Social,environmental and economic sustainability
Sustainability explains how the public and private sector run, and defines critical tools that provide aid to businesses and organizations to operate effectively and with minimal hitches through identification and curbing of risks. Many companies have admitted to working within the basics of their social, environmental and financial responsibilities as the most critical policies and practices of sustainable development.
Because of their central role in the management and accountability of organizations, social, environmental and financial techniques are the most suitable tools when assessing an organization’s competence. Social and ecological sustainability refers to the development and functioning of the organization’s market and State influence in service delivery. It is often considered a third party and of no profit to the organisation.
Financial sustainability, on the other hand, describes an organization’s corporate investments and financings to achieve desirable operations. Differences between social and environmental sustainability as compared to financial sustainability revolve around the impacts the three concepts have in reporting and business operations. While social and environmental sustainability often covers the business’ external factors in services and reporting, financial sustainability may cover the organisation’s internal needs in investment and profit returning. It may also include the organisation’s external factors, like in debt management and financings from other sources. Don't use plagiarised sources.Get your custom essay just from $11/page
These differences in social, environmental and financial sustainability define how organisations operate and give a percentage during organisations’ reporting of their activities. In business operations, social and environmental sustainability levels are described by how organisations exploit their strengths, weaknesses and opportunities in the political and cultural spheres. The observations show how businesses relate with their clients, how they are affected by the government’s regulations, and how they fuse old traditions with the new to achieve the desired business taste. Financial sustainability, in business operations, describes how much stable the business is in carrying out its activities. It involves the organisation’s net profit; it’s debts and the extent of its external financing.
Financial sustainability always relates to the organisation’s profits. Financial sustainability arises from the organisation’s ability to finance all its operations without struggling and its ability to pay its debts. From this, financial sustainability directly controls how an organisation works and is entirely concerned with the assets at hand to guarantee the business some self-handling. Both social and environmental sustainabilities do not look at the organisation’s profits during operation and for this, differ with financial sustainability. In reporting, social and environmental sustainability again differ with financial sustainability. Social reporting grew over from employee reporting in the 1960s and 1970s. Social and environmental sustainability effects in reporting constitute a range of areas that include politics, pollution, human resources, community involvement and cultural definitions.
Politics, especially country governments, have a say in the operations of businesses and are responsible for coming up with laws and ethics that govern business operations, consequently, making the government a factor in reporting by firms — Conservative politics us by tough economic times and a decrease in interests. Environmental pollution is generally associated with a reduction of investments and business operations because of outcries. Societal involvement and disasters usually lead to increased benefits. Human resources, including employee health and safety, also add up in defining organisational reporting. The reason remains that, prospects of an organisation depend on its employee circle; those who contribute to the firm’s output. The organisation’s output measure is helpful only when it accommodates the future.
Financial sustainability also has its ways of affecting reporting by organisations. An organization’s commercial projects and history can be the influence of external financing. The organization’s financial sustainability measure can also be the basis for calculating prospects as it shows the record of outputs and the organization’s financial position at the moment which forms a basis for calculating it’s future existence and operations. The concepts of social and environmental sustainability differ from financial sustainability in business reporting in that the former gives an analysis on the effects of the organization’s surrounding and for which it may have no or less control over on its operations. The latter, financial sustainability, affect real-time reporting as it is a measure of the organization’s diligence and efficiency through its profits earned. Hence, a study on financial sustainability in reporting is a clear indication of the organizations’ ability to hold their strands together in the future.
These differences affect, diversely, the operational and reporting efficiencies of organizations. However, they do not always stand to see organizations falling or lacking coordination in the three concepts. A harmonisation of these concepts often result in proper business operation and a stable assurance that the business will still be at its best in the future. These concepts differ by the fact that both social and environmental pillars are, at most times, not within the organization’s handling ability. Financial sustainability is always at the disposal of the organization, and its upward mobility depends on the functioning of the organization; it is the structure and the fabrics that hold its maximum operation.
Sustainability encompasses the whole chain of a business; from its productions, all the primary level inputs and to its service and product delivery to the market and a subsequent compiling of returns from operations. This chain usually is affected by social, environmental and financial pillars; either positively or negatively depending on how an organization’s doings and methods of operation. Despite being of different scopes and consequences, these three pillars, when reconciled, always forms a strategic plan for a business, targeting even the future. This is what corporations have been lately harnessing and, in the course, embracing sustainability. Social and environmental sustainability are investments classed as almost together because they embrace almost similar appropriations in the business world. A most common factor for both parties is employee recognition. Employees are the backbone of every business venture because they ensure there is a maximization of inputs. When the employee environment of an organization is stable, the production process is optimized, and the desired output achieved.
