stalking sustainability

GMI 26 Summer 1999 1

Stalking Sustainability

Simon Zadek

Chair, Institute of Social and Ethical AccountAbility, UK

Dr Simon Zadek is Chair of the international professional body for social

auditing, the Institute of Social and Ethical AccountAbility, having been

Development Director of the New Economics Foundation and Chair of the

Ethical Trading Initiative until the end of . He is on the Steering

Committee of the Global Reporting Initiative, the Operating Council of the

Global Alliance for Workers and Communities, and the International Advisory

Committee of the Copenhagen Centre.

Simon has contributed to the development and practice of corporate

responsibility and accountability as a practitioner advisor and external verifier, in

building multi-stakeholder alliances to promote good practice, and through his

writing. He has co-edited several books, including Building Corporate AccountAbility (with Peter Pruzan and Richard Evans; Earthscan, ), and

more recently Mediating Sustainability: Growing Policy from the Grass Roots(with Jutta Blauert) (Kumarian Press, ). He has written on diverse topics such

as environment and trade, indicators for sustainable development, Buddhist

economics, social entrepreneurs, utopia and economics, ethical trade, civil

regulation, new social partnerships, disability, and sustainable consumption.

Increasing numbers of companies are pronouncing on the integration of sustainable

development into their strategic vision and operational policies and processes. But what

does this mean for the way a company will need to measure, report and be run. This

paper traces recent trends in the evolution in a critical piece of this puzzle: social respon-

sibility. It explores the why and the how, focusing on the role of civil regulation and

emerging standards in the field. Building on this, sustainability accounting, auditing

and reporting is considered from the viewpoint of how organisational performance

can be assessed against the broader system condition of sustainability. It highlights

several qualitative dilemmas that will need to be resolved in designing appropriate

approaches, emphasising the need to explore the basis of decision-making at the higher

level of organisational governance as well as at operational levels

u Thrace House, 44–46 Southwark St,

London SE1 1UN, UK

! [email protected]

[email protected]

• Corporate social

responsibility

• Social auditing

• Sustainability

reporting

• Civil regulation

• Corporate

governance

here are growing pressures for the social aspects of the sustainability

conundrum to be addressed by corporations. However, the experience of environ-

mental auditing and reporting has demonstrated just how difficult it is to establish a

clear and commonly agreed approach to measuring and reporting on an organisation’s

environmental performance. And getting all but a relatively small number of leadership

corporations to take the environment seriously has proved to be notoriously difficult—

even when financial gains can be and are demonstrated (SustainAbility ; W B C S D ) .

During the s, however, we have taken some significant steps forward in drawing

the social out into the open. We have begun to explore its meaning in the organisational

context, and to create systems, procedures and gradually standards that enable us to cali-

brate and manage relevant processes and outcomes (ISEA ). As we move along the

millennium’s cusp, we are now for the first time in the modern era beginning to grapple

systematically with the matter of sustainability as it bears across the three spheres: environ-

mental, economic and social.

This paper seeks to describe some of these more recent developments. It focuses particu-

larly on the social dimensions of sustainability. This is not because the social is more or

less important than the environment, a debate that seems worse than pointless. Concen-

trating on the social issues is helpful because it has been so marginal to date in the sustainability

debate and practice. There is some catching up to do, and in recent years exactly such

a process has been in play. This process has involved excitement and frustration in ample

measure, and it is time to reflect on what we have got from that experience.

Through the social we see both similarities to, and radical differences from, the environ-

mental dimensions we arguably understand in some ways more clearly. Through the social

we also begin to edge towards the grander aim of integration. But integration of the three

spheres is not for the sake of conceptual completeness or tidiness. It is because organisa-

tions need to understand and at times make trade-offs between options, each of which

offers a menu of possible costs and benefits. Integration is critically important for organisa-

tions to understand the full implications of the options they face and decisions they make.

