The traditional view of business holds that its responsibility is to simply to maximise returns to its shareholders within the limits of the law. Unfortunately, this has led to many socially undesirable consequences, such as unacceptable risk-taking at public expense, and a tendency to externalise social and environmental costs wherever possible. Things that were not priced, were not costed. The standard production model of resource extraction, production and distribution, and finally disposal comes at a high price.
Fortunately a growing number of companies are now recognising that it is neither in their own interests nor those of society to continue with this ‘take-make-waste’ model. As the World Business Council on Sustainable Development has argued, business cannot thrive in societies which fail. Externalising environmental costs is also unsustainable in a world where there are real biophysical limits, and thresholds which we risk crossing. The challenge then becomes how business can thrive in a world of limits. Growing pressure from civil society, changing consumer patterns, increasing environmental regulation, and investor concern about long-term value have all added weight to the argument that the only good business is a sustainable one.
An increasing number of companies are paying attention to the amount and type of resources they use (take), the emissions they generate in the production and distribution process (make), and the durability, re-usability and final destination of their products (waste). We have seen, for example, the emergence of increased attention to sustainability in supply chains, of commitment to use only sustainably-sourced wood products, of extended producer responsibility for products made, and of commitments to phase out toxic ingredients and components. We have also seen innovative companies developing new products, technologies and solutions, exploiting the many new business opportunities which have emerged.
The least ambitious companies aim to improve their resource efficiency, reduce their negative impacts and be ‘less bad’. They aim to do things differently, an important first step. The more farsighted companies aim to transform themselves and their activities into positive forces for social and environmental good. They aim not only to do things differently, but also to do different things.
Further Information
Download the presentation on the Business of sustainability.
There are too many writers on this topic to list. Esty & Winston have spoken of a green wave which companies can either choose to surf (converting Green to Gold) or be swamped by. Porritt has looked Beyond the Business Case. And CPSL has collected the views of a number of key thinkers thinking about business in Facing the Future.
