Tuesday, 30 November, 2010
I wholeheartedly believe that business cannot talk seriously about the future, “sustainable competitive advantage” and “sustainable profits” with out embracing sustainability. Any “Business Leader” worthy of the title must realise that “business” does not exist in a vacuum but is reliant upon every other domain within our global ecosystem!
I would recommend anyone with an interest in embedding sustainability into their business to read Adam Werbach’s book Strategy for Sustainability. He is, after all, the man who was “vilified” by the green lobby for working with Wal-Mart but, low-and-behold, a few years down the line, here in this article about CSR and sustainability we have the CEO – of a firm with a once dubious reputation in this field – extolling the virtues of just such an approach. They would not be doing so unless it showed on their bottom-line!!!
Sustainability, like Complexity management, isn’t just “good for business” it’s good for everyone.
This extract from 2Sustain, a great blog on the subject matter:
Again and again, I’ve seen how sound CSR policy translates into solid business success, and that’s precisely why the title of Aneel Karnani’s recent Wall Street Journal article, The Case Against Corporate Social Responsibility, caught my eye.
In sum, Karnani’s basic premise is that CSR efforts are either irrelevant or ineffective. “The idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed,” he writes . . .
. . . and I’m sure it won’t surprise you to learn that I whole-heartedly disagree.
The concept of CSR isn’t flawed. What’s flawed is the mind-set that adheres blindly to the tired, old mantra that claims “the business of business is doing business.”
Sure, businesses want to make profits. But ultimately, the ability to make profits is affected by social and environmental issues. Scarce natural resources drive up prices. Poverty and poor education impact the workforce. The list goes on and on, and any company with ambition must realize that they have no choice but to engage –not only because it’s the right thing to do, but because in the end, a commitment to CSR helps mitigate risks and ultimately, benefits the bottom line.
McKinsey & Company deep dives into these issues in the report, Shaping the Future: Solving Social Problems through Business Strategy. Sub-titled, “Pathways to sustainable value creation in 2020,” this paper encourages a shift in mind-set, a new approach that enables companies to create value while simultaneously addressing social problems.
As Mike Duke, CEO, Wal-Mart Stores, Inc., explains in the report, “More will be expected from market leaders and globally successful companies, and those companies who are most involved will be most successful, creating an upward spiral.”
Bill Weldon, from Johnson & Johnson, agrees. “We all have to contribute to sustainable solutions over time –not any one group can do it alone,” he says. “You cannot assume that everyone else will address the problem and that you do not have to engage. If we do not align ourselves and work in a collective way on these social issues, everybody will be worse off.”
So, despite Karnani’s outdated and hollow insistence that CSR is ineffective and irrelevant, I’m going to side with business leaders like Duke and Weldon and continue to make the Case for Corporate Social Responsibility. In our increasingly interconnected and interdependent world, there really is no other way to achieve long-term business success.