Introduction to Corporate Sustainability in the U.S.

Wayne Mayer

30 years: Sustainability and Corporate Social Responsibility Executive

In this video, Wayne explores the evolution of Corporate Sustainability in the U.S. market, highlighting the shift from Corporate Social Responsibility (CSR) to integrating Environmental, Social, and Governance (ESG) factors into business strategies. He explains how environmental regulations and the 1992 Earth Summit influenced this transformation, leading to the rise of ESG investing and alignment with the UN Sustainable Development Goals (SDGs). Wayne discusses how sustainability now drives innovation, efficiency, and competitive advantage in modern business.

Sector and Region Transition

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Introduction to Corporate Sustainability in the U.S.

11 mins 6 secs

Key learning objectives:

Understand how Environmental Regulation and Sustainable Development led to Corporate Sustainability and the integration of ESG factors into business practices
Outline the shift from Corporate Social Responsibility and Corporate Philanthropy to Sustainability
Describe the emergence of ESG investing and the use of ESG metrics in business decision-making

Overview:

The evolution of Corporate Sustainability in the U.S. markets reflects a shift from Corporate Social Responsibility (CSR) and philanthropy to integrating Environmental, Social, and Governance (ESG) factors into business strategies. This transformation was driven by emerging environmental legislation in the 1970s and 1980s, which highlighted the need for balancing economic growth with social and environmental responsibilities. By the 1990s, companies began challenging the Milton Friedman doctrine of profit maximization, adopting CSR practices. The 1992 Earth Summit further promoted Sustainable Development, leading to the rise of ESG investing and the alignment of corporate objectives with the UN Sustainable Development Goals (SDGs). Today, Sustainability and ESG are integral to business strategy, driving innovation, efficiency, and competitive advantage.

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Summary

How did environmental regulation and sustainable development lead to corporate sustainability and the integration of ESG factors into business practices?

Emerging environmental regulations in the 1970s and 1980s aimed to protect air, water, and wildlife, fundamentally altering how businesses interacted with their external environments. This period witnessed a growing dichotomy between economic growth and environmental responsibility. As corporations focused on short-term profits, they moved away from Sustainable Development principles, which advocate for balancing economic, social, and environmental needs. This disconnect prompted a shift towards Corporate Sustainability, integrating Environmental, Social, and Governance (ESG) factors into business practices to align long-term financial performance with societal and environmental well-being.

How did Corporate Social Responsibility and Corporate Philanthropy evolve into Sustainability?

In the 1990s, Corporate America began to challenge the Milton Friedman doctrine that the sole social responsibility of business is to increase profits. Corporate Social Responsibility (CSR) emerged, enabling companies to demonstrate social accountability. Initially focused on corporate philanthropy and public relations, CSR raised awareness of companies' impacts on society and the environment. Over time, corporations moved beyond CSR to embrace Sustainability, integrating social and environmental considerations into core business strategies. This evolution reflects a growing recognition that sustainable practices can drive innovation, efficiency, and profitability, rather than being mere operational costs.

What is ESG investing, and how does it influence business decision-making?

ESG investing emerged from the broader context of Socially Responsible Investing and the rise of Sustainable Development. By focusing on Environmental, Social, and Governance (ESG) factors, investors encouraged companies to address their broader impacts on society and the environment. This investment approach gained traction as companies realized that integrating ESG metrics into business decision-making could enhance long-term value and resilience. ESG investing aligns financial performance with ethical considerations, promoting sustainable business practices that reduce risks, improve efficiency, and generate competitive advantages. Companies now often align their objectives with the UN Sustainable Development Goals (SDGs) to meet investor and stakeholder expectations.

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Wayne Mayer

Wayne Mayer, a Strategic Sustainability consultant and CEO of When Everything Matters, advises multinational companies and non-governmental organizations on various Sustainability and ESG issues. He helps companies transform business models into sustainable development partnerships, using Sustainability principles and Corporate Social Responsibility (CSR) practices to drive innovation, growth, and profits. With over 20 years of experience, Wayne has worked as a change agent focused on Environmental, Social, and Governance performance. He helps companies set science-based goals and leverage data and technology to measure, monitor, and communicate ESG risks, impacts, and opportunities.

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