Sustainable Social and Ecosystem Stewardship

International Conference of the Greening of Industry Network June 15-17, 2007 Wilfrid Laurier University, Waterloo, Ontario, Canada

Sustainable Development, Corporate Sustainability, and Corporate Social

Responsibility: The Need for an Integrative Framework

Stefano Pogutz

Assistant Professor of Management

The “Giorgio Pivato” Institute of Management

Bocconi University, Viale Filippetti, 9 - 20122 – Milan, Italy

Tel. +39.02.5836-3638 - Fax +39.02.5836-3691

E-mail: stefano.pogutz@unibocconi.it

1

Sustainable Development, Corporate Sustainability, and Corporate Social

Responsibility: The Need for an Integrative Framework

Abstract

This paper contributes to the ongoing theoretical debate on sustainable development

(SD), corporate sustainability (CS), and corporate social responsibility (CSR) – with the

goal of proving that there is a missing link between these conceptual dimensions. Over

the past decade SD, CS, and CSR have been widely discussed in academic literature. As

key objectives, these concepts have guided government programs and policies

worldwide; moreover, many corporations are leading the surge toward sustainability.

Nonetheless, twenty years after the publication of “Our Common Future” (1987), the

call for a radical “shift” in our production and consumption patterns has become even

more urgent because actual progress toward achieving SD has been very limited.

This article explores the relationship between the bio-economic approach to

sustainability and the individual firm’s approach, focusing on how SD is being adapted

by managerial science. A corporate win-win strategy, which successfully leads to

efficiency and sustainability according to the managerial paradigm, does not necessarily

imply that the corporation is contributing to SD according to an ecosystem view. In

other words, a series of companies that may seem individually to be CS- or CSR-

oriented (according to the managerial theory), are not necessarily sustainable. In fact,

the theoretical approach to CS and CSR is ignoring concepts such as “limits”, “carrying

capacity”, unsubstitutability of forms of capitals. But bridging the theoretical distance

between SD and CS/CSR is key to overcome barriers to sustainable business models.

2

The Sustainable Ecosystems Stewardship can be considered as an integrative

framework for these perspectives.

Key words: Sustainable Development, Corporate Sustainability, Corporate Social

Responsibility, Management Theory, Sustainable Ecosystems Stewardship

3

INTRODUCTION

Over the last two decades a general consensus on the need for a decisive change in our

model of production and consumption has gained strength among institutions and

governments, as well as the business world and civil society. An increasing demand for

Sustainable Development (SD) has spread from politicians and business leaders to

NGOs and scholars as a possible key to a more humane society, based on a renewed

relationship between individuals and nature, and between people themselves.

Substantial advances in environmental research and in computer science have

demonstrated to the broad public that global environmental threats (global warming and

climate change, above all) are urgent and critical problems that may compromise the

well-being of future generations and the survival of the planet (Sneddon, Howarth and

Norgaard, 2006). Furthermore, as a result of the Johannesburg Summit in 2002, the

issues of equitable distribution of resources and benefits within a society and the

widening gap between industrialized and developing countries have raised new

concerns. Even a large majority of those who were sceptical about sustainability,

seriously doubting the necessity for an intense and costly reversal of our economy in

order to face the decline in equity and the environmental crisis, have gradually aligned

their views with the advocates of SD (Business Week, 2004; the Economist, 2005,

2006).

For over twenty years, governments and international agencies have implemented

programs to incorporate sustainability into their policies and regulations. An impressive

number of conventions and protocols have been signed and enforced at the global and

local levels.

4

Similarly, companies have gradually abandoned their cynicism and become more

mature and responsible on the issue of sustainability. Networks of corporations like the

World Business Council for Sustainable Development or the Global Roundtable on

Climate Change have been established to communicate with stakeholders, implement

strategies, and circulate best practices. At the individual level, companies have become

active through incorporating sustainability issues into their mission, values, strategies,

and launching innovative programs focused on the development of environmentally

friendly technologies (Hall and Vredenburg, 2003; Hart and Milstein, 1999;

Shrivastava, 1995b), adopting environmental management standards worldwide (ISO,

2005), and incorporating environmental and social issues into their reporting initiatives

(KPMG, 2005). Finally, new management concepts like eco-efficiency, pollution

prevention, cleaner production, product stewardship, and design for the environment,

among others, have become guiding principles for organizations in the development of

responsible strategies.

But although these efforts have increased over the years, spreading across countries and

sectors, several studies show that they have been ultimately ineffective and

disappointing (Baumert, Herzog, and Pershing, 2005; WWF, Zoological Society of

London, and Global Footprint Network, 2006; IPCC, 2007).

Several reasons have been advanced to explain why, despite a strong international

commitment, a serious enforcement of regulations at the national level, and a new trend

in corporate behavior, the global SD performance is still so inadequate and

unsatisfactory. Scholars have tried to simplify this question by exploring both the

theoretical criticism of sustainability and its pragmatic fragility (Sneddon et al. 2006;

Stigliz, 2006). Moreover, many authors have strongly criticized the lack of commitment

5

at the government, business and citizen levels and the ineffectiveness of regulatory tools

such as international agreements (Sneddon et al., 2006).

Speaking to these disappointing efforts, this paper explores how management scholars

in the field of strategy and organization theory have incorporated the paradigm of SD

into their discipline (Gladwin, Kennelly, and Krause, 1995; Sharma and Ruud, 2003;

Hoffman, 2005). I argue that one of the causes of the global “sustainability gap” can be

traced back to the theoretical level, exploring the missing links between the SD concept

and the management disciplines.

Managerial science has developed a consistent theoretical framework to support the

integration of environmental and social issues into strategic management practices (Hart

1995; Porter, 1995; Shrivarstava, 1995a; Russo and Fouts, 1997; Aragon-Correa, 1998;

Hoffman, 1999, 2005; Sharma and Vredenburg, 1998; Bansal, 2005). Also, the notion

of Corporate Social Responsibility (CSR) has gained respect among academics as a

positive contribution to global problems like poverty, social exclusion, improvement in

labor conditions, and environmental degradation (Carroll, 1991; Carrol and Bucholtz,

2003; Margolis and Walsh, 2003; McWilliams, Siegel and Wright, 2006).

Through this increasing interest in SD in its several dimensions, this study tries to show

that management science has somehow failed to transpose the idea of sustainability to

the corporate level. More precisely, much of the research on Corporate Sustainability

(CS) and Corporate Social Responsibility (CSR) has neglected the normative strength

of the SD paradigm. In other words, the managerial discipline in conceptualizing a new

theory and through exploring the role of corporations in society, has rejected the

importance of factors like “natural limits” and “carrying capacity,” which are key to

understanding the relations and the tensions between business, natural environment, and

6

society. As a consequence, what the managerial paradigm defines as a “corporate win-

win strategy,” which successfully leads to an efficient firm oriented toward

sustainability, does not guarantee that the corporation is contributing to sustainable

development on a macro scale.

