Sustainability will drive our recovery

November 28 2008
By David Grayson

In business, as in politics, character and leadership only really get tested in adversity. So, too, corporate responsibility (CR) will be tested in the tough economic times we face. Businesses which have treated CR only as a ‘bolt-on’ to business operations (for example, high profile community projects, a manager for ‘CSR’ and glossy reports) will probably cut and run. Where corporate responsibility has been built-in to business purpose and strategy, it should be secure.

As Sir Stuart Rose declared in his recent Cranfield lecture: ‘Climate change won’t slow down just because the economy does. The problems of waste, obesity, the depletion of the world’s natural resources and poor working conditions in third world factories won’t go away either. So, if we believe that doing our bit to tackle these issues is the right thing to do then we have to stick to our principles. Our customers have long memories — if we fold under the first sign of pressure they won’t forget it.’

Increasingly, leading companies are talking the language of sustainability — in the environmental and social senses as well as commercial sustainability. Given the challenges of climate change, resource depletion and burgeoning global population, businesses can no longer be committed to corporate responsibility, without a commitment to sustainability. As the New York Times op-ed writer Thomas Friedman argues in his new book Hot, flat and crowded, ‘the task of creating the tools, systems, energy sources and ethics that will allow the planet to grow in cleaner, more sustainable ways, is going to be the biggest challenge of our lifetime’.

For businesses, sustainability needs to embrace their operating processes, logistics and premises; it may involve introducing new products and services which are more sustainable; and it can also become the overall strategy of the business. This involves innovation to create sustainable products and services; but their impact will be sub-optimal without the business community also being willing to choice-influence and even to choice-edit for consumers. De-stocking incandescent light-bulbs would be an example of the latter. Procter and Gamble’s Ariel washing powder reformulation which enables washing at the lower temperature of 30 degrees is an example of the former.

So, in difficult trading conditions, a sustainable business needs to ask itself: ‘are we sharing the pain fairly?’ Instead of knee-jerk mass redundancies, for example, are we examining alternatives such as temporary salary-cuts, reduced working hours, unpaid sabbaticals linked to training and job guarantees afterwards? In tough times, responsible businesses do not suddenly tolerate shady sales practices, start marketing irresponsibly, or turn a blind eye to bribery dressed up as ‘facilitation payments’ to make up the numbers.

Rather, now is the time to tap employee loyalty and commitment; to get employee creativity and ingenuity working to find sustainable business solutions. This needs businesses which have embedded CR. There are no quick fixes but from research and practice, we know a number of the key things that businesses have to do if they wish to embed corporate responsibility and sustainability. These become all the more important in tough times.

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