Why Focus on Business?

Why focus on business for sustainability progress?

Business is critical to progress to sustainable living and business and has the potential to deliver the fastest.

Business is our Biggest Resource Consumer and Polluter

• Vehicles it sells that are not getting high mileage/gallon
• Products it sells with:
  • Toxins, non-environmentally friendly chemicals
  • Non-renewable resources
  • Unrecyclable resources
  • Non-biodegradable resources
  • Heavy metals like electronics
  • Woods, like hard woods from rainforests and other threatened forests
  • Fish from depleting fisheries or of fish that are in danger of not being able to replenish due to over-fishing
  • Excessive packaging
• Disposable product alternatives that are not made from renewable, recycled materials and that are recyclable or biodegradable after use
• Chemicals and other materials used for agriculture and landscaping
• Products and services not designed ‘cradle to cradle’:
  • Made from recycled or renewable resources
  • Made for easy disassembly and sorting for reuse, recycling and/or to biodegrade
  • Meat products especially beef due to its radically intensive use of water, stock, land, as well as the methane produced by cattle

Business Has the Most to Lose and the Most to Gain

Business has the most to lose or gain from taking on sustainability integration throughout their business operation, including upstream in their supply chain and downstream in how their products are handled at the end of the product’s life. In our new era of declining resources and ecosystem services slammed against ever-increasing human demand and population growth, businesses face:

• Large cost increases due to energy, water, and waste cost increases year over year
• Potential inability to get required resources and/or pay exorbitant prices for those scarcer resources
• Pressure from consumers, the public, governments, and each other to operate sustainably or jeopardize their brand reputation
• Higher insurance rates due to risk of increased liability of non-sustainable actions and operation
• Inability to attract growing number of socially responsible investors

• Darden looked at its future and saw no fish. A no fish future doesn’t work for most restaurant menus. Darden has become involved with supporting certified and responsible fishery management, i.e., strengthening the stewardship of one of our commons. Darden doesn’t buy fish at risk of being depleted beyond recovery due to over-fishing or other fishery impact.
• Shell Oil looked at the future of progressively decreasing oil supplies to within 30 years the world having no oil and realized their company was not sustainable in that future. After a relatively slow start, they are on the road to redefining Shell to be a total energy company with strong positions in solar and wind technology, as well as bio-technology related energy. 

Businesses also have the potential for tremendous short and long term gain. Case study after case study of companies actively pursuing sustainability prove that, although hard work, these companies experience at least two of more of the following hard, tangible, and soft, intangible, benefits:

Tangible benefits

• Lower operational and project costs
• Higher revenues
• Lower lending rates; Lower insurance rates
• Lower financial and operational risk; Reduced liability
• Remain a supplier
• Increased innovation: new products, processes, materials, etc.

 Intangible’ Benefits (sometimes more potent in enhancing the hard gains)

• Higher employee productivity, dedication, trust, involvement
• Easier to do business in communities of operation
• Ensure sustainability of the business
• Stay out of reactive mode to new laws and regulations
• Avoid adversarial relationship with activist groups and governments

Companies rated high on the sustainability indexes, like the Dow Jones Industrials Sustainability Indexes, show that these stocks trade at 2 to 15 times book value. There is a universal perception that sustainability costs more, but this is contradicted by many case studies especially when companies take a longer term view versus the overly short term view they are accustomed to. Again, from the many case studies, these companies still require business cases, still require strong ROI, although many have a lower ROI hurdle when sustainability, social or environmental issues are involved. These leading companies in sustainability and economic performance find sustainability compelling as a positive constraint that drives a wealth of innovation.

Business Can Deliver Innovation, Influence and Change Faster

Although sometimes it takes forever for business change, e.g., a GM, who needed bankruptcy to allow the radical changes that were required a long time ago, many businesses are adept at change and leading other business to change. It is true that many companies struggle with making real change happen and that sustainability integration is hard work. However, in many case studies change to support sustainability both connected with the business’ reason for being and their employees and customers personal missions or purposes. This leads to the hope that as we learn more in the sustainability realm, businesses will be able to change faster and that change will be long lasting. 

“Business, more than any other major institution, is focused on innovation and change.” J. Ehrenfeld, Sustainability Design.   In almost all the case studies of companies taking the journey (integrating sustainability is not a destination, it is a continuing core mission commitment), companies experience visible and measurable increase in innovation whether in new ways to do things, new materials to use, new products and services, new ways to offer product and services, new ways to reduce energy, water, and resource consumption, as well as more ways to reduce waste, release of pollutants, or ways to capture waste and pollutants for treatment, reuse, etc. Businesses also find new markets in, e.g., buyers for their waste products. Since we know so little about creating truly sustainable business and living, this ability to innovate, learn and change is another reason to leverage business to move us to sustainability faster than big government at federal, state, or local levels and faster than a tipping point can be reached with the public. In any case, for the public to change their lifestyles and live more sustainability, businesses have to provide the products and services, along with the promotion, to enable the public.

Another important aspect of businesses is their capability to learn and their technical know-how. For real sustainability progress, sustainability results have to be at the system and component level, from upstream and downstream of the company’s product or service, and must be visible, verifiable with accountability. Sustainability measurement, tracking, and reporting are some of the most difficult challenges for sustainability integration and implementation. Business has some of the infrastructure to support this accountability and transparency, but as importantly has the skills to enhance the infrastructure for sustainability measurement, tracking, and reporting. 

