The Importance of Corporate Governance and Sustainability Strategies

This report delves into the multifaceted concept of corporate sustainability, positioning it as a crucial domain for modern corporate management. It underscores the importance of integrating sustainability into corporate strategies to drive profitability, emphasizing its role in environmental protection, social justice, and economic development. The report explores the three pillars of sustainability: economic, social, and environmental, highlighting how they collectively contribute to organizational success. It discusses the significance of stakeholder engagement, particularly in the context of corporate governance and the achievement of Sustainable Development Goals. Furthermore, the report emphasizes the importance of retaining talent, differentiating products, reducing costs, and enhancing brand recognition through effective sustainability practices. It also examines the role of stakeholders in corporate sustainability, highlighting the interconnectedness of corporate governance and stakeholder interests, and the benefits of stakeholder partnerships in fostering innovation and achieving sustainability goals. The report concludes by emphasizing the financial and strategic advantages of adopting a comprehensive approach to corporate sustainability.

Running head: GOVERNANCE SUSTANABILITY
Governance Sustanability
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Table of Contents

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Introduction......................................................................................................................................2
Importance of the corporate sustanibility........................................................................................2
Economic.........................................................................................................................................2
Social...............................................................................................................................................3
Environmental..................................................................................................................................3
Retaing the talent and employee satisfaction...................................................................................4
Differenciation of product or services.............................................................................................5
Reduce operating costs....................................................................................................................5
Enhance the brand recognition........................................................................................................6
Role of stakeholders in corporate sustainability..............................................................................6
Importance of stakeholder-partnerships in corporate sustainability................................................9
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

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Introduction
This paper discuss about the corporate sustanibility which can be addressed as a new
evolving corporate management domain. Concerning about the corporate sustainability is the
important profit maximization model (Fakher, Nourelfath and Gendreau 2018). It can recognizes
the corporate growth and the profitability which are very essential. Implementation of this can
result environmental protection, social justice and economic development. In shortly the
corporate sustanability is a long term driver of the profitable upliftment for the organization. It
can derive the innovation and the efficiency of the ultimate valuation. A research says, 96% of
the CEO believes that the sustanibility should be combined into company strategy and
operations. This paper also analyse the measurement factors in a very wide terms such in
Governance, Environment and Social. Focusing on the corporate sustainability will gear up the
stakeholders value (Lozano 2015). It changes the competitive and global business environment
through adopting the current and future economic value.
Importance of the corporate sustanibility
With the growing of sustanibility betterment and the shatreholders value, there are mainly
three pillars of the sustainability involved,
Economic
Unlike the name suggests itsef, it is not sbout the profit at any cost for the organization,
its all about the corporate risk management. The importance lies between the corporate ethics
and profit. Though the change of supply chain can bring a short term financial gains. Economic
pillars can provides the extreme measurement of the sustainability (Baumgartner and Rauter
2017).

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Social
The social pillars stands by the support of the employees, shareholders and the
community. A fair treatment to the employee and giving them a proper respect within the
organization can create the better productivity and creativity as well as the strong retentation and
engagement. In the case of a global scale, the social pillar may understand that why and how the
supply chain is to be filled- safe work environment, sustainable labour, fair wages and respect to
the community (Hahn et al 2018).
Environmental
It is most imporatant pillar among three, sustainable corporation are most often
innovative as they constantly checking the existiting process to address the better and greener
alternatives. By reducing the carbon footprint in the industrial concern the organization gain the
financial returns. Environmentral sustainability can build up a repuatation with the consumers as
eco friendly (Lozano 2015).
As the three pillar describes above, economi, social and environment, working togather to
improve the organizational endeavor for more sustainable practice. The business entity needs to
move from the post outdated quick profits to invest more in environment would be a mutual
interdependence and eco innovation. Adopting the sustainable practice is not only helps the
environment, it al,so recognizes the brand image, reduce costs, shareholders interest, increaded
productivity.
Corporate sustainability refers a significant competitive advantage and the higher profits
for the organizations. It is fostering a concept of positive working midset towards the
enbvironment and the socity. There are some issues exists which may break the sustanabilitry