Environmental factors and other related hazards may account for both the social and environmental sustainabilities. Proper disposal of waste and a rare occurrence of risks suits an organisation that aspires to succeed. Corporate sustainability can take the path of being socially responsible investments. Durability ensures that the business meets current needs and doesn’t compromise future generations to meet theirs, thus sustainable. Sustainability often calls for harmonizing social, environmental and financial responsibilities of these organizations. For corporates trying to seek economic profits, social good and future stabilities take into keen consideration the social, environmental and financial pillars.
These three concepts generally refer to the people, planet and profits; and they refer to social, environmental and financial sustainability. People, planet and profits are collectively responsible for operations of corporates hence are exploited together. Most companies have embraced the truth that positive pre-production and post-production exploitation of the environment consequently translates to a positive impact on their financial consequences. This makes the people forming the social sphere in the production process and the planet itself, forming the environment to be direct determiners of the profits an organization registers, and which forms the financial pillar. For example, reducing the number of materials used in packaging and during production reduces the overall cost of production which benefits financial sustainability. It, furthermore, reduces the effects of waste disposal on the environment. This example shows the need for coordinating the once integrated three concepts. Corporates may decide to source their packaging materials from recycled or re-used products. This lessens environmental pollution and reduces the cost of production, hence, enhancing environmental sustainability. Reducing costs of production ensures the upholding of the financial viability of the organization.
Social sustainability calls for an appreciation of an organization’s employees, stakeholders and the community in which it operates and serves. In employee management, corporates have been reported, of late, as presenting increased efforts in subjecting their employees to developmental learning which includes taking care of the environment. Socially responsible investing considers both the social and environmental spheres within its investment analysis. The increase of green investors has worked a long way in ensuring social, environmental and economic strength of corporations. Socially and environmentally responsible investors have continued staying away from deeds that cause detrimental environmental ion and poor human health. By this, they conserve their social areas of influence and still uphold work ethics related to environmental conservation.
When socially responsible investment began taking the course, most people thought that it was based on religious beliefs of sin and predicted them to having downfalls in the future because of their lesser exploitation of the flourishing market some of the socially irresponsible corporates held. To their disbelief and disapproving of sentiments, socially responsible investments thrived at an awesomely steady pace. Within no time, most had either gone or preferred going green as the pacesetters had already recorded healthy financial sustainability. This real-time example asserts the fact that incorporation of the social, environmental and commercial pillars of an organisation brings forth a successful business face and works well to adhere to all work ethics.
Socially responsible investment uses some defined factors to ensure the coordination of the three concepts; social, environmental and financial pillars are realised and upheld. The first factor is screening. Screening is a process that filters risks and securities to improvise utilisation and preventative measures that pay attention to social and economic criteria. The second factor is a negative screening. The original focus of the socially responsible investments was to shun engagement I’m undesirable activities. Lately, socially responsible investments have improvised industries such as alcohol and tobacco manufacturing to take into considerations environmental healthiness. Such sectors have now been absorbed to continue maximising their profit and at the same time, ensure social and environmental sustainability.
Thirdly, socially responsible investments use the method of positive screening, also known as inclusionary screening, to ensure social, environmental and financial sustainability. Positive testing provided room for socially responsible investors to single out organisations showing desirable operational characteristics even in non-green fields rather than ignoring the companies operating within non-green sectors. This screening was only possible when the targeted organisation took an interest in their social and environmental work spheres. When it happened, the socially responsible investors took care of the ‘planet and people’ environment while increasing returns, and that constituted an ample social, environmental and financial sphere.
Fourthly, socially responsible investments used divestiture to ensure coordination of social, environmental and financial sustainability. The investors got rid of specifically chosen investments from an organization’s portfolio after analysing their social, environmental and financial effects. As investors removed these investments, which in most cases, were degrading, they ensured environmental and social work ethics were taken care of. As they increased their financial scope, they also made sure the other concepts were at par. This shows the fantastic results that the constitution of these three concepts come along with.
Fifthly, shareholder activism has been used to influence corporate behaviour in ensuring that social, environmental and financial work ethics are note blown. Socially responsible investments brought with it management rules that did not only focus on gaining profits but also made sure organisations worked ethically in their social life and took care of the environment at all times in their operations.
