The Things We Wish Were True, and the Things That Are True
If we wish to cultivate a sustainable economy, it is first important to separate the things we wish were true, from the things that are true.
For example, we wish that building an environmentally sustainable company increased profits. We wish that building a company on a foundation of integrity led automatically to higher customer loyalty, sales, and profits.
But the reality is that sometimes these attributes benefit the company, and sometimes they don’t. Moreover, often all a company really needs to do is to create the impression that it has these attributes. Creating the impression is often cheaper than creating the reality.
Yet despite this, some argue that corporate sustainability is a matter of enlightened self-interest. Companies that profit sustainably will excel in the marketplace, they say.
Others argue that corporate sustainability is a matter of morality. Companies that fail to profit sustainably are immoral and should be condemned, they say.
The first view is based on the premise that those companies that act in a sustainable manner will somehow naturally outperform those that do not. Unfortunately, it’s not that simple. Advocates who claim perfect alignment between what is right and what is advantageous come across as either naïve or dishonest to people making real business decisions.
The second view is based on the premise that it is possible for a company to take a principled stand, and voluntarily pay a set of costs that its competitors refuse to pay. But in a competitive economy, no company can long survive if it voluntarily takes on significant costs while its competitors fail to do so. Principled or not, the company will fail.
Thus, a company that blindly pursues sustainability, with no eye to the bottom line impacts, will fail well before it is able to contribute significantly to society as a whole.
And a company that blindly ignores sustainability, with no eye to its impact on the larger whole, will undermine the long-term interests of the society it serves.
For these reasons, corporate sustainability is not about enlightened self-interest, or morality. The question is not whether a company is becoming more sustainable. The question is whether its people want it to be, and are willing to act in concert with others, outside the company, to create the conditions where it can become more sustainable.
Corporate sustainability is an objective to seek. If we are to reach it, we must be practical, pragmatic, and honest. We must be less determined to preach and teach, and more determined to learn, and then to act on what we learn.
One way to learn is to answer a few simple questions, honestly:
When does corporate sustainability benefit a company’s bottom line?
When does it impose a net cost on the company’s bottom line?
And how can we align the short-term interests of business, and the long-term interests of society and the environment, so that they are positively correlated? How can we cultivate an economy where advances in one lead to advances for the others?
Then, once we know what we must change – once we know how we can change the signals, the systems of rights and responsibilities, to assure that those who create good benefit in the process, and those that create harm pay the costs – we must wait for the right moment to act.
Right now, and the years immediately ahead, may provide us with just such an opportunity. Three events have converged, to create the conditions for change:
The first event was Enron and the crisis of corporate accountability that followed.
The second event was September 11, and the war on terrorism that followed.
The third event was the war with Iraq.
These moments, when old institutions break down, are the times when the most momentous change happens.
This retreat provides us with an opportunity to begin the process of change.
Thank you.
For information on the Future 500’s 2003 Industrial Ecology Retreat sponsored by the Collins Family Foundation, click here!
