Prioritizing sustainability strategies for global extractive sector firms

Abstract

Purpose

This paper seeks to examine the importance of corporate social and environmental initiatives to extractive sector firms and by measuring the level of social, environmental and economic sustainability in 128 countries around the world and applying these measures to a framework comprised of a sustainability indices matrix, and identifying certain strategic approaches to social and environmental practices.

Design/methodology/approach

The matrix contains eight categories of sustainability attainment and a k‐means cluster analysis is employed to identify what countries belong to each of these categories and to what extent these clusters identify countries with similar characteristics that may impact the focus of corporate social and environmental performance practices for extractive sector firms wishing to pursue projects in those countries.

Findings

The study finds that, in those jurisdictions where social and environmental sustainability is well established, extractive sector firms are required to deal with established rules and regulations that require a more reactive strategic approach. The various combinations of sustainability levels amongst the many countries around the globe require various combinations of strategies related to corporate social and environmental performance.

Practical implications

The realization that, today, extractive sector firms who choose to ignore the need for appropriate corporate social and environmental performance are risking increased costs arising from social and environmental damage created by their projects supports the need to create pro‐active strategies for addressing social and environmental responsibility.

Originality/value

This paper's contribution is the development of a framework for measuring the component levels of sustainable development and clustering a large number of countries into specific categories with recommended approaches to social and environmental sustainability strategies.

Citation

Walsh, P.R. (2012), "Prioritizing sustainability strategies for global extractive sector firms", Management of Environmental Quality, Vol. 23 No. 6, pp. 615-629. https://doi.org/10.1108/14777831211262909