Corporate sustainability : creating shared value in the 21st century

Date
2018-06-27
Authors
Montgomery, Ann Cox
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Abstract

The focus of this paper is to analyze companies’ motivations in adopting sustainability goals and metrics as internal policies. In establishing a sustainability strategy, are companies motivated primarily by shareholder profits or do companies act based on moral obligations or a perceived benefit to society? The underlying question asks whether or not the adoption of sustainability policies necessitates a departure from the standard economic prescription to maximize shareholder value. In the first chapter, this paper traces sustainability practices across several business models, beginning with the Milton Friedman model of maximizing shareholder profit and ending with the Shared Value model, which emphasizes collective action and business strategies that increase both social and corporate value. The next two chapters examine specific case studies of large consumer-facing companies that have successfully adopted sustainability strategies: Wal-Mart and Unilever. In the fourth chapter, I conclude that in a world affected by climate change with increasingly constrained resources, maximizing shareholder value mandates that companies pursue a collective action strategy by engaging external stakeholders and political advocacy

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