Within the business world, ethics and finance are often seen as warring ideas. In fact, in the past, many large corporations have fought against sustainable initiatives in fear of losing profits. Others partake in “greenwashing,” or when companies make a show of superficial sustainability merely for PR purposes. Because making truly sustainable choices like providing fair working conditions and implementing environmentally friendly machines can require large upfront costs, businesses are hesitant to invest in them. However, recent studies have proven that making sustainable choices actually yields more profits for those businesses, rendering tactics like “greenwashing” frivolous. In their new book Organizational Survival: Profitable Strategies for a Sustainable Future, Gregory Balestrero and Nathalie Udo suggest that companies who partake in sustainable practices not only survive better, but actually accumulate more stable and steady earnings.
The idea of ethics and finance working together is an ideal that for many is difficult to picture. However, financial advisor Rebecca True says it’s not so far fetched. “Reliable corporate ethics can make a big difference not only with non-financial aspects of sustainability, but also in terms of financial governance, reporting, auditing, and accountability.” While many collectives like BCorp, American Sustainable Business Council, Sustainable Brands, and World Business Academy, are pushing for a paradigm shift in the business world, large corporations themselves actually have tangible, financial incentives to make sustainable choices on their own volition. Below are four examples of those incentives:
- Loyalty and sailing smoothly:
- Sustainable practices help bring about loyalty to companies in all different aspects. Customers are more satisfied purchasing their products, employees are happier, managers face fewer complaints and disruptions, and communities tend to be more supportive.
- Efficiency of operations:
- By becoming more efficient, less time is spent managing and monitoring and more time is left open for innovation.
- “Trimming the fat” in operations leads to economic gain as there is less superfluous money being spent.
- Enhanced reputation:
- A good reputation for environmental practices, fair employee wages, labor practices, and quality products, builds trust between customer and company.
- Enhanced internal relationships minimizes the risks of lawsuits and workers are more engaged, feel valued, and safe.
- Long term thinking trumps short term thinking:
- Making investments in sustainability is more beneficial. Corporations that are future oriented and work towards achieving long-term goals are more profitable. The company faces fewer “highs and lows” and instead achieves a steady rate of growth, a desirable quality amidst an ever-oscillating economy.
Ultimately, sustainable practices generate more satisfied customers, a collaborative community, confidence in transparency, an engaged labor workforce, forward thinking, high adaptability, and less susceptibility to risk. It’s even more simple than that. At the end of the day, “Business doesn’t thrive unless the planet is thriving.”
Written by Julie Elliot, Class of 2015
Photo source: Wikimedia http://en.wikipedia.org/wiki/Triple_bottom_line …