Integration is important for stakeholders to understand and effect what could and did go

on, and to find ways to voice their sense of which trade-offs make sense, and which do

not.

Which social?

As good a place to start as any is to consider what we might want to include in the ‘social’.

The Council on Economic Priorities, for example, describes several key spheres of ‘corpo-

rate responsiveness’ apart from the environment: charitable giving; human resources; health

and safety; and international sourcing and child labour (C E P ). The European Founda-

tion for Quality Management (E F Q M), building out from the ‘business excellence model’,

provides a further perspective on ‘contribution to society’, as does the measurement rod

of Corporate Community Involvement developed by Bruce Naughton Wade (Bruce

Naughton Wade ). F o rtune magazine recently published a list of ‘the best c o m p a n i e s

to work for in America’, based on measures of the way companies treat their staff (Branch

). The Centre for Tomorrow’s Company in association with Kleinwort Benson has,

among others, defined criteria that allow the share prices of socially ‘inclusive’ companies

to be tracked to determine their performance relative to other companies (Goyder ) .

Or, if transparency is the key, the New Economics Foundation (N E F), in association with

the Institute of Social and Ethical AccountAbility (ISEA) and the Association of Certified

simon zadek

2 GMI 26 Summer 1999

T

Chartered Accountants (ACCA), have defined criteria for assessing the quality of trans-

parency, focusing on the social sphere (Gonella et al. ).

The problem is not, therefore, as some would have it, a shortage of benchmarks, measure-

ment options and rating systems. There is an over-abundance of factors to take into account;

and similarly of criteria, assessment frameworks and ranking systems to operationalise these

factors into simplified, comparative measures of performance. Which, then, are the right

ones?

This is an extraordinary list of aspirations as to how humans should behave towards

each other, preceded by a host of pragmatic measurement, reporting and improvement

kits for the business sector. It should not, of course, lead us to forget that every society is

permeated, indeed arguably made up of, social rules. Some are vested in national law,

particularly labour law; some are embedded in less precise but equally (if not more) relevant

social norms. Increasing numbers exist within international agreements. Notable among

these are key conventions agreed through the International Labour Organisation (ILO);

the United Nations Universal Declaration of Human Rights; the most comprehensive

and universally applicable standard directly addressing the responsibilities of business

operating internationally, the International Labour Organisation’s Tripartite Declaration

of Principles concerning Multinational Enterprises and Social Policy (ILO ); and the

Guidelines for Multinational Enterprises developed by the Organisation for Economic

Co-operation and Development (OECD ). Some social norms are also set through

omission: for example, the lack of social and environmental standard international trade

regulations overseen by the World Trade Organisation.

Why should companies bother?

Increasingly, public statements by senior managers of leading companies seek to estab-

lish a bridgehead between sound business and civil practice. But why should companies

bother? One way of thinking about this is through the ‘Rationale Triangle’, represented

in Figure (Zadek et al. ).

a The Managerialist rationale: that to survive and prosper in society, business needs

to know what is happening, what people think about them, and how best to respond

to and influence those perspectives. At the simplest level, this speaks to the need for

good market research and public relations. At the more sophisticated level, this highlights

the need for managers to have a broader understanding and appreciation of stakeholder

needs and views, and the patterns of demands on business that are likely to arise in

the future.

b The Public Intere s t rationale at the second corner of the triangular spectrum concerns

the ability of society to make business respond to changing interests and needs. This

public interest perspective emerged particularly in the s, but has become insti-

tutionalised more recently in the growing ethical consumer and investment move-

ments. Here, businesses are not merely choosing to undertake some form of social

and ethical accounting, auditing and reporting as a means of understanding and manipulating

their social environment, but are rather being forced to respond to demands from

the actors that make up that environment.

c The third corner of the triangle is the most contentious, since it refers more to a

Value Shift in business than a compliance or managerialist-based response to new

pressures. Here lies the view that business can evolve and take on a different historic


stalking sustainability

role in society, at the same time as the roles traditionally taken on by the state are

increasingly under threat. Leaders are tending to question the raison d’être of their

company’s and their own activities and are searching for an expanded repertoire of

explanations and measures of success that are provided by the bottom line.

