Page 39 - Materials Chemistry, Second Edition

34 2. Sustainability, sustainable development, and business sustainability

2.3.2.4 True business sustainability
In recent years, a step forward in the concept of business sustainability was made by sev-
eral authors (i.e., McDonough and Braungart, 1998, 2002; Dyllick and Hockerts, 2002; Young
and Tilley, 2006; Dyllick and Muff, 2015). This concept evolution will be referred to with the
expression “true business sustainability,” used by Dyllick and Muff (2015). A question imme-
diately emerges: why “true”? Was business sustainability not true? Where does the need for
“true” business sustainability come from?
In fact, the adjective “true” has not only been recently used by the aforementioned authors,
but companies started to apply it to other concepts such as “true cost,” “true price,” “true
earning,” “true profit,” “true progress,” and “true value.” All these concepts were created
based on the recognition that companies have impacts on society and on the environment that
are not taken into account. These impacts correspond to business externalities since, being
difficult to be measured, they do not have a price and they are thus considered outside
the market. The ignorance of externalities leads to a narrow definition of value creation,
which is challenged by sustainable value creation, implying the account of all costs and
benefits (Fatemi and Fooladi, 2013). As a consequence, in recent years, several business
accounting organizations and other business-related institutions started to find ways to
measure, through monetization (true price), business impacts (true costs) to society and
nature. This was done in order to internalize externalities and assess firms’ true earnings
or true profit and ultimately, their true value—that is, a value benefiting both shareholders
and society (WBCSD, 2010; True Price Foundation, 2012; KPMG International, 2014). It has to
be mentioned that externalities refer in general to all of what is not accounted within the
corporate statement, positive or negative, meaning that externalities could also include
hidden benefits given by the firm to the outside (KPMG International, 2014).
Trucost, a company helping businesses to identify their hidden costs and impacts, applies
this approach in terms of risk minimization for business (“What we do”, n.d.). Nevertheless,
the True Price Foundation (2012) seems to be more vocal in terms of expressing the
potential of externalities internalization. Firstly, monetization means fostering sustainability
through the use of markets; secondly, internalization of externalities creates transparency,
as it is widely questioned by consumers. Thirdly, transparency can turn into more profitabil-
ity for businesses, implying more competitiveness and license to operate; and lastly,
the whole process envisages multistakeholder cooperation instead of conflict leading to
unpredictability.
Although these new concepts are bringing business sustainability a step forward, the
abovementioned authors researching on true business sustainability seem to mean something
deeper and broader than mere internalization of externalities, which could bring business
sustainability to a new level. In this case, the “true” addition seems to refer to an implicit
critique to the reductionist approach to business sustainability, which has characterized
the discourse and the initiatives up to now.
Dyllick and Muff (2015) highlight the lack of evidence concerning an actual benefit of
Business Sustainability initiatives to Sustainable Development. The assimilation of sustain-
ability to eco-efficiency is, according to Gray and Bebbington (2000), a signal that the
business-as-usual growth and profit maximization are not questioned and alleviating global
issues is preferred to solving them (McDonough and Braungart, 1998). Starting from these
premises, Dyllick and Muff create the concept of true business sustainability, referring to a