This paper begins with a broad review of the main current definitions of SD, from a bio-

economic framework. (Costanza, 1991; Daly, 1992; Martinez-Alier, 1987). I next

analyze the concept of CS and CSR, which represent different attempts to import the

overall notion of SD into the management disciplines. In the second part of this paper, I

discuss the normative aspect of SD and compare it with the conceptual perspectives of

CS/CSR. Then I discuss the notion of “resource,” summarizing the different meanings

assigned to it by the bio-economic and managerial perspectives. I argue that this

difference derives from basic principles and shows a lack of integration between the two

theories. In the next section, I explore the limits and substitutability of different types of

capital and their implications at the corporate level. Again I posit that management

research and theories dealing with sustainability differ in their interpretations of

boundaries and capital substitutability over time. In the last section, I critically suggest

that academic research into the “organizations and sustainability area” should create a

new subject area based on a new theoretical framework in order to bridge the gap

between the SD and corporate perspectives. In other words, the fact that firms are

constantly encroaching upon the boundaries of the natural environment entails a major

discontinuity in managerial studies, reformulating the notion of CS or CSR and

addressing new questions like how to internalize the concepts of limits and carrying

capacity into strategic and organizational theory. I finally introduce the concept of

7

Sustainable Ecosystem Stewardship as an integrative framework that offers new

challenges for organizational theory and research,

SUSTAINABLE DEVELOPMENT: FROM THE WCED

TO THE BIO-ECONOMIC PERSPECTIVE

Sustainable Development has developed over the last forty years consistent mainly with

a macro perspective. Since its early days, several interpretations has been advanced in

terms of vision, values, and principles, cross-cutting different disciplines like economics

(Barber, 1987; Sen, 1987, 1999; Daly and Cobb, 1989; Pearce, Markandya, and Barbier,

1989; Norgaard, 1991; Daly 1992; Passet, 1996), other social sciences (Bateson, 1972;

Morin, 1980; Jonas, 1985; Naess and Rothenberg, 1990; Capra, 1996, 2002), and

natural sciences (Lovelock, 1988; Commoner, 1990; Shiva, 1992; Odum, 1993). To

date, probably the most popular definition of Sustainable Development was provided by

the World Commission on Environment and Development (WCED) in 1987:

“development that meets the needs of the present without compromising the ability of

future generations to meet their own needs.” The Brundtland Commission defined this

concept intentionally very broadly so that no specific category of needs would prevail

(UN et al., 2003). At the same time, this broad approach has been widely accepted and

endorsed by governments, corporations, and other organizations around the planet

(Gladwin et al., 1995). Within this framework, since the Rio conference in 1992, the

approach based on the “three pillars” of sustainability, which integrates economic,

social, and environmental considerations into the model, has been consolidating,

influencing both the institutional and corporate path to SD (Elkington, 1994, 1997).

According to this approach, each of the pillars is independently crucial and urgent in the

8

short run, but in order to reach the goal of sustainability in the long run the three pillars

must be considered simultaneously. Moreover, they are deeply interconnected and may

influence and support each other.

There are several critiques of this view of sustainability both at the theoretical and

practical levels (Lehtonen, 2004, Sneddon et al., 2006). First, a conceptual opposition

denies that the three dimensions are qualitatively, hierarchically equivalent. Ecological

economics (Martinez-Alier, 1987; Costanza, 1991; Daly, 1992), along with several

other scientific disciplines (Odum, 1993), approach sustainable development based on a

bio-economic model, representing the three dimensions with three circles inscribed one

inside the other. In this model, the biosphere identifies the external limit of the system

and contains the social sphere, which in turn includes the economic sphere, representing

the last and most internal dimension. This approach reflects the idea that economy and

society owe their hierarchical dependence to the ecological systems and organize

themselves within the relevant environmental constraints (Daly and Cobb, 1989). In

other words, from this bio-economic perspectice of SD, the idea of limits and the

carrying capacity of the ecosystem guide the growth of the other two systems

normatively, creating the theoretical ground for a new vision of the relations among

business, natural environment, and society.

Second, the “institutional” definition of SD does not address one of the critical

questions in the discussion on sustainability: the dispute over different types of capital.

The capital approach has been developed based on an economic perspective, but has

been extended by economists to other domains, including the natural and social

sciences. Three main kinds of capital have been identified: economic, natural, and social

(Perace and Turner, 1990; Costanza, 1991, Putnam, 1993, 2000; Köhn, 1998; Dasgupta,

9

2002; Dyllick and Hockerts, 2002). According to this capital-based approach, the

question of sustainable development depends on the maintenance of different forms of

capital stocks over time (El Serafy, 1991; Dyllick and Hockerts, 2002). This perspective

has opened a broad and intense debate over the possible interchangeability of different

kinds of capital. Various interpretations of this concept can be grouped into two main

schools: weak and strong sustainability (Perace and Turner, 1990).

The first approach assumes that all forms of capital are equivalent and that any loss

within one kind can be compensated with other forms (Solow, 1986). An example is the

production of chemical fertilizers to compensate for the loss of natural fertility in soil,

that is, the substitution of man-made technology for natural capital (UN et al., 2003). In

other words, weak sustainability permits the degradation of natural resources as far as

they are covered with an increase in other forms of capital. The second approach posits

that some types of capital, for example, several forms of natural capital, have no

substitute. The assumption is that different forms of capital are complementary

(Costanza, 1991). Therefore, these forms of capital must be preserved intact

independently of one another. An example often proposed is nature: a forest plays

several vital roles --as a habitat for living species, preserving biodiversity, absorbing

CO2, contributing to the water cycle-- all of which to date cannot be replaced by other

forms of capital (Lovins, Lovins, and Hawken, 1999; Dyllick and Hockerts, 2002). In

this sense, a useful definition of sustainability is provided by El Serafy (1991): “the

amount of consumption that can be continued indefinitely without degrading capital

stocks – including natural capital stocks”.

Another problem often brought up is the uncertainty of the consequences of our actions

on natural and social capital. Many scholars suggest a precautionary principle to reduce

10

the risk of unexpected effects. Costanza (1991), for example, believes that keeping the

amount of natural capital constant can assure sustainability. This strict approach has

been embraced by such international institutions as the UN, whose recent reports (UN et

al., 2003) specify that the still-limited scientific understanding of the environment

requires the adoption of a “precautionary principle” in dealing with natural capital.

As a consequence, over the years academics have provided several more prescriptive

definitions of SD, in an effort to incorporate sustainability into the bio-economic

dimension while forbidding substitution among different types of capital. The following

definition elaborated by Costanza, Daly, and Bartholomew (1991) is probably one of

the most popular (Gladwin et al., 1995), focusing on the concept of limits, and

considering the relation between the economic, social, and environmental dimensions:

“Sustainability is a relationship between dynamic human economic systems and larger

dynamic, but normally slower-changing ecological systems, in which 1) human life can

continue indefinitely, 2) human individuals can flourish, and 3) human culture can

develop; but in which the effect of human activities remains within bounds, so as not to

destroy the diversity, complexity, and function of the ecological support system.”

CORPORATE SUSTAINABILITY AND CORPORATE SOCIAL

RESPONSIBILITY

Corporate Sustainability and Corporate Social Responsibility are addressed by many

different disciplines, but they both have become particularly important in the

management literature because of a vision of the relation between firm, society, and the

natural environment strongly corporate-centred (Lockett et al., 2006; Steuer, 2006).

Although scholars and practitioners often interpret these two terms similarly, pointing to

11

their similarities and common domain (van Marrewijk, 2003), in fact the two concepts

have different backgrounds and different theoretical paths.

The notion of CS can be defined first as the capacity of a firm to create value through

the product and services it produces and to continue operating over the years. Therefore

sustainability in this context entails the creation of a sustainable competitive advantage.

