Factors Affecting Corporate Sustainable Development: The Case of Indian Cement Sector

Abstract

The increased awareness of contemporary consumers towards environmental issues has led to a proliferation of regulations that companies must comply with. In such a dynamic business environment, companies must look beyond the profit-maximisation paradigm, and move towards a sustainable development model for their survival in the long run. The concept of corporate sustainable development (CSD) encompasses the dimensions of environmental integrity, social equity, and economic prosperity. The present study analyses the extent of CSD and its driving factors in the Indian cement industry. The study finds that CSD has been increasing in importance in the Indian cement sector, in terms of increased emphasis on environmental integrity and on economic prosperity. However, there is no significant change in emphasis on social equity, particularly in large companies, though profitability does not play much of a role. The study also finds that media exposure related to environmental issues and liquidity was the significant determinant of CSD in the Indian cement sector. Each CSD dimension was found to have distinct determinants: environmental integrity was determined by incurrence of fines/penalties/court cases; economic prosperity by media attention and liquidity; and social equity by diversity of exposure, media attention, and capital intensity.