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Sustainability and corporate responsibility

VIVA Subject Guide

1 The physical environment and business

Business and the physical environment affect each other. Climate, extreme weather and the availability of energy, water and raw materials can disrupt operations and supply chains. In turn, production, transport and waste may cause emissions, pollution, habitat loss and depletion of resources.

2 Operating sustainably

Sustainable operation means meeting present needs while protecting the resources and conditions needed in the future. Practical measures include using energy and water efficiently, reducing emissions and waste, reusing and recycling materials, designing less wasteful products and packaging, choosing responsible suppliers and reducing the impact of transport and distribution.

3 Economic sustainability and stakeholders

Economic sustainability is the organisation’s ability to remain viable over the long term by managing resources, costs and risks while continuing to meet stakeholder needs.

  • Owners and lenders: lower long-term risk, more resilient profits and continued access to finance.

  • Employees: more secure employment and investment in future skills.

  • Customers and suppliers: reliable products, supply chains and long-term trading relationships.

  • Government and communities: stable tax revenues, employment and lower environmental and social costs.

4 Corporate social responsibility

Corporate social responsibility (CSR) means accepting responsibility for the social and environmental effects of business decisions, not merely complying with the legal minimum. Standards should reflect the nature and impact of the organisation and be translated into objectives, policies, measures and accountable action.

5 Responsibilities to stakeholders

  • Internal stakeholders — employees and managers: fair treatment and pay, safe working conditions, equality, wellbeing, training and honest governance.

  • Connected stakeholders — owners, customers, suppliers and lenders: transparent reporting, safe and reliable products, responsible marketing, fair supplier terms and prompt payment.

  • External stakeholders — government, communities and the environment: legal compliance and taxes, reduced pollution and waste, protection of natural resources and constructive support for local communities.

Managers should identify stakeholder needs, assess their power and interest, set measurable objectives and report performance against them.

6 Reporting and greenwashing

Sustainability or integrated reporting can explain environmental, social and governance performance alongside financial performance. Reports should be balanced and supported by evidence: selective or exaggerated claims may amount to greenwashing and damage trust.

Practice question

A manufacturer's factory is closed after severe flooding. The same manufacturer releases untreated waste into a river. Which statement is correct?

Practice question

Which action most directly improves the sustainability of a manufacturer's operations?

Practice question

A company invests in energy efficiency, supply-chain resilience and employee training. What is the best description of the likely long-term benefit?

Practice question

A business pays employees fairly, improves workplace safety, reports transparently, pays suppliers on time and controls pollution. Which statement best describes these actions?

Practice question

A company advertises a product as ‘carbon neutral’ using selective data and provides no evidence for the claim. What is this most likely to be?