THREE-PRONGED INTEGRATED MODEL OF THE CAUSAL INTERPRETATION OF SUSTAINABLE BUSINESS DEVELOPMENT
THREE-PRONGED INTEGRATED MODEL OF THE CAUSAL INTERPRETATION OF SUSTAINABLE BUSINESS DEVELOPMENT

Summary/Abstract: In this paper we propose an integrated model leading to the causal interpretation of sustainable development. By applying financial management, environmental and corporate social responsibility (CSR) principles both private and public sectors must adequately respond to sustainable development challenges in three causality areas: profit, people and the planet. This is of particular significance during increased environmental risk in sectors such as agriculture. Global society has high expectations from companies which became an increasingly powerful factor influencing the quality of people’s lives. The evolution from “shareholders” to “stakeholders” capitalism with pronounced climate changes contributes to this paradigm. Therefore, the modern knowledge economy requires economic, financial, environmental and social sustainability from companies. A company must be aware of the environmental and stakeholder impact of its activities. Good corporate governance should also incorporate a clear strategy with a financially sustainable approach to different resources, acknowledging the need for recycling, waste management, pollution reduction, anti-corruption and employee protection. This directly impacts financial performance, reduces risks of hidden costs from loss of reputation, environmental and labor disputes and negative media campaign. Disputes cause a negative societal reaction; threaten people’s health and the ecosystem with great material damage. The potential for effective conflict management is evident and requires a change of consciousness, adequate management expertise and strong political support. Effective management mechanisms are modeled by the authors in a three-pronged integrated approach towards sustainable business development incorporating three decision trees of environmental and social problems, corporate solutions, and financial solutions.

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