One of a series of excerpts from the 2014 State of Green Business report (download here).
"Sustainability," as everyone knows, is about the three-legged stool: the integration of environmental, economic and social issues. Except, more often than not, it isn't: "Sustainability" is used synonymously with "environmental," at least inside many companies.
Protecting the purity of that word has become a largely losing battle in the communications marketplace, as companies, activist groups, cities and others invoke the S-word when they refer only to environmental issues. Even many of us who know better find ourselves doing that (including in this report) — although sometimes that is mitigated through inelegant references to "environmental sustainability."
There are encouraging signs that the world, in particular the corporate world, is catching up to the language: More companies are integrating social issues into their "sustainability" (read: environmental) programs as they come to recognize the interconnectedness between the two.
This is more than a mere linguistic shift — it's an emerging recognition about the role of business in society, and the futility of solving only a portion of the problems in an interconnected world.
"The environment exists not as an end unto itself, but the very thing that enables life to be worth living on this planet, to live lives in dignity and having one's basic needs met," said Aron Cramer, president and CEO of BSR, a global nonprofit business network dedicating to creating "a just and sustainable world."
Cramer is among those who recognize how the pieces fit together. "One of the reasons it's so difficult to manage environmental issues is poor governance," he said, "which leads to environmental degradation, which leads governments to bring in the military in to control the population. You can't say the story starts with one issue, then leads to another. It's the entirety of it."
Seeing "the entirety of it" is what sustainability executives should be about. And slowly, it is, as companies knit together their environmental and corporate responsibility programs to address more holistically the role of business in the world, and what's needed to ensure long-term success. In some cases that means mitigating environmental risks, such as water shortages or polluted air. In others, it's about ensuring the well-being and raising the standard of living of the communities in which they operate in order to ensure future customers.
A powerful shift in thinking
Whatever the motivation, it's a breath of fresh air. For most of the past quarter century — since the advent of corporate responsibility in mainstream business — companies didn't need to think much about ensuring future markets. Economies were growing, markets were emerging, globalization was creating seemingly limitless opportunity.
Even before the global economic crisis in 2008, things began to hit a wall. Water, energy, climate and natural resource shortages started to show up around the globe. Access to cotton, wheat, minerals and other commodities — not to mention clean air and water — hindered business growth. Human rights violations, poorly educated workers, political corruption and other issues challenged companies entering emerging markets.
The business world has had to rethink what it means to be a "responsible" company. It's not just about "doing the right thing" or "doing well by doing good." It's about creating value — for shareholders, of course, but also employees, customers and communities. Failing that, the future didn't seem so, well, sustainable.
Think of it as CSR 2.0 — corporate responsibility meets business longevity.
Good business, better lives
A growing number of companies are seeing how improving lives makes good business sense. Procter & Gamble's 2010 "sustainability vision," for example, included a variety of environmental commitments: replacing petroleum-based materials with "sustainably sourced" alternatives, reducing packaging and manufacturing waste and growing its use of renewable power.
At the same time, it launched an initiative aimed at providing "enough clean water to save a life every hour" by delivering more than 2 billion liters of clean drinking water a year by 2020. The company says this would help save an estimated 10,000 lives and prevent 80 million days of diarrheal illness annually.
What's the business opportunity? Unilever's Sustainable Living Plan includes commitments to improve hygiene and bring clean drinking water to the poorest citizens.
Other companies have made similar moves: Starbucks has leveraged strategic CSR initiatives to gain competitive advantage to secure premium coffee from Ethiopia and gain successful market access into India. Levi Strauss' Wellthread line of clothing connects the dots between smart design, environmental practices and the well-being of the apparel workers who make the garments. Pharmaceutical giant GSK created a Developing Countries Unit to expand access to medicines for around 800 million people in developing countries, including the world's 49 poorest nations, as defined by the United Nations.
These are examples of companies seeking to align their brands with sustainability while creating business opportunity. Behind these, however, are other companies, including some faceless B-to-B firms, that are doing similar things, albeit more quietly. For them, it's less about brand than ensuring their social license to operate: that they are welcome participants in local economies. The horrific working conditions of electronics workers in China or textile workers in Bangladesh only begin to unmask the plight of wage-earners at the bottom of the global economic ladder. The increased scrutiny paid to companies tolerating such practices will be at least as great as that of companies spewing noxious chemicals into the air and water.
The good news is that addressing such challenges plays to businesses' strength: to prosper by improving lives. As companies continue to integrate social dimensions with environmental ones, they are more likely to see the big picture — that they can make more money and gain competitive advantage by creating "a just and sustainable world."
CSR photo by Andrew Sproule via Shutterstock