SUSTAINABILTY SPECIAL .........ABLE ENOUGH FOR SUSTAINABILITY?

ABLE ENOUGH FOR SUSTAINABILITY?





What could drive the adoption of sustainable business practices ­ pull or push?

The modern idea of sustainability may be attributed to The Brundtland Commission Report, which defined sustainable development as `development that meets the needs of the present without compromising the ability of future generations to meet their own needs' way back in 1987.However, global warming became a part of mainstream discussions after Al Gore's documentary film, `An inconvenient truth' won an Oscar. Over the last decade or so, `sustainability' which encompasses environmental, social and economic sustainability has become one of the biggest buzzwords among the corporate circles. Last year's research report published in MIT Sloan Management Review, based on the Boston Consulting Group's study of global executives on sustainability and innovation, pointed out that nearly 70 per cent of companies rated sustainability issues as significant or highly significant but only 16 per cent reported to fully addressing these issues. The questions therefore are: how can more and more companies be made to adopt sustainable business practices in a sustainable way? How do they move beyond cause-driven, cost-driven, customer-driven approaches to the genuine move to minimise business impact on the environment and society? How many corporates actually create sustainable strategy, put it on top management agenda item, develop sustainability business cases, measure sustainability performance and change business models to address sustainability issues?
An examination of what is contributing so far in the adoption of sustainable business practice reveals two broad factors: `promotional pull' and `push through pressure'.

>> THE PULL FACTOR:

Sustainability awareness campaigns could be one way to make companies realise its value. Systematic and consistent efforts by media to help understand the significance of social and environmental issues can create serious conver sations around these issues.Symposia and business forums around the theme can contribute in providing an alternative perspective to issues of planet and people beyond the profit.However, this approach could have little impact in making businesses actually adopt sustainable practices in the long-term. Even if discussions are around specific issues of sustainability practices in business, they often lead to a kind of fad resulting in short-term practices, which fail to go beyond `greenwashing'. `Triple bottom Line', `Net Positive', `SRI or ESG Investing' are some of the sustainability buzzwords rarely heard at board rooms. Further, absence of active firms whose business is to promote the sustainable business practices and provide specific solutions as professional service makes it worse.Other business practices such as ERP and CRM in recent times that followed a similar route could go beyond mere hype and had an entire IT industry behind it actively making sense of technology to businesses. Unfortunately, sustainability consulting is yet to make its presence felt.

>> THE PUSH FACTOR:

Another way is to be forced to address sustainability. Pressure can come from government regulators, activists or public, customers and investors. Although most companies that are forced through significant crises generally adopt sustainable practices with the long-term and large-scale intent, regulations quite often do not contribute in making a major change. Mandatory CSR in India is criticised by many suggesting that not only it is uneconomical but also socially counterproductive. Further, it is expensive for firms to wait till a major crisis affects their profits to realise their commitment to society and environment.

>> THE THIRD FACTOR:

While both `pull' and `push' factors may contribute, the effective way to lead the change in business mindset, however, could be through education. In order for businesses to adopt sustainable practices, business schools need to play an active role. Jolted by the 2008 financial crises, America now has several business schools offering intensive coverage of sustainable practices in the MBA curriculum. Educational institutions can contribute in a more significant way as students not only become more sensitive to the sustainability issues but also learn much needed tools and techniques to address these issues. Thus, while `pull' or `push' could make businesses follow sustainable practices to an extent, if business schools make efforts to develop future business executives to be sustainabilitysensitive, the sustainable business practices could indeed be sustainable.

The author is professor and dean development at IIM Kozhikode

Keyoor Purani

ETAS 17FEB15