The corporate challenges of sustainable development

Abstract

Executive Overview While evidence pointing to environmental, social-equity, and economic threats mounts, few U.S. firms have embraced the principles of sustainable development. This reticence is illustrated through an analysis of the adoption of ISO 14001, an international environmental-management system intended to advance the sustainable-development agenda in organizations. Interviewed managers said they resisted the standard because the benefits of ISO 14001 did not outweigh the costs and because in-house environmental systems served the same purpose. While part of this reticence can be attributed to the standard itself, it is also partly due to the nature of the issue of sustainable development. It is a societal issue to which most firms do not know how to respond. To bridge this divide, sustainable development must become more institutionalized in the regulations, norms, and mindsets of Americans. By translating the general principles of sustainable development into business practices, by developing better measures of sustainable development, and by empowering and engaging employees, firms are more likely to embrace sustainable development so that it permeates all organizational activities.