Why Sus­tain­abil­ity is Im­por­tant for Busi­ness

Thai-American Business (T-AB) Magazine - - Front Page - Writ­ten by: Alex Mavro

As some­one ac­tive in cor­po­rate so­cial re­spon­si­bil­ity ( CSR) since the turn of the cen­tury, I have seen some changes in the field. My in­ter­est in CSR orig­i­nated from ob­serv­ing the work of my com­pany at the time, not­ing the re­la­tion­ships be­tween our em­ploy­ees, our cus­tomers, and our neigh­bors. Af­ter we sold that com­pany, I be­gan to ab­sorb what lit­tle teach­ing was avail­able in the day and re­pur­posed my­self as a strat­egy ad­vi­sor spe­cial­iz­ing in so­cial re­spon­si­bil­ity.

It be­came quickly ev­i­dent that the con­ven­tional need for a sep­a­rate menu of con­sid­er­a­tions for the so­cial im­pacts on one side ver­sus the busi­ness im­pacts on the other was a false di­chotomy. Busi­ness is a sub- sec­tor of so­ci­ety, not a sep­a­rate but an in­te­gral part of it. So­ci­ety can do without busi­ness ( and still does in tiny oases around the world); busi­ness, on the other hand, can­not ex­ist without so­ci­ety. How, then, can one talk about busi­ness as if it were gov­erned by rules sep­a­rate from those that ap­ply to so­ci­ety?

In the past cen­tury or two, we have be­come ac­cus­tomed to a de­lin­eation best char­ac­ter­ized by the clas­sic movie line, “Noth­ing per­sonal: it’s just busi­ness,” usu­ally de­liv­ered co­in­ci­dent with a par­tic­u­larly oner­ous ac­tion by the speaker. We have come to be­lieve that busi­ness and so­ci­ety are sep­a­rate en­ti­ties, some­how in­ter­sect­ing yet dis­tinct, like oil and wa­ter. Log­i­cally – busi­ness be­ing a sub- set of so­ci­ety – this can­not be so.

While of­ten loathe to ad­mit it, busi­ness has al­ways been sen­si­tive to so­cial con­sid­er­a­tions, and these con­sid­er­a­tions are of­ten cod­i­fied into law. There­fore, it is not a ques­tion of whether busi­ness should be re­spon­sive to so­ci­etal needs, but how at­ten­tive busi­ness should be to those needs, and in what ways it should demon­strate this sen­si­tiv­ity.

WHAT IS SUS­TAIN­ABIL­ITY?

Un­til re­cent decades, the un­der­ly­ing di­a­logue guid­ing the busi­ness/ so­ci­ety re­la­tion­ship was founded upon an un­spo­ken con­sen­sus about what should and should not be the role of busi­ness in so­ci­ety. That con­sen­sus has mor­phed con­sid­er­ably through the years, though, and in to­day’s trans­par­ent am­biance, there is in­creas­ing pres­sure to spell out the un­der­ly­ing val­ues that drive a busi­ness, and how these val­ues are rel­e­vant to so­ci­ety. Which brings me to the ques­tions I most fre­quently hear from busi­nesses new to the CSR jour­ney.

What is sus­tain­abil­ity? Does it re­late to my busi­ness, and if so – how? What should I be do­ing about it?

Sim­ply, sus­tain­abil­ity refers to the abil­ity to en­dure – in­def­i­nitely, ide­ally – not just in na­ture, but across all con­struc­tive ac­tiv­i­ties. Ev­ery en­ter­prise wants to be able to con­tinue to cre­ate turnover and prof­its. And the way to do that is to not shovel the wooden bits of the steam­boat into the fire in or­der to power what’s left of the boat.

Back when con­duct­ing busi­ness with the long view in mind was called be­ing so­cially re­spon­si­ble, there arose a ten­dency to try to buy off po­ten­tial crit­ics of pri­vate en­ter­prise by ( for ex­am­ple) do­nat­ing com­put­ers to schools, or by paint­ing or­phan­ages, or by plant­ing trees. All this to show that the friendly ABC- XYZ Corp was a re­ally, truly lov­able or­ga­ni­za­tion.