After the United Nations Conference on Environment and Development in 1992, when

a large debate developed over how businesses and firms had to contribute to the

objective of SD, a different view of CS emerged among academics and the business

community. In general, according to this new approach, CS can be considered as the

attempt to adapt the concept of SD to the corporate setting, matching the goal of value

creation to environmental and social considerations. Consistent with this perspective,

managers and scholars have nonetheless formulated different definitions. According to

the Dow Jones Sustainability Index, “Corporate Sustainability is a business approach

that creates long-term shareholder value by embracing opportunities and managing risks

deriving from economic, environmental and social developments”

(http://www.sustainability-indexes.com). The Journal of Environmental Strategy

defines it as “the capacity of an enterprise to maintain economic prosperity in the

context of environmental responsibility and social stewardship.” Another important

conceptualization of CS that includes the integration of different forms of capital is

provided by AccountAbility (1999): “the capability of an organization to continue its

activities indefinitely, having taken due account of the impact on natural, social and

human capitals.” Finally, Hart and Milstein (1999) define a sustainable enterprise as

“one that contributes to sustainable development by delivering simultaneously

economic, social and environmental benefits – the so-called triple bottom line.”

12

Three main considerations emerge. First, CS concerns preserving the competitiveness of

a firm in the long term, which is the maintenance of the firm entity itself. Second, CS

focuses on the capacity of the firm to balance what the scholars of organization and

management theory have called the “business case” --economic sustainability-- with

environmental and social sustainability. This definition embodies the “triple bottom

line” concept that Elkington advanced in 1994, referring to a situation in which firms

focus not only on the economic value they add, but also on the environmental and social

value they add or destroy, trying to harmonize their efforts as they pursue these different

goals (Elkington, 1994). Finally, CS includes attempting to integrate the environmental

and social dimensions into business operations: processes, products, and procedures.

From a theoretical perspective, the idea of CS has sparked a growing interest in the

managerial disciplines, exploring both “why” companies commit themselves to SD and

“how” they implement it (Schmidheiny, 1992; Shrivastava and Hart, 1995; Bansal,

2005).

The evolutionary path of the concept of CSR is different from that of CS; probably the

first recognized contribution in the literature dates back to Bowen (1953), who stressed

the responsibilities of businesses and wrote that social responsibility refers to “the

obligations of businessmen to pursue those policies, to make those decisions, or to

follow those lines of action which are desirable in terms of the objectives and values of

our society.” Since this seminal study, CSR has evolved through a number of theoretical

and empirical contributions and a growing interest among practitioners and academics,

which has in turn fostered the proliferation of different approaches, definitions, and

terminologies (Carroll, 1994; McWilliams and Siegel, 2001).

13

Despite the scepticism of prestigious scholars like Friedman (1970), who criticized both

the vagueness of the notion and the introduction of CSR into business operations, in the

late seventies an important attempt to formalize the concept was proposed by Carroll

(1979, 1991; Carroll and Buchholtz, 2003), who wrote that “the Social Responsibility of

business encompasses the economic, legal, ethical, and philanthropic expectations

placed on organizations by society at a given point in time.” In other words, the author

posited that besides economic and legal responsibilities (that is, to be profitable and

obey the law), companies are expected to face other requirements, relevant to

conformity to social norms and voluntary contributions to the community where they

operate. Another important CSR approach developed during the eighties in the light of

the growth of the Stakeholder Approach Theory (Freeman, 1984). According to this

view, managers of firms have obligations to a broader group of stakeholders than the

simple shareholders, where a stakeholder is “any group or individual who can affect or

is affected by the achievement of the firm’s objectives” (Freeman, 1984). Freeman also

added that “business can be understood as a set of relationships among groups which

have a stake in the activities that make up the business” (Freeman, Wiks, Parmar, and

McVea, 2004), proposing a more radical perspective on corporations. Stakeholder

approach has evolved into a dominant paradigm in CSR, also through Donaldson and

Preston’s research (1995), which grounded the theoretical basis by exploring the

normative, instrumental, and descriptive aspects of the theory.

Finally, during the last decade, CSR has continued to transform and enrich itself with

new theories and themes like the integrative social contract theory (Donaldson and

Dunfee, 1999), the Corporate Citizenship approach (Crane and Matten, 2004), and

research into measurement and reporting (Elkington, 1997). In other words, the CSR

14

concept has emerged as the managerial framework wherein the relationship between

business and society is studied.

To conclude, although CS and CSR have different roots and developed along diverse

theoretical paths, they ultimately converged and overlapped from both the academic and

practical perspectives. This strong complementarity is evident in some recent definitions

of CSR provided by international organization like the Prince of Wales International

Business Leaders Forum: “CSR means open and transparent business practices that are

based on ethical values and respect for employees, communities, and the environment.

It is designed to deliver sustainable value to society at large, as well as to shareholders.”

Furthermore, this red line is strengthened in some institutional documents, including the

European Union Green Paper “Promoting a European Framework for CSR,” which

defines corporate responsibility as “a concept whereby companies integrate social and

environmental concerns in their business operations and in their interaction with their

stakeholders on a voluntary basis” (CEC, 2001).

SUSTAINABLE DEVELOPMENT AND THE MANAGEMENT DISCIPLINE

The discussion of the way in which management science had to include in its theoretical

framework the concept of Sustainable Development started in the nineteen nineties.

Over the years numerous papers and articles have been published with the goal of both

building a systematic conceptual theory of sustainability at the corporate level, and

empirically exploring the phenomenon of “going sustainable” with a set of

methodological tools.

15

Despite this strong infiltration of environmental and social issues into the academic

literature, in organizational and managerial studies the concepts of SD and CS/CSR

discussed above still offer some relevant theoretical trade-offs. This disassociation

seems to mark a variety of contributions that in the last decade explored the relations

between business, society, and the natural environment.

Managerial science almost completely neglected the SD paradigm as a normative

approach capable of prescribing behavior for business organizations. Literature on CS

and CSR often focuses on the philosophical and moral basis linked to the discipline of

business ethics rather than to the scientific background of sustainability. Instead, the

bio-economic view of SD described above grounds the strength of its normative

guidance in scientific disciplines (physics, biology, ecology, etc.), theoretical models,

and empirical findings (carrying capacity and resource scarcity). In contrast, the

managerial discipline has developed a corpus of research focusing primarily on such

instrumental questions as “does it pay to be green?” exploring “how” and “when” firms

create a competitive advantage through environmental and social responsibility

(Hoffman, 2005; McWilliams et al., 2006). This focus is evident in the reviews by

Margolis and Walsh (2003), and more recently by Lockett, Moon and Visser (2006),

who highlighted the management literature’s concentration on the relationship between

CSR and financial performance. Moreover, while the bio-economic perspective has

questioned some pillars of the economic discipline, delving into the implications of SD

for growth--ultimately developing new theoretical fields like ecological economics

(Costanza, 1991), scholars who study management and organization have mainly

focused on the relation between sustainability and corporate management according to

the prevailing theories and models.

16

Sustainable Development (bio-economic view)

Corporate Sustainability

Corporate Social Responsibility

Background disciplines

Natural sciences, political science, and ethics

Business Ethics, political science, and management theory

Theoretical foundation of the

normative approach

Limits and carrying capacity. Moral prescriptions Moral and legal prescriptions

Table 1 – SD, CS and CSR. Background disciplines and theoretical foundation

Such an approach, for example, can be found in the interpretation of the word

“resource.” Resource scarcity, both in terms of source and sink, is the basis of the

concept of sustainability, setting normative boundaries to human economic growth

(Daly, 1992). But in the modern strategic management framework, “resources” was

assigned a totally different meaning, acquiring value only from the perspective of

competitive advantage (Wernerfelt, 1984, Prahalad and Hamel, 1990, Barney, 1991). In

other words, as Gladwin, Kennelly, and Krause very clearly pointed out in 1995, “Most

management theorizing and research continue to proceed as if organizations lack

biophysical foundations”.