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such as climate change, security towards the natrions, scarcity of water, the global economic
crisis, geopolitaical instability and socially unfair trade. Stakeholders, involved customers,
investors, financial instituitions and community and also the media all have raising their
anticipation for companies to examine and address the impacts their business. The stance is
based on the ideological breliefs and some values relating to the developing the bottom line
criteria for retaining the employees. Now a days the workers are expecting more safe work
environment for that developing and implementing the corporate sustainability strategy is
important, many people belive that there is ttrade off between the business proifitability and
envirionment and social responsibility, thi sis completelyn a false statement, here this papar
discuss five reasons that why an effective corporate sustanabiity strategy is important in every
organizations to derive the higher value of the shareholders (Ioannou and Serafeim 2017).
Retaing the talent and employee satisfaction
To attempt a copetative ever changing global market place, many companies are realizing
the value of managing, attempting and resonding the manangement risks. As a guide, the
corporate sustainability can ready for changing the expectations, trends, drivers and regulatins in
their industry. It helps to assure the potential risk and liabilities that are recognizes the entire
value chain of the company. It can differenciate the maintaining and increasing profitability
within the business entity (Ibidunn et al 2015).
Differenciation of product or services
The business can earn a loyal class customers by the providing the responsibility in
environmentally as a result it increase the new market share and tapping the new market. Often
buyer wants to realize good what they buy so it is no longer important to simply deliver the

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quality products at a fair market price. To adapt this change business organization must innovate
the new products and re-engineer the new thing to reposition themselves in the competatibve
market palace. Although it considers afresh investment, consequently cost can be bit increased.
Such new products in terms of environmentally and socially responsibale nature can distinct the
companies from their competition, addressed higher selling price, appraise the customer loyalty
and market share, which creates the hogh return on the investment.
Reduce operating costs
Concerning about the manufacturing and operating cost, reducing energy, water and
materials consumption, deducing waste generation helps. It directly makes an impacts on the
bottom line set up. Energy and water effeciant mechanism and equipment then waste decrease,
recycling factors as well as other cost reduction process can motivatre the company to continue
the cost saving practice. Further it optimizes their operating and manufacturing facilities and the
process must be eco-efficient. It gives a sresult of imapcing on shareholder’s value and future
costs (Chang et al 2018).
Enhance the brand recognition
A corporate sustanibility strategy successfully evaluated, that has a positive impact on the
company’s reputation and brand image through thae comaony is taking responsibility for its
movements. Moreover it is an essential part of the company’s success, which encompass a strong
relationships with the internal and the external stakeholders. The interest of the shareholders will
bvased on the trust, respect and cooperation.

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The corporate sustainability is a realizing and collaborating the enormous benefits of
implementing an effective sustainability practice (Baumgartner and Rauter 2017) which derives
a strategy that built on a foundation of enhancing the business growth and the profitability.
Implimaenting the corporate sustainability clearly shows the financial benefits addressing then
social and environmental impacts. Structured process and the integrated corporate sustainability
strategy creates a greatest value for all the concerned shareholders.
Role of stakeholders in corporate sustainability
Corporate governance aids the organization to achieve their corporate and social
responsibilities, which is important for their organization. However, without proper participation
of the stakeholder, the organizational cannot meet its corporate responsibilities. Each of the
shareholders has their unique role in the corporate governance. Corporate governance reforms
easily and effectively with the stakeholders (Johnston etal. 2019). The role of stakeholders is very
important for all of the employees of the organization. Corporate governance and stakeholders
are interconnected with each other. The corporate governance aids the shareholders by protecting
their interest where the decision making of the shareholders aids the company to achieve its
corporate social responsibility (Jones, Hillier and Comfort 2016). Proper corporate responsibility
aids the corporation with different range constituencies along with the community, which they
are operating. Therefore, it is necessary for the business to serve the needs of the shareholders by
following its ethical practices (Ngorima 2019). The stakeholders are classified as either primary
stakeholders who are engaged in the formal relation with the firm whereas for secondary
stakeholders, they do not actually have any direct relation with the firm. The primary or internal
stakeholders are employees and directors where secondary stakeholders are creditors,

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government and society. The stakeholders are the key factor, which strengthens the structure of
the corporate governance.
The primary stakeholders takes a part in the decision making phase as well. They aids the
firm to get benefits from their corporate social responsibility projects, as they possess power,
urgency and legitimacy (Min, Kim and Lo 2020). Primary stakeholders possess more power and
responsibility than the secondary stakeholders do. The local communities are considered as the
primary stakeholders aiding the firm to reach its initial roles. Primary stakeholders are directly
connected to the company hence they get affected for any benefits and mishaps directly. They
affect the success or failure of the company.
On the other hand, the secondary shareholders can influence the organization indirectly,
making it easier or difficult for the origination to maximize organizational effort regarding their
CSR (Charan and Murty 2018).