Although criticisms may argue that socially responsible investments do not fully exploit their abilities to generate profits, increased implications of these investments form the basis of healthy future corporate operations. Socially accountable investments keep track of employees, communities and state requirements; at the same time they are for a green economy and always take care of the environment – additionally, these investments have continued to record increased revenues since they were first implied. If we ignore the beauty and importance that socially responsible investments hold, the whole globe is going to become a filthily polluted hub, with inefficiency in production and subsequently weak economies. This owes to the fact that upon assumption of the coordination of these three concepts, investors and corporates are not going to learn the need of keeping employees and communities at peace and the effects of a degraded environment on production and organisation’s financial security.
Title
Student’s Name
Institution Affiliation
Sustainability explains how the public and private sector run, and defines critical tools that provide aid to businesses and organizations to operate effectively and with minimal hitches through identification and curbing of risks. Many companies have admitted to working within the basics of their social, environmental and financial responsibilities as the most critical policies and practices of sustainable development.
Because of their central role in the management and accountability of organizations, social, environmental and financial techniques are the most suitable tools when assessing an organization’s competence. Social and ecological sustainability refers to the development and functioning of the organization’s market and State influence in service delivery. It is often considered a third party and of no profit to the organisation.
Financial sustainability, on the other hand, describes an organization’s corporate investments and financings to achieve desirable operations. Differences between social and environmental sustainability as compared to financial sustainability revolve around the impacts the three concepts have in reporting and business operations. While social and environmental sustainability often covers the business’ external factors in services and reporting, financial sustainability may cover the organisation’s internal needs in investment and profit returning. It may also include the organisation’s external factors, like in debt management and financings from other sources.
These differences in social, environmental and financial sustainability define how organisations operate and give a percentage during organisations’ reporting of their activities. In business operations, social and environmental sustainability levels are described by how organisations exploit their strengths, weaknesses and opportunities in the political and cultural spheres. The observations show how businesses relate with their clients, how they are affected by the government’s regulations, and how they fuse old traditions with the new to achieve the desired business taste. Financial sustainability, in business operations, describes how much stable the business is in carrying out its activities. It involves the organisation’s net profit; it’s debts and the extent of its external financing.
Financial sustainability always relates to the organisation’s profits. Financial sustainability arises from the organisation’s ability to finance all its operations without struggling and its ability to pay its debts. From this, financial sustainability directly controls how an organisation works and is entirely concerned with the assets at hand to guarantee the business some self-handling. Both social and environmental sustainabilities do not look at the organisation’s profits during operation and for this, differ with financial sustainability. In reporting, social and environmental sustainability again differ with financial sustainability. Social reporting grew over from employee reporting in the 1960s and 1970s. Social and environmental sustainability effects in reporting constitute a range of areas that include politics, pollution, human resources, community involvement and cultural definitions.
Politics, especially country governments, have a say in the operations of businesses and are responsible for coming up with laws and ethics that govern business operations, consequently, making the government a factor in reporting by firms — Conservative politics us by tough economic times and a decrease in interests. Environmental pollution is generally associated with a reduction of investments and business operations because of outcries. Societal involvement and disasters usually lead to increased benefits. Human resources, including employee health and safety, also add up in defining organisational reporting. The reason remains that, prospects of an organisation depend on its employee circle; those who contribute to the firm’s output. The organisation’s output measure is helpful only when it accommodates the future.
Financial sustainability also has its ways of affecting reporting by organisations. An organization’s commercial projects and history can be the influence of external financing. The organization’s financial sustainability measure can also be the basis for calculating prospects as it shows the record of outputs and the organization’s financial position at the moment which forms a basis for calculating it’s future existence and operations. The concepts of social and environmental sustainability differ from financial sustainability in business reporting in that the former gives an analysis on the effects of the organization’s surrounding and for which it may have no or less control over on its operations. The latter, financial sustainability, affect real-time reporting as it is a measure of the organization’s diligence and efficiency through its profits earned. Hence, a study on financial sustainability in reporting is a clear indication of the organizations’ ability to hold their strands together in the future.
These differences affect, diversely, the operational and reporting efficiencies of organizations. However, they do not always stand to see organizations falling or lacking coordination in the three concepts. A harmonisation of these concepts often result in proper business operation and a stable assurance that the business will still be at its best in the future. These concepts differ by the fact that both social and environmental pillars are, at most times, not within the organization’s handling ability. Financial sustainability is always at the disposal of the organization, and its upward mobility depends on the functioning of the organization; it is the structure and the fabrics that hold its maximum operation.
