are not included in regulatory filings that typically are covered by anti-fraud standards.  Disclosure of actual or potential links between CSR and corporate sustainability goals and compensation must also be handled carefully, similar to links between short-term financial goals and compensation.

[3] C. Williams, “Corporate Social Responsibility and Corporate Governance” in J. Gordon and G. Ringe (Eds.), Oxford Handbook of Corporate Law and Governance (Oxford: Oxford University Press, 2016), 15, available at http://digitalcommons.osgoode.yorku.ca/scholarly_works/1784 (citing Initiative for Responsible Investment, Corporate Social Responsibility Disclosure Efforts by National Governments and Stock Exchanges (March 12, 2015), available at http://hausercenter.org/iri/wpcontent/uploads/2011/08/CR-3-12-15.pdf).  These countries included Argentina, China, Denmark, the EU, Ecuador, Finland, France, Germany Greece, Hungary, India, Indonesia, Ireland (specific to state-supported financial institutions after the 2008 financial crisis), Italy, Japan, Malaysia, The Netherlands, Norway, South Africa, Spain, Sweden, Taiwan, and the U.K.

[4] See ¶ 6 of Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014, amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups, Official Journal of the European Union L330/1-330/9.

[5] C. Williams, “Corporate Social Responsibility and Corporate Governance” in J. Gordon and G. Ringe (Eds.), Oxford Handbook of Corporate Law and Governance (Oxford: Oxford University Press, 2016), 16, available at http://digitalcommons.osgoode.yorku.ca/scholarly_works/1784 (citing Initiative for Responsible Investment, Corporate Social Responsibility Disclosure Efforts by National Governments and Stock Exchanges (March 12, 2015), available at http://hausercenter.org/iri/wpcontent/uploads/2011/08/CR-3-12-15.pdf).

[6] Id.

[7] Id. at 19 (citing KPMG, UNEP, Global Reporting Initiative and Unit for Corporate Governance in Africa, Carrots and Sticks: sustainability reporting policies worldwide 8 (2013), available at https://www.globalreporting.org/resourcelibrary/carrots-and-sticks.pdf.).

[8] KPMG, The KPMG Survey of CR Reporting 2013, available at http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/corporateresponsibility/Documents/corporate-responsibility-reporting-survey-2013-exec-summary.pdf.  In addition, in 2013 76% of the top 100 companies in the Americas published a separate corporate responsibility report, as did 73% of top 100 companies in Europe and 71% in Asia.  Also, 59% of the Global 250 had their reports “assured” typically by the specialist bureaus of the major accountancy firms.  As reported in C. Williams, “Corporate Social Responsibility and Corporate Governance” in J. Gordon and G. Ringe (Eds.), Oxford Handbook of Corporate Law and Governance (Oxford: Oxford University Press, 2016), 5, available at http://digitalcommons.osgoode.yorku.ca/scholarly_works/1784

[9] C. Williams, “Corporate Social Responsibility and Corporate Governance” in J. Gordon and G. Ringe (Eds.), Oxford Handbook of Corporate Law and Governance (Oxford: Oxford University Press, 2016), 2-3, available at http://digitalcommons.osgoode.yorku.ca/scholarly_works/1784 (citing M. Blair, C. Williams and Li-Wen Lin, “The New Role for Assurance Services in Global Commerce”, Journal of Corporate Law, 33 (2008), 325).

[10] Id. at 16-19.  See also C. Williams, The Securities and Exchange Commission and Corporate Social Transparency, Harvard Law Review, 112 (1999), 1197.  The federal Securities and Exchange Commission has also occasionally issued guidance on selected ESG topics such as disclosures related to climate change.

[11] See Flash Report: Eighty One Percent (81%) of the S&P 500 Index Companies Published Corporate Sustainability Reports in 2015 (Governance & Accountability Institute, Inc., 2016), available at ga-institute.com; and Sustainability Accounting Standards Board, The State of Disclosure Report 2016, available at sasb.org.  The percentage is particularly striking given that less than 20% of the companies in the same group in 2011 published sustainability reports in that year.

