Corporate Sustainability: Funding and Challenges

This assignment delves into the financial obstacles faced by enterprises when engaging in sustainability practices. It highlights the significant funding required for organizing sustainability events and the resulting strain on an enterprise's budget, which can lead to reduced profitability. The lack of governmental enforcement or legal penalties for not implementing these activities further contributes to the trend of organizations scaling back on sustainability investments during financial difficulties.

QUESTIONS
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Table of Contents
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Corporate social responsibility (CSR) is defined as liability of the company towards
community people. It is defined as accountability of the company towards social well-being and
environment. Resources for manufacturing products are taken from environment and becomes vital
that companies should take proper initiatives for returning back to the society. Many damages are
caused to the surrounding environment while production activities and it becomes accountability of
organizations to take initiatives for reducing harmful effects on the environment. Donation done in
charity and national funds also comes in corporate social responsibility activities of the
organization. It is assertive that local community people should be given some part of profits gained
by the business and it is also critical that proper policies and practices should be adopted for making
improvement in lives of people through CSR activities. It renders a positive impact on social and
environmental well-being and aids in completing responsibility of enterprise towards local
community people and environment. Navi, (2012) has described CSR as accountability of
enterprises towards social and environmental areas of business. Philanthropy activities done by a
enterprise for making modifications in file of people comes under CSR. Issues of corporate social
responsibility impacts diverse range of topics including ethics and governance. According to
Carroll, (2015) stakeholders of the business play a significant role in executing desired operations
of business in a successful manner. It becomes liability of companies to pay back to the society by
taking various initiatives that comes under the category of CSR. Activities done under corporate
social responsibility supports in developing organizational structure and creating positive brand
image of business in market. When campaigns and charity events are organized by companies many
individuals and local community people takes part in that and it supports in providing effective
social services to large number of people. Clapp and Rowlands, (2014) has explained that corporate
social responsibility is accountability of corporations to return back some part of profit to poor and
needy people of society. Companies should make it core part of their business operations and take
positive steps for making changes in lives of local community people. Companies uses natural
resources for executing their desired business operations and so it becomes their liability to pay
back to society and environment by taking positive steps in the form of CSR activities. However
Brief and Policy,(2016) have described that business enterprises can offset the negative effect of
their operational and production activities by investing in local communities. Various initiatives that
can be taken under CSR includes Offering medical services, supporting educational programs and
organizing awareness campaigns for society people. Despite of this Okpara and Idowu, (2013) has
mentioned that sole responsibility of organizations is to provide benefits for their stakeholders and
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so they should not devote larger part of their profits in CSR activities as it will reduce their financial
revenue and profitability. Organizations should pay only smaller part of financial funds towards
corporate social responsibility initiatives.
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Sustainability is defined as feature of biological systems to remain productive and diverse
for longer time period (Kiron and Goh, 2013). Nowadays emphasis on economical sustainability
and social environment has become a major focus area and many large size organizations are taking
initiatives for maintaining sustainability. The major objective for giving efforts to gain sustainability
is to meet needs of present and future without compromising on capabilities of future generations
for meeting their requirements. Stakeholders of business are now challenging them for developing a
blueprint for how they will achieve sustainable growth (Amini and Bienstock, 2014). It is vital for
organizations to take appropriate care of their stakeholders including customers, employees,
activists and investors. Sustainability activities are considered as core driver for achieving corporate
competitiveness. Whenever any business firm observes decline in profitability then the first action
taken by management is to drop sustainability activities.
Financial revenues needed to be earned for ensuring growth and success of the business and
when there is decline in profits it becomes vital for organizations to take significant steps to
enhance the profit rate (Hughen, Lulseged and Upton, 2014). Sustainability activities includes
compliance driven activities under which initiatives are taken for providing welfare to the society.
Various charity events are organized and awareness programs are initiated for providing services to
local community people. Profit driven sustainability activities are also organized under which
appropriate integration of ethical, social and ecological aspects is done into business operations of
the enterprise. Green sustainability activities includes initiatives taken for balancing social,
ecological and economical concerns (Fuisz-Kehrbach, 2015). The major objective behind green
sustainability activities is to render appropriate care to environment and human potential.
When any organization faces troubles in getting huge financial revenues and profitability of
the enterprise decreases then large number of problems are faced by management of companies. It
becomes difficult to execute their daily operations in appropriate manner and lack of proper funding
halt operations of the firm. Giving wages and incentives to workers becomes difficult and overall
functioning of the enterprise gets affected (Haanaes and Kruschwitz, 2012). It becomes critical that
proper initiatives should be taken for reducing profit decrement and the major step which is taken is
reducing sustainability activities of the enterprise. When these activities are organized by the
enterprise huge funding are required for organizing these events. When finance is allocated for
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sustainability activities than budget of enterprise decreases and due to it overall profitability of the
enterprises reduces. It is not enforced by government to adopt these activities and there is no legal
punishment for not organizing these activities. It has been not mandatory to initiate sustainability
activities for ensuring well-being to environment and society and due to it many organisations
reduces funding for sustainability activities when they faces troubles in getting good financial
revenues (Lee and Kim, 2015). It is easiest method for reducing extra expenses of business and
money saved through sustainability activities can be invested in important operations of the
business. It is a common trend which is observed in many organizations and due to overall
response which was gained through sustainable initiates of corporates gets declined.
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REFERENCES
Books and journals
Amini, M. and Bienstock, C.C., 2014. Corporate sustainability: an integrative definition and
framework to evaluate corporate practice and guide academic research. Journal of Cleaner
Production. 76. pp.12-19.
Brief, A. and Policy, P.A., 2016. Corporate Social Responsibility. Issues.
Carroll, A.B., 2015. Corporate social responsibility. Organizational Dynamics. 44. pp.87-96.
Clapp, J. and Rowlands, I.H., 2014. Corporate social responsibility. Essential Concepts of Global
Environmental Governance, p.42.
Fuisz-Kehrbach, S.K., 2015. A three-dimensional framework to explore corporate sustainability
activities in the mining industry: Current status and challenges ahead. Resources Policy. 46. pp.101-
115.
Haanaes, K. and Kruschwitz, N., 2012. Sustainability nears a tipping point. MIT Sloan Management
Review. 52(2). pp.69-74.
Hughen, L., Lulseged, A. and Upton, D.R., 2014. Improving stakeholder value through
sustainability and integrated reporting. The CPA Journal. 84(3). p.57.
Kiron and Goh, E., 2013. The benefits of sustainability-driven innovation. MIT Sloan Management
Review. 54(2). p.69.
Lee, J. and Kim, S., 2015. The influence of sustainability management fit of SPA brand on
consumer purchase intention. The Research Journal of the Costume Culture. 23(2). pp.161-175.
Navi, S.T., 2012. Corporate social responsibility.
Okpara, J.O. and Idowu, S.O., 2013. Corporate Social Responsibility. Springer Berlin Heidelberg.
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