Companies are increasingly under pressure from civil institutions to impose social and

environmental standards along the economic pathways over which they have some lever-

age and control. This includes the spheres within their own organisational and legal boun-

daries—for example in relation to their own staff—and increasingly down so-called global

production or supply chains. These pressures come in the form of activist campaigning

which aims to damage companies’ market performance by undermining their reputation

(Zadek and Amalric ). These pressures are not linked in the main to public regulation,

except in so far as the regulatory threat is one basis for successful campaigns. At the same

time, this is not a matter of ‘voluntary’ approaches in any meaningful sense. Rather, companies

are responding to an organic ‘civil regulatory framework’.

Such civil pressures are not, however, the sole or maybe even the most important driver

for companies embracing ‘value-based’ approaches to doing business. Of equal if not greater

importance are the organisational and market changes associated with contemporary tech-

nological developments and the process of globalisation. With respect to the former, we

are seeing the most radical shift in the manner in which commerce is organised since

Taylorian mechanics entered our organisational vocabulary. The downsizing and flat-

tening of the main rump of most corporations, and the dispersal of many of their core

functions into market networks (through, for example, franchising and outsourcing), all

raise new demands with regard to quality at every level. The combination of techno-

logical developments in the area of computing and communications—and increasingly

their relationship—has vastly reinforced the tendencies towards ‘functional dispersal’. At

the same time this has tightened market and cost-based competition in ways that place

enormous pressure on the need to make these dispersed operations work at their peak

of possible performance.

simon zadek


Managerialist/stakeholder

management

Value

shift/base

Public

interest/

accountability

Figure 1: rationale triangle

Globalisation has both enabled and driven these tendencies further. Opportunities for

cost reduction and accessing new markets through physical and cultural extensions of

the business process has placed further pressures on the traditional business unit. For exam-

ple, this has focused the source of value-added and profit on supply rather than production,

and brand rather than product leadership.

A ‘stakeholder-based company’ that is able to build trust and integrity into its key relation-

ships thereby lowers the cost of establishing and maintaining increasingly complex networks

of suppliers, franchisees and agents; physically dispersed staff (Wheeler and Sillanpää ) .

Such a company is able to handle more effectively multiple levels of actual and potential

regulators from the local town council to the World Trade Organisation. A stakeholder-

based company is one that in many respects is most fit to take advantage of the techno-

logical and regulatory changes that underpin and enable the globalisation of trade, production

and marketing.

Another way of understanding this is through an examination of the rising impor-

tance of intangible assets. These are made up particularly of skills, knowledge, relation-

ships and reputation. Intangible assets are increasingly important, particularly for those

companies with a competitive advantage focused heavily on knowledge creation or/and

market position. One recent study suggested that as much as % of global financial assets

comprises brand value (Clifton and Maughan ). The significance of intangible assets

explains why companies are rightly concerned to protect their reputations, to recruit the

best people and to create an environment suited to innovation.

These facets of intangible assets go some way to explaining why there has been such

a dramatic growth in stakeholder engagement, non-financial measures and increased trans-

parency. In the short term this may be rooted in the protection and enhancement of

brand and reputation. However, this is at best a static, one-off gain. The longer-term

contribution to competitive advantage lies in the contribution to dynamic, active knowledge

through the development of new social networks, more nuanced risk assessment processes,

and more effective product development and communication. It is in this context that

new tools such as ‘social auditing’ need to be understood, such as the ‘intellectual capital’

approach developed by Skandia (Skandia ).

What companies do

So what do companies do? Faced with good reason for acting, and a host of possible

social standards, how do companies then operationalise their response?

