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ACCA Applied Knowledge · Business and Technology · Environmental and sustainability factors

A board adopts a sustainability strategy that goes beyond legal compliance, aiming to reduce emissions and treat this as a source of long-term competitive advantage. Which description best fits this approach?

This is a proactive strategy that integrates sustainability into core objectives. The board goes beyond legal minimums and seeks long-term competitive advantage. A reactive approach waits for penalties, and a defensive approach limits disclosure, neither of which is described.

  1. AA proactive strategy that integrates sustainability into the business's core objectivesCorrect
  2. BA reactive strategy that only responds once fines have been imposed
  3. CA defensive strategy that minimises disclosure to avoid stakeholder scrutiny

Explanation

Going beyond compliance and using sustainability for competitive advantage is proactive and embedded in strategy. Reactive or defensive approaches wait for penalties or limit information, which the board is not doing.

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