This is the second part to Sustainability is a Business Problem …
If human behavior around wants, needs and consumption isn’t changing and business must compensate, that means business-first solutions are necessary. This includes, among other things, disciplined corporate spending. Arguing that companies should simply do the right thing at any cost because it is right is … wrong. Not philosophically, but in business terms. My Dad always said “If you spend more than you make, you go broke.” That applies to sustainability, too.
There is a corollary – if you go broke from overspending on sustainability, all gains/benefits made die along with the company. Adding insult to injury, the business failure then adds to the lore that sustainability is a dangerous drag on finances.
For decades, sustainability and social responsibility professionals fought to be seen as truly relevant to the business, but we generally didn’t take the right path. In the past few months, I’ve seen more recognition that a hard-dollar, hard-nosed business-first approach to sustainability is necessary. It’s difficult for some professionals to get on board with the idea, but creating hard dollar benefits – especially beyond managerial accounting – transcends many obstacles and competing priorities. No more advocating for theoreticals, possibilities, contingencies or philosophy, moving past basics of compliance and disclosure. It gets to the very heart of business – revenue, costs, and profits necessary to stay in business, meet customer and investor demands while furthering sustainability progress for which human behavior isn’t changing.
One way to address the human/business conflict is for companies to make sustainability improvements hidden to, or at least easy for, customers. This is hard but it works when you can find it. A business solution – no behavioral change needed by customers.
A theme I took away from The Masterclass on The ROI of Sustainability is sustainability professionals face an existential choice right now – adapt/pivot to this business-forward approach and way of communicating, or miss this opportunity and end up where we were after the 1990s sustainability trainwreck.
In the end, corporate sustainability challenges demand smart, disciplined business solutions. We must focus effort on the most meaningful business risks and opportunities hitting on operations (i.e., costs and efficiencies) and help customers/consumers address their sustainability concerns while minimally impacting wants and needs – instead of insisting on consumer behavior change.
Members can learn more about the business value of sustainability here. Detailed how-to resources include our Guidebooks Practical Methodology for Sustainability ROI Using Company-Specific Business Fundamentals, Simplifying ESG/Sustainability Business Value and Communicating ESG Value. Also, keep an eye out for a series of coming guidebooks on the top real examples of sustainability business value for revenue generation, new market development, cost reductions and profit margin improvements.
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