Veronika Janyrova
"It's not about what is done with the profits, but how the profits are achieved: environmentally friendly, socially responsible and at the same time economically successful"
Dirk Lippold, Humbold University, on sustainable management
The importance of sustainability risks can no longer be denied, at least since the 1992 United Nations Framework Convention on Climate Change, when 154 states in New York have committed themselves to slowing global warming and mitigating its consequences. Since then, the threat of climate change has lost none of its explosiveness. Neither is there any further ecological, social and health damage that entrepreneurship likes to leave behind. Today, even the world's leading companies see environmental and social risks as the greatest challenges of our time.
Holy Trinity of Sustainability
It is therefore not surprising that companies are increasingly held responsible for the undesirable side effects of their business activities. Specifically, it means that "they are responsible for their products or services, inform consumers about their properties and choose sustainable production methods" - this is how sustainable companies are defined by Germany's sustainability strategy. Daniela Knieling, managing director of respACT, an Austrian corporate platform for responsible business, sees the role of sustainable companies as even more ambitious. According to her, “sustainable businesses contribute to solving real ecological, social and economic problems. This includes the best possible reduction of the ecological footprint as well as the avoidance of negative social impacts ”.
Where exactly corporate responsibility begins and where it ends has been the subject of public debate for decades, and will probably continue to do so. Because the understanding of sustainability is always subject to changing times. While companies were made responsible for their water and air pollution in the 1990s, their focus today is on greenhouse gas emissions and energy consumption, as well as their supply chains.
Doing business sustainably: something different for everyone
Sustainability means something different for every company. While a toy manufacturer will think about the production conditions of its suppliers and the compatibility of the materials used, the focus of a food manufacturer is on the use of pesticides and fertilizers or animal welfare. Industry-specific, so.
However, it is essential that sustainability affects the company's core business: “It is not an additional activity, but a kind of way of thinking to operate the core business: It is not about what is done with the profits, but how the profits are made become: environmentally compatible, socially responsible and at the same time economically successful, ”says Professor Dirk Lippold from Humbold University. The three pillars of sustainability are already named: economic, social and ecological responsibility.
Florian Heiler, managing director of plenum, Society for Sustainable Development GmbH recognizes a sustainable company by the fact that it actually operates sustainably and does not merely pursue a sustainability strategy. He also sees sustainability as a development path: "If sustainability is a real concern for managers, the company creates honest transparency with regard to its ecological and social influences and involves the affected stakeholders, then it is on the right path," says Heiler.
Although the sustainable commitment of each company may be different, there are now established standards across the most important fields of activity. These so-called GRI standards are also the leading framework for sustainability reporting by the Global Reporting Initiative (GRI).
Not just an image
However, sustainable corporate governance is by no means a purely philanthropic goal. The management consultants from Ernst & Young they see it as being of considerable importance for the economic success and performance of a company, because sustainability "not only has a positive effect on a company's reputation, it is also extremely important for relationships with customers, (potential) employees and investors". According to Stephan Scholtissek, managing director at Management consulting company Accenture, ultimately depends on the future viability of every company, because in the long run “only those who make sustainability part of their core business remain competitive”.
Share AND stakeholders
Today consumers and investors expect companies to operate sustainably. This can be seen very well in the food industry, for example. Interest in organic food has been gradually increasing in Austria for years. This increases the turnover of the companies as well as the share of organically cultivated areas and businesses. After all, over 23 percent of Austrian agricultural land is used for organic farming. A top figure across the EU.
The influence of investors should also not be underestimated. While shareholders were often seen as the biggest obstacle to sustainable business, today they are sometimes a driving force. Since the turn of the millennium, hundreds of investment funds that specialize in sustainable companies have been valued, ranked and provided with capital in the USA and Europe. The investment volume in sustainable companies is managed by the New York-based research and consulting firm Impact Investing LLC estimated at $ 76 billion last year - and the trend is rising. Europe is the gravitational center of this development with 85 percent of the global sustainable investment volume. But investors also expect comprehensive and systematic reporting.
Nice reports
It is obvious that beautiful reports do not yet lead to sustainable corporate management. However, they are not without effect. After all, on the part of the companies they have brought about a systematic examination of and increasing transparency about material cycles, energy use, environmental influences, human rights and employee interests.
At the same time, these sustainability reports are often neither meaningful nor comparable due to the innumerable reporting frameworks, norms and standards. Sustainability reporting itself threatened to degenerate into a veritable greenwashing industry, in which agencies and PR professionals give companies a green coat of paint with the help of beautiful reports.
Orientation guide SDGs
As soon as the GRI standard has emerged from the jungle of standards as a global standard, companies are already beginning to turn to a new framework: The United Nations Sustainable Development Goals (SDG).
The UN Agenda 2030, in the framework of which the SDGs were published in 2015, underlines the shared responsibility of politics, business, science and civil society for sustainable development. Austrian companies show great interest in this global framework and align their activities with the most relevant SDGs. According to Michael Fembek, author of the Austrian CSR initiatives-Guides, goal # 17 (“Take immediate action to combat climate change and its impacts”) is currently the most popular. According to him, "the most interesting thing about the SDGs is the measurability approach, because each of the sub-goals also has one or more indicators against which progress can and should be measured in every country," says Fembek in the Austrian CSR Guide 2019 .
Doing business sustainably: successes and failures
Despite numerous setbacks for the environment and sustainability movement and horrendous challenges, there are also numerous successes. In Austria, for example, environmental protection and sustainability have been anchored in the federal constitution since 2013. The public drinking water supply has recently found its way into it - and not Austria as a business location. In this country, companies are subject to high environmental and social standards, which largely take corporate responsibility into account. In the Energy Transition Index 2019 of the World Economic Forum, Austria ranks 6th out of 115 countries examined. Thanks to cooperation between business and politics, it has been possible (since 1990) to significantly reduce greenhouse emissions from buildings (-37 percent), waste (-28 percent) or agriculture (-14 percent). Energy consumption has remained almost constant since 2005, despite aggregate economic growth of 50 percent, while the share of biogenic energies has more than doubled. In view of these partial successes, it is simply no longer possible to say that change is not possible.
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