Business sustainability depends on relationship with stakeholders: experts

The sustainability of a company depends on relationships among its employees, suppliers, customers and the community, said speakers at an ICAB webinar yesterday.

They said entrepreneurs were taking steps to ensure business growth through reporting corporate social responsibility (CSR) activities focusing, for instance, healthcare and education and raising awareness about environmental threats and climate change among employees.

The webinar styled "Environmental, Social, and Corporate Governance (ESG)-Global Perspective" was organised by the Institute of Chartered Accountants of Bangladesh (ICAB).

Resilience against environmental and social threats will ensure more productivity and enhance employees' contribution to the economy's development, they also said.

Md Tazul Islam, minister for local government, rural development and co-operatives, said governance was a system of rules, regulations, practices and processes by which a company was directed, operated, monitored, controlled and balanced in the interest of its stakeholders.

"Successful businesspeople attain sustainable business growth by taking along corporates, stakeholders, the public and environment. While doing so, the roles of auditors are commendable, as they act as a link between corporates and the public," he said.

"The CAs (chartered accountants) are doing very critical jobs, especially in the field of auditing. Auditing is essential to corporations and society because it is a medium to build a good relationship between corporations and stakeholders," he added.

Mahmudul Hasan Khusru, president of the ICAB, said investors, regulators, consumers and the media see how a company uses energy, manages its waste and pollution, deals with environmental risks and acts in the wake of disasters.

Citing examples from Europe and America regarding legal requirements and regulatory frameworks of the CSR, he said noncompliance to the CSR policies were often legally deemed punishable offences in those countries.

Their laws enforce that corporations take decisions based on long term sustainability rather than on profits and dividends alone, he said.

"The practice of the CSR in Bangladesh is rather of negative impact, as structural approaches- through which the CSR is administered and regulated - often lacked practical applicability," he said.

"Chartered accountants, as information providers to the top management and stakeholders, should take into consideration environmental, social and corporate governance rules while they plan future oversight functions of the company for business," he added.