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Why is Sustainability important?

1. Timeline of Key Milestones

This timeline traces the evolution of corporate responsibility from a niche idea to a central part of global business and policy.

Early Foundations (1950s-1970s)

  • 1953: Howard Bowen's book, Social Responsibilities of the Businessman, is published. This is widely seen as the first formal articulation of what would become Corporate Social Responsibility (CSR).
  • 1970: Nobel laureate economist Milton Friedman proposes the "Friedman Doctrine" (or Shareholder Theory). His famous argument: "The social responsibility of business is to increase its profits." This creates a major point of debate for decades.
  • 1971: The Committee for Economic Development introduces the idea of a "social contract," arguing that firms have a responsibility to serve the public interest, directly countering Friedman's view.
  • 1979: Archie Carroll proposes his highly influential Pyramid of CSR, a framework with four distinct responsibilities for businesses.

The Rise of Environmentalism & Global Frameworks (1980s-1990s)

  • 1987: A pivotal year for sustainability.
    • The Brundtland Report ("Our Common Future") is released, defining and popularizing "sustainable development."
    • The Montreal Protocol is signed, a landmark international treaty to reverse ozone layer depletion. 🌍
  • 1989: The Exxon Valdez oil spill in Alaska acts as a major catalyst for corporate environmental accountability. This disaster directly led to the founding of CERES (Coalition for Environmentally Responsible Economies).
  • 1992: The Rio Earth Summit is held. This was the first major international summit focused on sustainable development and it launched Agenda 21, a comprehensive global action plan.

The Modern Era: Institutionalization & ESG (2000s-Present)

  • 2000:
    • The UN launches the Millennium Development Goals (MDGs): A set of 8 goals aimed at tackling global poverty and social issues by 2015.
    • The UN Global Compact is initiated, securing CEO-level commitment to 10 universal principles related to human rights, labor, environment, and anti-corruption.
  • 2004: The UN report "Who Cares Wins" officially introduces the acronym ESG (Environmental, Social, and Governance), crucially linking these non-financial factors to a company's financial performance.
  • 2006: Michael Porter & Mark Kramer introduce the concept of Creating Shared Value (CSV), which redefines CSR as a potential competitive strategy rather than just a cost or philanthropic duty.
  • 2015: The UN adopts the Sustainable Development Goals (SDGs), succeeding the MDGs with a more comprehensive set of 17 global goals to be achieved by 2030.
  • 2016: The Paris Agreement on climate change is adopted, creating a global framework for climate action.
  • 2020: A significant move towards standardizing sustainability reporting occurs with the merger of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) to form the Value Reporting Foundation.

💡 Visual Aid Suggestion: A timeline infographic would be the most effective visual aid for this content. It could plot these key events, reports (like Brundtland), and theories (like Friedman's Doctrine and CSV) chronologically, helping to visualize the flow of ideas.

2. Key Theories & Frameworks

  • Shareholder Theory (Milton Friedman, 1970): The sole purpose of a business is to maximize profits for its owners (shareholders) while operating within the law.
  • Carroll's Pyramid of CSR (1979): A model that structures corporate responsibilities in a hierarchy. For a business to be a good corporate citizen, it must meet its responsibilities at all four levels:
    1. Economic (Base): Be profitable. This is the foundation upon which all others rest.
    2. Legal: Obey all laws and regulations.
    3. Ethical: Act in a fair and ethical manner beyond what the law requires.
    4. Philanthropic (Peak): Actively contribute resources to the community and improve quality of life.
  • Creating Shared Value (CSV) (Porter & Kramer, 2006): An advanced business strategy where companies gain a competitive advantage by creating economic value in a way that also creates value for society by addressing its needs and challenges.

3. Important Context: A Global vs. Indian Perspective

  • It's crucial to note that this timeline is primarily centered on global and Western developments.
  • Key Indian events that shaped its environmental and corporate responsibility landscape, like the Bhopal Gas Disaster (1984), are not included here and will be covered separately under the topic of "Indian Environmentalism."

Exam Tip: Be prepared to explain the fundamental difference between Friedman's Shareholder Theory and the broader CSR/Stakeholder approach. Carroll's Pyramid is a classic framework you should be able to draw and explain. Also, know the key differences and evolution from the MDGs to the SDGs.

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