Insights

The Service Leader message first appeared in SR Inc’s Quarterly Newsletter.

For over a decade, from 2008 to 2018, I displayed the 1999 Dow Jones Sustainability Index (DJSI) definition of corporate sustainability under my email signature. This definition states: “A business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental, and social developments.” This definition served as a cornerstone, highlighting the importance of competence in managing nonfinancial “capital” critical to long-term enterprise success in diverse global markets. 

How an enterprise defines Corporate Sustainability is now legally significant.  Consequently, if your enterprise has not done so, it is past time to build a solid and sustainable definition of the term and your enterprise’s related efforts. This is a process that Sustainability Roundtable, Inc. would be glad to assist with and will properly involve both your General Counsel and at a minimum, an enlightening tour through the last 25+ year evolution of the term. 

The United Nations’ Brundtland Commission’s 1987 report famously introduced the broad field of “sustainable development” as “meeting present needs without compromising future generations’ ability to meet their own.” This concept was a preliminary step toward broader acceptance and integration of sustainability in business practices. In 1997, John Elkington transposed this concept of sustainable development to the far more narrow subject of enterprise or corporate sustainability when he proposed “The Triple Bottom Line,” (for individual enterprises) encapsulating the idea that true corporate profitability should account for people and the planet in addition to monetary profit. This approach was transformative, urging businesses to measure their environmental and social impacts alongside financial performance. As these concepts gained traction, frameworks, and indices such as the DJSI began to quantify and benchmark these efforts, paving the way for standards like the European headquartered, impact conscious, Global Reporting Initiative (GRI) and the later, U.S. headquartered, Sustainability Accounting Standards Board (SASB) focused on industry specific financial materiality. These frameworks helped standardize the reporting of economic, environmental, and social performance, enhancing transparency and accountability.  But legal mandates were needed to create comparable metrics and they have arrived. 

Supporting the development of mandated reporting requirements around the world was a change in the articulated understanding of world leading business collaboration.  In 2019, JP Morgan CEO Jamie Dimon led The Business Roundtable in redefining “The Purpose of the Corporation” reversing a Business Roundtable declaration decades ago and committing to serving all stakeholders instead of shareholders alone. This was paralleled by the World Economic Forum’s 2020 Davos Manifesto, which largely restated its 1973 Manifesto that advocated for a stakeholder-centric approach to global businesses.

The most important, currently enforceable legal manifestation of this new commitment to multi-stakeholder value creation is the European Union’s Corporate Sustainability Reporting Directive (CSRD) and the International Financial Reporting Standards (IFRS) Foundation’s establishment of the International Sustainability Standards Board (ISSB) mark critical steps towards integrating sustainability into core corporate governance frameworks. These initiatives aim to streamline and enhance the quality of sustainability reporting globally, a move that supports informed decision-making by all corporate stakeholders. In the United States, although the SEC’s climate rule is currently stayed, it also reflects an unequivocally clear move to recognizing competence in multi-stakeholder value creation as material to corporate governance and financial reporting. 

Given these developments, it is worth taking a moment to offer an informed if still provisional definition of corporate sustainability:

“Corporate sustainability is an approach to business that commits to building value with the corporation’s stakeholders including employees, customers, suppliers, host communities and investors over the near, mid and long term, in a world confronted by unprecedented existential challenges.”  

This draft definition is intended to be legally appropriate, commercially effective, and compellingly challenging. It’s only one possible draft but it captures enterprise sustainability as an evolving discipline that enables corporations to adapt to diverse, multi-level, far-reaching change while acknowledging the unprecedented nature of our global existential challenge of human-caused climate breakdown. It pushes an enterprise’s sensitivity and its ability to react out into its relationships with diverse global stakeholders.  

As discourse and laws around the world change corporate sustainability, through both advocacy and opposition, the need for a current, accurate, and adaptable definition has never been more critical. SR Inc’s growing team looks forward to collaborating with Member-Clients to refine and adapt their own definition, ensuring it aligns with their unique contexts.  Done right, this effort aligns with – but also steps beyond – compliance and public relations. To step into ethical integrity and a sustainable social license to operate, even as the transformative depth and breadth of our global challenge is, every quarter and every year, only more clear. 

Jim Boyle is the CEO & Founder of Sustainability Roundtable, Inc.  For more than a dozen years, Jim has led full-time teams of diverse experts to assist nearly 100 Fortune 500 and growth companies in their move to more sustainable high-performance.  Specifically, SR Inc has helped world-leading corporations, real estate owners, and federal agencies to set goals, drive progress, and report results in their move to greater Corporate Sustainability.  Mr. Boyle led in the creation of SR Inc’s Net Zero Consortium for Buyers (NZCB), which advises and represents Fortune 500 and fast growth companies across the U.S. and internationally in the development of renewable energy strategies and the procurement of both on and off-site advanced energy solutions.  Before founding SR Inc, Mr. Boyle co-led Trammell Crow Company Corporate Advisory Services in San Francisco and returned to his native Boston and Trammell Crow Company’s market leading team in Greater Boston where he received the Commercial Brokers Association’s Platinum Award for the highest level of commercial real estate transactions.  Earlier, he advised companies on real estate and environmental matters as an attorney at a large law firm based in Boston.  Jim is a graduate of Middlebury College, where he co-captained the football team, and Boston College Law School.  Early in his career, he served as a federal law clerk, an aide to John F. Kerry in the U. S. Senate, and on Vice President Al Gore’s campaign for President.  Jim lives in Concord, MA with his wife and kids a half mile across the street from Emerson’s house and museum on the route to Walden Pond.