[12] H. Gregory, “Corporate Social Responsibility, Corporate Sustainability and the Role of the Board”, Practical Law Company (July 1, 2017), 4.

[13] Sustainability Accounting Standards Board, “Business and Financial Disclosure Required by Regulation S-K—the SEC’s Concept Release and Its Implications”, (2016), 3-4, available at sasb.org.

[14] SEC Release Nos. 33-9106, 34-61469, FR-82 (February 8, 2010).

[15] California Civil Code § 1714.43.

[16] GRI 101: Foundation 2016 (Amsterdam: Stichting Global Reporting Initiative, 2016), 3.

[17] For detailed discussion of the GRI Standards, see “Sustainability Reporting and Auditing” in “Corporate Social Responsibility: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

[18] P. DeSimone, Board Oversight of Sustainability Issues: A Study of the S&P 500 (IRRC Institute, March 2014), 7.

[19] The International <IR> Framework (London: The International Integrated Reporting Council, December 2013), 5.  For detailed discussion of the International Integrated Reporting Framework, see “Sustainability Reporting and Auditing” in “Corporate Social Responsibility: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

[20] For detailed discussion of the activities of the SASB, see “Sustainability Reporting and Auditing” in “Corporate Social Responsibility: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

Changing Expectations for Board Oversight of Sustainability

A discussion paper on board adoption and oversight of corporate sustainability prepared by The Global Compact LEAD included the following observation[1]:

“Sustainability is increasingly recognized as a strategic imperative for businesses globally. Far more than when the Global Compact was launched in 1999, companies recognize that their sustainability performance affects their strategy, financial performance, resilience, access to essential resources, reputation, and license to operate. Peter Senge, noted strategy theorist and faculty member at the Sloan School of Business at MIT wrote in 2009 that “people are starting to suspect that these are really strategic issues that will shape the future of our businesses.” And as sustainability is being recognized more and more as a strategic business question, Boards are increasingly considering sustainability as part of their core responsibility of guiding and overseeing corporate activities.”

The paper also noted that: “more and more investors are looking for corporate boards to steward corporate sustainability in order to both adequately manage risks and maximize business opportunities related to sustainability. Indeed, engagement activities are on the rise in many quarters, and like‐minded investors are increasingly pooling resources to create a stronger and more representative shareholder voice and to ensure that company engagement becomes more effective.[2]

Calvert Asset Management, in its 2010 survey of board oversight of environmental and social issues in North America, explained the rationale for the board’s role as follows:

“The question of whether boards of directors should have responsibility for corporate sustainability matters is sometimes debated.  Some critics of the idea argue that social and environmental issues are by their nature managerial and operational issues which makes them inefficient for the board to address. However, many investors have come to believe that these issues have implication for capital investments, corporate strategy, brand and reputation. From this perspective, boards of directors are the appropriate bodies to provide long-term perspective and guidance on these matters, and the absence of board responsibility can raise questions about whether a company is managing these factors appropriately. Conversely, board-level oversight of corporate responsibility can set a meaningful “tone at the top” and provide investors and other stakeholders with a deeper understanding of how the company assesses its challenges and prioritizes issues relevant to its success.”[3]

A March 2014 study of board oversight of sustainability issues among S&P 500 companies commissioned by the IRRC Institute and authored by the Sustainable Investments Institute found that just a little over half of the companies had implemented board oversight of sustainability issues.[4]  The sustainability executives surveyed in a report released by The Conference Board in June 2016 found that 55% of the respondents said that their boards of their companies met only once a year or never on sustainability issues and 69% of the respondents said that their boards spend four hours or less per year on sustainability issues.[5] Identifying, acknowledging and addressing corporate sustainability issues create new and significant challenges for directors and the management team that range from setting high-level goals and adopting strategies to achieve those goals to extensive changes in day-to-day operational activities.  Directors must not only ensure that their companies are conducting full assessments of the entire lifecycle of their products and services but must also provide the resources and incentives to collect, analyze and report information relating to the progress of the company’s corporate sustainability initiatives.  Institutional investors and other stakeholders will not be satisfied with vague promises and aspirational principles from their companies, nor will companies be able to simply continue to adopt a reactive approach to ESG-related concerns (i.e., waiting until a shareholder proposal on an ESG-topic is imminent before engaging with the shareholder to resolve the concern).  In fact, directors should expect that stakeholders demand that companies demonstrate a proactive approach to developing and implementing sustainability strategies, allocating capital to sustainability-related initiatives and managing the risks associated with failure to respond to ESG issues.

