Today a major shift from the single bottom line shareholder value creating mindset to the triple bottom line stakeholder engagement based sustainable value creation mindset is needed at board level in companies.
This evolution of business refers to organizations embracing the need for both economic, social and environmental value creation focused on the triple bottom, Sri Lanka Institute of Nanotechnology, CEO Ravi Fernando told the CIMA Symposium at Hotel Cinnamon Lakeside yesterday.
He was speaking on the emerging paradigm for sustainable business and enterprise governance under Strategic Corporate Sustainability. He said that sustainable business is increasingly becoming the aspiration of all business and the world s best are all moving in the direction of sustainable business as they know stakeholders and the emerging ethical consumer have begun to demand that Corporate Responsibility is a business commitment to sustainable business. It is a shift from creating economic value for shareholders to creating sustainable value for stakeholders and it refers to migration from the focus of creating economic profit at any cost to triple bottom.
Fernando said that the boards need to take on four main tasks to facilitate strategic corporate sustainability - namely policy formulation, strategic thinking, supervision of management and accountability.
The emerging paradigm for sustainable business which is increasingly being embraced but has yet to be articulated is the concept of strategic corporate sustainability as an approach for business to integrate corporate responsibility, corporate strategy and sustainable business strategy, he said.
The 21st century will have only two types of business.
Firstly, business where enlightened boards have understood the new paradigm and embedded stakeholder, triple bottom line mindsets in the business through strategic corporate sustainability and business where boards continue to focus on corporate and enterprise governance on the old paradigm of shareholder value creation, he said.