Corporate sustainability is a business approach aimed at creating long-term value for stakeholders by implementing strategies and practices that protect and support the natural resources that will be needed in the future. Companies that have sustainability programs in place embrace opportunities and manage risks that arise from economic, environmental and social developments.
In a rapidly changing world, now is the time to implement a corporate sustainability strategy, says Richard Plewa, senior vice president and director of corporate sustainability for Comerica Bank. “Global drivers, including water scarcity, resource and food scarcity, energy security issues and climate change, are going to transform the way that economies work.”
Smart Business spoke with Plewa about corporate sustainability, why a growing number of companies are embracing this new business model and how a company can benefit from sustainability.
What are the primary principles, or pillars, of corporate sustainability?
The basic concept of sustainability is to meet the needs of people today in ways that do not compromise the ability of future generations to meet their needs. When you take the concept which comes from a 1987 United Nations commission that looked at the trade-offs between economic development and environmental quality and translate it into today’s business setting, it is clear that business is more than just about profits. In fact, a business’s total performance needs to be viewed as its financial performance plus its social performance plus its environmental performance.
Why are more and more companies embracing corporate sustainability?
The world is changing quickly. As we look around us, we see that there are concerns about energy, national security, climate change and water and food security. More and more people are waking up to the reality that we have to live on the planet in a way that is different from how we have in the past. By the middle of this century, we will have 10 billion people on this planet right now we have 6.7 billion people and there is only one earth’s worth of resources to meet the needs of all of these people. The resources will not go very far unless we learn to use them very differently. We can’t afford the wastefulness; we can’t afford to continue pumping greenhouse gases into the atmosphere. Recent advances in science have enabled us to see that ecosystems all over the planet are already in decline. As people wake up to this reality, businesses are waking up to the reality that people and businesses have new needs, and we need to offer new products, services and solutions to help people live in this world of resource constraints and accelerating climate change.
How should a company go about formulating a sustainability strategy?
You need to take a good look at your stakeholders customers, employees, host communities, suppliers and those who provide capital to your business and you need to understand how your business model and the products and services that you provide are going to be impacted by the global changes we are facing. Having figured that out, you need to think about how the organization should respond to those challenges. What will shake out of the analysis is a list of priorities for action that is going to enable you to manage the risks of operating in this new world and drive the way you decide to pursue opportunities.
How can a business benefit from sustainability?
Businesses that take sustainability seriously are going to be better managers long-term of both risk and opportunity. This means that they will be able to create value for their shareholders and other stakeholders by reducing costs, reducing risks, growing revenues and improving their brand and company reputation. Having a sustainability program in place also helps to both attract and retain high-quality employees who care about which companies they work for and want to do more than just generate wealth they also want to make the world a better place while they do it. A company with a sustainability program tends to attract young creatives and set loose a wave of innovation.
Why is it so important to emphasize actions rather than words when it comes to corporate sustainability?
It is important to walk the talk because a good many people are justifiably skeptical about claims that aren’t matched with deeds. In fact, the term ‘greenwashing’ refers to companies jumping on the bandwagon of the green movement without doing the deep work of changing the kind of company they are and making a substantive commitment.
RICHARD PLEWA is senior vice president and director of corporate sustainability for Comerica Bank. Reach him at (734) 930-2401 or firstname.lastname@example.org.