SUSTAINABILITY AND CORPORATE GOVERNANCE

Definition and the Triple Bottom Line (TBL) of Sustainability

Sustainability involves business practices that satisfy the needs of the present without compromising the
ability of the future generation to meet their own needs. It involves managing a company's profit or loss
and social and environmental responsibility. Andrew Beattie (2021) described the "Triple Bottom Line"
(TBL) or the three (3) pillars of sustainability as follows:

• The Economic Pillar (Profit). This ensures economic efficiency and income for businesses. To
become sustainable, a business must be profitable. This pillar of sustainability includes business
activities such as compliance, proper governance, and risk management.
• The Social Pillar (People). This ensures the quality of life, safety, and services for citizens. To
become sustainable, a business should have the support and approval of its employees,
stakeholders, and the community in which it operates. The approaches to securing and
maintaining this support boil down to treating employees fairly and being a good neighbor and
community member in the local and global arena.
• The Environmental Pillar (Planet). This ensures the availability and quality of natural resources.

To become sustainable, businesses should focus on reducing their carbon footprints, packaging waste,
water usage, and overall undesirable environmental impact.

Sustainable Business Practices

In the business world, sustainability is seen as the triple-bottom line in which a business enterprise
corresponds to its investors. The following sustainable business practices of global companies are as
follow:

• Better World Books. This company sells used books and donates a portion of the profits to help
fund literacy programs. Better World Books has raised millions of dollars for literacy programs
and created hundreds of jobs while allowing book lovers to purchase books cheaply.
• Unilever. The company aims to reuse 100% of plastic packaging by 2025. The company is
working with its suppliers, NGOs, and business partners to ensure it pledges to use reusable,
recyclable, or compostable plastic packaging.
• DHL. This global logistics company commits to reaching zero emissions by 2050 to aid climate
protection. Zero emission refers to an engine, motor, process, or energy source that emits no
waste products that pollute the environment or disrupt the climate.
• Patagonia. This company's goal is to make quality apparel that does not harm the environment.

They started producing clothes from recycled plastic bottles in 1993 to help tackle the plastic crisis. They
also switched to using organic cotton to help lessen toxic pesticides from the growth of cotton.

• Coca-cola Company. This company plans to achieve a major recycling initiative by 2030. The
company pledged to collect and recycle a bottle or can for everyone sold by 2030.
• Apple. Apple has been claiming, to great public acclaim, that it uses 100% renewable energy
sources such as solar and wind for many of its power needs, including its data centers.
 • The North Face. The second largest outdoor apparel company manufacturer donates annually to
a carbon farm fund it created. It also uses eco-friendly materials and has set an absolute target
to reduce greenhouse emissions from its operations and supply chain.
• Google. Google became the first major company to balance absorbing and emitting carbon from
the atmosphere and is now the largest corporate renewable energy purchaser on the planet.
• Microsoft. Since 2017, Microsoft has offered digital skills training to learners worldwide to
ensure access to technology, skills, and opportunity.

Corporate Governance

Corporate governance pertains to the system of rules, practices, and processes by which a firm is
directed and controlled. It essentially involves balancing the interests of a company's stakeholders, such
as shareholders, management, customers, suppliers, government, and the community. According to
Lister

(2017), the following are the functions of corporate governance:

• Goals and risk management. Corporate governance through the board of directors sets the
policies and procedures to effectively meet a company's short and long-term investment goals
while working to manage business risk. The board of directors oversees the risk involved with
each investment opportunity through careful examination of the opportunity's value while
forecasting the problem that may occur in the long run. This allows the company to plan for
potential trouble spots and develop strategies to avoid them.
• Corporate accountability. Corporate governance ensures accountability within the board of
directors and the company's larger management structure. This provides a counter-checking
system to ensure that certain company procedures and initiatives are being carried out correctly.
It also allows greater mobility in the company in terms of goal or project methods adjustment if,
in any case, an investment opportunity produces smaller returns than projected.
• Shareholder meetings. Corporate governance requires shareholders to remain well informed of
the company's financial health and the status of its ongoing business initiatives. The board of
directors must schedule regular meetings to keep the shareholders informed about the company
s level of profitability, its strategies for achieving goals, and any problems it foresees in the
market that may cause them to fall short of meeting those goals. Shareholders well-informed of
company practices are more likely to trust the board of directors and remain corporate investors
than selling company stock.
• Government regulations. Corporate governance ensures transparency concerning corporate
government regulations. These rules involve required procedures, including regular financial
reporting, ethical treatment of workers, safe environmental practices, and handling of hazardous
materials.