The term “resource” may refer to several different concepts, according to the theoretical

“milieu” in which it appears (biology, ecology, economy, sociology). In considering the

SD framework, resources are the means available for the development of a nation - or a

population - and include natural resources (natural capital in terms of sources and sink),

economic resources (like capital goods and other forms of economic capital), and

human resources (like intellectual and social or relational capital). As noted above,

natural resources have specific properties that differentiate them from other forms of

capital and make them irreplaceable. Natural resources are often classified as renewable

17

or non-renewable, according to the capacity to restock themselves and be used

indefinitely. When resources are consumed at a rate faster than that of replacement, the

stock diminishes and eventually extinguishes itself. This equilibrium is a key issue in

sustainability theory. It depends on the relation between the behavior of human

organizations, including firms, and the biosphere. The SD concept conceived within the

bio-economic theoretical framework internalizes the question of stocks and resource

flows. The physical availability of commodities – oil, water, metals, and so on – and the

absorptive capacity of sinks are the essence of environmental sustainability. The

effectiveness of SD is grounded in an understanding of the “materiality” of natural

resources, either as isolated parts or as systemic, and their intrinsic scarcity as much as

in the economic and social value they generate.

A completely different view of the concept of resources has been contributed by

management science. Researchers in the field of strategic management developed the

Resource-Based View (RBV) theory (Wernerfelt, 1984, Prahalad and Hamel, 1990,

Barney, 1991). This theory grew from the seminal work of Penrose (1959) and

developed in the last two decades to the extent that it can probably be considered the

most influential theoretical framework in management science (Barney, 2001).

According to the RBV internal assets – resources and capabilities – are the basis of the

firm’s competitive advantage: resources are not productive when considered in

isolation; to be effective in generating competitive advantage, they must be assembled

and integrated though the firm’s organizational capabilities. The concept of resources,

therefore, is linked to the notion of capabilities, and both can be viewed as “bundles of

tangible and intangible assets, including a firm’s management skills, its organizational

18

processes and routines, and the information and knowledge it controls” (Barney, 2001).

Moreover, according to this view, productive resources must be valuable (rent

producing), irreplaceable, rare (or firm specific), or difficult to imitate (that is, causally

ambiguous and socially complex) (Barney, 1991). Starting from this compact and

effective theoretical framework, as Russo and Fouts wrote in 1997, scholars in the

strategic field “expanded the RBV of the firm to include the constraints imposed and

opportunities offered by biophysical environment.” Hart, who can be considered the

father of the Natural-Resource-Based View, stated in the popular article that probably

gave birth to this approach: “In the future, it appears inevitable that business (markets)

will be constrained by and dependent upon ecosystems (nature). In other words, it is

likely that strategy and competitive advantage in the coming years will be rooted in

capabilities that facilitate environmentally sustainable economic activity – a natural-

resource-based view of the firm.”

This theory has occupied a position progressively more central to studies on CS and

CSR, providing a conceptual framework for incorporating environmental and social

issues into strategic management and deeply influencing the last decade of research

streams (Russo and Fouts, 1997; Aragón-Correa, 1998; Sharma and Vrendenburg,

1998; Christmann, 2000; McWilliams and Siegel, 2001). The main focus in this broad

series of contributions has been to understand the role of specific corporate resources -

and capabilities – in the development of proactive strategy based on sustainability

leading to superior performance and competitive advantage. Otherwise, this

conceptualization of resources has nothing to do with the notion of resources at the core

of the bio-economic view of SD. Even the characteristics of “scarcity” and “non

19

substitutability” have acquired different meanings, according to heterogeneous

theoretical frameworks.

As noted in the previous section, managerial science has internalized in its system of

rules the concept of natural resources, as a means of attaining sustainable competitive

advantage. “Physical resources can be a source of competitive advantage if companies

outperform equivalent assets within competitors” (Russo and Fouts, 1998). But when

bio-economic theory deals with resources, they become physical inputs (or sinks) to

transformation and consumption processes, and the focus is on how to preserve them (or

preserve the services they provide).

This significant divergence in terms of conceptual models between SD and CS/CSR

has oriented research paths toward different directions. Management scholars and

theoreticians, with the development of new conceptualizations like the natural resource

based view, have only partially adapted the framework of organizational theory and

strategy to include the drive toward sustainability at both the environmental and social

levels. This focus encompasses more consensus than was previously possible

(Shrivastava, 1995a; Hart, 1995; Bansal 2002; Hart and Milstein, 2002) and has in turn

inspired an intensive amount of research that helped expand the challenges posed by SD

for companies and businesses. In any event, according to this view, the scarcity of

natural resources, which are an intrinsic component of natural capital and a pillar of SD,

has been deemphasized and diluted in managerial models and strategies. The “lack of

biophysical foundations” posited by Gladwin et al. (1995) guided scholars in largely

focusing a research agenda on instrumental considerations, exploring the

external/internal conditions that enable the development of an efficient CS/CSR strategy

20

rather than addressing new questions like how to incorporate the normative concepts of

limits and carrying capacity into the theory of the firm.

Sustainable Development (bio-economic view)

Corporate Sustainability

Corporate Social Responsibility

Notion of “resource” Focus on natural resources Focus on corporate resources

Critical property Scarce and nonsubstitutable Valuable, rare, irreplaceable, difficult to imitate

Research focus Capacity of resources to be replenished over the years

Role of resources in developing a strategy leading to competitive advantage

Table 2 – SD, CS and CSR: The different notion of “resource”

LIMITS, CARRYING CAPACITY, AND CAPITAL SUBSTITUTABILITY

I have already explored the concepts of limits, carrying capacity, and capital

substitutability, discussing weak and strong sustainability (Daly and Cobb, 1989;

Costanza 1991, Köhn, 1998). The question I address now is how these concepts are

applied in management science. In fact, according to the definitions of CS and CSR

discussed in this paper, the conceptual approach that seems to prevail at the firm level is

one of balancing in a contingent way the three dimensions of sustainability, according

to Elkington’s Triple Bottom Line (TBL) approach (1994 and 1997), or balancing

different stakeholder needs and requests (Freeman, 1984)3.

3 For example, Post, Preston, & Sachs (2002) emphasize how the capacity of a company to generate value over time, in the long run, depends on its relationship with the stakeholders, and that “the stakeholder relationship may be the most critical one at a particular time or on a particular issue.”