Sustainability encompasses the whole chain of a business; from its productions, all the primary level inputs and to its service and product delivery to the market and a subsequent compiling of returns from operations. This chain usually is affected by social, environmental and financial pillars; either positively or negatively depending on how an organization’s doings and methods of operation. Despite being of different scopes and consequences, these three pillars, when reconciled, always forms a strategic plan for a business, targeting even the future. This is what corporations have been lately harnessing and, in the course, embracing sustainability. Social and environmental sustainability are investments classed as almost together because they embrace almost similar appropriations in the business world. A most common factor for both parties is employee recognition. Employees are the backbone of every business venture because they ensure there is a maximization of inputs. When the employee environment of an organization is stable, the production process is optimized, and the desired output achieved.
Environmental factors and other related hazards may account for both the social and environmental sustainabilities. Proper disposal of waste and a rare occurrence of risks suits an organisation that aspires to succeed. Corporate sustainability can take the path of being socially responsible investments. Durability ensures that the business meets current needs and doesn’t compromise future generations to meet theirs, thus sustainable. Sustainability often calls for harmonizing social, environmental and financial responsibilities of these organizations. For corporates trying to seek economic profits, social good and future stabilities take into keen consideration the social, environmental and financial pillars.
These three concepts generally refer to the people, planet and profits; and they refer to social, environmental and financial sustainability. People, planet and profits are collectively responsible for operations of corporates hence are exploited together. Most companies have embraced the truth that positive pre-production and post-production exploitation of the environment consequently translates to a positive impact on their financial consequences. This makes the people forming the social sphere in the production process and the planet itself, forming the environment to be direct determiners of the profits an organization registers, and which forms the financial pillar. For example, reducing the number of materials used in packaging and during production reduces the overall cost of production which benefits financial sustainability. It, furthermore, reduces the effects of waste disposal on the environment. This example shows the need for coordinating the once integrated three concepts. Corporates may decide to source their packaging materials from recycled or re-used products. This lessens environmental pollution and reduces the cost of production, hence, enhancing environmental sustainability. Reducing costs of production ensures the upholding of the financial viability of the organization.
Social sustainability calls for an appreciation of an organization’s employees, stakeholders and the community in which it operates and serves. In employee management, corporates have been reported, of late, as presenting increased efforts in subjecting their employees to developmental learning which includes taking care of the environment. Socially responsible investing considers both the social and environmental spheres within its investment analysis. The increase of green investors has worked a long way in ensuring social, environmental and economic strength of corporations. Socially and environmentally responsible investors have continued staying away from deeds that cause detrimental environmental ion and poor human health. By this, they conserve their social areas of influence and still uphold work ethics related to environmental conservation.
When socially responsible investment began taking the course, most people thought that it was based on religious beliefs of sin and predicted them to having downfalls in the future because of their lesser exploitation of the flourishing market some of the socially irresponsible corporates held. To their disbelief and disapproving of sentiments, socially responsible investments thrived at an awesomely steady pace. Within no time, most had either gone or preferred going green as the pacesetters had already recorded healthy financial sustainability. This real-time example asserts the fact that incorporation of the social, environmental and commercial pillars of an organisation brings forth a successful business face and works well to adhere to all work ethics.
Socially responsible investment uses some defined factors to ensure the coordination of the three concepts; social, environmental and financial pillars are realised and upheld. The first factor is screening. Screening is a process that filters risks and securities to improvise utilisation and preventative measures that pay attention to social and economic criteria. The second factor is a negative screening. The original focus of the socially responsible investments was to shun engagement I’m undesirable activities. Lately, socially responsible investments have improvised industries such as alcohol and tobacco manufacturing to take into considerations environmental healthiness. Such sectors have now been absorbed to continue maximising their profit and at the same time, ensure social and environmental sustainability.
Thirdly, socially responsible investments use the method of positive screening, also known as inclusionary screening, to ensure social, environmental and financial sustainability. Positive testing provided room for socially responsible investors to single out organisations showing desirable operational characteristics even in non-green fields rather than ignoring the companies operating within non-green sectors. This screening was only possible when the targeted organisation took an interest in their social and environmental work spheres. When it happened, the socially responsible investors took care of the ‘planet and people’ environment while increasing returns, and that constituted an ample social, environmental and financial sphere.
