Can Business and Sustaining the Environment Coexist?
What is sustainability?
A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. This includes businesses that operate in a socially responsible manner and protect the environment. (wikipedia)
Business and sustaining the environment… can they co-exist?
50% of the world’s wetlands have been lost in the last 100 years,
50% of the world’s forests have been chopped down,
70% of the world’s major marine fisheries have been depleted
100% of the world’s coral reefs are at risk, and
6.3 billion people on the planet, with another 3 billion in the next 40 years
The Old School of Thought
Single Bottom Line— “The Social Responsibility of Business is to Increase its Profits.”
Milton Friedman, Nobel Lauriat and chief economist, The New York Times Magazine (13 September 1970)
The New School of Thought
Triple Bottom Line (TBL)— People, Planet and Profit
People (Human Capital) pertains to fair and beneficial business practices toward labor and the community and region in which a corporation conducts its business. Stakeholders are taken into account, not just shareholders.
Planet (Natural Capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact.
Profit (Economic Capital) the bottom line shared by all commerce, conscientious or not. It is the lasting economic impact the organization has on its economic environment. A TBL approach can be interpreted as traditional corporate accounting plus social and environmental impact.
Harvard Business Review on Corporate Responsibility by Harvard Business School Press
5 Stages of Shifting Business’ Thinking
Stage 1 The company feels no obligation beyond profits.
Stage 2 The business manages its liabilities by obeying the law and all labor, environmental, health, and safety regulations.
Stage 3 the company moves from defense to offense. It realizes it can save expenses with proactive and incremental operational eco-efficiencies, cleaner processes, and better waste management. It is about incremental, continuous improvements in eco-efficiency.
Stage 4 The firm transforms itself. It re-brands itself as a company committed to sustainability and integrates sustainability with key business strategies. It is about discontinuous, leapfrogging breakthroughs. (i.e. Reverb, Music Matters, and Live Earth.)
Stage 5 Driven by a passionate, values-based commitment to improving the well-being of the company, society and the environment, the company helps build a better world because it is the right thing to do. (i.e. Patagonia, Gaiam.com)
Top 10 Hot “Green” Topics
Chemicals, Toxics, and Heavy Metals
Ozone Layer Depletion
Biodiversity and Land Use
Forest and Fisheries