21

If we consider the evolutionary path of the CS/CSR framework, it is possible to state

that the TBL view added a fresh and new flavor to management-science research on

firm sustainability. In other words, this perspective has contributed to come through the

conventional defensive approach to environmental and social issues, establishing the

basis for a new research agenda. The TBL requires that the three forms of SD be

addressed simultaneously. A CS- or CSR-oriented firm should consider: (1) the

environmental principle, which establishes that the consumption of natural resources

should be (at the least) consistent with the rate of natural reproduction and the carrying

capacity; (2) the social principle, which ensures that companies respect and increase the

human capital and the social capital of the communities where they operate; (3) the

economic principle, which guarantees that companies create a wide-ranging value for

shareholders and other stakeholders. Although the gradual dissemination of Elkington

principles can be considered as an important innovation to strategic and organization

theory, there is need for a more radical transformation in management science, which is

still dominated by the traditional competitive framework based on economic and

financial success. On the one hand, in practical terms many scholars have observed that

companies have difficulties in adopting a balanced view between environmental

concerns, social issues, and economic value. Economic sustainability is still the

prevalent consideration, widely influencing organizational goals and decision-making

(Bansal, 2002, Lockett et al., 2006). On the other hand, even the theory-building

scholars who analyzed the interconnections between firm, society, and the natural

environment were mainly corporate-centered, that is assuming that maximizing value is

the key to optimizing their social and environmental goals (McWilliams and Siegel,

2001). But the bio-economic view of SD radically reformulates the dominant frame of

22

corporate sustainability. In other words, if the idea of strong sustainability is accepted at

a macro level, then at the firm level the TBL view is probably unsufficient to respond to

constraints like limits, carrying capacity, and capital substitutability.

Limits and Carrying Capacity: Implications for Management Theory

The normative paradigm of SD discussed above establishes a set of hierarchical goals

and requires prioritizing decisions on the basis of issues like resource scarcity, resource

boundaries, carrying capacity, and contingent circumstances - for example, sudden and

unexpected crises of the systems considered, whether ecological, social, or economic

(Costanza, 1991). I discuss the implication for management theory of these concepts,

briefly exploring two examples: the CFC phase-out and the greenhouse gases crisis.

When the problem of the ozone layer and CFC pollutants emerged as a major issue in

the early eighties, the institutional response was a phase-out regulation, enforced at the

international level by the Montreal Protocol. The global ban on these substances had a

direct impact on industries, companies, and employees, generating a trade-off between

environmental-protection goals, economic value, and social issues. At the same time,

the problem of ozone depletion led to a clear prioritization of goals among the three

aspects of sustainability, in that process obliging several companies to cease production

and turn to other activities. My second focus is the Kyoto Protocol and the enforcement

of the emission-trading system at international and national levels. Even in this case, a

normative framework based on the definition of environmental boundaries sets limits on

global emissions.

23

At least two different implications for management theory emerge.

First, at the company level, this strict approach to sustainability influences firm

behavior in the following ways:

• the rate at which a firm uses resources cannot exceed the rate at which these

resources are replaced, replenished, or substituted by alternative resources;

• the rate at which a firm through transformation processes and products generates

emissions cannot exceed the rate at which these emission can be assimilated by the

environment.

Second, respect for natural environmental boundaries becomes a priority in decision-

making processes that conditions the other dimensions of sustainability, both the

economic and the social. In order to comply with these binding rules, strategic

behaviors are required, involving trade-offs between the three domains examined.

To return to the first implication, air quality is a case in point. If a company generates a

certain amount of emissions per unit of product/service, and it is forced to respect the

carrying capacity limits, its emissions must accumulate at a rate less than the absorption

capacity of the natural system--either the technologyical efficiency improves enough to

compensate for the reduced growth of sales in absolute values, or the company must no

longer seek growth. Many firms must cope with this trade-off in their everyday

activities in that the increase in technological efficiency and resource productivity

cannot compensate for market growth

Managerial literature in recent years has explored this tension, seeking a feasible and

effective balance between these different pressures. The principle of balance has been

examined both in terms of moral justifications for respecting the environment and the

consequences at the instrumental level, that is, economic efficiency. According to the

24

normative paradigm of SD here proposed, I take the debate on the role of the firm in

society further by asking, first, whether management science will be able to accept such

physical limits to production, if not offset by increments in efficiency and productivity;

and, second, whether organization and management scholars will be able conceptualize

and internalize these constraints in terms of the original principles of managerial theory.

Substitutability of Different Types of Capital: Implications for Management

Theory

The second implication, decisively linked to the first, concerns the substitutability

among various types of capital. As previously noted, according to the dominant view of

sustainability it is possible to sacrifice a specific performance in one dimension for the

sake of better performances in other dimensions. Different forms of capital are

considered substitutable in the short term, thus contributing to sustainability in the long

term. The idea is that different forms of capital compensate for each other. In other

words, according to stakeholder theory, firms have to balance different requests over

time for example, a certain relationship may be most critical at a given time or in the

context of a particular issue (Freeman, 1984; Post et al., 2002).

As an example consider a company that develops new markets for its consumer goods

in emerging countries, leveraging on a socially responsible business model that respects

the existing social capital and improves the well being of local communities. This

company is probably creating economic value, reducing poverty, and increasing social

equity. The same company, on the other hand, is probably indirectly modifying the

environmental integrity of its surroundings, creating less environmentally sustainable

consumption patterns, and increasing the amount of waste generated and dispersed in

25

the natural environment or augmenting water pollution. The company probably

considers its strategies responsible, in that several stakeholders are satisfied with this

value-creation process. The firm is balancing different needs in order to preserve and

improve its capacity to generate value. On the other hand, this behavior works against

the strong-sustainability model that considers different forms of capital only slightly

interchangeable at best.

This reasoning acknowledges that specific expectations might be more important than

others at certain times. Moreover these expectations do not depend on the normative

hierarchical view discussed before, but on contingent factors, that in turn depend both

on the pressures and demands that firms must face and on the degree to which managers

prioritize specific issues or stakeholder requests (Kassins and Vafeas, 2006). The

corporate sustainability theory seeks to embrace environmental constraints and social

issues, but when external prescriptions intrude, natural capital becomes dispensable, and

when this fact is ignored, the strict approach to the SD concept and management theory

part ways. A second point, related to the practical implications of this conceptual

divergence, refers back to the above example, where a number of large corporations, for

contingent reasons, agree to sacrifice the same set of performances, thus making the

whole system unsustainable. The exploitation of natural capital beyond its carrying

capacity would be acceptable where a significant improvement in social conditions

occurs and companies generate economic value for their shareholders. But natural

capital is not interchangeable with other forms, and the time scale and velocity of its

autonomous recovery are not comparable with the life time scale of such human

organizations as companies.

26

The stakeholder approach emphasizes the idea of balancing and harmonizing in a

contingent way the different dimensions of sustainability. As a result, it provides a

theoretical framework that coheres with the long-term capacity of the firm to generate

and maintain a competitive advantage. But balancing different goals involves the

possibility of dissolving hierarchies and boundaries between systems, while strong

sustainability might prioritize environmental integrity over economic value creation or

social expectations.

To conclude, the field of management has built a theory of corporate sustainability

based on balancing in contingent terms environmental, social, and economic goals; but

the resulting systemic model is not necessarily sustainable at the bio-economic level. In

other words, the evaluation of a series of companies which, when considered separately,

seem to be CS- or CSR-oriented (according to managerial theory), is not necessarily

sustainable or does not necessarily imply that the corporations are contributing to SD.

The main implication that emerges is that, according to the mainstream theoretical

approach to SD, CS, and CSR, management disciplines must broaden their research

focus to encompass a new agenda in order to develop an integrative framework that

accommodates all these dimensions. Until now the contribution of scholars in the field

of management has been critical to our understanding of firms’ environmental and

social strategies, to explore the organizational drivers, and to explain managers values,

motivations and attitudes (Hart, 1995; Shrivastava, 1995a; Russo and Fouts, 1997;

Sharma and Vredenburg, 1998; Hoffman, 1999), which have proved to be theoretically

effective but nonetheless disappointing at the practical level, to address the challenge of

SD.

