One of the major balancing acts that corporations have to handle is that between taking advantage of the laws where they can be turned to their own benefit, without going quite so far that they provoke a country’s legislature into actually changing the law in a way that the company would find detrimental. In the past decade, several companies have fallen off of this tightrope and major new legislation has resulted which places much stricter limits on practices like accounting within a corporation. One of the reason that companies pursue a corporate sustainability agenda is to avoid finding themselves in this situation.
Having to deal with potentially damaging legislation is a regular event for companies that do business in ways that can be upsetting to consumes. For example, the credit card companies in the United States battled against legislation that would restrict their business practices for many years before a law was finally passed that placed limits on such decisions as how quickly and how much they could raise a customer’s interest rates. The simple fact that businesses have to face is that if they can manage to regulate their own behavior to avoid offending anyone so badly that the government becomes involved, the industry is usually better off in the long run.
The appealing point of corporate sustainability is that it promotes as business approach that is likely to shield industries from this type of legislation. First, any company which is public about pursuing these practices is more likely to maintain the type of public image that keeps it from becoming the target of public outrage. Since this outrage is often the source of new legislation, this can be invaluable. Second, even if an industry comes to the attention of a country’s government, any business that has taken real steps to behave in sustainable ways will be able to provide a compelling argument about why regulation is unnecessary.
Practicing corporate sustainability ultimately benefits corporations by preventing them from becoming the target of legal actions that would be to their detriment. It is a happy secondary effect that corporate sustainability also benefits their employees, customers, and the rest of society as well.