Putting executives from secular arch-rivals PepsiCo and Coca-Cola in the same room is not as hard as you might think. You just have to make them talk sustainability. That's what McGill University, the Inter-American Development Bank, and Google did in Montreal a few weeks ago. They gathered experts from academia, civil society, government, media and the business world to discuss how to bridge the gap between two apparently disparate things: economic development and profitable private business.
Sustainability has proven to be the middle ground where these two concepts meet. Furthermore, companies have slowly come to realize that the intentional promotion of a better, more inclusive world is the way, probably the only way, to become sustainable as a business.
Companies now align corporate strategies with societal goals, and set principles on human rights, labor, the environment and corruption. NGOs have abandoned, to a degree, their mistrusted civil action parlance. The language now is more businesslike, more akin to the training of CEOs, perhaps closer to CEO's beliefs, and probably to their personal paychecks: longterm profits. That is, the discourse has moved in the direction of what Harvard's Michael Porter named "shared value".
Paola Perez-Aleman, associate professor of management at McGill University, said that creating shared value implies the simultaneous construction of private economic value and value for society which is achieved by addressing its needs and challenges. In other words, increase profits, reduce costs, and enhance competitiveness by solving social problems (See boxes).
A NEW SET OF NORMS
Solving social problems is not something the private sector can do alone. "It necessarily requires collaboration among the private sector, civil society and the public sector," said Phil Oxhorn, founder of the Institute for the Study of International Development at McGill University.
Each actor has a different role. "Companies tend to have a long-term view, they have a steady revenue stream, and create jobs where people live," Oxhorn said.
Effective partnerships require a permanent multi-stakeholder dialogue. Even among improbable partners like businesses, university professors, suppliers, clients, government and, yes, competitors. Going at it solo has the cost of lack of impact and irrelevance.
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