Business: Largest World Institution and Leading Trainer of People Worldwide

Business is the largest world institution. Business is the leading trainer, educator, of people worldwide. Business is not only the largest employer, but the largest user and provider of technology. Business is the largest and most powerful global institution in terms of financial power, exceeding the historically dominant role of governments.” J. Ehrenfeld, Sustainability By Design . These aspects of business give business the capability to influence the way people do their jobs and live their lives. Many companies have significant training capability to influence and change the behavior of its employees, but also its suppliers and customers. Encouraging businesses to look to their broader circle of influence will further accelerate our sustainability progress. The Aspen Ski Company may seem like a strange example for sustainability impact due to their mission of providing luxury experiences that arehighly energy, water, and resource intensive, as well as high in polluting and waste. However, The Aspen Ski Company looked at its future and saw no snow in 10 years. A ski resort doesn’t work real well without snow. They have been on the sustainability journey for quite awhile and have made considerable progress while acknowledging it is hard work, requires a lot of learning, and involves a lot of surprises where results contradict intuition. The company realized that their environmental footprint reduction was important, but was not enough of a contribution to change the world’s global warming trajectory to have snow in Aspen. They decided they could have significant impact by using their prestige and visibility to make global warming and the action required more real to the world. They use the Aspen no snow future to and their sustainability experience to garner attention for global warming action in the media, always friendly to Aspen, and other forums.

Businesses Are in the Best Position To See the Future

This may seem like an over-statement, but businesses are tied to resources, tied to income and earnings putting them in a position where the future is more visible and real. All large companies and many medium and small companies have a formal strategy and planning function that looks longer term (actions are not dictated by long term health or sustainability in America, but is already moving slightly more that direction). The future is more in front of them than it is for the public. In addition, businesses have access to experts and analysis that removes the confusion that global warming and declining resources and ecosystem services are real and based in factual and well-founded science, including being urgent and important. Since government is so tied to public opinion and the next election and not responsible for a product or service, or income and earnings, they are not as likely to see global warming and declining resources and ecosystem services with the urgency and importance deserved. Business leaders are paid to plan and address both the urgent and important to assure their company’s short and long term future. Hopefully, business can help itself and us by thinking and acting based more on the long term and making the long term more urgent for all of us.

Businesses Have A Moral Responsibility

Again, based on the numerous case studies on companies working sustainability, the bottom line for the leaders and leadership teams, and their employees is that sustainability integration is ‘the right thing to do’. For some, it goes beyond that gut reaction to more of an obligation. A recent quote from Warren Buffet, “If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.” recalls an earlier sentiment he expressed, i.e., he, his investors, business couldn’t succeed without the American business and financial systems, not to mention the country’s infrastructure. Business success is supported by the systems created by this country to support its operation. Those systems and support are provided by the people through the taxes they pay. Without this system, business success would not be feasible. 

Per Jared Diamond in the book “Collapse”, there are five factors that determine the success or collapse of societies, but the over-riding factor for success or failure is ‘that society’s response to its environmental and social problems.’ The private sector, business, has an obligation to lead our response to climate change and an era characterized by declining resources and ecosystem services with the huge human demand and population growth.

Conclusion

Business, both directly and indirectly, cause the most environmental damage, resource use, waste of resource, and is the biggest polluter. Real sustainability (total system level, verifiable and transformative, accountable and transparent) implemented from leadership and involving all employees and business processes, products and services presents tremendous opportunity to benefit a company and, without action, high risk and jeopardy to the business’ future. The competitive advantage for companies that take on sustainability vigorously is compelling in terms of cost advantage, enhancing their brand, lowering their liabilities, increasing their level of innovation, as well as a stronger connection with their employees and customers. The 30 year love affair American business has had with the measure of its success based solely on shareholder value has to end. Besides being the most fickle of a business’ stakeholders, business value is built through a business’ employees and customers first and foremost, as well as the communities in which it operates. Businesses have a lot to gain from integrating sustainability both short term and long term. In many cases, deep commitment to sustainability will determine whether the company itself is sustainable in the future. Business has the capability and infrastructure to deliver sustainable results faster and with more widespread impact. It is increasingly clear that if the business itself doesn’t feel a moral obligation to act on sustainability, consumers, the public, and government are increasingly see it that way.

Call To Action

Our best opportunity for rapid sustainability progress is through business whether started at the working level or the executive level. It is not only executives that can see the threats in our future. Many employees know them too. Many employees have seriously taken on living more sustainably in their personal lives, but haven’t thought to take that same personal commitment into their jobs. 

YOU can make a contribution to sustainability action by expanding your contribution to take on sustainability on your job. Net Impact Orlando can help you make that contribution in your workplace. Net Impact Orlando mission is to inspire and enable you to lead or support social and environmental change through business, in your job within your business.

Join Net Impact Orlando to further develop your sustainability knowledge base, to define a sustainability contribution, and engage with others working to make sustainability contributions to our community through their jobs.

What do you have to do? 

Join us for a Net Impact Orlando meeting or two.  Assess whether Net Impact Orlando is a fit for your need to contribute and/or your personal mission or purpose.