In 1987, the United Nation's World Commission on Environment and Development (the Brundtland Commission) described sustainable development as "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs2".
Leading global companies have long moved beyond Corporate Social Responsibility (CSR) as it was perceived that the focus was more on the social aspects of the business – its people and the community, and had limited impact on stakeholder value creation.
In 2006, Bursa Malaysia launched its CSR framework for public listed companies (PLCs) to highlight that CSR is more than philanthropy and community initiatives. Bursa Malaysia has always advocated CSR as being key to sustainability. Today, sustainability, which supports stakeholder value creation, should be the main focus of every responsible company.
Business opinion polls and corporate behaviour both show increased levels of understanding of the link between responsible business and good business. Also, institutional investors, investment managers and financial service providers recognise that sustainability activities that integrate broader environmental and societal concerns into business strategies and performance can drive superior operating performance and be the hallmarks of good management and corporate govemance.
Sustainability is not new – some aspects of sustainability are already embedded in businesses. Those that adhere to the Shari'ah principles, for example, adopt ethical practices that are in line with sustainability.
Globally, sustainability, as a key business issue is becoming increasingly important, largely due to key trends:
Consumers and society in general expect more from companies. This sense has increased in the light of recent corporate scandals, which reduced public trust of corporations.
The growing influence of the media, including the Internet, sees any 'mistakes' by companies brought immediately to the attention of the public, especially amongst like-minded groups and consumers — empowering them to spread their message and giving them the means to co-ordinate collective action for impact (i.e. a product boycott).
Increasingly amongst developing countries like Malaysia, affluent consumers can afford to pick and choose the products they buy. An affluent society is more likely to enforce strict regulations and penalise organisations by taking their business and money elsewhere.
With the increasing depletion of the earth's natural resources, companies are looking at better efficiency in managing their resource needs.
1 Prime Minister's Office, www.pmo.gov.my, accessed March 2010
2 World Commission on Environment and Development, "Our Common Future", 1987