Harper Ho suggested that investor activism around ESG issues and investors’ growing demand growing demand for investment-grade ESG information has important implication for how directors should approach corporate governance, investor engagement, compliance and disclosure practices.[6]  First of all, the broadened scope of risks that directors must consider in light of ESG activism means that boards must have new capacities to support oversight of ESG risk.  Second, investors want their companies to integrate ESG performance metrics and long-term benchmarks into executive compensation.  Third, directors should ensure that investor engagement encourages dialogue and learning and confirm that senior management and investor relations personnel are aware of the increasing overlap between corporate governance and environmental and social concerns.  Finally, directors need to improve the quality and formatting of their sustainability-related reporting and ensure that ESG materiality is being considered as part of their company’s financial reporting process.  According to Harper Ho, companies that can improve their practices in these areas are likely to see improved financial and operational performance, improved focus on long-term risk and return, better access to “patient capital” (i.e., investors that are less fixated on quarterly earnings and more supportive of R&D and other investments in the company’s future) and be able to identify and exploit new sources of value for the company and keep ahead of emerging risks and opportunities.[7]

CSR and corporate sustainability are broad and challenging topics and the directors must carefully consider how the board’s duties and responsibilities will be discharged and allocated among board members.  One well-known corporate governance advisor has counseled that directors should begin the process of developing an oversight framework for CSR and corporate sustainability by asking and answering the following questions[8]:

  • How should concerns regarding CSR and corporate sustainability be integrated into the board’s discussions on strategy and risk oversight? Strategy and risk oversight are two topics that all board members should be working on and actively discussing during each board meeting and investors are looking to see whether CSR and corporate sustainability have been formalized as priorities in the board’s governance guidelines and overall goals.
  • To what extent should CSR and corporate sustainability topics be included as standalone agenda items for board meetings?
  • What information should be provided to directors (e.g., data on how the company’s efforts compare to those of its peer companies, leading industry standards, and the CSR-related priorities of key shareholders and proxy advisory firms)?
  • Which metrics should the board and members of the executive team focus on in considering progress against CSR and corporate sustainability goals (e.g., goals involving reduction of water usage and emissions, reducing on-the-job injuries and employee turnover, or improving workforce diversity and employee retention)?
  • What process should be used for drafting and reviewing public disclosures about the company’s CSR and corporate sustainability efforts?

In addition, the board should also consider how the company’s current efforts and activities with respect to CSR and corporate sustainability compare to its peers, how investors and other stakeholders perceive the company’s engagement with and disclosure of CSR and corporate sustainability and whether or not the company has been effectively communicating its CSR and corporate sustainability strategies, goals and actions to investors and other stakeholders.[9]

Recognition of the importance of stakeholders in corporate governance calls on directors and managers of corporations to develop new skills in order to integrate the values and expectations of external and internal stakeholders into the overall strategic management process.  Digman et al. pointed that strategic management is “inseparable from the strategic management of relationships” and Masuku advised: “A strategy should be in place for each stakeholder group their key issues and willingness to expend resources helping or hurting the organization on those issues must be understood.  For each major stakeholder, managers responsible for that stakeholder relationship must identify the strategic issues that affect the stakeholder and must understand how to formulate, implement and monitor strategies for dealing with that group.”[10]

