A capability framework for managing social and environmental concerns

Abstract

While there is a broad consensus supporting the principles of sustainable development, it has been difficult to achieve a similar consensus on an operational definition that can be used to assess the effectiveness of specific actions. Sustainable development has been described as more a journey of learning than a particular destination (Boons and Wagner 2009; Kates et al. 2005; National Research Council 1999; van Kleef and Roome 2007). Companies have struggled to define key performance indicators that describe causal linkages that can be leveraged to drive sustainability initiatives (Epstein and Roy 2001). Stakeholders want common measures of sustainability performance that can be used to hold companies accountable and inform consumer choices, and therefore push for consensus standards, such as the Global Reporting Initiative G3 guidelines or the proposed ULE-880 sustainability for manufacturing organizations standard. Thus, companies are faced with conflicting demands to develop flexible metrics for learning and standardized metrics for accountability (Swarr and Fava 2007). It has also been argued that because sustainability is a complex goal that is viewed (and evaluated) differently by different stakeholders, it is necessary to move beyond the need for a consensus on definitions and quantified measures and focus on developing a practical process for action that acknowledges the irreducible plurality of perspectives and modes of understanding (Frame and Brown 2008; Meppem and Gill 1998). Simon (1978) noted that when the rationality of an action depends upon the actions of other independent stakeholders, then there can be no consensus on what constitutes rational or appropriate behavior. A rational process is as important as a rational outcome. This suggests that efforts to assess sustainability initiatives must consider both the process used as well as the outcomes achieved.