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The primary focus of CSR should be their community and stakeholders. CSR has a
positive impact on the financial performance, market performance and social performance of the
firm (Salvioni and Gennari 2017). The stakeholders aids the business to achieve their target goals
by fulfilling their CSR. Stakeholders provides better working environment by providing safety
and security to their employees. The Financial Recovery act made significant development
regarding the corporate governance making the shareholders more strong and effective for the
organization. The secondary shareholders such as creditors are also facilitated with the act. The
stakeholders plays a notable role in the corporate governance of the company by reacting to any
unethical and illegal activity in the organization (Ansong 2017). Overall, the stakeholders has a
key impact in the corporate social responsibility of the organization. The below are the pyramid
of corporate social responsibility that the company follows with the help from their shareholders.

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Stakeholder’s theory stated that the corporate social responsibility of a firm is directly
dependent on their shareholders. This theory implies that the CSR is an important element for
between the organization and the shareholders (Moriarty 2016). Every organization should
consistently maintain their formal relation with their shareholders, which will aid them to make
the CSR decisions more effectively. Multiple groups of shareholders should be managed
effectively for the betterment of the organization.
Importance of stakeholder-partnerships in corporate sustainability
The Sustainable Development Goals (SDGs) are the 17 development goals, which are known
as the 2030 Agenda for Sustainable Development. This agenda will cover various issues
including climate change, sustainable cities and health and education (Hák, Janoušková and
Moldan 2016). Multi Stakeholders partnership have the ability to influence the success or failure
of the company. Multi stakeholder’s engagement is vital component of the corporate
sustainability. Multi stakeholders can aid the organisation in decision making related to their
corporate responsibility (MacDonald, Clarke, and Huang 2019). Multi stakeholder’s partnership
plays a significant role in collaborating the public and privates sectors together, which aids them
to achieve the sustainable development goals. Multi stakeholders can improve the problem
solving of the organisation, developing more innovative ideas about the issues that the
organisation is facing (Kannan 2018). Collaborative partnership always has a positive impact to
the organisation. Collaborative capacity of the partnership aids the organisation to achieve their
sustainability goals effectively. Multi stakeholders provides better decision making to the
organisation. Multi-stakeholders aids the organisation by solving problems related to social,
economic and ecological problems. The stakeholders can aid the firm to solve their sustainability
issues by taking key decisions. Sustainability is a serious and complex problem, which involves

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multiple shareholders actively. The organisation should understand the need of these
shareholders regarding their interest. Multi stakeholder can aid the business to achieve greater
sustainability in the business as well as assists the organisation to gain competitive advantages in
the market. It can be challenging for the managers to address the demands of the shareholders
related to sustainability issues. Multi stakeholder’s partnership can provide more comprehensive
and scalable approach to the eradication of poverty and sustainability challenges by facilitating
the roles and capabilities of a large set of stakeholders and promotes them to participate in
solving the problems regarding the sustainability (Du etal. 2019). There are few ways in which
multi stakeholders aids the firm. Multi stakeholders can benefit the organisation to achieve their
sustainability development goals by
 Facilitating the inter stakeholder dialogue on sustainability issues. The stakeholders can
address the issues of sustainability, which will aid the company to understand the
sustainability issue of the company (Goodman, Korsunova and Halme 2017).
 Multi stakeholder partnership bring resources, manpower and capacities of the private
and public sectors, aiding the business to identify their gaps in sustainability projects
(Wojewnik-Filipkowska and Węgrzyn 2019). By understanding the gaps, the
sustainability projects will be more effective for the community.
 Multi stakeholders partnership can cover the innovative approaches regarding their
sustainable development goals. Multi stakeholders engagement compiles a wide range of
problem solving skills and perspectives. Organisations can provide benefit to the society
with the help from their stakeholders.

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 Multi stakeholder partnership enables sharing of information about the sustainability
issues of the organisation. By assessing the information, organisations can aware the
community about the sustainability issues.
Conclusion
Multi stakeholders are very much important for the organisation and the society in achieving
the sustainable development goals. Achieving target sustainable development goals requires
resources, manpower and institutional capacities. Most of the businesses are focused to the
sustainability of the environment. Multi stakeholders supports brand reputation, diminish risks of
the organisation. Lowering the sustainability and development issues, organisations can
undermine long-term profitability. Multi stakeholders also enables to achieve better innovations
to achieve their sustainable development goals within a short period of time. The more faster the
sustainable development goals are achieved, the better the organisation can flourish.