27

TOWARD A CONCLUSION: SUSTAINABLE ECOSYSTEM STEWARDSHIP

AS A NEW INTEGRATIVE FRAMEWORK

The goal of this paper is to explore the reasons why after more than twenty years of

policies activated at the international, national, and local levels and relevant changes in

corporate behavior, SD is still so far from realization. In particular I discuss this issue at

the theoretical level, analyzing how the concept of SD has been transposed by

management science from the macro to the corporate dimension. Companies, in fact, are

a productive resource of the socio-economic system and key to the implementation of

sustainability (Schmidheiny, 1992). According to management theory, the attempt to

subsume sustainability issues into the organizational framework can be divided into two

separate concepts: CS and CSR. Therefore, the actualization of SD within CS/CSR

seems crucial to respond effectively to the challenges posed by sustainability.

The first finding of the study is that between the macro and firm dimensions a

significant theoretical gap persists due to the disparity between the disciplines in which

the concepts of SD, CS, and CSR are grounded.

On the one hand, the scientific disciplines (natural sciences) that have contributed to

shaping the notion of SD have addressed the question of hierarchies, limits, and

carrying capacity (Odum, 1993) A similar path was undertaken by a certain group of

economics scholars, who raised the question of the unsubstitutability of different forms

of capital (Costanza, 1991; Pearce et al., 1989 and 1990; Norgaard and Howarth, 1991).

The result of this evolutionary process was the establishment of a new epistemological

framework, where boundaries to economic growth are conceptually established and

accepted, but it is hardly practicable, complex to implement, and probably extremely

costly (Sneddon et al., 2006). On the other hand, managerial science has developed a

28

new corpus of research leading to new models within the dominant theories; namely,

the value-creation theory. In other words, both CS and CSR were conceived within the

parameters of competitive advantage and the creation of economic value for

shareholders (Starik and Marcus 2000; Hoffman, 2005; McWilliams et al., 2006).

Management theory has attempted to adjust the principles of SD and has explored the

effects of environmental strategies and social strategies on competitive advantage

(Gladwin et al., 1995). Scholars have tried to understand which company capabilities

and strategies optimize environmental and social performance without underperforming

economically (Porter and van del Linde, 1995; Shrivastava, 1995b; Russo and Fouts,

1997; Aragòn-Correa, 1998; Christmann, 2000; McWilliams and Siegel, 2001). At the

same time, a focus on the instrumental perspective has guided research attention over

the years (Lockett et al., 2006).

Conversely, management theory has been unable to embrace the concepts of

boundaries, carrying capacity, and the unsubstitutability of different forms of capital as

a prescriptive norm for strategic planning. Automakers, for example, are improving the

environmental efficiency of cars with several innovations. However, they cannot give

up on developing new markets (China, India, etc.), where the growth in demand will

eclipse the gains achieved by improvements in the environmental efficiency of cars and

their prioritization.

Furthermore the managerial approach to SD accepts short-term compromises – or

compensations – among different sustainability goals, but these may lead to irreversible

loss in certain forms of capital, which in the long run could compromise the efficiency

of other systems.

29

There is a critical need to bridge the theoretical distance between the bio-economic

aspect of SD and managerial science in order to better integrate these two domains.

Sustainability requires that companies understand both the physical and social

constraints on the creation of economic value and the existence of systemic

interconnections between organizations, or between stakeholders. Sustainable

Ecosystem Stewardship (SES) provides this integrative paradigm, emphasizing that

progress in SD is feasible only when businesses “move from separate strategies for

’greening’ and ’community engagement’ toward an integrated stewardship of the

resources, ecosystems, and communities that are impacted by their operations along the

entire supply chain—from cradle to grave, from one generation to the next, from one

species to another, and from one society to another”.

In other words, SES broadens the boundaries of management studies from firms to

communities and eco-systems, opening the doors to cross-fertilization patterns among

disciplines and offering new opportunities to researchers for knowledge creation.

Within a strengthened integrative framework that bridges the macro and corporate

perspectives on sustainability, a new research agenda with a radically innovative

theoretical basis is necessary.

The first step should be research into the possibility of integrating such concepts as the

limits and carrying capacity, hierarchies, and unsubstitutability of forms of capital into

management theory. One of the key questions will be “what is a sustainable business?”

from the perspective of both firms and the systems (eco- and social-systems) where they

operate. In fact, what we often define as a successful sustainable company on the basis

of a corporate-centered view is not necessarily sustainable in terms of its systemic

interconnection with other organizations through space and time. We must come to

30

understand the relationship between a “sustainable business” in terms of the “corporate

entity” and the contribution of the “corporate entity” to SD in a broader sense, namely

the societal and ecological levels.

Second, by transferring boundaries from the macro to the micro dimension, new

measurement techniques to assess the corporate contribution to sustainability must be

explored and integrated into organizational behavior. This involves developing

theoretically and then actualizing a new paradigm for accounting, breaking down the

boundaries that separate management disciplines, natural sciences, and other social

sciences.

SES offers to management research the opportunity to connect with new approaches--

for example, industrial ecology, a research field that focuses on describing the flows of

material and energy that connect business with the natural world. This physical

representation of resources has led to a new concept (Frosh and Gallopulos, 1989;

Lovins et al., 1999) founded on the idea that industrial systems – that is, systems of

facilities, regions, industries, and economies – are specific ecosystems that must be

integrated into the biosphere. Industrial ecology has grown fast in recent years and has

achieved great popularity in the scientific community; that is among engineers and

scholars in the natural sciences, but has not succeeded in influencing the management

disciplines.

According to the reasoning developed in this paper, sustainability demands that the

management discipline devote new attention to this approach, understanding the

relationship between the physical flow of resources and social well-being, as a key to

overcoming the tensions that currently persist, as described above.

31

Furthermore, practical tools are needed to systematically evaluate the impact of

products and services on the natural environment and society. Over the last two

decades, several methods of evaluating the sustainability of products, projects, and

organizations have been designed: life-cycle assessment, design for the environment,

and total-cost assessment are just a few examples. These methodologies remain

marginal, however, compared to other traditional decision-marking tools, in both

theoretical and practiceal application. Therefore, more progress is needed.

Finally, along with the exploration and integration of new measurement methodologies

to replace the corporate-centered view with a systemic one, a further innovation is

needed, focusing on another important question: how is it possible to integrate into

corporate-performances measurement “absolute” indicators of environmental and social

impacts? Absolute indicators are, in fact, essential for evaluating the effectiveness of a

company’s contribution to SD, linking the organizational system with the carrying

capacity of its production activity, and therefore linking the organization with the

ecosystems where it can legitimately operate. Interesting suggestions have been

proposed by researchers in economics (Callens and Tyteca, 1999; Figge and Hahn,

2004) and management and accounting (Schaltegger and Wagner, 2006), but their

methods have yet to acquire legitimacy among scholars and practitioners.

To conclude, along with the need for a new research agenda to explore the integrative

opportunities offered by the SES framework as a possible cohesive interface between

SD and CS/CSR, this study raises another important issue. If managerial theory cannot

produce a significant breakthrough in its dominant paradigm, still so deeply based on

the value-creation model (Jensen, 2002), when structural trade-offs between natural

capital, social integrity, and economic growth take place and no short-term

32

compensation is accepted, external regulations to coerce and force firms to respond to

specific rules are required. Where management science cannot contribute to the

construction of a new theoretical paradigm, such external forces as regulations and

norms become crucial to the improvement of the sustainability of production processes

and consumption patterns.

