Corporate sustainability performance: methods and illustrative examples

Abstract

The concept of sustainable development is of increasing importance for societies. Corporations are as relevant societal actors in an essential role for the realization and implementation of sustainable development. Therefore, it is necessary to assess the performance of corporations in the light of sustainable development. In this paper, basic methods and instruments for the assessment of corporate sustainability performance are compared. Sustainability assessments can be divided into two groups: The fi rst group consists of methods based on monetary units; the second group consists of methods based on non-monetary units. The methods of Sustainable Value Added, Composite Sustainable Development Index and Integrated Sustainability Assess- ment are discussed in detail and evaluated regarding the criteria applicability, contribution to basic goals of sustainable development and completeness. The methods are used to assess the sustainability performance of BP and Royal Dutch/Shell Group. Keywords: assessment, Composite Sustainable Development Index, corporate sustainability assessment, Integrated Sustainability Assessment, monetarization, sustainable business management, sustainable development, Sustainable Value Added. Assessing the sustainability performance of corporations is an important aspect within the transition of societies towards the principles of sustainable development. In this paper, three methods (Sustainable Value Added, Composite Sustainable Development Index, Integrated Sustainability Assessment) are presented. Sustainable Value Added is based on monetary units and assesses the value a company creates by using resources compared to a benchmark. Composite Sustainable Development Index and Integrated Sustainability Assessment are based on non-monetary units. These methods use different indicators for each dimension of sustainable development and combine them either with benefi t analysis or with fuzzy logic. Depending on the goals used for the benchmark, relative and absolute contributions to sustainable development can be assessed. The objective of sustainable development (1) is sustainability, which can be characterized by four principles. First, contribution to systematic increase in concentrations of substances from the earth's crust has to be eliminated. This means substituting certain minerals that are scarce in nature with others that are more abundant, using all mined materials effi ciently, and systematically reducing dependence on fossil fuels. Second, contribution to systematic increases in concentrations of substances produced by society has to be eliminated. This means systematically substituting certain persistent and unnatural compounds with ones that are normally abundant or break down more easily in nature, and using these ones in an effi cient and effective way. Third, contribution to the systematic physical degradation of nature through over-harvesting, introductions and other forms of modifi cation has to be eliminated. This means drawing resources only from well-managed eco-systems, systematically pursuing the most productive and effi cient use both of those resources and land, and exercising caution in all kinds of modifi cation of nature. Fourth, contribute as much as possible to the meeting of human needs in our society and worldwide, over and above all measures taken in meeting the fi rst three objectives. This means drawing resources only from well-managed eco-systems, systematically pursuing the most productive and effi cient use both of those resources