Sustainable business practices : a review of eco-efficiency

Abstract: The current demanding business environment requires corporations to act fast in finding effective solutions to problems given the myriad of challenges they face (Dyllick & Hockerts, 2001). The challenges include the impact of climate change on business practices, natural resource consumption, chemical pollution, technological change etc. Moreover, the forces of globalization, heightened concerns about the deteriorating quality of the physical environment and increased stakeholder power are also increasingly having a real influence on business practices (Rainey, 2008). Since 1992, the World Business Council for Sustainable Development (WBCSD) has encouraged the adoption of the concept of ecological efficiency (eco-efficiency) to support business efforts aimed at addressing some of these challenges. The aim of eco-efficiency is to reduce the amount of energy and materials used in production processes to achieve economic and environmental benefits (WBCSD, 2000). In particular, eco-efficiency indicators (EEI) were developed, some tailored for business purposes while others have generic application. The aim of this study was to investigate how corporations with ambitions of achieving sustainable development use the concept of eco-efficiency. Specifically this involved an assessment of the application of eco-efficiency indicators within corporations to illustrate their effectiveness when utilized to achieve sustainable development. A qualitative approach based on a literature review formed the basis of the research approach. Empirical data for the study was derived from journal articles reviewed from the Swedish University of Agricultural Sciences (SLU) library and other organization websites. The triple bottom line perspective which requires corporations to pay attention to economic, social and ecological aspects (Elkington, 1999) was used as the grand theory for the thesis. The findings were that: corporations in different sectors use different eco-efficiency indicators which presents a challenge of comparing best practice; the triple bottom line framework does not provide enough grounds for understanding the required cooperation and manifest interdependencies between the different domains of sustainable development (SD); eco-efficiency indicators are inadequate as a solution for corporations especially small companies, to move towards sustainable development, because of the high costs, data intensity and lack of attention to social development, associated with their implementation. In view of the above findings, the study proposes that more needs to be done to find sustainable and affordable democratic indicators, tools and concepts that capture all the aspects of sustainable development.