Demystifying Sustainability Buzzwords

Sustainability

Demystifying Sustainability Buzzwords

  • Demystifying Sustainability Buzzwords Sustainability, responsible business, CSR, corporate citizenship, corporate responsibility, creating shared value, ESG… what''''s the difference? This infographic sheds light on the definitions of these terms and the nuances, if any, between each definition.
  • Date: Feb 22, 2019
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De-mystifying sustainability buzzwords

A company looking to embark on a journey to be more responsible and sustainable may face a challenge navigating the myriad of terms in use today. While these terms may have different origins and formal definitions, their use in everyday life by organisations and individuals often overlaps and they are often used interchangeably, creating confusion. But do they mean the same thing? If not, what is the difference between these terms?

Sustainability / Sustainable Development

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability – now a widely-adopted term in business management – often refers to the approach taken by companies to create and maintain long-term stakeholder value by addressing the economic, environment, social and governance issues related to their business.

Source: Brundtland Report

Responsible Business

A responsible business can be defined as one that includes creating healthy communities and maintaining a healthy environment as part of its strategy to achieve long-term financial value. It is a term referring to the responsibilities businesses have towards a broader range of stakeholders – on top of their shareholders – including employees, customers, suppliers, governments, communities, NGOs and the environment.

Source: Business In The Community (BITC)

Corporate Social Responsibility (CSR)

A term which emerged as early as the 1950s and still used today, CSR encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organisations at a given point in time. Some may use the term more narrowly than the given definition, focusing only on the social side of business, particularly when it comes to engaging communities through philanthropic giving and employee volunteerism.

Source: Carroll’s Pyramid of Corporate Social Responsibility (CSR)

Corporate Citizenship

Corporate citizenship refers to the idea that corporates should be viewed as a part of society, not apart from it. Like individual citizens, companies not only have rights, but also responsibilities and aspirations. In exercising their rights, acknowledging their responsibilities and pursuing their aspirations, companies contribute to society through their core business activities, social investment and philanthropy programmes, and engagement in public policy.

Source: Corporate Citizenship

Environmental, Social, Governance (ESG)

A generic term used mainly by the financial sector to refer to the environmental, social and governance factors, alongside financial factors, used to inform the investment/lending decision-making process.

Source: Adapted from: FT Lexicon and MSCI

Economic, Environmental, Social (EES)

Refers to the economic, environmental and social risks and opportunities which companies should consider, for a more holistic approach to business management.

Source: Bursa Malaysia’s Sustainability Reporting Guide

Creating Shared Value (CSV)

A business concept first introduced in 2011 by economists Michael E. Porter and Mark R. Kramer in an article for the Harvard Business Review. CSV is about generating economic value in a way that also produces value for society by addressing its challenges. It requires companies to pursue new market strategies that value both economic and social development.

Source: Michael Porter

Triple Bottom Line

A popular term coined in 1994 by John Elkington, the Triple Bottom Line was originally proposed as an accounting framework that goes beyond the traditional measures of profits and shareholder value to include environmental and social dimensions. Today, it is used by some companies in their approach to produce annual reports that include material disclosures on these dimensions, also known as “integrated reports”.

Source: John Elkington
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