Sustainable Success
by Zoe Cruz (New York City)
Sustainability is the new buzzword in Corporate America – but what does it actually mean and why is it so important? Corporate sustainability grew out of the concept of sustainable development, which means to “meet the needs of the present without compromising the ability of future generations to meet their own needs.” In terms of corporate goals, sustainability is the balancing of short-term financial gains with the “long-term goal of balance and survival”, as mentioned by Deutsche Bank CEO Seth Waugh during his opening words at this year’s Women on Wall Street conference, as reported on The Glass Hammer.
According to a white paper sponsored by BT and Cisco Systems, “Use of resources, waste management, pollution, climate change and biodiversity are all issues of great importance which, in the traditional business model, have had to give way to the maximization of shareholder return. Today that approach is no longer viable in the long term. Business practices that result in products with huge amounts of waste embedded in them; that involve the consumption of large amounts of energy; that undermine local communities or contaminate the environment can no longer be justified on the basis of shareholder return.” Corporate sustainability “takes into account corporations’ obligations not just to investors, but to the communities they serve and the environment as well.”
While environmental stewardship is traditionally what one thinks of when one thinks of sustainability, the corporate sustainability concept now being embraced includes three elements of sustainability: social, economic, and environmental. And the panelists at the WoWS conference certainly did show us diverse examples of how corporations and individuals are working towards the three-pronged sustainability. From the development and ultimate use of the sustainable computer (a long-lasting computer that is created from all recycled parts and can, once obsolete, be recycled) as discussed by Seth Waugh, to the creation of the green collar job training program, as created by Majora Carter through her work as founder of Sustainable South Bronx, to the empowerment of women through business development and education, which is the focus the Goldman Sachs 10000 Women program, it is clear that there are many options and opportunities to integrate economic, social and environmentally-sustainable practices.
Of course, this movement has sparked a support industry designed to assist companies in the establishment and integration of sustainable practices. The Environmental Performance Group, based in Utah, offers sustainability programs and helps companies and organizations to lessen environmental impacts and carbon footprints, improve performance, and add value. Another such company is Majora Carter Group LLC, dedicated to helping clients connect the value of government, business, industry, and community, to create sustainability.
But why the big movement towards sustainability? Corporations large and small are beginning to recognize the economic value of integrating ethical practices into their corporate culture. According to a white paper referenced above, a 2007 Goldman Sachs study of six industrial sectors – energy, mining, steel, food, beverages and media – “those companies considered leaders in implementing environmental, social and governance policies designed to create sustained competitive advantage had outperformed the overall stock market by 25 per cent since August 2005. Within their own sectors, 72 per cent of these leading companies had outperformed their peers over the same period. Also, a separate study released at the same time by McKinsey & Company showed that more than 90 per cent of chief executives are doing more now than they did five years ago to incorporate environmental, social and governance issues into their companies’ strategy and operations.”
Corporate America is slowly, but surely, realizing that things cannot continue to go on the way they have – and that change is an absolute necessity. “Sustainability and its alter-ego, corporate social responsibility (CSR), have long fallen under the aegis of risk management. This view is changing, with investors and customers increasingly rewarding organizations which wholeheartedly embrace sustainability with superior sales and shareholder value.” Add to that the management and employees within the corporations who are personally committed to social, economic and environmental sustainability and you have a recipe for sustainable success.
