This chapter will assess climate change as a concern for business, both as a stand-alone issue and as part of the broader shift that scientists are calling the Anthropocene. It begins by examining the extent to which the market – comprised of corporations, the government and non-governmental organisations, as well as the many stakeholders in market transactions, such as the consumers, suppliers, buyers, insurance companies, banks, etc., is the cause of the climate crisis, but also discussing the extent to which the market must also be the solution. It then presents two models for examining the role that business can play in addressing the climate crisis. The first is Enterprise Integration, which works by fitting climate concerns within existing business objectives and parameters. The second is Market Transformation, which is based on the premise that systemic change is necessary to address the systems challenge of climate change. The chapter concludes with a call for business students and business leaders to think of their career as a vocation or a calling, one that recognises the vast power that business has to solve our climate challenges or bring us to ruin.

This chapter discusses the role of ethical reflection in the context of corporate sustainability. It starts by reviewing the relevance of four normative ethical theories (utilitarian ethics, duty-based ethics, virtue ethics and posthuman ethics) for corporate sustainability. Next, the chapter discusses how people in organisations make ethical decisions and which cognitive biases impact our decision-making. In the following section, the chapter asks two essential questions: Why do we need ethics when discussing corporate sustainability? and Can corporations engage in ethical reflection or is this something that only individuals can do? The final section discusses how firms can manage ethics, and we distinguish two orientations that can guide such management: compliance and integrity.

Multinational corporations (MNCs) and small and medium-sized enterprises (SMEs) all over the world engage vividly in sustainable development and responsible management. It is important to know the very different ways in which they do so, as this will allow you to best support their progress for contributing to sustainability and societal improvement. We present five key features where MNCs and SMEs differ in their sustainability approach: motivation, communication, operations, organising and stakeholder scope. For many people, the default position when we talk about business and sustainability is to think of the large, MNCs which dominate media, stock exchanges and business school curricula. However, it is often under-acknowledged how the SME or ‘small business’ in fact is the dominant way of organising business. SMEs constitute over 90 per cent of private sector business and are perhaps even more important in developing economies than developed ones, where reliance on the economic benefits generated for individuals and communities is a fundamental part of poverty alleviation. This chapter aims to encourage you to consider how to support carefully the development and maintenance of sustainability and responsibility in the different contexts of MNCs and SMEs.

This chapter introduces the debate about how a firm’s strategy and corporate sustainability are interrelated. Section 5.2 looks at the term ‘strategy’ and identifies some key characteristics of strategic decisions. Based on this, we discuss which characteristics a strategic approach towards corporate sustainability would entail. Section 5.3 introduces two types of approaches to link business strategy and corporate sustainability: outside-in thinking (based on the assumption that sustainability-strategy alignment starts with reflections on a firm’s competitive context) and inside-out thinking (based on the assumption that such alignment starts with reflections on a firm’s value chain). Section 5.4 extends this debate and shows how sustainability-strategy alignment can be achieved for companies with multiple business units (corporate strategy), as well as for firms that target only one market (business strategy). Section 5.5 demonstrates how firms can identify ‘material’ (i.e., strategic) ESG issues through so-called materiality assessments. Finally, section 5.6 distinguishes different stages of alignment between a firm’s strategy and its sustainability efforts, ranging from complete detachment and denial to companies that build their entire strategy around sustainability.

Over the past three decades, globalisation has particularly manifested itself in the spread of global supply chains. Only recently, rising protectionism and trade wars between the United States and China, as well as the COVID-19 pandemic, have placed an unprecedented burden on the world economy and the globalisation process of supply chains. Already existing power asymmetries and poor working conditions of workers in global value chains of MNCs have become even more visible. Against this background, the questions arise as to what role sweatshops play in global value chains, how they should be evaluated from an economic and ethical perspective, and what measures can and should be taken to improve poor working conditions. We provide a brief overview of the labour rights frequently affected by the contracts between MNCs and their suppliers before discussing a number of examples for violations of these labour rights in global supply chains. We offer a definition for sweatshops and then continue to critically evaluate the pros and cons of sweatshop labour. Based on these insights, we briefly review opportunities at different levels and by different actors to regulate and improve working conditions in global supply chains.

