Are corporations responsible for sustainable development? A new study by global consultancy Futureye suggests yes – and notes that both the general public and regulators are likely to increase pressure on companies accordingly in the near term.

"The core narrative of what the corporation should be and do is changing," Katherine Teh-White, Managing Director of Futureye, said. "Companies will have to shift from being core entities designed to make money to organizations that consider the damage being caused by the way they make money."

Teh-White and a team of sociologists in Melbourne used a proprietary system called the Social Maturation Curve to track this issue. The Social Maturation Curve plots data inputs from social media, news, and archival sources on a graph, and precisely tracks a given topic from its initial observation to its emergence as an issue generating public outrage and regulation.

The group found that corporate responsibility for sustainable development is in the "challenge phase," or stage four of six possible sequences.

"The challenge phase is significant," Teh-White explained. "It means that both the public and highly involved stakeholders demonstrate a growing research interest in the topics. It means that some people are joining as advocates, while others are pushing back. At the same time, knowledge of the idea that corporations might bear responsibility is growing among the general public."

Challenge phase ending, governance phase starting.
The challenge phase suggests that society’s high expectations of corporate stewardship have combined with sustainable development concerns, and could potentially impact investment and divestment.

Futureye's study defined as a major 'challenge phase turning point' Maryland's approval of the B-Corp corporate tax structure in 2010. The law change allowed entrepreneurs to enshrine in their articles of incorporation rules assuring that their companies will always have a positive impact on society and the environment, even when ownership changes.

The study also ranked as a 'challenge phase turning point' Stanford University's announcement in 2014 not to invest its endowment funds in coal companies.

These and several other incidents bookended what could be the end of the social maturation curve's fourth phase and the beginning of fifth phase, the governance phase.

"We know that the curve has ticked up into the governance phase when we see 'Big Business’ visionaries show leadership," Teh-White explained. "There's usually also new regulation commensurate with the level of 'outrage' around an issue. The general public has essentially demanded and received a policy response."

Teh-White and team cited the United Nations Sustainable Development Goals (SDGs) as the major turning point – and indicator of – the governance phase's emergence.

"The SDGs are set to impact the international agenda," Teh-White said. "They will have the potential to impact the curve, which will then raise social expectations of companies' responsibility for sustainable development issues."

How UN Goals in 2015 link with 17th century timber shortage
Yet the events that led up to 2015's SDG's date back over 400 years.

Teh-White and her team found that the rudiments of the corporate responsibility for sustainable development movement started in 1662, when the British Royal Navy warned legislators about the implications of timber shortages on their infantry, in what Futureye researchers called 'an early sign of government recognizing unsustainable forestry practices.'

The social maturation curve turned sharply upward starting in the second half of the twentieth century. Events such as the publishing in 1962 of Rachel Carson's 'The Silent Spring' – which documented the chemical industry's environmental pollution – led to greater public scrutiny of the industry's lack of responsiveness to issues that affect society. Watershed moments like New York environmentalist Jay Westervelt's coining of the term 'greenwashing' (1986) remain part of the vernacular of the movement today
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"The Social Maturation Curve is very steep from 1980 onward," Teh-White said. "Of course, you would know anecdotally that there has been a dramatic increase in interest in this subject. But we are helping bring understanding to what the turning points mean in the movement by plotting them on the graph using our proprietary method."

Teh-White stressed the importance of looking at societal events and understanding how, in nearly all cases, outrage drives the Social Maturation Curve upwards.

"Looking at outrage is key," she said. "It allows us to help stakeholders to pinpoint exactly when outrage overtook their messages. Once they know this, they gain a sense of how much time they have left to respond to stakeholder demands."