Developing the Conceptual Framework of Corporate Sustainability anagement and its empirical application to the Tobacco Industry

Abstract

During the last decades corporations proved that they cause environmental and social problems but they also solve the problems. The recent global movements towards sustainable development facilitate applicable principles to corporations. These include the UN Global Compact, the OECD Guidelines for Multinational Enterprises, and the GRI sustainability reporting guidelines. By establishing the Korea Business Council for Sustainable Development (KBCSD), the Korean industries positively responded to such global movements for sustainable development. More importantly, the model of corporate sustainability management (CSM) and the CSM rating model are designed to facilitate CSM activities in Korean industries. The model has seven key areas for corporate sustainability management in Korea and the rating model has two folds: strategic and functional sustainability. In order to evaluate corporate sustainability management, four areas are identified and categorized as (i) vision & strategy (ii) economic value (iii) social value and (iv) environmental value. The empirical study is conducted in the Korean tobacco industry. Although the two companies (A and B) in tobacco industry are not largely differentiated in sub-dimensions of economic, social and environmental values, the B company showed higher scores than the A company in general.