Note: This is the third blog in our series about sustainability and organizational position.
The only way for corporate sustainability to succeed is if the corporation succeeds. At the same time, increasing evidence shows that businesses prosper when they practice CSR. The two are bound together. Too often, however, they still speak past each other. “What he have here,” to quote the movie Cool Hand Luke, “is a failure to communicate.” And what we need, it seems, is a common language.
Business investors speak in terms of profits, market share, and shareholder value. Sustainability leaders advocate for doing the right thing, and then demonstrate how good practice helps business. Yet even when the sustainability crowd adopts “business speak”—with terms such as the “triple-bottom line”—it can come across as fuzzy. Sure, the finance department values that first bottom line, economics, but the department is often skeptical of measuring environmental or social impact in a business. It’s as if the sustainability folks have invented a parallel language to “speak” with business—terms such as “connected reporting” and “CO2 equivalents”—when there are perfectly legitimate terms available that have proven track records in both camps.
The core word, “sustainability,” is a good place to start. The root word, “sustainable,” means, “built to last.” This is what great businesses are all about. Yet we have added the suffix, “-ility,” to this basic notion, changing the meaning to, “having the quality of being sustainable.” The result is that the latter term is unnecessarily distanced from its core, when the two should be integrated. Perhaps it’s time to realign our language and go back to the fundamental notion of sustainable growth and success.
Of course, sustainability is a vital concept that has advanced real change in business planning and management. But if the term marginalizes its broader potential impact, just as the place of CSR in the org chart can limit its potential, perhaps we need to rethink the words we use. For as former British Prime Minister Maggie Thatcher stated in the 2012 movie, Iron Lady, “words do become actions.”
What does this mean in practice? Sustainable success means to be a successful business in five years, 10 years, or longer. It means planning products, resources, and finances to sustain growth now and in the future. It also means that traditional “-ility” notions are only as credible as their contribution to lasting success. The good news is that many are. Sustainable product design, lower energy consumption, and good labor practices can lower costs, mitigate risks, and increase revenue. The most remarkable part of this equation is that these investments are measurable; they deliver ROI and a clear payback period that CFOs can appreciate. We don’t need to morph these good business practices into anything less than what they are.
This should not suggest that all CSR causes must be measured by payback period. The ROI for community engagement may be hard to measure, for example, but it is no less important. Yet if the CFO is to consider issues such as sustainable supply chain and resource planning seriously, then we must position the terms and the measurement of sustainable success with the same rigor that we consider where to place the CSR department.
In the fourth blog in our series, we’ll ask CFOs what they think, and will investigate how words are indeed becoming action in the financial plans and annual reports of business.