The answer lies in two things

• organizations understanding their role in ensuring sustainable development
• communicating about their efforts to stakeholders (sustainable reporting)

This implies taking a holistic stakeholder view and not just a shareholder view. The definition of stakeholders has indeed changed from owners and consumers of any business to include also government/regulators, employees, suppliers and community at large. Today corporations are motivated to involve stakeholders in their decision making and to address societal challenges. It is not difficult to understand why. Today's stakeholders are increasingly aware of the importance and impact of corporate decisions on society and the environment. Organizations have begun to recognize this and in this effort to optimize value delivery lies the origin of the concept of "sustainability" for businesses across the globe.

What is Corporate Social Responsibility (CSR)?

The World Business Council on Sustainable Development defines CSR as "the commitment of business to contribute to sustainable economic development, working with employees, their families and local community and society at large to improve their quality of life." According to the WBCSD, CSR is the third pillar of sustainable development, along with economic growth and ecological balance.

Sustainable development involves meeting the needs of the present without compromising the ability of future generations to meet their own needs. Economic growth provides the conditions in which protection of the environment can best be achieved. Environmental protection, in balance with other human goals, is necessary to achieve growth that is sustainable. In turn, versatile, dynamic, responsive and profitable businesses are required as the driving force for sustainable economic development. They contribute by providing the managerial, technical and financial resources for the resolution of environmental challenges. Market economies, characterized by entrepreneurial initiatives, are essential to achieve this. Business thus shares the view that there should be a common goal, not a conflict, between economic and social development and environmental protection, both now and for future generations. Thus there is a considerable overlap, interaction and interrelation between the three elements of sustainability.

Has Industry Made Any Progress?

Organizations have been and will be an integral part of society. The reasons - contributions to society which includes creation of wealth, employment and many spin off benefits. However, historically, addressing environment, health and social issues has been perceived as a mandatory cost by most corporations and many may have not been proactive on this.

The last two decades have witnessed more stringent regulation; increase in compliance requirements, increased awareness amongst employees & local community and realization amongst organizations the importance of corporate responsibility. As a result there has been a paradigm shift. Businesses have reinvented themselves as entities delivering value to stakeholders rather than just producers and sellers of commodities/ services. This has brought the global community together on several occasions in international forums.

The outputs have been protocols, agreements and standards such as ISO 14001, OHSAS 18001, and SA 8000 for providing a guiding framework to industry. Businesses have had to realign their processes to these requirements, sometimes at very high costs. The approach of business to these changes has been largely reactive. However, over a period of time organizations across the world have realized that there are several benefits of proactively aligning to the "new way". These are cost savings from environmental protection, economic growth and social improvements.

Today, several organizations have successfully deployed and implemented management systems compliant to requirements of ISO 14001, OHSAS 18001, and SA 8000. They are also using tools like codes of practices and principles to promote better corporate governance

Is CSR a One Point Agenda?

There is no single activity that will form the basis for a corporate responsibility (CR) strategy. Instead, an effective CR strategy requires a pairing of meaningful stakeholder engagement and an effective internal management system. Such a system should include policies, targets, procedures, and monitoring. But most importantly the system needs a feedback loop, without which it will ultimately fail.

Why Should Organizations Continue to Carry the Cross?

There is enough evidence that several organizations have contributed to society and become responsible citizens. However, on the flip side concern has been voiced by society on the negative impacts caused by corporations, for imposing huge costs on society. The allegation ? profits created is largely from the costs borne by the society.

Today investors, consumers and prospective employees do not have any information about corporate social and environmental performance. The reason ? no objective and structured disclosure of such performance. This impacts perceptions of stakeholders about all organizations. One Bhopal gas tragedy mars all the good being done by others. Moreover, the voluntary and selective nature of CR initiatives leaves onlookers in the dark about how well companies are actually performing overall on such matters.

Despite many attempts to bring forth these positive factors, corporations have failed to capture them in a holistic and systematic manner. There is a lack of consensus on the methodology adopted as well as the nature and type of information reported. Top

What is Corporate Sustainability Reporting?