The business of sustainability as a governance tool

This chapter examines whether environmental, social, and governance (ESG) action by the private sector effectively contributes to sustainable development. We explore how the private sector understands and employs sustainable development concepts through their ESG portfolios, which are rapidly growing components of corporate social responsibility (CSR) initiatives by firms around the world. We overview global developments on business and sustainable development, and the social impacts of these activities, then present an analytical discussion of what this global shift means for development and governance actors in development spaces. The chapter raises the theoretical and practical application of these issues in the form of three questions on business, sustainable development, and societal contributions writ large, specifically in the business logics of contribution to sustainability and how the choices that managers make about where to place these discussions within their firms carry deep implications for how they are addressed, and to what depth and impact. Next, we outline how sustainable development action is operationalized by firms. Finally, we unpack how these differences lead to conceptual and practical fractures between the private sector and international organizations and governments. We focus on two divisions: whether active or passive engagement in global governance activities by the private sector is an appropriate and impactful approach; and how ‘minimalist’ versus ‘maximalist’ definitions of what each group considers development itself colors their respective positions and goals.