This chapter provides an introduction to the concept of corruption, presents an overview of the major stakeholders and strategies involved in the business response to the corruption challenge and explains how this all relates to corporate sustainability.

More specifically, the chapter starts out by proposing a workable definition for corruption and explains what different forms corruption can take and what its consequences are for business and society at large. In a second step, we map the key actors, rule frameworks and initiatives that shape anti-corruption governance relevant to the business environment. We then zoom in on the company perspective and review the common approaches deployed by businesses to tackle corruption and their evolution over time, as well as some of their weaknesses and challenges ahead. The concluding section shows how the business response to corruption is linked to broader concerns about corporate sustainability, highlighting that corporate anti-corruption efforts can be considered as part and parcel of a comprehensive corporate sustainability agenda.

This chapter articulates the central argument (why a new legal form for social enterprises in India, Malaysia, Hong Kong, and Singapore is needed and what it should entail); explains why the four Asian jurisdictions are selected as case studies; and examines the purposes of social enterprises and their two main business models. The chapter then provides an overview of social enterprises in the four Asian jurisdictions including: their operating domains, the drivers of the development of social enterprises, the challenges faced by them, the three main conflicts of interests afflicting them, and the legal forms used by social enterprises. Importantly, the chapter shows that the legal forms available to or used by social enterprises in the four Asian jurisdictions are unable to properly address the conflicts of interests, and thus, a new legal form is required.

This chapter explains the field of Business and Human Rights (BHR) as an interdisciplinary area of research and management of core relevance to sustainable and responsible business conduct. Section 21.1 introduces the issue through some examples of positive and harmful business impacts on human rights and recent examples related to COVID-19 and climate change. Section 21.2 is an overview of the evolution of BHR. Section 21.3 explains the background, forms and normative substance of human rights, and their implications for business. Section 21.4 sets out key similarities, differences and complementarities between BHR and corporate sustainability. Section 21.5 introduces the BHR regime and explains fundamental elements for sustainable and responsible management: the United Nations Guiding Principles (UNGPs), the ‘pillars’ of state duties, corporate responsibilities and access to remedy for victims; the connection, differences and complementarity between the UNGPs’ ‘do no harm’ focus vis-à-vis human rights fulfilment and the Sustainable Development Goals (SDGs); and operational aspects of human rights due diligence, which is a management process to identify and manage a company’s human rights impacts. Section 21.6 addresses accountability and remedy; section 21.7 wider sustainability governance perspectives; Section 21.8 offers critical perspectives; and section 21.9 concludes.

The ability of business to meaningfully engage with those groups and individuals who it affects, and is affected by – its stakeholders – is a critical component in humanity’s pursuit of net zero, sustainable development for all. This chapter explores and unpacks stakeholder approaches to corporate sustainability and responsible business.

It starts off by framing the big picture of why a stakeholder approach – one that accounts for the interdependencies between business, society and nature – is increasingly pivotal during the uncertain and ambiguous times of the 2020s. Following on, the chapter introduces the core features of a stakeholder approach to corporate sustainability. The third section looks at different stakeholder models. It illustrates stakeholder model development in business settings over time, as well as the influence of the cultural context, such as the one found in the Nordic countries, to foster a stakeholder mindset in business.

The fourth and final section considers stakeholder theory in the age of sustainability, with particular coverage given to the implications of new Information Communication Technologies (ICT) for successful stakeholder engagement strategies.

Weaved in throughout this chapter, and parallel to the online case study, are a number of examples designed to illustrate how a stakeholder approach manifests in the ‘real world’.

