Corporate Sustainability. Inclusive Business. Social Enterprise. These are no more than just buzz words but are now embedded as part of business speak. It is now a norm for policy makers to engage with the private sector to step up and play a leading role in contributing towards a green economy, to evolve products towards a circular economy and become a responsible business.
For business to embrace sustainability, it needs a sustainable development philosophy and a focused operational strategy. The philosophy has been established by the UN 20 years ago, in the form of ‘Our Common Future’ report which states – “sustainability is to meet the needs of the present without compromising the ability of future generations to meet their own needs”. It’s an apt direction that has stemmed many global targets which humanity (and its governments) tries to attain from the Millennium Development Goals to the current Sustainable Development Goals.
But there remains much debate over the operational tactics of the private sector to achieve these Goals. Clearly (and rightfully) the private sector is designed to be a profit-making machine and there is as much good and as much bad that this outlook has contributed to the state of the world. Calls for the private sector to limit growth is something that is difficult to process, hence the need for a strong operational equation to give life to the sustainability philosophy.
Allow me to propose one equation for the private sector to solve in their pursuit of profit and sustainability. The basis of this equation is that profit and growth is not a bad thing. They are neutral in nature. How profit is attained and what is fueled by growth are the impact that private sector needs to address. Therefore:
All profit produces some form of power, be it from providing better wages and benefits or influencing policies. A private sector must be profitable in order to exert power, giving it a position to contribute to a better world. How it can contribute depends on the Corporate Value that the organisation carries – if it is built only to profit by exploitation or it will create an ecosystem that enriches the entire stakeholder chain of its operations. The weaker these value systems are the less sustainability centric it will be. For example, cigarette companies; immaterial how much good they do through their CSR programmes, can never be a net positive contributor to the Sustainable Development Goals.
This means that the private sector must be measured beyond Profit and Power metrics but also how it applies its Corporate Value system that drives leadership decision, employee behavior and sustainable product innovation. Internal KPIs must also evolve to enable internal operations and external supply chains to actively commit to these values.
Every private sector organisation I know of has great corporate values written down. This is the most promising baseline there is, as these values will influence how Profit is attained and how Power is wielded. But if it remains a 30,000 feet document, until then corporate sustainability will never be a sustainable word.