Sustainable development for businesses: what are the challenges?
If sustainable development is present today in corporate charters and values, the term brings with it a set of complex issues and is more difficult to define than it might seem. The questions raised today by what we call “sustainability” are broad when applied to business, for example, also encompassing the sustainability of employment as part of the business.
In the rapidly changing professional world, developing sustainable economic activity is a major challenge. Government and European standards and regulations bear witness to this, demanding ever more that companies rethink their practices.
What does sustainable development mean for businesses today? Let us summarize some of the most important links between sustainable development and the business world.
Sustainable development within companies: CSR
Definitions: Sustainable Development and CSR
Sustainable development is based on three basic pillars: economic efficiency, social equity, and environmental responsibility. These can be represented by a diagram of three intersecting spheres, or three bottom lines (TBL, or 3BL), sometimes interpreted as economic development that fulfils the needs of today without compromising the resources of tomorrow.
The task has fallen to companies to engage in this approach. As a result, the notion of Corporate Social Responsibility (CSR) appeared in the 1960s’ business literature, notably in two works, Social Responsibilities of the Businessman, by H.R. Bowen, and The Responsible Company, by G. Goyder. CSR then developed into a tangible application of the principles of sustainable development within a company.
What is a responsible business?
A responsible company is one that has committed to the process of ecological, economic and social transition, and sets sustainable development objectives.
Businesses have a large carbon footprint, and therefore have a crucial role to play in the ecological transition. In assuming a CSR approach, in this regard and beyond, a responsible company must carry out a set of actions to reduce its negative impacts. An example is how the American company Patagonia pursues the improvement of the social conditions in the chain of production of its clothing, while also promoting ecological advocacy.
Whether it is a change in practices or a re-imagining of its activities in terms of energy consumption and social impact, the means for action for companies are vast.
The development of the CSR approach in business
Environmental protection
Raising awareness among a company’s stakeholders is an important part of this. Indeed, both employees and customers can and must be involved and engaged in the ecological transition process. This is, for example, the objective of The Climate Fresk, a collaborative awareness-raising activity that has stimulated engagement in as many as 1.2 million participants since its creation in 2018 in France.
Thinking about the impacts of business activities on the environment is another important strategy. By studying the consumption of materials, the energy performance of premises or the management of waste, companies can take concrete measures to limit their carbon footprint, such as by implementing a comprehensive Energy Management System (EMS).
As highlighted by the film Demain, by Cyril Dion and Mélanie Laurent, the French printing company Pocheco is an example of a company that has shown its commitment to this responsible approach, by eliminating the use of solvents in its inks. Primarily motivated by improving employee health protection, this change demonstrates a positive result in social, environmental and economic terms.
The economic and social spheres of CSR
In this regard, the question of localization of activities is increasingly relevant. In view of the extremely important social issue of high unemployment, establishing or re-establishing businesses in European countries is becoming a growing issue, particularly in the industrial sector.
Accordingly, the social dimension of work and the protection of jobs are at the heart of a CSR approach, and companies can really stand out through the commitments they make in this area.
In this vein the company Total has decided to recruit petrol pump attendants in as many as 300 service stations in France. Going against the current of this profession disappearing, the hiring campaign demonstrates a strong social commitment, with a direct impact on the lives of individuals and their families.
The major trends for the future
An increasingly more influential legislative framework
In this context, the United Nations defined a series of Sustainable Development Goals (SDGs) in 2015. Seventeen in number, they define a strategy to achieving significant results by 2030.
Similarly, in the European Union, the European Climate Law entered into force on the 29th of July 2021, setting objectives to achieve carbon neutrality by 2050 as a legal obligation. Member States must therefore reduce their greenhouse gas emissions by as much as 55% by 2030, compared to 1990 levels.
This, of course, has various repercussions for companies, in terms of legal obligations. In France, the so-called Tertiary Decree of July 2019, for example, requires companies to reduce their energy consumption by 40% by 2030. In addition, the Action Plan for Business Growth and Transformation (PACTE) law of 2019 invites companies to make further commitments to their social and environmental responsibility in their so-called “reason for being”, or mission statement.
This legal development echoes the growing importance of these issues, which are reflected in the concerns of the general public. Indeed, today, clear actions by companies in favour of sustainable development can have direct and immediate effects on their image in society and also the job market.
The influence on the job market ...
This generation is particularly alert to these issues, considering, for example, that in France as many as 65% of young people aged 18 to 30 have indicated (according to a study by Harris, 2022) that they would be ready to give up applying for a job in a company that does not sufficiently take environmental issues into account.
This means that the brand image of a company is at stake in its CSR approach, and, therefore, demonstrating a responsible commitment can have positive repercussions and the perception of the company as an employer.
… and on consumption
There are also repercussions of CSR on sales and economic growth. Consumers are paying ever more attention to the origins of products, methods of production, and environmental impact.
Consumers are particularly sensitive to where products come from and are made, and therefore local products are benefiting from a renewed appeal. Indeed, according to an OpinionWay/CCI survey, conducted in October 2023, as much as 89% of French people want to consume more products made in France. Likewise, in Germany, the company Marktschwärmer, which offers food products direct from producers less than 40 km from the consumer’s home, is enjoying great success.
In summary, major challenges have been set for the economy and the social role that companies have to play in sustainable development, for both today and the years to come.
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