Fourthly, socially responsible investments used divestiture to ensure coordination of social, environmental and financial sustainability. The investors got rid of specifically chosen investments from an organization’s portfolio after analysing their social, environmental and financial effects. As investors removed these investments, which in most cases, were degrading, they ensured environmental and social work ethics were taken care of. As they increased their financial scope, they also made sure the other concepts were at par. This shows the fantastic results that the constitution of these three concepts come along with.
Fifthly, shareholder activism has been used to influence corporate behaviour in ensuring that social, environmental and financial work ethics are note blown. Socially responsible investments brought with it management rules that did not only focus on gaining profits but also made sure organisations worked ethically in their social life and took care of the environment at all times in their operations.
Although criticisms may argue that socially responsible investments do not fully exploit their abilities to generate profits, increased implications of these investments form the basis of healthy future corporate operations. Socially accountable investments keep track of employees, communities and state requirements; at the same time they are for a green economy and always take care of the environment – additionally, these investments have continued to record increased revenues since they were first implied. If we ignore the beauty and importance that socially responsible investments hold, the whole globe is going to become a filthily polluted hub, with inefficiency in production and subsequently weak economies. This owes to the fact that upon assumption of the coordination of these three concepts, investors and corporates are not going to learn the need of keeping employees and communities at peace and the effects of a degraded environment on production and organisation’s financial security.
References
Barter, N. and Bebbington, J. ( 2009 ), Factor 4/10/20/130: A briefing note, Social and Environmental Accountability Journal, 29 ( 1 ): 23 – 26.
Hopwood, A., Unerman, J. and Fries, J. ( 2010 ), Accounting for Sustainability: Practical Insights, Earthscan: Abingdon.
Adams, C.A. and Whelan, G. ( 2009 ), Conceptualising future change in corporate sustainability reporting, Accounting Auditing and
Accountability Journal 21 ( 1 ): 118 – 43. Association of Business Schools (ABS) ( 2010 ), ABS Academic Journal Quality Guide v4, available at http://www.associationofbusinessschools.org, accessed November 2012.
Azcárate, F., Carrasco, F. and Fernández, M. ( 2011 ) The role of integrated indicators in exhibiting business contribution to sustainable development: a survey of sustainability reporting indicators, Revista de Contabilidad [Spanish Accounting Review] 14 ( Extraordinario ): 213 – 40.
Canadian Securities Administrators (CSA) ( 2010 ) CSA Staff Notice 51-333 Environmental Reporting Guidance , available at http://www.osc.gov.on.ca/documents/en/Securities-Category5/csa_20101027_ 51-333_environmental-reporting.
Chapman, R. and Milne, M.J. ( 2004 ) ‘The Triple Bottom Line: How New Zealand Companies Measure Up’, Corporate Environmental Strategy: International Journal for Sustainable Business, 11 ( 2 ): 37 – 50.
References
Barter, N. and Bebbington, J. ( 2009 ), Factor 4/10/20/130: A briefing note, Social and Environmental Accountability Journal, 29 ( 1 ): 23 – 26.
Hopwood, A., Unerman, J. and Fries, J. ( 2010 ), Accounting for Sustainability: Practical Insights, Earthscan: Abingdon.
Adams, C.A. and Whelan, G. ( 2009 ), Conceptualising future change in corporate sustainability reporting, Accounting Auditing and
Accountability Journal 21 ( 1 ): 118 – 43. Association of Business Schools (ABS) ( 2010 ), ABS Academic Journal Quality Guide v4, available at http://www.associationofbusinessschools.org, accessed November 2012.
Azcárate, F., Carrasco, F. and Fernández, M. ( 2011 ) The role of integrated indicators in exhibiting business contribution to sustainable development: a survey of sustainability reporting indicators, Revista de Contabilidad [Spanish Accounting Review] 14 ( Extraordinario ): 213 – 40.
Canadian Securities Administrators (CSA) ( 2010 ) CSA Staff Notice 51-333 Environmental Reporting Guidance , available at http://www.osc.gov.on.ca/documents/en/Securities-Category5/csa_20101027_ 51-333_environmental-reporting.
Chapman, R. and Milne, M.J. ( 2004 ) ‘The Triple Bottom Line: How New Zealand Companies Measure Up’, Corporate Environmental Strategy: International Journal for Sustainable Business, 11 ( 2 ): 37 – 50.