How do private firms contribute to sustainable development? While US political debates with hot buttons focus on diversity in the workplace and environmental standards, a wide view of the opening recognizes deep shifts that have evolved through different geographies over a long -term horizon. Many deep global trends are showing signs of approximation of market forces with sustainable development results. This is a key topic in our new edited volume, “For World Winning: How Business can support sustainable development.”
In the 18th century, Adam Smith, the father of modern capitalism, emphasized virtues as justice and benefits along with the role of good governance and taxation. In the second half of the 20th century, a powerful debate took shape between the capitalism of Milton Friedman’s shareholders and the capitalism of the stakeholders of Edward Freeman and Klaus Schwab. The heart of the dispute depended on how narrow or broad firms must determine their mission to make the best contributions to society.
With the turn of the millennium, a diverse range of initiatives sought to exploit the forces of globalization for the better, while also limiting planetary challenges, inequalities and risks. A growing number of influential business leaders were openly demanding more proactive action to approximate market forces and social results.
This coincided with the calls for reliable measures and the public discovery of corporate performance and investors for social and environmental concerns. On the other hand, an spread of voluntary measurement initiatives and often contrary and reporting motivated initiatives towards reach and convergence, including the creation of the International Board of Sustainability Standards (ISSB) in 2021 Published Corporate Sustainability Directive In 2022 and the General Corporate Sustainability Directive published in 2024. Meanwhile, in the United States, the counter -accusations of “green washing” (from the political left) and “awakened capitalism” (from the right) gained steam steam) gained steam.
Three major debates
Within this wide terrain, three major analytical debates are continuing. First, what do you consider to be the creation of value, and for whom the firms trying to create it? Is it simply financial value for shareholders or a combination of financial types and other types of value for a wider group of stakeholders – employees, customers, suppliers, business partners, communities and governments? Will private profit and social values overlap, such as the case where firms innovate to reduce their material inputs, or is there trade and space for free knights?
Second, what forms of risk should business executives and board directors concern: risks to their firms or wider social risks coming from their activities? And what wider social risks create risks for their firms?
Third, to whom should firms be responsible – easily to their shareholders or wider stakeholders? This quickly leads to debates about compulsory reporting and insurance – the articles for which firms can and must be held accountable – and how much discretion to leave with firms in their voluntary discoveries.
None of these debates have been resolved, and each is playing in different ways in different jurisdictions and sectors of industry and with different time horizons. History offers a context. It took ten years since the 1929 US market overthrow in the establishment of the 1939 Accounting Committee to regularly lead the accountants for the interpretation of generally accepted accounting principles. Then it took until 2001 that the rest of the world adhered to a common group of international financial reporting standards (IFRS).
Soon to 2025, and countries as diverse as Australia, Brazil, Malaysia, Nigeria, Singapore and Turkey have announced all time schedules for companies publicly listed to begin mandatory reporting on related reporting standards with the sustainability of IFRS S1 and IFRS S2. Eachdo jurisdiction has its own specifics, but thanks to meticulous consultations and coordination efforts in countless actors, each is based on the same essential standards. In further recent development, a new standard of international security was published in November 2024 (as described in a chapter of our book) and was immediately approved by the International Insurance Committee Organization. It will undoubtedly take time for reporting systems to direct new practices, and issues of green washing heritage and cherry choice will undoubtedly continue, but presenting international standards is undoubtedly a significant development for the global economy, Even if the United States is likely to follow a special path in the near deadline.
Some main knowledge
In our volume, we asked a number of prominent authors to provide their prospects that such developments will play in all corporate actors, financial actors, policymakers and regulators. The following is a single main recommendation from each of the book chapters (following our chapter 1 Summary), with the relevant authors shown.
Corporate actors
- CH 2. Challenge corporate leaders to embrace a net positive mentality, giving more to the world than them, and publicly discover the goals and paths to achieve it. (Paul Polman)
- CH 3. Stimulate large companies and local organizations to help small, medium and microenter to build capacity to operate sustainable. (Ndidi okonkwo nwuneli)
- CH 4. Legally search for corporate boards to create and discover their governance structures and powers for governance of strategies, risks, opportunities and sustainability performance. (Emily Farnworth and Eldrid Herington)
- CH 5. Create the thematic and sectoral stability platforms to form markets and standards, resources and advocacy throughout the scale industry at global and local levels. (Jane Nelson)
Financial actors
- CH 6. Translate the goals of sustainability and metrics into clear investment or mandates from property owners. (Beslik Sasja)
- CH 7. Adjust Basel III risk weights for loans for small and medium -sized enterprises and stable infrastructure to reflect evidence on predetermined risk and loss in developing countries. (Liliana Rojas-Auraz)
- CH 8. Narrow gaps in insurance protection in developing countries through coordinated actions to integrate risk management into public policy. (Ekhosueh iyaen)
Policymakers and regulators
- CH 9. Expand the acceptance of EFFA’s developing standards and ISSB detection standards and encourage more jurisdictions to address barriers to political and technical implementation. (Richard Samans)
- CH 10. I agree to incorporating the International Standard for Sustainability Assurance (ISSA) 5000 and strengthen the insurance ecosystem. (Tom Seidenstein and Warren Maroun)
- CH 11. Learn and share lessons from India’s experience with the implementation of mandatory requirements for the financial contributions of corporate social responsibility. (Katsuo matsumoto)
- CH 12. Public discovery mandate of corporate political activities and leadership of thought focused on advocacy led or funded by business. (Alberto Alemanno)
- CH 13. Build extensive political support at a national level for business sustainability through multiple campaigns, relying on teaching from Japan. (Ichiro Sato and Kei Endo)
What derives from these perspectives is that an ecosystem with many aspects is essential and continues to evolve into its approaches to approximating private sector stimuli with positive social results.
Looking forward
While the private sector firms face increasingly complex and sometimes contradictory pressures about the fulfillment of social expectations, both worlds of sustainable business -related development policies and regulations will inevitably overlap. Currently, business sustainability standards are set mainly by regulators and accountants, while global finance ministers discuss sustainable finances and role of business and innovation in countries like G20 and G7 or two -year meetings of the International Monetary Fund and World Bank. Parallel dialogues should be more related.
This volume can help link these conversations and, in turn, inform discussions of global purposes of sustainable development after 2030. Any future generation goals will have to quickly connect with the title debates described above and learn from the various implementation efforts that still appear around the world. Doing this can help ensure that the global tracking of firm level profits increases the collective profit of the world’s profit.