Sustainability is a new buzz word, together with its three components, economic, social, and environmental -or more succinctly, profit, people and planet . It is increasingly seen as a set of interlinked objectives with evidence showing that those who follow all three components now do better financially than those who don’t.
Most of us, certainly those in commercial entities, see delivering financial value to shareholders as the key objective of business, together with the Peter Drucker nostrum “To find and keep customers is the sole objective of business, all else is cost.” But even this narrow definition of objectives raises questions. Are we really delivering sustainable profit to our shareholders? What do our customers really want over time, and how are these wants trending?
Our customers, staff, shareholders, the wider public, are all stakeholders in our business.
Customers are increasingly interested in supply chain integrity when they say, “where does it come from, and are you sure it is what it says on the tin”. Fair Trade vies with Organic as a key value. Schoolchildren from all backgrounds today question the type and level of packaging in everyday products.
Candidates at interview are starting to ask us questions about our environmental policies, and may make employment decisions based on the answers we give.
Shareholders are concerned when managers make expedient decisions that produce good short term results but may have negative long term consequences.
The public will bay for our blood if we are seen to damage their environment. Governments will increasingly support them in taking class actions particularly against large scale polluters.
Rafts of environmental legislation continually emerge from Westminster and Brussels, are often gold plated by our civil servants, and we regard them as an unwarranted cost, which we ignore at our peril. Yet we all feel uneasy about resource depletion or climate change, even if the time horizons in which our commercial concerns lie appear to be much shorter than the decades over which we may find resource depletion or climate change to bite.
So it looks as though we are all going to be taking sustainability seriously, and to some extent all Chairmen will soon need to be Green Chairmen!