In addition to the steps needed to integrate CSR and corporate sustainability at the board level, including allocating various responsibilities and activities among board committees, the directors need to ensure that the company has an effective internal organizational structure.  Many companies are creating an additional position among the members of the senior executive team that is specifically focused on corporate sustainability.  Appointing these “chief sustainability officers” demonstrates a high level of commitment to the area by the directors and also helps everyone inside and outside the company to identify the person who will likely be the company’s spokesperson on corporate sustainability issues and responsible for managing the resources provided by the board to implement sustainability strategies and satisfy the company’s disclosure obligations.  The chief sustainability officer must be prepared to support the board as it considers CSR and corporate sustainability issues, engage with the company’s stakeholders and, not unimportantly, effectively coordinate the efforts of all of the various departments within the company that should be involved in sustainability initiatives (e.g., investor relations, legal, operating heads and risk management).[11]

Advice for Directors on Meeting Stakeholder Expectations Regarding Sustainability

Kuprionis and Styles suggested that directors ask “How prepared is my company to respond to increased sustainability expectations from investors, customers and employees? and then be prepared to do each of the following seven things:

·         Add sustainability discussions to the board agenda.

·         Focus on what sustainability means for the company.

·         Ask for briefs on industry developments, both in substance and in governance.

·         Engage with the company’s chief sustainability officer and investor relations officer.

·         Establish an effective board oversight approach.

·         Look for balanced perspectives among differing constituencies and stakeholders.

·         Consider the appropriate sustainability disclosures for the company.

Source: D. Kuprionis and P. Styles, “Translating Sustainability into a Language Your Board Understands”, The Corporate Governance Advisor, 25(5) (September/October 2017), 13, 17. 

This article is part of the Sustainable Entrepreneurship Project’s extensive materials on Sustainability and Corporate Governance.

[1] The Global Compact LEAD, Discussion Paper: Board Adoption and Oversight of Corporate Sustainability.

[2] Id.  For further discussion of board oversight of sustainability, see “Board Oversight of Sustainability” in “Governance: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

[3] Board Oversight of Environmental and Social Issues: An Analysis of Current North American Practice (Calvert Asset Capital Management Inc. and The Corporate Library, 2010), 8.

[4] P. DeSimone, Board Oversight of Sustainability Issues: A Study of the S&P 500 (IRRC Institute, March 2014).

[5] The Seven Pillars of Sustainability Leadership: CEO Business Implications (The Conference Board, June 2016), 4 (as cited and discussed in V. Harper Ho, Director Notes: Sustainability in the Mainstream–Why Investors Care and What It Means for Corporate Boards (The Conference Board, November 2017), 15, electronic copy available at: https://ssrn.com/abstract=3080033).

[6] V. Harper Ho, Director Notes: Sustainability in the Mainstream–Why Investors Care and What It Means for Corporate Boards (The Conference Board, November 2017), 13-14, electronic copy available at: https://ssrn.com/abstract=3080033 (based on information available at UNPRI, Signatories, https://www.unpri.org/signatory-directory/).

[7] Id. at 15.

[8] H. Gregory, “Corporate Social Responsibility, Corporate Sustainability and the Role of the Board”, Practical Law Company (July 1, 2017), 3.

[9] D. Kuprionis and P. Styles, “Translating Sustainability into a Language Your Board Understands”, The Corporate Governance Advisor, 25(5) (September/October 2017), 13, 15.

[10] C. Masuku, Corporate Social Responsibility Literature Review and Theoretical Framework, available at https://www.academia.edu/2172462/CORPORATE_SOCIAL_RESPONSIBILITY_LITERATURE_REVIEW_AND_THEORETICAL_FRAMEWORK (citing L. Digman, Strategic management: concepts, decisions, cases (Homewood IL: BPI/Irwin, 1990).

[11] D. Kuprionis and P. Styles, “Translating Sustainability into a Language Your Board Understands”, The Corporate Governance Advisor, 25(5) (September/October 2017), 13, 16.