The Dual Lenses of Corporate Sustainability

At first glance, this photo has nothing to do with this topic. But later, I start thinking about the UNESCO Heritage status of Fes, Morocco and how hundreds of years of life for its inhabitants has been preserved as you can see. What considerations went into the thinking behind this decision - and how was sustainability for the whole ecosystem addressed?

Basically, a company exists to create value. Once it is ascertained that the company’s purpose is to create some form of societal value in addition to financial value, it has to decide who it is creating value for and what form of value does it take? This imposes the dual lenses of sustainability for the company: financial value and societal value, expressed in the following table-

At the heart of sustainability is maintenance of capital so that it can continuously provide a flow of income. We are talking about 3 types of capital: natural resources, financial (shareholders fund’s or financiers) and social capital generated by society . The SDGs are simply the aspirations to the maintenance of these capitals.

Externalities are an important concept to this maintenance activity. Profit alone does not entirely capture the full cost-benefit of the company’s activities and externalities . So even if an activity is profitable, it is not necessarily sustainable.

In order to figure out which of the company’s activities is sustainable, it would be necessary to make an analysis of the impact to and dependence on a particular topic, of the company’s actions. How would a 3rd party experience the corporation’s actions? Is it a positive or negative impact (such as quality of life or resource exhaustion)? What is the company’s reliance on something or someone in order to continue to generate value eg on the climate or on workers? A company has to continually assess who they impact or on whom they are dependent, to remain successful and sustainable.

Location: Kuala Lumpur, Federal Territory of Kuala Lumpur, Malaysia

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