Part of the answer is that there are in most cases many things that companies are already

doing, and might simply want to do better, or make more visible. As a senior executive

of a large telecommunications company argued, ‘our greatest contributions lie in the income

we give to people we employ, the taxes we pay, and the technological gains that our

investments and operations bring to individuals and the overall economy’. In one sense

this is clearly correct. The core business has a greater social impact than the philanthropic

side of any business, however great and effective that might be. The most significant shift

in corporate responsibility in recent years has indeed been the increasing acknowledge-

ment by large companies that social responsibility is about the way they do business, not

about corporate giving.

This focus on core business is leading to the emergence of new and renewed business

tools which take social and environmental issues more into account. Social labelling accom-

panied by effective monitoring and verification against agreed standards is one means

whereby companies seek to establish social issues at the heart of the business process,



from supply through to the consumer. There has been an explosion of such labels, intended

to reward companies that demonstrate good behaviour in the consumer market, includ-

ing the ‘Rugmark’ associated with monitoring the use of child labour in the production

of carpets in India; the fair-trade marks of the Max Havelaar Foundation in the Netherlands

and the Fairtrade Foundation in the UK awarded to fairly traded coffee; and the social

label awarded by the Abrinq Foundation in Brazil to companies that demonstrate that

they do not exploit child labour. While a significant development, a recent study published

by the European Commission has raised questions about the effectiveness of such initiatives

(Zadek et al. ). The study concludes that for social labels to move beyond the niche

product and niche ‘aware’ consumer will take considerable consumer education, and will

probably require the application of fiscal incentives to make labelled products more attractive

to consumers on price as well as ethical terms.

A further tool used more o n rather than b y companies is ethical investment. According

to the latest study by the US Social Investment Forum, the total value of all ‘responsibly

invested’ assets under management in the U S climbed from U S$ billion in to U S$.

trillion in (Social Investment Forum ). Such investments now represent about

% of new dollar inflows. In the UK and elsewhere in Europe the comparable figure is

much lower, but is rapidly climbing. Critically, the leverage of still relatively small ethical

investment holdings can be considerable. In the UK, for example, the shareholder action

group, PIRC, has achieved much by being able to table shareholder motions with control

over only very small shareholdings. South Africa has seen the launch of a number of ‘black

empowerment’ venture funds, targeted to supporting companies owned and managed

by black business people excluded from economic opportunities during the apartheid

period.

Social and ethical accounting, auditing and reporting

Some of the more interesting tools to emerge during the s have been methodolo-

gies for social and ethical accounting, auditing and reporting (‘social auditing’ for short).

Companies seeking to take greater account of social issues—for whatever reason—need

to know the views of stakeholders who do count (Zadek a). They also need to know

how these views are changing over time, and how they are likely to determine attitudes

and actions by stakeholders—whether individual or collective—towards the company.

simon zadek


There has been a shift in the language of these statements from:

t If being good is good for business, then we will be good; to

t It is good for business to be good; to

t It is necessary for business to be good.

Recent statements by BP superbly illustrate the third level—for example:

A good business should be both competitively successful and a force for good

(BP 1998).

Box 1: shifting discourse

Thus, companies seek to measure and disclose their social and ethical performance in

order:

t To understand what they are trying to achieve and how best to measure performance

against their aims

t To know what they are doing

t To understand the implications of what they are doing

t To understand in what ways if any they can explain their actions to increasingly scepti-

cal and aggressive stakeholders

t To understand whether there are practical options for improving their social perfor-

mance in ways that will not harm their business performance, and may in many cases

improve it

Surely, you might argue, senior managers at least k n o w what they are doing? The worry-

ing answer to this is: not always, and often not in critical areas where ‘soft’ information

is required. In one recent internal seminar run for a major multinational, an overhead

was shown of an article about people demonstrating against the employment of child

labour. The seminar’s facilitator laughingly said, ‘of course, you don’t do this sort of thing’.

