This chapter starts by discussing the changing overall context in which business, nature and society operate. It is important to understand this context, because it shapes the problems that corporate sustainability aims to address, and it influences how firms can cope with these problems. We then introduce the concept of corporate sustainability. We discuss similarities and differences to related concepts such as corporate social responsibility and business ethics. Next, we review some of the main environmental, social and governance (ESG) issues that firms are asked to address as part of their corporate sustainability commitments. Finally, the chapter reviews four key motivations (instrumental, ethical, stakeholder-based and political) that underpin firms’ corporate sustainability commitments.

We start by discussing what motivates investors to enter the sustainability field (section 11.2). We debate different reasons for their engagement, ranging from concerns for securing competitive returns to changes in the regulatory landscape and client demand. Next, we discuss how ESG factors are integrated into different asset classes. We first discuss how ESG considerations are integrated into equity investing (section 11.3). We then look at other ways to consider ESG-related information in investment decisions, focusing on impact investing and fixed income (section 11.4). Section 11.5 looks at how investors that already have invested in companies can improve these firms’ ESG performance, either via active engagement and dialogue or via voting on shareholder resolutions. Next, we discuss what different kinds of data can shape investors’ consideration of sustainability issues (section 11.6). Finally, we look at the new European legislation (Sustainable Finance Disclosure Regulation, SFDR) which requires investors to disclose the level of sustainability risks and adverse sustainability impacts associated with their investment decisions.

This book contributes to the literature on comparative social enterprise law in four respects. First, it demonstrates that the existing legal forms and laws in common law Asia, the UK and US, do not properly address the three principal types of conflicts of interests affecting social enterprises. Second, this book distinguishes social enterprises and profit-driven companies that take into account sustainability or environmental, social and governance (ESG) considerations. Third, given the key difference between social enterprises and profit-driven but socially responsible companies, the concern that having a new legal form for social enterprises will undermine the sustainability practices of profit-driven companies is misplaced. Finally, creating a new legal form comprising the five criteria will reduce transaction costs for social entrepreneurs, investors, and consumers.

This chapter presents and discusses key developments in corporate sustainability reporting (CSRep). It shows that the nature of CSRep and its governance have been subject to fundamental changes over the last decades. The chapter introduces students to the rationales for and challenges to companies’ engagement in CSRep. At its core, the chapter explores different alternatives for governing CSRep, distinguishing between voluntary standards and legally binding measures such as disclosure requirements by governments and stock exchanges in European and other countries. Particular attention is given to the most widely used standard for CSRep, the Global Reporting Initiative (GRI) Standards, and the concept of materiality. Finally, countries and industries in which reporting has become a more institutionalised practice are described in more detail.

Along with traditional organisational forms, such as SMEs and MNCs, a variety of alternative types of organising exist in the business world. As hybrid organisations between traditional for-profit businesses and non-profit organisations, alternative types of organising often integrate social and environmental concerns deeply into their business models. Hence, these organisations aim at combining economic goals with the pursuit to proactively create a positive social and environmental impact.

In this chapter, we will take a deeper look into alternative types of organising for corporate sustainability as a promising pathway to integrate sustainability into the business sector and discuss the challenges they face as well as the social and environmental impact they create. Specifically, we will discuss four examples of these organisations: foundation-owned companies, which are companies that are fully or partially owned by an industrial foundation instead of shareholders; cooperatives, which are community-based organisations that are owned by their members (i.e., individuals who voluntarily join their forces and collaborate); social businesses, defined as organisations that pursue a social or environmental mission while engaging in commercial business activities; and B Corps as a specific form of social businesses, meaning those that have applied for and passed a certain certification process.

This chapter assesses the mechanisms of reporting, impact measurement, and certification. I first examine the actual reporting practices of the social enterprises in common law Asia, and then analyze the reporting requirements of the public benefit corporations, social purpose corporations, and community interest companies. Next, I examine whether social enterprises in common law Asia have disclosed impact and I explain why so few of them have done so, and I analyze whether social enterprises should be required or incentivized to do so. Subsequently, I propose a three-step framework to guide social enterprises on impact measurement. Finally, I critically assess three types of certification regime in the US, Hong Kong, and Malaysia.

This chapter presents an introduction to the relationship between government policy and corporate sustainability. It opens with a review of the dichotomous and related perspectives on government and corporate sustainability, revealing why the question of a relationship is quite contentious. Having established the normative, conceptual and empirical significance of the relationship, it proceeds by indicating the types of corporate sustainability issues that government policies address, the types of policies that are deployed and the alternative corporate responses to such policies. These relationships are illustrated with reference to four well-known corporate sustainability issues: corporate philanthropy, ethical trade, corporate sustainability reporting and corporate taxation. Finally, the chapter focuses on two cases of complementarity between government policies and private initiatives for corporate sustainability, responses to: dangerous work conditions in the Bangladesh ready-made garment industry; and corrupt uses of payments to government by corporations in the extractives industry.

In this chapter, we examine the role of NGO activism as a driver of sustainability. Such activism offers opportunities and poses challenges to firms; examining the role of activism is important to appreciate the broader question of what makes businesses more sustainable and more socially responsible. We provide an overview of what activist NGOs are and explore ways by which they seek to influence corporate policies, ranging from collaboration and partnerships to contestation and protest. We then discuss which firms are more likely to encounter NGO activism as not all firms are equally susceptible to NGO activism. Firm size, industry and visibility to consumers are important elements, as well as their historical record on CSR and sustainability issues. Finally, we discuss how firms may respond to NGO activism. For a firm to take responsibility implies that it moves beyond the defence of its own economic interests, to consider the questions of what kind of corporation the firm wishes to be, what role in society it aspires to fulfil and how to relate to its various stakeholders. Ultimately, these are questions of ethics.