REFERENCES

AccountAbility. 1999. AccountAbility 1000 (AA1000) Framework. Standard,

Guidelines and Professional Qualification. Accountability, London.

http://www.accountability.org.uk

Aragón-Correa JA, Sharma S. 2003. A contingent resource-based view of proactive

corporate environment strategy. Academy of Management Review 28: 71-88.

Aragón-Correa JA. 1998. Strategic proactivity and firm approach to the natural

environment. Academy of Management Journal 41(5): 556-567.

Bansal P. 2002. The corporate challenges of sustainable development. Academy of

Management Executive 16(2): 122-131.

Bansal P. 2005. Evolving sustainably: a longitudinal study of corporate sustainable

development. Strategic Management Journal 26(3): 197-218.

Barber E. 1987. The concept of sustainable economic development. Environmental

Conservation, 14(2): 101-110.

Barney J, Wright M, Ketchen DJ. 2001. The resource-based view of the firm: Ten years

after 1991. Journal of Management 27: 625-641.

Barney JB. 1991. Firm resources and sustained competitive advantage. Journal of

Management 17(1): 99-120.

33

Barney JB. 2001. Resource-based theories of competitive advantage: A ten-year

retrospective on the resource-based view. Journal of Management 27: 643-650.

Bateson G. 1972. Steps to an Ecology of Mind. Ballantine: New York.

Baumert KA, Herzog T, Pershing J. 2005. Navigating the Numbers: Greenhouse Gas

Data and International Climate Change. World Resource Institute: Washington,

DC.

Business Week. 2004. Global Warming. Why business is taking it so seriously. Cover

Story. August 16.

Callens I, Tyteca D. 1999. Towards indicators of sustainable development for firms. A

productive efficiency perspective. Ecological Economics 28: 41-53.

Capra F. 1996. The web of life: A new scientific understanding of living systems.

Anchor Books: New York.

Capra F. 2002. The hidden connections: Integrating the biological, cognitive and social

dimensions of life into a science of sustainability. Doubleday: Toronto, ON.

Carroll AB, Bucholtz AK. 2002. Business & Society: Ethics and Stakeholder

Management, 5th edition. Thomson – South Western: Mason OH.

Carroll AB. 1979. A three-dimensional model of corporate social performance.

Academy of Management Review 4: 497-505.

Carroll AB. 1991. The pyramid of corporate social responsibility: towards the moral

management of organizational stakeholders. Business Horizons, 34: 39-48.

Christmann P. 2000. Effects of “best practices” of environmental management on cost

advantage: the role of complementary assets. Academy of Management Journal

43: 663-680.

34

Commission of the European Communities (CEC). 2001. Green Paper ‘Promoting a

European framework for Corporate Social Responsibility’.

http://ec.europa.eu/employment_social/soc-dial/csr/greenpaper_en.pdf

Commission of the European Communities (CEC). 2002. Corporate Social

Responsibility: A business contribution to Sustainable Development.

http://ec.europa.eu/employment_social/publications/2002/ke4402488_en.pdf

Commoner B. 1990. Making peace with the planet. Phanteon: New York.

Costanza R (ed). 1991. Ecological Economics. Columbia University Press: New York.

Costanza R, Daly H, Bartholomew J. 1991. Goals, Agenda, and Policy

Recommendations for Ecological Economics. In Ecological Economics,

Costanza R (ed). Columbia University Press: New York.

Crane A, Matten D. 2004. Business ethics. Oxford University Press: Oxford.

Daly H, Cobb J. 1989. For the Common Good: Redirecting the Economy toward

Community, the Environment, and a Sustainable Future. Beacon Press: Boston.

Daly H. 1992. Steady-state economics. EarthScan Publications: London.

Dasgupta P. 2001. Human Well-being and the Natural Environment. Oxford University

Press: Oxford.

Donaldson T, Dunfee TW. 1999. Ties that Bind: A social contract approach to business

ethics. Harvard Business School Press: Cambridge.

Donaldson T, Preston L. 1995. The stakeholder theory of the corporation: Concepts,

evidence and implications. Academy of Management Review 20: 65-91.

Dyllick T, Hockerts K. 2002. Beyond the business case for corporate sustainability.

Business Strategy and the Environment 11: 130-141.

35

Elkington J. 1994. Towards the sustainable corporation: win – win – win: business

strategies for sustainable development. California Management Review, 36: 90-

100.

Elkington J. 1997. Cannibals with Forks: The Triple Bottom Line of 21st Century

Business. Capstone: Oxford.

Figge F, Hahn T. 2004. Sustainable Value Added-measuring corporate contributions to

sustainability beyond eco-efficiency. Ecological Economics, 48: 173-187.

Freeman RE, Wiks A, Parmar B, McVea J. 2004. Stekeholder theory: the state of the

art and future perspectives. Politeia 74: 9-22.

Freeman RE. 1984. Strategic Management: A stakeholder approach. Pitman

Publishing: Boston.

Friedman M. 1970. The social responsibility of business is to increase profits. The New

York Time Magazine September 13th.

Frosch RA, Gallopoulos NE. 1989. Strategies for Manufacturing. Scientific American

261(3): 144-152.

Gladwin TN, Kennelly JJ, Krause TS. 1995. Shifting paradigms for sustainable

development: implications for management theory and research. Academy of

Management Review 20: 874-907.

Grant RM. 1991. The resource-based theory of competition advantage. California

Management Review 33(3): 114-135.

Hall J, Vredenburg H. 2003. The Challenges of Sustainable Development Innovation,

Sloan Management Review 45(1): 61-68.

36

Harrison JS, Freeman RE. 1999. Stakeholders, social responsibility, and performance:

empirical evidence and theoretical perspectives. Academy of Management

Journal 42: 479-485.

Hart SL, Milstein MB. 1999. Global sustainability and the creative destruction of

industries. Sloan Management Review, 41(1): 23-33.

Hart SL, Milstein MB. 2003. Creating sustainable value. Academy of Management

Executive, 17(2): 56-67.

Hart SL. 1995. A natural-resource-based view of the firm. Academy of Management

Review 20: 986-1014.

Hicks JR. 1948. Value and Capital 2nd edition. Oxford University Press: London.

Hoffman AJ. 1999. Institutional evolution and change: environmentalism and the U.S.

chemical industry. Academy of Management Journal 42(4): 351-371.

Hoffman AJ. 2005. Business Decision and the Environment: Significance, Challenges,

and Momentum of an Emerging Research Field. In Decision Making for the

Environment: Social and Behavioral Science Research Priorities, Brewer G,

Sterns P. (eds.). National Academic Press: Washington DC; pp 200-229.

Intergovernmental Panel on Climate Change (1PCC). 2007. Summary for Policymakers

– Working Group III contribution to the Intergovernmental Panel on Climate

Change Fourth Assessment Report. Climate Change 2007: Mitigation of Climate

Change. WMO and UNEP, Geneva.

ISO. 2005. The ISO Survey – 2005. http://www.iso.org/iso/en/iso9000-

14000/certification/isosurvey.html [16 May 2007]

IUCN, UNEP, WWF. 1991. Caring for the Earth: A Strategy for Sustainable Living.

IUCN, Gland, Switzerland.

