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Most organization’s are realizing the importance of considering the impact they have on society. These impacts can be environmental, economic or social (EES) and in most cases are interlinked where each one can create impacts on the other two. Organizations are also realizing that EES impacts can effect their operations and profitability. These impacts can come from climate change, extreme weather events, changing economic conditions and social disorder or from impacts the organisation has created through its business activities. Examples can include man made disasters such as Exxon Valdez, Bhopal and BP;s Gulf of Mexico incidents, natural events such as floods and tsunami’s which have affected Japan and Thailand and social examples such as the reaction to Lynas operations and bauxite mining in Kuantan, Malaysia.
Organizations are also being pressured through regulatory change to consider to consider these sustainability issues. Bodies such as stock exchanges in Malaysia,Singapore, Thailand and India are increasingly asking their listed companies to “comply” with sustainable reporting requirements or “explain” why not. Pressure is also being applied indirectly through the supply chain with organizations being asked to vouch for the credibility of their supply chain. Recent examples in the palm oil sector are a case in point where customers have boycotted large plantation companies because of supply chain issues. Other stakeholders such as NGO’s, minority shareholders, employees, communities are increasingly demanding a say in how organizations operate.
Investors are also becoming more conscious of the actual and potential EES impacts of those with whom they wish to invest. Human rights and human trafficking are becoming important considerations for investors. The recent UK Modern Slavery Act 2015 and the Corporate Manslaughter and Corporate Homicide Act 2007 are clear examples where those creating EES impacts are being held accountable and the failure to comply with these Act’s would deter investors.
Sustainability and sustainable development are becoming central to best practice management and organizations that are not following that path may find themselves out of business in the not too distant future. entral to best practice management and organizations that are not f