Why Sustainability is Important for Business
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.