FROM FAST COMPANY | OCTOBER 18, 2010
A new book, Sustainable Excellence, shows that for companies to deliver lasting value for investors, they must create strategies that include solutions to the biggest social and environmental challenges of the twenty-first century. You might wonder though. Aren’t social and environmental concerns for NGOs or governments to worry about?
A new book, Sustainable Excellence, shows that for companies to deliver lasting value for investors, they must create strategies that include solutions to the biggest social and environmental challenges of the twenty-first century. You might wonder though. Aren’t social and environmental concerns for NGOs or governments to worry about? Aren’t companies supposed to build shareholder value?
According to authors Aron Cramer and Zachary Karabell, social and environmental challenges are vital to businesses for the following reasons:
- the availability and prices of the natural resources that businesses use
- the new era of “radical transparency” with real-time scrutiny and mobilization by individuals and NGOs, and
- major new market opportunities in developing countries
The authors speak from experience. Cramer is President and CEO, Business for Social Responsibility (BSR). Karabell is an author, money manager, and CNBC contributor.
In Sustainable Excellence, Cramer and Karabell provide five compelling ways that executives are positioning their companies “to excel over the long run and to produce lasting prosperity that preserves natural resources.” One of the ways is to “use sustainability to drive innovation.” An example the authors point to is that “there are signs that Detroit’s auto industry is looking afresh at transportation, designing alternative fuel vehicles and exploring radical ideas like car sharing and public transport … .Each of these innovations is propelled by the pursuit of profit.”
Another of the five successful approaches is to “embrace the transparent world–and collaborate.” The authors show the benefits to businesses and the community by using the examples of Coca-Cola and Greenpeace, Walmart and Conservation International, Clorox and the Sierra Club, and many others.
Sustainable Excellence surely makes the case that it’s in shareholders’ interests for companies to address social and environmental challenges in their business strategies. That the dark side is the potential for violent conflict with governments fighting over scarce resources, and eventually further tensions related to security and trade.
And the bright side of businesses engaging in global solutions? That companies will increase their value as people in developing countries emerge from poverty and become consumers, and companies will have sustainable access to resources that are necessary for production. Learn more from Cramer and corporate leaders at BSR’s 2010 Conference in New York City in two weeks.
The authors lead us to the conclusion that sustainable excellence is simply excellence.