Incomplete Observations and Constructed Relevance: A Framework for the Assessment and Management of Corporate Sustainability

In this paper I argue that the assessment and management of corporate sustainability potentially runs the risk of severe biases due to the application of inadequate criteria. Firstly, present praxis as well as theory of corporate sustainability assessment tend to not distinguish between structural and performance related features relevant for corporate sustainability. Secondly, the nature of corporate sustain-ability as the result of a constructive process of complexity reduction performed by social systems, which is highly context-specific, selective, and ambiguous, is ignored. Considering these two features as well as their interactions is described as one step towards rendering theorizing about and management of corporate sustainability able to adequately take into account the immense increase of complexity the adherence to the goal of corporate sustainability represents. INCOMPLETE OBSERVATIONS AND CONSTRUCTED RELEVANCE: A FRAMEWORK FOR THE ASSESSMENT AND MANAGEMENT OF CORPORATE SUSTAINABILITY Anselm Schneider ([email protected]) Center for Corporate Responsibility and Sustainability/University of Zurich Kuenstlergasse 15a CH – 8001 Zurich Zurich, 30 July 2010 Work in progress. Please do not cite or quote without permission! INCOMPLETE OBSERVATIONS AND CONSTRUCTED RELEVANCE: A FRAMEWORK FOR THE ASSESSMENT AND MANAGEMENT OF CORPORATE SUSTAINABILITY ABSTRACT In this paper I argue that the assessment and management of corporate sustainability potentially runs the risk of severe biases due to the application of inadequate criteria. Firstly, present praxis as well as theory of corporate sustainability assessment tend to not distinguish between structural and performance related features relevant for corporate sustainability. Secondly, the nature of corporate sustainability as the result of a constructive process of complexity reduction performed by social systems, which is highly context-specific, selective, and ambiguous, is ignored. Considering these two features as well as their interactions is described as one step towards rendering theorizing about and management of corporate sustainability able to adequately take into account the immense increase of complexity the adherence to the goal of corporate sustainability represents.In this paper I argue that the assessment and management of corporate sustainability potentially runs the risk of severe biases due to the application of inadequate criteria. Firstly, present praxis as well as theory of corporate sustainability assessment tend to not distinguish between structural and performance related features relevant for corporate sustainability. Secondly, the nature of corporate sustainability as the result of a constructive process of complexity reduction performed by social systems, which is highly context-specific, selective, and ambiguous, is ignored. Considering these two features as well as their interactions is described as one step towards rendering theorizing about and management of corporate sustainability able to adequately take into account the immense increase of complexity the adherence to the goal of corporate sustainability represents. INTRODUCTION Referring to the Brundtland-definition, sustainability can be defined as long-term system maintenance (Crane and Matten, 2004, p. 22). Due to the factual and temporal complexity and multi-dimensionality of this concept, analysis of sustainability is a complex task and there is no fair chance for unambiguous optimization (Spangenberg, 2004). In theory as well as in practice, the concept of sustainability often is subdivided into three factual spheres – environmental, economic, and social sphere. These spheres often are described as constituents of corporate sustainability (CS) (Bansal, 2005), which in turn is regarded as one important contributor to sustainable development (Hart and Milstein 2003), as companies generate and distribute wealth as well as affect and transform societies and the ecosystem. Having acknowledged its important role in sustainable development, businesses are described as increasingly endeavoring to contribute to this development (Schmidheiny and Business Council for Sustainable Development, 1992). An increasing number of initiatives (e.g. United Nations Global Compact) and the changing reporting practice of firms (by means