No mat­ter that what ABC- XYZ Corp do­nated had lit­tle to do with the ac­tual im­pact of their busi­ness ac­tiv­i­ties them­selves, or even any re­la­tion to what the peo­ple in the area needed. The com­pany’s pu­rity of heart was vouch­safed by their gen­eros­ity. It was a penance that could be bud­geted… and eas­ily mea­sured. Some rec­og­nized at the time that this char­ity- based pro­gram of com­mu­nity re­la­tions was overly sim­plis­tic. To­day’s nu­anced ap­proach boils down to an in- built re­flec­tion on the po­ten­tial im­pacts of cor­po­rate de­ci­sions on a wider slice of so­ci­ety than just cus­tomers or em­ploy­ees or fi­nanciers. Mod­ern com­pa­nies term this larger de­mo­graphic “stake­hold­ers,” which in­cludes any­one af­fected by – or who can af­fect – a busi­ness.

Stake­hold­ers are core to a busi­ness, and to how peo­ple view their work and their prod­uct. If a com­pany is busily do­nat­ing books or lunches to schools, peo­ple will see that, and be grate­ful. With luck, no one will ques­tion how, for ex­am­ple, a heavy equip­ment man­u­fac­turer con­nects to books or even to schools, be­cause af­ter all, the com­pany is re­ally, truly nice, and their largesse proves it!

And to be sure, this ap­proach can cre­ate a de­gree of re­silience. At the very least the neigh­bors won’t chase the busi­ness away, be­cause they will have earned what we to­day call a “li­cense to op­er­ate,” a gos­samer phrase that de­scribes the un­voiced con­sen­sus that a busi­ness is a net con­trib­u­tor to the com­mu­nity, and as such is wor­thy of sup­port.

But sus­tain­abil­ity is much more than a pop­u­lar­ity con­test. It is a char­ac­ter­is­tic of a busi­ness whose prod­ucts and pro­cesses tread lightly on the planet – the more suc­cess­fully, the more sus­tain­ably. Along with this more nu­anced un­der­stand­ing came a more so­phis­ti­cated, in­te­grated way of ap­proach­ing sus­tain­abil­ity strat­egy. As com­pa­nies achieve this level of so­phis­ti­ca­tion, they find that their sus­tain­abil­ity strate­gies can­not be parsed from their busi­ness strate­gies. The two are so in­ter­twined as to be one and the same.

Rather than scam­per­ing, hel­ter- skel­ter, to com­plete en­dear­ing one- off projects

to show­case and earn ap­plause, for­ward­think­ing com­pa­nies first link their com­mu­nity work di­rectly to their own ca­pa­bil­i­ties and then progress to the holis­tic stage where the com­mu­nity’s wishes are con­sulted. To­day, thanks to de­vel­op­ments that have cul­mi­nated in the United Na­tion’s Sus­tain­able De­vel­op­ment Goals, or SDGS, most or­ga­ni­za­tions – com­pa­nies, govern­ments, and civil so­ci­ety or­ga­ni­za­tions alike – are mov­ing to­wards more or less com­mon ob­jec­tives, ex­pressed in a shared vo­cab­u­lary and us­ing com­pa­ra­ble mea­sure­ments of suc­cess. The hoped- for out­come, of course, is a world able to con­tinue ( able to be “sus­tain­able”) as our re­source base into the in­def­i­nite fu­ture. Most of us in­volved in sus­tain­abil­ity be­gin with the Brunt­land def­i­ni­tion: “Sus­tain­able de­vel­op­ment is the kind of de­vel­op­ment that meets the needs of the present without com­pro­mis­ing the abil­ity of fu­ture gen­er­a­tions to meet their own needs.” The Fi­nan­cial Times of Lon­don has para­phrased this as “a process by which com­pa­nies man­age their fi­nan­cial, so­cial, and en­vi­ron­men­tal risks, obli­ga­tions, and op­por­tu­ni­ties” so as to en­sure the ro­bust­ness and re­silience of their en­ter­prises. HOW DOES SUS­TAIN­ABIL­ITY RE­LATE TO BUSI­NESS? All busi­nesses wish to con­tinue to op­er­ate – the longer, the bet­ter, in terms of rev­enue and prof­itabil­ity. But other con­sid­er­a­tions im­me­di­ately cas­cade: What is the com­pe­ti­tion do­ing? What drives your em­ploy­ees, and makes them want to re­main? How de­mand­ing are your cus­tomers; your in­vestors; your sup­pli­ers – and what are their con­cerns? What prod­uct and process in­no­va­tions are you in­tro­duc­ing? How are you com­mu­ni­cat­ing with your stake­hold­ers ( not just your share­hold­ers, which al­most ev­ery com­pany pri­or­i­tizes)?

