Social sustainability is a cornerstone for business operations

Marinka Lanne

The role of companies in creating a socially sustainable society is significant, and responsible operations increasingly determine the opportunities for a successful business. Socially sustainable operations require companies to understand the topic and display a genuine desire for change and concrete actions.

Social sustainability is considered one of the pillars of sustainable development, but in discussions related to sustainability, it has long been overshadowed by environmental and economic aspects. This is about to change: the increased awareness and demands of customers and consumers, international agreements and changing legislation highlight the aspects of social sustainability and responsibility more strongly.

For example, the European Commission's proposal for a corporate responsibility directive presents new, even stricter obligations to companies, which also concern possible harmful human rights impacts in the company's own operations, its subsidiaries and the entire value chain. The UN's sustainable development goals have also been taken into action in companies' operations, for example in the GRI standard.

The idea of corporate social responsibility starts with the fact that companies are responsible not only to their shareholders but also to the society in which they operate. In this case, companies also need to participate in solving social issues and creating positive effects around them. Responsibility includes actions that aim for a sustainable society. From the point of view of the company, the key idea is that responsibility is taken care of throughout the life cycle of the product and service.

When it comes to social sustainability and responsibility, companies often look at the following topics:

  • Safety and wellbeing
  • Diversity
  • Equality and inclusion of the company’s own personnel
  • Human rights issues of the entire supply chain
  • Ties to organisations and the local community
  • Business ethics and good governance
  • Data-related ethical and privacy protection issues
  • Involvement of stakeholders in general
  • Company involvement in societal discussion

At the core of social sustainability and responsibility are people, their consideration and proper treatment, and human rights. Thus, identifying the content related to a company's social sustainability and responsibility must be strongly based on what kind of questions concern the company's stakeholders.

A strategic approach to sustainability and responsibility

The sustainability and responsibility of a company are based on its values and culture. The strategy determines the role they play in the company's business. In companies, challenges can be posed, first of all, by the organisation of activities aimed at sustainability and responsibility, which requires both centralisation and decentralisation. There must be responsible persons and experts who are precisely and extensively familiar with the details related to developing sustainability and responsibility, practical actions, stakeholder cooperation and the intricacies of regulations and sustainability reporting.

Each business unit and employee must also realise how their own actions can affect sustainability and responsibility. This requires resources and training from the company. Matters should also be discussed together with the personnel and other key stakeholders, such as customers, suppliers, local communities, partners, network partners, organisations, consumers and citizens.

Large companies in particular have complex, global value chains where operations are difficult to monitor, and even more difficult to discuss with all stakeholders. In addition, various responsibility frameworks and reporting tools are in use, and when utilising them, the company has to make choices about which system it should belong to. On the other hand, the company's own customers, suppliers and also investors may require them to take certain measures, investigations and reporting on sustainability issues.

The most important thing in responding to these challenges is a strategic approach, where sustainability and responsibility are discussed as a whole in the management teams and the board. They should also be key factors in the business, or at least firmly integrated into it. In organisations that master social sustainability and responsibility, sustainability and responsibility are discussed both internally and with stakeholders, and programmes and roadmaps are created in cooperation. They also listen to feedback, learn from mistakes, communicate their own goals and actions in an open, transparent and comprehensible way, and thus move the entire industry forward.

Why is it important to develop social sustainability and responsibility?

Companies have a great influence on society's activities and culture. The values of society and companies interact, which challenges businesses to examine the sustainability of their operations from a wide range of perspectives. With its operations, a company creates not only economic but also social and environmental value. These elements of value should also be considered when defining the value proposition of a sustainable business.

Companies are increasingly expected to have an even stronger grip on sustainability and responsibility issues. According to an extensive international trend report covering more than 36,000 employees (Edelman Trust Barometer 2022), 60% of employees choose their workplace according to their own values and beliefs, and similarly 60% hope that top management would speak publicly about important, even controversial, social and political issues. Companies are therefore seen as key players in achieving a sustainable society. Society benefits from companies, and companies benefit from the welfare prevailing in society.

For companies, sustainable business is an increasingly strategic choice to secure future operating conditions. Sustainable business is a long-term goal-oriented activity that involves themes such as responding to and influencing climate change, loss of nature, geopolitical changes and human rights issues in a way that aims to take into account the needs of customers and other stakeholders and to offer a competitive advantage in the international market.

The task is not easy, but companies can take concrete steps, for example, in cooperation with research institutes. At VTT, a lot of sustainability-related research and development work is carried out in areas such as material flows, biobased products, and transport and energy solutions. We also take a broader look at the role and significance of sustainability and responsibility in society, innovation activities, technological development and the business operations and business development of companies.

VTT provides an external perspective to the discussions, which often allows us to better focus on the needs and perspectives of stakeholders – also on what the reforming legislation now requires from companies. We ourselves have good experiences from cooperation with Kiilto, for example, where we first started conducting interviews with the company's key players and then formulated social responsibility themes to support the company's own development programme.

Gathering brilliant minds together helps to find ways to move towards tangible outcomes. The role of companies in both the green transition and socially sustainable production of products and services, and business model innovations is the key to a more sustainable future.

Marinka Lanne
Marinka Lanne
Our vision beyond 2030

Our goal is to secure society’s functions, fiscal sustainability and wellbeing while demographics shift