Corporate Responsibility and Corporate Sustainability
Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
—Brundtland Report, 1987, p. 54.
What is the purpose of the corporation? It is increasingly accepted that the purpose of the corporation is to certainly create profits and value for its stakeholders, but the respon- sibility of the corporation is to do so in a way that inflicts no costs on society, including the environment. As a result of globalization, this growing responsibility and role of the corpo- ration in society has added a level of complexity to the leader- ship challenges faced by the twenty-first century firm.
This developing debate has been somewhat hampered to date by conflicting terms and labels—corporate goodness, corporate responsibility, corporate social responsibility (CSR),
corporate philanthropy, and corporate sustainability, to list but a few. Much of the confusion can be reduced by using a guiding principle—that sustainability is a goal, while responsibility is an obligation. It follows that the obligation of leadership in the mod- ern multinational is to pursue profit, social development, and the environment, all along sustainable principles.
The term sustainable has evolved greatly within the con- text of global business in the past decade. A traditional primary objective of the family-owned business has been the “sustain- ability of the organization”—the long-term ability of the company to remain commercially viable and provide security and income for future generations. Although narrower in scope than the con- cept of environmental sustainability, there is a common core thread—the ability of a company, a culture, or even the earth, to survive and renew over time.