Dale Stohr Innovation #2 Business Shaper 2009

'What impact is sustainability likely to have on how organisations behave?'

People have become more interested in the human impact on the environment since the 1960's when over-population became a concern. Over the next 40 years, numerous topics and incidents such as nuclear energy, the Exxon Valdez oil spill, the Three Mile Island nuclear accident, the ozone layer, the Chernobyl nuclear explosion, peak oil and climate change have forced governments and corporations to re-assess the way the environment is managed. Legislation for more national and marine parks, better environment protection laws, advances in technology and consumer recycling have all had an effect on protecting humans, animals, trees and the environment.

However, Western society and the growing Third World have continued to use Earth's finite resources beyond reasonable need and without consideration for the long-term effects on the planet. In order to reduce the consumption of resources and minimise waste, sustainability has become a driver for governments and corporations to review their business practices. The definition of 'sustainable business' is 'business that contributes to an equitable and ecologically sustainable economy'1. These businesses '... offer products and services that fulfill society's needs while contributing to the well-being of all Earth's inhabitants...'2. Such practices include renewable energy generation, resource-efficient industrial processes, transportation, agriculture and recycled products. These 'green' practices reduce negative environmental impacts but also lead to the creation of new industries, products, services as well as profits.

Sustainable businesses must balance the needs of '... people, planet and profit...'3 in order to achieve the 'triple bottom line'. The true purpose of any business is '... to create a customer...'4 and, through marketing and innovation, 5 meet the needs of the customer. Unlike the past 200 years of industry, future organisations will need to serve the customer and the planet as well as the shareholder to achieve success or simply survive - 'adapt or die'.

The old adage 'what is good for business if good for the country' used to apply to expansion and production policies leading to better living standards for citizens. But these growth policies, including globalisation, sometimes led to increased waste, environmental damage, cultural invasion and low or illegal working conditions. The benefits of business (eg reduced costs, reduced wages, over-the-horizon production, etc) were not always in the best interest of all stakeholders and through the media and activist groups and social networking, these negative impacts have been exposed. From a small meetings to global attention, groups like the Pachamama Alliance and Greenpeace have managed to highlight the errors and damage done to the planet. Their actions over time have led to changes in law and changes in mindset like the emergence of Corporate Social Responsibility (CSR) and new international standards like ISO 14000, AA1000 and SA8000 across all countries and businesses.

The implementation of these new rules has not been without resistance and many governments and businesses brand themselves to support protecting the environment while adding to the problem at the same time (eg. increased coal exports and China's environmental and human health issues due to factory production). Consumers, as individuals, continue to add to the issue through their purchasing and supporting of corporate products and services. The dilemma is to meet the needs of all citizens around the world in the long-term without shutting down the economy. This issue is still very hard for many people to comprehend let alone try to resolve (eg the current Global Financial Crisis and excessive debts). Corporations rely on increasing profits and governments rely on increasing tax revenue - finding solutions that don't make millions of people unemployed or make society unstable will not be easy. Many companies have begun the journey of sustainability but many more have yet to see the long-term benefits.

The future for sustainability may lie in new technologies and a new understanding of how individuals live their lives. Choices made by consumers can influence companies to change their products just as legislation by government can force corporations to change their business practices. It may be more effective that future generations of school children will grow up with sustainability and their influence on future employers, corporations and governments will have the most impact. Therefore, organisations will need to truly listen and act according to what is best for their stakeholders and the environment. Different measures of lifestyle, success, accountability and profit may exist in the future compared to those we have today. Better technologies must deliver better innovations that meet consumer needs but do it with less impact from product design to production to delivery to usage.

The evolution of the corporation to embrace sustainability will have many positive benefits for the planet but it is the choices of the individual and the collective power of many individuals that will deliver the changes necessary. Failure to influence key decision-makers to prioritise issues that affect everyone will result in a status quo that only appears to promote sustainability. The way organisations behave in the future and the key decisons they make will be more important than ever before.


References:
1 www.sustainablebusiness.com
2 www.sustainablebusiness.com
3 www.wikipedia.org
4 www.yourbusinesscoach.net
5 www.yourbusinesscoach.net