The Impact of Sustainable Practices on Business Performance

Abstract

The industrial revolution of the 18th century was rather a war between the industry and nature, and certainly not the path to sustainable business. Friedman (1970) says that "one and only one social responsibility of business is to maximize profits, of course without committing any fraud". Profit maximization and production were the sole significant aim of industries until 1970 when environmental issues were beginning to enter the scenario. As the industry began developing without any restrictions in the environmental or social domains, earlier on account of uncontrolled environmental contamination and other exploitation, the public wanted the laws of industry enacted for the environment's and the society's safety by mid-19th century. The intersection of resource limitations, climate change, and the need for greater transparency and governance means that the investor community will expect more information on social and environmental concerns. The global financial crisis highlighted sustainable business practices and the developed economy has been learning to adapt to it. In emerging economies such as India, there has been incessant pressure from investors and other stakeholders to respond to the above challenges to prevent loss of competitiveness and resilience. In responding to these challenges, we need to develop a mechanism for balancing economic growth as well as environmental and social challenges.