Sustainable Practices in Italian Businesses: Environmental, Social and Economic Aspects (SpringerBriefs in Environmental Science)

This SpringerBrief describes the development and use of a synthetic indicator to assess different degrees of sustainability adoption by economic sector and businesses size. To make this analysis a theoretical framework which involves variables common to alternative frameworks (specifically ESG, GRI and Istat) is proposed. The empirical analysis focuses on the environmental, social and economic variables of the Italian businesses. In this analysis, all three pillars of sustainability – economic, environmental, and social – are considered. The work begins with a review of business sustainability literature and a look into institutional frameworks for the development and measurement of the phenomena. Connections between businesses and the SDGs are examined and comparison of the classifications of sustainable activities defined by GRI and ESG international standards is used to define a framework to be adopted to analyse ISTAT Business Census. Selected indicator variables are aggregated with a synthetic indicator and the results are presented (this is a new proposal of a synthetic indicator useful for the type of data used and published by ISTAT – Italian National Statistical Institute), discussing pros and cons of using it. This study provides two important innovative contributions. The first one is about how to approach the theoretical framework of businesses sustainability at firms aggregated level. The basic idea to work on a set of variables common to different approaches is interesting from the interpretative point of view. The second one, is about the specific empirical analysis, i.e. the Italian businesses sustainability situation. The investigation based on this new theoretical classification/framework and the new proposed indicator provides some interesting substantive results. Contents 6 Abbreviations 8 Chapter 1: Sustainability Background and Literature 9 1.1 Introduction 10 1.2 Defining Sustainability 12 1.3 Pillars of Sustainability (Identifying the Dimensions of Sustainability) 13 1.4 The Different Structures of the Dimensions of Sustainability 15 1.5 Sustainability Initiatives and Indexes 18 1.5.1 A Short Historical Overview of the Sustainability Initiatives 19 1.5.1.1 Organization for Economic Co-operation and Development (OECD) Initiatives 19 1.5.1.2 The World Bank, Monitoring Environmental Progress 20 1.5.1.3 UN Department of Policy Co-ordination and Sustainable Development 21 1.5.1.4 European Environment Agency 21 1.5.1.5 European Common Indicators 21 1.5.2 The Current State of Art 22 1.5.2.1 General Level Initiatives 22 EUROSTAT Sustainable Initiatives 22 UN Sustainable Development Goals (SDGs) 22 National Government Sustainability Guidelines and Initiatives 23 More on Sustainability Initiatives: An Italian Perspective 25 1.5.2.2 Business Level Initiatives 26 OECD Measuring the Non-financial Performance of Firms through the Lens of the OECD Well-being Framework 27 Standards for Disaster Risk Reduction (ISO 14000, ISO 26000) 28 United Nation Global Compact, UNGC 28 Global Reporting Initiative (GRI) 29 Environmental, Social and Corporate Governance (ESG) 29 Bibliography 31 Chapter 2: Developing a Synthetic Index of Business Sustainability 35 2.1 Methodology for Composite Indicator 36 2.1.1 How Some of the Steps of Constructing CI Have Been Faced in the Research Context 40 2.2 A New Indicator for Measuring Businesses’ Sustainability 42 2.2.1 Theoretical Framework and Variables Selection 42 2.2.1.1 Business Sustainability and the SDGs 42 2.2.1.2 A New Classification of Sustainability: Connection between GRI-ESG-ISTAT variables 54 2.2.2 Data Treatment, Normalization, Transformation and Aggregation 55 2.2.2.1 Data Treatment and Preliminary Statistics 55 2.2.2.2 Correlation Analysis 56 2.2.2.3 Correlation Between Selected Indicator Variables 57 2.2.2.4 Transformation, Weighting, and Aggregation 58 2.2.2.5 How We Compute the ABR INDEX 58 2.2.2.6 Validating a Synthetic Indicator 63 2.3 Methodology for Analyzing Sustainability and Profitability and Productivity 63 Bibliography 65 Chapter 3: Application of the Sustainable Index: A Feature of Sustainability in Italian Businesses 67 3.1 Introduction 68 3.2 Data and Source of Data for Our Analysis 69 3.3 Sustainability Actions in the Italian Businesses 70 3.4 The Sustainability ABR Index 74 3.4.1 Social Dimension- Internal, External, Safety and Security 82 3.4.2 Size and Sector of Business 83 3.5 Italian Businesses’ Contribution to the SDGs 85 3.5.1 An Elaboration of ISTAT Data Variables under the SDG Mapping 86 3.6 Comparing Indexes, Importance of the ABR INDEX 103 3.7 A Relationship Between Sustainability Level and Level of Profitability and Productivity 106 3.8 Synthesis of the Results 111 Bibliography 117 Chapter 4: Appendix 119 Index 161