I was once ex­pound­ing on the many con­sid­er­a­tions that com­prise a sus­tain­abil­ity mind­set to a west­ern cor­po­ra­tion CEO here in Bangkok. He in­ter­rupted me to say, “What you are talk­ing about is not sus­tain­abil­ity, or CSR. What you are talk­ing about is sim­ply good busi­ness!” That was when I re­al­ized that he had seen the light. More im­por­tantly, so did he. Once man­age­ment ac­cepts that sus­tain­abil­ity is not a sep­a­rate train of thought, iso­lated from busi­ness plan­ning ( in the same way that busi­ness and so­ci­ety are not iso­lated from one an­other), the strate­gic ad­just­ments to be un­der­taken be­come much more ev­i­dent. No more one- off projects: rather, an at­ten­tive­ness to busi­ness pro­cesses and their im­pacts. No more photo op­por­tu­ni­ties: rather, lis­ten­ing to the re­sponses of af­fected stake­hold­ers. And no more “CSR bud­gets,” be­cause the work is so in­te­gral to each busi­ness process that it can­not pos­si­bly be de­con­structed without de­rail­ing the busi­ness out­come it­self. It has taken decades to come around to a shared vo­cab­u­lary that spans in­dus­tries, oc­cu­pa­tions, and func­tions. Those of us who re­mem­ber the early days of com­put­ers will re­call that the first generation of stor­age me­dia had up­wards of thirty dif­fer­ent for­mats, de­pend­ing on man­u­fac­turer. To­day, there are ba­si­cally only two, and even their data can be mu­tu­ally in­tel­li­gi­ble. Sim­i­larly, in the sus­tain­abil­ity field we have moved from dif­fer­ent mean­ings and dif­fer­ent out­comes to un­der­stand­ing and agree­ment on a sin­gle com­mon goal, what you might call the planet’s North Star: to main­tain the world as we know it – or at worst, to min­i­mize the harm we do. SUS­TAIN­ABLE DE­VEL­OP­MENT GOALS The Sus­tain­able De­vel­op­ment Goals, an­nounced in late 2015 with a tar­get date of 2030, form an in­tim­i­dat­ing en­cy­clo­pe­dia of ideals to at­tain for coun­tries, driven by their pri­vate, com­mer­cial, and civil so­ci­ety or­ga­ni­za­tions. Do not be dis­cour­aged by their breadth and scope, but do be guided by the col­lec­tive wis­dom and mas­sive ef­fort that went into col­lat­ing the 17 Goals, 169 Tar­gets, and 230 In­di­ca­tors that make up this roadmap to a sus­tain­able fu­ture. The Goals are there for all to work to­wards as best you can: pick the ones that are in your baili­wick, find part­ners ( Goal 17), and be­gin your plan­ning. Thanks to the SDGS, all or­ga­ni­za­tions can as­sess their ca­pa­bil­i­ties and po­ten­tial con­tri­bu­tions us­ing a com­mon, mu­tu­ally un­der­stand­able ter­mi­nol­ogy to de­scribe shared chal­lenges and suc­cesses. Long gone are the days when an ap­parel com­pany or a plumb­ing con­trac­tor could claim that by sup­port­ing the mu­nic­i­pal sym­phony or­ches­tra, they were pur­su­ing any­thing other than free ad­ver­tis­ing. Long- term busi­ness suc­cess comes from cre­at­ing value be­yond rev­enue. This has al­ways been true, but is too sel­dom ac­knowl­edged. The SDGS give every­one a head start by giv­ing us all ideas about where to be­gin our work.

Newspapers in English

Newspapers from Thailand

© PressReader. All rights reserved.