Corporate Sustainability - Are You Behind The Eight Ball?

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Addressing matters of Corporate Sustainability is one very similar to  politics – companies tend to campaign in poetry but they end up governing in prose. In other words, they make bold declarations about embracing green initiatives (beneficial to their employees, consumers, and industry) - but in reality, take the path of least resistance and do little or nothing.

Ever since businesses started advocating for “social responsibility”, a corporate dilemma was born: a tug-of-war between profit and purpose.

Historically, experts have dismissed the coexistence of businesses and sustainability efforts. In his 1970 New York Times essay, The Social Responsibility of Business is to Increase its Profits, renowned economist, Milton Friedman, debunks the said consideration:

“The discussions of the ‘social responsibilities of business’ are notable for their analytical looseness and lack of rigor.”

Unforgiving words.

That well-known remark unfortunately still informs the way businesses still operate till today.

With all the advancements we’ve made thus far, why then does the “Friedman philosophy” still ring true?

The following should provide an explanation:

  1. Corporate Social Responsibility (CSR) efforts don’t yield any money
    Despite numerous reports and studies which provide hard evidence of the financial health of companies that integrate sustainability into their core business structures, companies for some reason still carry out the order of “business as usual” – one that states the unprofitability of investing in sustainable efforts.
  2. Fear of absorbing short-term loss for long-term gain
    Integrating CSR propositions into an existing business model, most times, requires a major operation overhaul; it also requires substantial financial investment. This means that companies might experience a slight dip in profits pending the time the new sustainable strategies take root. Such projects make business executives and shareholders nervous, hence, the reason for their slow adoption.
  3. The issue of measuring sustainability
    There has been a well-documented debate over the quantification of corporate sustainability. As stated in their book, “Sustainability Indicators: Measuring the Immeasurable?”, business co-authors Simon Bell and Stephen Morse highlight one of the drawbacks of measuring sustainability:

    “Quantification, (of sustainability), does have limitations, and clearly it is not possible to measure all human experience… and a desire to incorporate the richness of humankind’s complex interrelationships with nature, SIs (Sustainability Indicators) are still a classic reductionist set of tools based on quantification. We find it ironic that those who scorn attempts to give value to sustainability… still employ a language that has quantification at its heart. This has clear relevance… to the whole sustainability debate. Can we really use simple SIs to gauge a complex issue as sustainability?”

  4. The concern of transparency
    One of the many “treats” in the CSR goody bag is transparency – many companies are frightened of this kind of vulnerability. Gone are the days when corporations make grand sustainability claims without authentication. We live in a trust-but-verify climate where the general public (via the internet) can separate the wheat from the chaff. Volkswagen’s recent “Diesel-gate” scandal is testament.
  5. Weak external collaboration
    Getting key external players – such as shareholders and/or suppliers – onboard to support the disruptive tactics of corporate social responsibility can be a long and painful road; mainly because it’s perceived as a huge undertaking.


Gloom and doom aside, there have been great strides made by some top-tier companies in the sustainable business movement. These establishments have made a resounding case for businesses grounded in sustainability and social good.

Green Giants: How Smart Companies Turn Sustainability Into Billion-Dollar Businesses” a book by E. Freya Williams, she outlines nine different companies (some which include Unilever, Tesla, Whole Foods Market, Chipotle Mexican Grill and Natura) that have:

“…succeeded in building wildly successful businesses while selling products and services designed to help us live happier, healthier, more environmentally conscious lives. Together (these Green Giants) represent over $100 billion in annual revenue and outperform their competitor in the stock market by 11%.”

Large businesses are not the only ones making worth-while changes. Here are examples of other small to medium sized businesses that are also championing the corporate social responsibility message:

  • DICE
    A mobile-only app that is on a quest to transform the live music-ticketing sector (an industry fraught with a variety of hidden - booking, transactional and printing - fees) campaigning with a monumental selling proposition – zero fees.
  • Everlane
    An online shopping/clothing brand that espouses “Radical Transparency” – a belief rooted in three simple principles: “Know your factories. Know your costs. Always ask why.”
  • Green Glass Recycling Initiative Lebanon (GGRIL)
    A CSR project spearheaded by a Lebanese engineer - Ziad Abichaker - that “diverts green glass from landfills by providing work for the last 6 glassblowers of Lebanon.”


With all that has been said, you’re probably asking yourself this question: “Of what relevance is this to me?”

For starters, I trust that you’re now convinced about the transformational effects that the implementation of corporate sustainability efforts has on any business.

Secondly, we’re genuinely hopeful that you’re motivated to be the activist for worthwhile corporate sustainability efforts; which means formulating innovative, concrete, and realistic action proposals that reignite the way you do business.

And most importantly, you now see yourself as the messenger of change and are challenged to add a new line into the financial ledger that says - give a damn! 

 

healthy bus

Altus Team

With over 30 years in the personal financial and SME business advice profession, the Altus brand has emerged as one that is well respected through the industry. Let's Connect