This chapter critically examines the fifth and last criterion of the proposed framework for social enterprise law, namely, distribution of dividends and assets, and allocation of tax benefits. I assess how restrictions on the distribution of dividends and assets can ensure that the pursuit of social benefit is not subordinated to that of profit-making by analyzing the CIC regulations. I argue that these restrictions in themselves do not necessarily ensure that the pursuit of social benefit is prioritized over profit-making. Under my criterion, it is argued that directors should be required to issue a report specifying whether and how they have complied with the corporate purpose, among other requirements. In addition, they should be required to engage in a critically self-reflexive process on how they measure impact based on the proposed three-step framework. I also argue that because investors need to be incentivized to invest in social enterprises and given that a central challenge facing social enterprises in Asia is poor access to funding, I consider how tax law can be used to incentivize investments from shareholders.

This chapter argues that beneficiaries of social enterprises should be given decision-making powers. I examine two problems with restricting the decision-making powers to shareholders, that is, shareholders can exercise the governance rights to benefit themselves but at the expense of the constituencies that the social enterprise is set up to benefit; and it is odd for a social enterprise to claim that it seeks to pursue social welfare and to promote public benefit, and yet its beneficiaries have absolutely no say in how the social enterprise is being run. I then analyze three objections in giving beneficiaries decision-making powers, that is, it will be disruptive and inefficient; beneficiaries can act opportunistically; and only shareholders have the incentive and ability to monitor. Finally, I assess five different decision-making mechanisms, that is, beneficiary advisory panel; director appointed from the beneficiary advisory panel; appointing independent nonexecutive directors; beneficiaries as shareholders; appointing a regulator and public enforcement.

This chapter discusses the relationship between corporate governance and corporate sustainability. We start by looking into the different components of the general corporate governance system. This allows us to revisit a central tension: shareholder- versus stakeholder-oriented governance. We then discuss how well-designed corporate governance can support firms’ sustainability efforts. We label this debate ‘corporate governance for sustainability’, and we discuss how sustainability topics can be integrated into the discussions of boards of directors. Next, we show that some aspects of corporate governance can themselves pose challenges that need to be discussed under the ESG umbrella. We label this debate ‘corporate governance as sustainability’, and we focus on topics that reflect the ‘G’ in ESG (e.g., executive compensation). Finally, we discuss elements of a possible reformed corporate governance system which would allow to better address sustainability-related debates.

The central argument in this chapter is that the duties to which directors owe the company, specifically the duty to act in good faith in the best interests of the company and the duty to exercise powers for proper purposes, should be aligned with the purpose of social enterprises. In other words, the meaning of company’s interests in the best interest duty and that of proper purpose in the proper purpose rule ought to be equated with the proposed corporate purpose advanced in Chapter 1. To make this argument, I show that the laws governing these two directors’ duties in the four common law Asian jurisdictions and those of UK CICs and US PBCs and SPCs are not aligned with the purpose of social enterprises and I demonstrate why it is important to have this alignment. I also explain how the proper purpose rule can be aligned with my proposed purpose of social enterprise.

This chapter discusses when, how and why consumers interact with corporate sustainability, both responding to it and, ultimately, shaping it. The chapter first outlines the two types of consumer behaviours that a company’s sustainability actions seek to impact: pro-company behaviours and pro-sustainability behaviours. Because the former is more directly critical to the survival and success of companies, this chapter focuses primarily on pro-company behaviours. The bulk of the chapter then explores the psychological processes that determine when consumers respond most favourably to corporate sustainability, and why. The different thoughts, feelings and motivations consumers have about a company’s sustainability efforts come together as the 3 U’s: Understanding, Utility and Unity. Understanding is how well consumers understand a company’s sustainability efforts. Utility is the value consumers get from such efforts. Unity is the sense of connection consumers feel with a company based on these efforts. The 3 U’s need to work synergistically for the key sustainability-guided behaviours to be obtained. Finally, the chapter discusses the key consumer, company and contextual factors that determine the exact nature of the 3 U’s and the extent to which these come together to produce pro-company behaviours.