37

Jensen MC. 2002. Value maximisation, stakeholder theory, and the corporate objective

function. Business Ethics Quarterly, 12(2): 235-56.

Jonas H. 1985. The Imperative of Responsibility: In Search of an Ethics for the

Technological Age. University Of Chicago Press: Chicago.

Kassins G, Vafeas N. 2006. Stakeholder pressures and environmental performance.

Academy of Management Journal 49(1): 145-160.

Köhn J. 1998. Thinking in terms of system hierarchies and velocities. What makes

development sustainable? Ecological Economics 26: 173-187.

KPMG. 2005. KPMG International Survey of Corporate Responsibility Reporting 2005.

http://www.kpmg.com [12 April 2007]

Lehtonen M. 2004. The environmental-social interface of sustainable development:

capabilities, social capital, institutions Ecological Economics, 49: 199-214.

Lockett A, Moon J, Visser W. 2006. Corporate Social Responsibility in Management

Research: Focus, Nature, Salience and Sources of Influence. Journal of

Management Studies 43(1): 1-18.

Lovelock J. 1988. The ages of Gaia: A biography of our living earth. W.W. Norton &

Company: New York.

Lovins AB, Lovins LH, Hawken P. 1999. A road map for natural capitalism. Harvard

Business Review, May-June: 145-158.

Margolis JD, Walsh JP. 2003. Misery Loves Companies: Rethinking Social Initiatives

by Business. Administrative Science Quarterly 48: 268-305.

Martinez-Alier J. 1987. Ecological Economics: Energy, Environment and Society. Basil

Blackwell : Oxford, UK.

38

McWilliams A, Siegel D. 2001. Corporate Social Responsibility: a Theory of the Firm

Perspective. Academy of Management Review 26(1)117-127.

McWilliams A, Siegel DS, Wright PM. 2006. Guest Editors Introductions. Corporate

Social responsibility: Strategic Implication. Journal of Management Studies

43(1): 1-18.

Morin E. 1980. L’écologie généralisée. Edition de Seuil: Paris.

Naess A, Rothenberg D. 1990. Ecology, Community and Lifestyle: Outline of an

Ecosophy. Cambridge University Press: Cambridge.

Norgaard RB, Howarth RB. 1991. Sustainability and discounting the future. In

Ecological Economics: The Science and Management of Sustainability. In

Ecological Economics, Costanza R. (ed). 1991. Columbia University Press: New

York.

Odum EP. 1993. Ecology and Our Endangered Live-Support Systems. Sinauer

Associates: Sunderland, MA.

Passet R. 1996, L’économique et le vivant. Payot: Paris.

Pearce DW, Markandya A, Barbier E. 1989. Blueprint for a Green Economy. Earthscan

Publications: London.

Pearce DW, Turner RK. 1990. Economics of Natural Resources and the Environment.

Wheatsheaf: Brighton.

Penrose ET. 1959. The theory of growth of the firm. Blackwell: London.

Perrings C. 1997. Economics of Ecological Resources: Selected Essays. Edward Elgar:

London.

Perrini F, Pogutz S, Tencati A. 2006. Developing Corporate Social Responsibility ‘A

European Perspective’ Edward Elgar: Northampton, MA.

39

Porter ME, van der Linde C. 1995. Green and competitive. Harvard Business Review

73(5): 120-133.

Porter ME. 1985. Competitive Advantage. Free Press: New York.

Post JE, Preston LE, Sachs S. 2002. Redefining the corporation: Stakeholder

management and organizational wealth. Stanford University Press: Palo Alto.

Prahalad CK, Hamel G. 1990. The core competencies of the corporation. Harvard

Business Review 68(3): 79-91.

Putnam RD. 1993. Making Democracy Work. Civic Traditions in Modern Italy.

Princeton University Press: Princeton.

Putnam RD. 2000. Bowling Alone. The Collapse and Revival of American Community.

Simon and Schuster: New York.

Russo MV, Fouts PA. 1997. A resource-based perspective on corporate environmental

performance and profitability. Academy of Management Journal 40(3): 534-559.

Ruth M. 2006. A quest for the economics of sustainability and the sustainability of

economics Ecological Economics 56: 332-342.

Schmidheiny S. 1992. Changing Course: A Global Business Perspective on

Development and the Environment. MIT Press: Cambridge, MA.

Sen A. 1987. On Ethics and Economics. Basil Blackwell: Oxford.

Sen A. 1999. Development as Freedom, Oxford University Press; Oxford.

Sharma S, Henriques I. 2005. Stakeholder influences on sustainability practices in the

Canadian forest products industry. Strategic Management Journal, 26(2): 159-

180.

40

Sharma S, Ruud A. 2003. On the path to sustainability: Integrating social dimensions

into the research and practice of environmental management. Business Strategy

and the Environment 12: 205-214.

Sharma S, Vredenburg H. 1998. Proactive corporate environmental strategy and the

development of competitively valuable organizational capabilities. Strategic

Management Journal 19(8): 729-753.

Shiva V. (ed.). 1992. Biodiversity: Social and Ecological Perspectives. Zed Press: U.K.

Shrivastava P, Hart S. 1995. Creating sustainable corporations. Business Strategy and

the Environment, 4: 154-165.

Shrivastava P. 1995a. The role of corporations in achieving ecological sustainability.

Academy of Management Review 20(1): 936-960.

Shrivastava P. 1995b. Environmental technologies and competitive advantage. Strategic

Management Journal 16: 183-200.

Sneddon C, Howarth RB, Norgaard RB. 2006. Sustainable development in a post-

Bruntland world. Ecological Economics 57: 253-268.

Solow RM. 1986. On the Intergenerational Allocation of Natural Resources.

Scandinavian Journal of Economics 88: 141-149.

Starik M, Marcus AA. 2000. Introduction to the special research forum on the

management of organizations in the natural environment: a field emerging from

multiple paths, with many challenges ahead. Academy of Management Journal

43: 539-546.

Steuer R. 2006. Mapping Stakeholder Theory Anew: From the ‘Stakeholder Theory of

the Firm? To Three Perspectives on Business-Society Relations. Business

Strategy and the Environment 15: 55-69.

41

Stiglitz J. 2006. A new agenda for global warming. The Economists' Voice, 3(7), Article

3. http://www.bepress.com/ev/vol3/iss7/art3

the Economist. 2005. Don’t despair. Grounds for hope on global warming. December

10th-16th.

the Economist. 2006. The heat is on. A special report on climate change. September 9th-

15th.

United Nations Statistics Division with European Commission, International Monetary

Found, Organization for Economic Co-operation and Develoment, & Wolrd

Bank. 2003. Handbook of National Accounting. Integrated Environmental and

Economic Accounting, final draft circulated for information prior to official

editing. http://unstats.un.org/unsd/pubs/gesgrid.asp?ID=55

van Marrewijk M. 2003. Concepts and Definitions of CSR and Corporate

Sustainability: Between Agency and Communion. Journal of Business Ethics 44:

95-105.

Walley N, Whitehead B. 1994. It’s not easy being green. Harvard Business Review

72(3): 46-52.

Wernerfelt B. 1984. A resource-based view of the firm. Strategic Management Journal,

5: 171-180.

World Commission on Environment and Development (WCED). 1987. Our common

future. Oxford University Press: Oxford, UK.

WWF, Zoological Society of London, Global Footprint Network. 2006. Living planet

report 2006. http://www.panda.org/ [20 May 2007]

42