The Evolution of Sustainable Management: A Journey Through Time

Sustainable management has evolved significantly over the past several decades, from a niche concept to a mainstream business practice. This evolution reflects a growing awareness of the need to balance economic success with social and environmental responsibility. Let’s delve into the history of sustainable management, tracing its roots and milestones that have shaped the way businesses operate today.

The Early Foundations

The journey of sustainable management began in 1953 when American economist Howard Bowen introduced the concept of Corporate Social Responsibility (CSR) in his publication “Social Responsibilities of the Businessman.” Bowen’s work laid the groundwork for the idea that businesses have an obligation to consider the impact of their operations on society and the environment.

The 1970s and 1980s: Shifting Paradigms

The 1970s saw the rise of the Shareholder Supremacy concept by Milton Friedman, which emphasized the primary responsibility of businesses to maximize profits for shareholders. However, this period also marked the beginning of a counter-movement towards stakeholder theory, notably with the work of R. Edward Freeman in 1984. Freeman’s Stakeholder Theory argued that businesses have responsibilities not only to shareholders but to all stakeholders, including employees, customers, and the community.

The Brundtland Report and the Earth Summit

The 1987 Brundtland Report, titled “Our Common Future,” is a pivotal moment in the history of sustainable development. It popularized the concept of sustainable development, defining it as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This report set the stage for the 1992 Earth Summit in Rio de Janeiro, where nations came together to discuss environmental issues and sustainable development, leading to the establishment of Agenda 21, a comprehensive plan of action to be taken globally, nationally, and locally.

The Triple Bottom Line and the UN Global Compact

In 1997, John Elkington introduced the Triple Bottom Line (TBL) concept, which suggests that companies should focus on three Ps: People, Planet, and Profit. This framework encourages businesses to measure their success not just by financial performance but also by their social and environmental impact.
The UN Global Compact, launched in 1999, is another significant milestone. It is a call to companies everywhere to align their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption, and to take actions that advance societal goals.

The 21st Century: Accelerating Sustainability

The new millennium brought with it a series of initiatives and agreements that further cemented the importance of sustainable management. The Millennium Development Goals (MDGs) in 2000 set out to tackle poverty and other global challenges. The Global Reporting Initiative (GRI) was established the same year, providing guidelines for sustainability reporting.

The 2011 Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises provided further frameworks for responsible business conduct. In 2011, Michael Porter and Mark Kramer introduced the concept of Creating Shared Value, which posits that companies can create economic value in ways that also create value for society by addressing its needs and challenges.

The most recent milestone is the 2015 adoption of the Sustainable Development Goals (SDGs) and the Paris Agreement, which aim to end poverty, protect the planet, and ensure prosperity for all by 2030. 2017 marked Launch of the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations which provided a framework for companies to disclose climate-related financial risks and opportunities, promoting transparency and accountability. In 2023: Launch of the International Sustainability Standards Board (ISSB). Established by the International Financial Reporting Standards (IFRS) Foundation to develop global standards for sustainability disclosures.

These goals provide a comprehensive vision for a more sustainable and equitable world, challenging businesses to play their part in achieving them.

Corporate Social Responsibility (CSR) [1953] → Milton Friedman Shareholder Supremacy [1970] → Pyramid of Carroll [1979] → Edward Freeman Stakeholder Theory [1984] → Bruntland Report [1987].

Earth Summit [1992] → Triple Bottom Line [1997] → Battle of Seattle [1999] → Edward Freeman Stakeholder Theory [1984] → UN Global Compact [1999].

Millennium Development Goals [2000] → Global Reporting Initiative (GRI) [2000] → Principles for Responsible Investment [2006] → BLab Non-Profit Network [2006] → Guiding Principles on Business and Human Rights [2011].

Porter and Kramer Creating Shared Value [2011] → Agenda 2030 SDGs | Paris Agreement [2015] → Launch of TCFD [2017] → Euro Green Deal [2020] → Launch of ISSB [2023].

Conclusion

The history of sustainable management is a testament to the growing recognition that businesses have a critical role to play in addressing global challenges. From the early ideas of CSR to the comprehensive frameworks of the SDGs, the journey has been one of increasing ambition and collaboration. Do refer the 17 SGD goals at the home page.

Let’s make history by learning, sustaining, and sharing our knowledge for a better future. Let’s be mindful pollinators of change.