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Sustainability and the Firm

Author

Listed:
  • Forest Reinhardt

    (Harvard Business School, Morgan Hall, 265 Soldiers Field, Boston, Massachusetts 02163)

Abstract

Macroeconomic definitions of sustainability focus on the need to maintain aggregate stocks of natural and manufactured capital constant over time, so that future generations have consumption possibilities similar to those of the current generation. Similar tests can be applied at the firm level. To be sustainable, a company must maintain on its balance sheet an undiminished level of total net assets, measured at their social costs. It must also pass a similar test when assets are valued at prevailing private costs. To make realistic assessments of a country's or firm's sustainability, therefore, one needs to consider its overall economic performance as well as its environmental performance. By this definition, sustainability is intimately linked to the fundamental preoccupations of business managers: productivity, investment, and profit.

Suggested Citation

  • Forest Reinhardt, 2000. "Sustainability and the Firm," Interfaces, INFORMS, vol. 30(3), pages 26-41, June.
    • Handle: RePEc:inm:orinte:v:30:y:2000:i:3:p:26-41
    DOI: 10.1287/inte.30.3.26.11667
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    References listed on IDEAS

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    1. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    2. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    3. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
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    Citations

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    Cited by:

    1. Andrea Beatriz Damico & José María Aulicino & Jorgelina Di Pasquale, 2022. "What Does Sustainability Mean? Perceptions of Future Professionals across Disciplines," Sustainability, MDPI, vol. 14(15), pages 1-17, August.
    2. Witjes, Sjors & Lozano, Rodrigo, 2016. "Towards a more Circular Economy: Proposing a framework linking sustainable public procurement and sustainable business models," Resources, Conservation & Recycling, Elsevier, vol. 112(C), pages 37-44.
    3. Andrea Beatriz Damico & Margherita Masi & José María Aulicino & Yari Vecchio & Jorgelina Di Pasquale, 2022. "The Knowledge and Perception of Sustainability in Livestock Systems: Evidence from Future Professionals in Italy and Argentina," Sustainability, MDPI, vol. 14(23), pages 1-16, December.
    4. Nicos A. Scordis & Yoshihiko Suzawa & Astrid Zwick & Lucia Ruckner, 2014. "Principles for Sustainable Insurance: Risk Management and Value," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 17(2), pages 265-276, September.
    5. P. Anbarasan, 2018. "Does Pro-Green Policy and Growth Strategy of an Organization will Bail Out Post-Crisis?," International Journal of Social Science Studies, Redfame publishing, vol. 6(7), pages 65-70, July.
    6. Periyasami Anbarasan & Sushil, 2018. "Stakeholder Engagement in Sustainable Enterprise: Evolving a Conceptual Framework, and a Case Study of ITC," Business Strategy and the Environment, Wiley Blackwell, vol. 27(3), pages 282-299, March.
    7. Dong-shang Chang & Li-chin Regina Kuo, 2008. "The effects of sustainable development on firms' financial performance - an empirical approach," Sustainable Development, John Wiley & Sons, Ltd., vol. 16(6), pages 365-380.
    8. N. A. Dentchev & A. Heene, 2003. "Toward stakeholder responsibility and stakeholder motivation: Systemic and holistic perspectives on corporate sustainability," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/196, Ghent University, Faculty of Economics and Business Administration.
    9. Primiano Di Nauta & Enrica Iannuzzi & Michele Milone & Claudio Nigro, 2020. "The Impact of the Sustainability Principles on the Strategic Planning and Reporting of Universities. An Exploratory Study on a Qualified Italian Sample," Sustainability, MDPI, vol. 12(18), pages 1-21, September.
    10. Bárbara Crespo & Carla Míguez-Álvarez & María Elena Arce & Miguel Cuevas & José Luis Míguez, 2017. "The Sustainable Development Goals: An Experience on Higher Education," Sustainability, MDPI, vol. 9(8), pages 1-15, August.
    11. Kalim U. Shah, 2011. "Corporate environmentalism in a small emerging economy: stakeholder perceptions and the influence of firm characteristics," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(2), pages 80-90, March.
    12. Rodrigo Lozano, 2020. "Analysing the use of tools, initiatives, and approaches to promote sustainability in corporations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 982-998, March.
    13. Jim Ormond, 2015. "New Regimes of Responsibilization: Practicing Product Carbon Footprinting in the New Carbon Economy," Economic Geography, Clark University, vol. 91(4), pages 425-448, October.

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    Keywords

    ENVIRONMENT; PLANNING—CORPORATE;

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