A nervous silence was followed by one of the more outspoken participants blurting out:

‘But that is the whole point. We don’t know. This whole downsizing and decentral-

isation has meant that we no longer get information about these sorts of things. And even

if we did, we would never get a chance to look at it, or do anything about it.’ This proved

to be a prescient statement. Just a few months later, the company was subjected to an

aggressive challenge in the national press over its social, ethical and environmental record

in and around one of its major facilities in the South, a facility that had the reputation

within the company of having ‘best-practice’ community relations and environmental

programmes.

Managers need to understand the factors that influence their company’s performance.

These include an increasingly complex matrix of non-technical, non-financial factors—

exactly the kinds of factor that they and their companies are ill-equipped to find out about,

and even less equipped to understand. Hence the ‘Tomorrow’s Company’ initiative con-

cluded: ‘tomorrow’s company is able to develop a framework of measurement that . . .

will include financial components but will also feedback on the values [and] the health

of key relationships’ (R S A ). This is not just a question of more market surveys covering

a wider range of issues. Shell has been supporting environmental issues for several decades,

and until the Brent Spar fiasco was seen as a reasonably ‘green company’. No amount

of traditional market research would have been likely to predict the public response to

Greenpeace’s call not to sink the Brent Spar. Similarly, it is very unlikely that the managers

of toys, sportswear and textiles companies in the late s would have believed that the

consuming public would respond as they have in the last couple of years to concerns

about labour conditions in suppliers in the South. After all, they would have argued, it

has always been this way, and consumers benefit from poor labour conditions in terms

of cheaper products. The evolution of people’s ethical positions is, perhaps thankfully,

not purely guided by such thoughtless logic.

Companies are increasingly realising that merely asking people their opinion about

things does not reveal the dynamic process of how and in what directions people develop

their thinking on the basis of deeply rooted values. ‘Counting’ in the traditional sense

of polling people’s views may work in choosing between different flavours of ice cream,

but it rarely helps in understanding how people develop a sense of moral concern, and



how this concern is voiced. Understanding stakeholders’ views requires much more than

simple survey work. Some deeper social contract is needed to go beyond inaccurate counting

to a point where stakeholders begin to feel that their views count.

Companies realise now that they need to understand the underlying ‘climatic condi-

tions’ that underpin people’s values if they want to be able to predict how they will respond

to any particular situation. This has dramatic implications. In moving away from the conven-

tions of traditional market surveying that do little more than observe the ‘weather’ at

any point in time, companies are faced with a far more complex dynamic that can only

really be understood if they actually engage and gain people’s trust.

So companies now understand the need to ‘count ethics’. Most importantly this is to

understand things that are going on that were not previously considered important to

the daily life of a busy manager. What follows from this acceptance of the need to measure

is the realisation that conventional approaches do not always work. Measuring turns out

to be far more than a purely ‘subject–object’ phenomenon, a ‘we measure it’ situation.

It turns out that, insofar as measuring is about understanding the deeper patterns that

inform people’s attitudes and actions, alternative approaches to measurement are needed.

There are clear signs of a convergence of standards taking place in the practice of social

and ethical accounting, auditing and reporting. The relevance of both external bench-

marks and stakeholder dialogue is confirmed in most current practice, albeit to differing

degrees in each case. Even those approaches that have focused exclusively on one or

other element are now moving towards some combination. The originators of the E t h i c a lAccounting Statement, for example, are actively exploring how external benchmarks as well

as verification might be used where the approach has to date focused exclusively on stake-

holder dialogue. Companies such as British Telecom, which are known for their environ-

mental reporting and activities related to the European Total Quality Management, are

now actively exploring how best to integrate these experiences with the emerging standards

in social and ethical accounting and auditing. Within the public and private, non-profit

communities, increasingly attention is also being given to this emerging body of experience.

