Sustainable development, corporate social responsibility, triple bottom line, creating shared value, non-financial reporting…
There are so many concepts around sustainability. This article aims to explain those basic concepts, understand their differences, similarities, and the links between them.
Sustainable development and sustainability
The most cited and also the most debated definition of sustainable development is from the Brundtland Report (1987):
“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
Simply put, the sustainable development model aims for long-term stability of human societies. For that, the goal is to find balance between environmental, social, and economic aspects. These are also known as the three pillars of sustainability:
Many initiatives were taken in the past 30 years to raise awareness and take action for sustainable development.
At the moment, the biggest initiative is the United Nations 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs).
The SDGs were adopted by all United Nations Member States in 2015 as “a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030”.
Sustainable development and sustainability are similar terms and often seem like interchangeable. However, sustainability tends to a long-term goal, while sustainable development is the way to achieve it.
According to a research study, here are the main differences:
Corporate Social Responsibility (CSR)
The concept of corporate social responsibility (CSR) was introduced by Howard Bowen (1953) :
“The obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society.”
Nowadays, CSR is seen as a company's responsibility for its impact on society and refers to corporate initiatives that address sustainability issues. However, there is no commonly accepted definition at international level. The same term can refer or lead to different approaches such as corporate philanthropy, creating shared value, and even the most broadly used: the Triple Bottom Line concept (People, Planet, Profit).
The main difference between sustainability and CSR would be that the first one is a global agenda involving governments, companies, civil society, etc., while the second one is only corporate related.
European Commission defines CSR as “the responsibility of enterprises for their impact on society and, therefore it should be company led.
Companies can become socially responsible by:
Creating shared value (CSV) is a concept introduced by Kramer and Porter in 2011 in a Harvard Business Review article. While CSR is about corporate responsibility, CSV is about value creation for both the company and the local communities.
The triple bottom line (TBL) is a concept that consists of three elements: profit, people, planet. Instead of the classical one bottom line – the profit, TBL takes into account social and environmental issues into measuring corporate performance.
Sustainability, CSR and triple bottom line concepts are used in non-financial reporting. Regardless of the term used, non-financial reporting refers to measuring, analysing and communicating to its stakeholders the social, environmental, economic and governance aspects of an organisation. For more information regarding non-financial reporting, please see our page “sustainability reporting”.