The Value of Sustainability: Why Bother?

• Author: William R. Blackburn
• Pages: 33-122

CHAPTER 3

The Value of Sustainability: Why Bother?

“Problems are only opportunities in work clothes.”1

—Henry Kaiser

As they say in my neighborhood, the only sure things in life are death,

taxes, and that the Chicago Cubs baseball team will once again fail to win

the World Series championship. There are no such certainties in busi-

ness; the adoption of a sustainability initiative does not ensure success.

This is particularly true of the company that views sustainability only in

terms of its public relations value—such shallow sustainability programs

don’t last. However,if used as the foundation of a business operating sys-

tem, as described in Chapters 4 and 5, sustainability can make a business

stronger and more competitive. It can strengthen risk management, com-

pliance, productivity,and credibility. It can help a firm avoid many prob-

lems of the past, seize new opportunities for the future, and become part

of the lifeblood of the company that continues to contribute in good times

and bad. While the benefit of an SOS will vary from company to com-

pany, all who make a serious effort to implement one should find the ef-

fort well worth the investment.

The value of an SOS is at the heart of the business case for pursuing

sustainability. Much has been written about this elusive case—the Holy

Grail of social activists. The problem is that pursuing sustainability is not

just about going after one issue. As we learned in Chapter 2, it’s really

about many issues, each with a different priority and business justifica-

tion. For example, reducing waste for the purpose of cutting cost—some-

thing with visible short- and long-term financial benefits—is almost al-

ways more attractive to a business than furthering biodiversity.It is hope-

less to search for overarching arguments that support aggressive ad-

vancement on all sustainability topics. Instead, one must first define an

SOS, which enables a company to comb through topics, applying evalua-

tion criteria to determine which topics deserve attention and which do

not. In other words, with an SOS, one has a way of examining the busi-

ness case for sustainability on a topic-by-topic basis from the unique

viewpoint of each company.

33

Business Value Versus Ethical Value

Does this mean that sustainability issues like biodiversity will always be

ignored because they have a lower business value with most companies?

Not necessarily.One objective of an SOS is to modify decisionmaking on

important matters so that all relevant, significant sustainability issues are

considered. Designs of new facilities and products should identify and

address relevant biodiversity impacts, for example. Of course, this does-

n’t mean every company should contribute to a “save-the-whales” fund.

But an SOS can help determine if and when a company should do so. An

SOS is a cyclical process that year after year works down through the pri-

ority of actions that contribute to sustainability and company success. In

early years, the SOS may point to productivity, legal compliance, and

high risk issues as those to be addressed. Later, after the top issues have

been mastered, action can be taken on those of lower priority. These ac-

tions may well involve programs to control lower level risks or enhance

or protect the company’s new-found reputation for social consciousness.

At this later stage of the SOS, a save-the-whales program may be consid-

ered. Such an initiative may fit nicely with the theme, culture, and

reputational goals of a company in the fishing industry, but not with one

manufacturing farm equipment. All companies cannot take on all

sustainability issues. Most companies simply don’t have the resources,

and as with any organizational endeavor,focus is the key to achievement.

If companies are to address sustainability issues according to the prior-

ities they set, what is to prevent them from conveniently ignoring some

important ethical issue simply because there is no money in it for them?

Nothing. Certainly there will be companies that do just that for any num-

ber of reasons. A few business leaders—the most culpable—will choose

to break the law,be dishonest, or adopt other “career-limiting” strategies.

Other executives may display benign neglect; like slave owners of cen-

turies past, they may continue unsavory conduct because they lack the

creativity, ambition, or courage to find a morally upright way of doing

business. Thus, the SOS is not for them. It is for those who are eager for

business success while adhering to high standards of ethics. It is for the

vast majority of business leaders—the ones who want to “do well by do-

ing good.”

34 THE SUSTAINABILITY HANDBOOK

Framing the Business Case: Five Questions

So how do we make the business case for establishing an SOS? In es-

sence, we must show that attractive nuggets of business value are waiting

to be found in the hills of sustainability, attractive enough to support a

prospecting expedition there.

Unfortunately, many executives who ask about the business case for

sustainability are not thinking about a process for prospecting for big

nuggets of business value—their view is much narrower. What they are

thinking about is the business justification for preparing a sophisticated

annual sustainability report. They find the “case for sustainability” want-

ing because they have yet to see good examples where such a report gen-

erated identifiable increases in sales, stock price, or worker motivation.

But this type of analysis misses the point. The value of reporting is based

on the value of an SOS. We must establish the latter first.

The business case for both an SOS and sustainability reporting can be

built by working through this sequence of easy questions:

1. Should business operations and functions perform short- and

long-term planning in a way that anticipates future trends and

considers the needs of those who make a company successful?

2. Should this planning involve a process by which operational

and functional groups identify business risks and opportunities

and prioritize them for action?

3. Should business managers be accountable for setting and

achieving performance goals designed to realize these identi-

fied, high-value priorities?

4. Should progress toward these goals be periodically measured

and reported within the organization?

5. Should the company use this collected information to its best

advantage in enhancing its credibility with interested employees,

customers, suppliers, investors, governments, and communities?

The answers to these questions should be obvious. They ask about

common techniques of good management. That’s the point: an SOS is

simply good management. An SOS naturally flows from positive an-

swers to Questions 1-4. Question 4 speaks to internal reporting as a tool

for constructive change. Question 5 assumes that an SOS has already

been justified on its own merits. In essence, Question 5 asks whether the

company feels it should spend some added time and money to take ad-

vantage of information it has already obtained for internal management

THE VALUE OF SUSTAINABILITY 35