A similar convergence is taking place in the understanding of the need for and roles

of the external agent, although again with different emphases. Ben & Jerry’s, for example,

has in its recent history of social performance reports seen the external agent essentially

as an ‘evaluator’, asked to pass personal judgement on the company’s social performance.

More recently, however, it has been experimenting with a move away from this personalised

judgement process more towards a view of the external agent as ‘auditor’, charged with

the duty of ensuring that the published statement is a correct description of what happened

over the period, rather than his or her view of those events.

There is a gradual consensus emerging as to what constitutes some of the key principles

of ‘good practice’ that need to be reflected in any sound approach (Gonella et al. ;

ISEA ). This understanding is focused on three key areas. First, to ensure that social

and ethical accounting, auditing and reporting becomes an increasingly bounded and hence

d e fined set of activities, it must become less and less possible for anyone to describe anything

as being the practice of social and ethical accounting and auditing. Second, not only the

activity and outcomes, but their quality, should become subject to assessment as a part

of the ‘professionalisation’ process. Third, there is a need to ensure that the skills and

experiences that are required to support the process of social and ethical accounting, audit-

ing and reporting become more and more precisely specified and testable.

This emerging consensus is being driven in the main by the Institute of Social and

Ethical AccountAbility, and the individuals and organisations that have come together

around AccountAbility’s networks of activity. Far from closing the door to further experi-

mentation, this emerging consensus allows for a more systematic assessment of different

simon zadek


approaches, a clearer dialogue between them and their users, and a deeper appreciation

of what skills and experience are required to make any process effective in achieving

understanding, transparency and accountability.

Thinking about sustainability

This brief tour of some of the issues and options in taking the ‘social’ more into account

in moving business towards responsible practices brings us back to the matter of ‘sustain-

ability’. At one level, we are interested in finding a way of bringing together the social,

the environmental and the economic. The metaphor of the ‘triple bottom line’ is useful

in getting business managers and boards to conceive of the possibility and appropriate-

ness of such a task (Elkington ). However, the metaphor breaks down when one

tries to use it to ground a conceptual framework that allows us to understand what really

needs to be done. There are a number of issues to take into account in grounding one’s

thinking and practice in building operational tools for companies wishing to take the

fuller sphere of sustainable development into account, some of which are discussed below

(Zadek b).

The main problem is quite simply that ‘sustainability’ refers to a system condition. Organ-

isations, however large, are subsystems. The relationship between these two levels in under-

standing the pathway to sustainable development is not clear. It is reasonable, for example,

to conclude that less pollution is a good thing if the objective is e n v i ronmental s u s t a i n a b i l-

ity. But if the objective is overall sustainability, is less pollution a good thing if people are put

out of work? There is no obvious way to value the trade-offs between pluses and minuses

across the three domains of sustainable development (or indeed often within them).

Any systematic approach to sustainability auditing will therefore need to embrace the

evolutionary nature of our understanding of sustainability and its implications for our

day-to-day practice. We are only now beginning to understand some of the dynamic

feedback loops between the different spheres that need to be taken into account, and

our ability to model these relationships should improve over time. Any methodology

must be flexible enough to cope with this learning process. As our understanding of sustain-

ability evolves, sustainability accounting, auditing and reporting should be able to respond

and evolve as well.

The second issue concerns the matter of ‘intentions’. There is a tension between under-

standing an organisation’s ‘behaviour’ and its ‘intention’. Shifts in ‘intentionality’ are impor-

tant lead indications of change. Most accounting and auditing methods in use today focus

on behaviour. While accepting that in the main it is behaviour and indeed impact that

really counts, shifts in value often concern organic movements in the perceived under-

standing and intentions of individuals groups within and around the organisations concerned.

For example, when Shell announces that it is moving from being a ‘carbon’ to an ‘energy’

company, how can a sustainability report handle this information? It is not enough merely

to register the fact that it has made this statement. Nor is it sufficient to predict what it

might mean in the future if the company makes some of the moves it has said it will

make. These pieces of information are necessary, but not sufficient. At the same time,

it is inadequate to measure only what effects their statements have had in some past account-

ing period, since this may massively understate the real significance of the ‘new thinking’

event that has taken place over that period.

The third issue concerns the matter of weak versus strong sustainability. Sustainabil-

ity auditing makes little sense unless we work with what has become known as ‘weak



sustainability’, which does not automatically reject transfers from environmental to social

and other forms of capital. Both views of sustainability carry normative implications, albeit

quite different ones. Each involves different ways of thinking about accounting. The fir s t

can be understood in purely biophysical terms, while the second needs to be versed in

terms that allow for trade-offs between social, economic and environmental goods and

bads, which cannot be set out in purely biophysical terms. Indeed, since the ‘weak’ sustain-

ability version involves the ‘valuing’ of social goods and bads, it implies the need for ‘nego-

tiated valuation’ systems of some kind (since market-based valuation is not likely to prove

satisfactory to many key stakeholders). However, if we focus on ‘strong sustainability’,

we will be forced into an extreme normative framework that rejects the possibility of

the positive value of using natural capital to form social capital, income and wealth. On

the other hand, weak sustainability is based on an assumption of substitutability between

different forms of capital—and, like all assumptions, there are some circumstances where

it fails. Therefore, we need to have some overarching sense of environmental constraints,

and the role that an organisation plays in pushing us towards or helping us stay within

that limit.

The discussion about capital transfers and weak sustainability brings us squarely to the

fourth point, which concerns the matter of governance. It is by exploring the gover-

nance of an organisation—that is, the decision-making processes, the rewards and sanctions,

and incentives for different stakeholders—that we can really begin to understand whether

an organisation has really begun to ‘think’ differently.

A sustainability audit must be able to analyse interactions between people, the organ-

isation and the environment. It should lay out who is central to the governance of the

organisation, what interests they represent and incentives structures for staff. For example,

what staff behaviour and decisions reap rewards? Is a staff member encouraged and rewarded

for breaking the ‘values statements’ of an organisation in favour of greater financial success

above all else?

It is a relief in a way that all routes lead to decision-making and, in particular, gover-

nance. Endless manifestos concerning the macro dimensions of sustainable development

have highlighted its connection to democracy and citizens’ participation. Too much of

this, however, has remained at the level of principle and ideal. Now in considering what

would logically be covered in a sustainability audit drives us to the same conclusion, not

from ideals, but from the practicalities of good practice accounting, auditing and report-

ing. This coherence between the high-level aims and micro-level tools that need to be

evolved is very attractive, to say the least.

Accountable futures

There are many ways to approach the subject of business and sustainability. This brief

paper has covered but a few of its dimensions. There has been no mention, for example,

of the emerging phenomenon of new social partnerships, of civil security issues, of the

significance of ageing, of the driving effect of unsustainable consumption patterns, and

of the deeper and arguably invidious dynamics of the financial community. Sustainable

development is indeed a ‘systems’ issue, and we have to grapple in practice with the chaotic

dynamics that that implies.

But as an old friend and colleague, Alan Parker, commented when asked how to get

going in social auditing, ‘put your bucket down and start digging’ (Parker ). For

companies, and those who can and do seek to influence their practices, this means embracing

the principles of sustainable development, and exploring how to put these principles into

simon zadek


practice. Social accounting is basic to this exploration, since without it the pathway is

shrouded in mist, or at least offers a lopsided view. Auditing and public reporting of social

and environmental performance is a critical next step, since it is an acknowledgement

not only of a broader accountability, but also of the need to learn from stakeholders who

have been historically marginalised from decision-making. Beyond this, the imperatives

of integrating social and environmental goals and measures of performance with the ‘fin a n-

cials’ become the real step towards placing the process of business within the framework

of sustainability. It is here that we reach the governance issues, and begin to come to

grips with the underlying purpose of companies in the st century and hopefully beyond.

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