When we think about the future of business and the future of the corporation, some important global trends are impossible to ignore. We are at a population of seven billion people on this planet, on our way to nine billion by the year 2050. At the same time we are experiencing rapid urbanization, so the growth of mega-cities, as well as the rise of the middle class in many emerging markets. All of that translates into an incredible demand at an unprecedented scale for food, consumer goods, housing, transportation, infrastructure, energy, water, etc. Feeding a population of nine billion people by 2050 is going to be impossible if we do not find new technologies to do it.
Need of the Hour
Providing energy and housing to that population is going to be impossible if we do not figure out more sustainable ways to produce and use energy. We are beginning to experience very real constraints on the availability of many natural resources and agricultural inputs that go into making the goods that these nine billion people will need. Therefore, companies are going to have to be very innovative when they think about how they are going to make and deliver goods in the future at the scale and the pace that is needed.
What is Corporate Sustainability
Corporate sustainability is an approach to doing business that recognizes that responding to social and environmental considerations can be good for business because it mitigates risk and it creates new opportunities. Therefore, when we talk about sustainability, we are talking about this intersection of three things, people, planet, profit. Sometimes, we call that the triple bottom line. Sustainability is a corporate issue because companies are now larger than in many countries. Multinational corporations do business around the world. They have revenues exceeding the gross national product of some countries. In addition, with that kind of reach, it is imperative that companies bring their values to where they do business.
When I was in business school, sustainability was still a relatively new concept for me. I thought I wanted to be a doctor because I was interested in science and I really wanted to help people. And I realized after taking a few environmental science classes as part of the biology major that it seemed that the long-term demands for using science to help people was going to come more from natural resource management than from medical innovation. The next wave of critical care that’s going to come to the average human was going to come from where they get their food, their water, and their energy rather than where they are getting their medicine and their medical care.
I shifted into really caring about sustainability. I was instantly hooked on this idea that we could use the power and the scale of the private sector to address large-scale global, social, and environmental challenges. It is a very compelling idea, right, that we can take the financial capital, the human resources, the skill sets, and the discipline of business and apply it to innovating solutions to some of the world’s biggest problems. One of my best experiences I have had since coming to business school was my internship at Wal-Mart.
Modern Business Trends
I was working in global food sourcing and they are focused on lowering their food waste. It is a big problem in all sectors of the food system right now that we throw away our food excessively. It is a business challenge. It is also an environmental challenge and it is a challenge to the consumer. Therefore, Wal-Mart is taking it very seriously. It was exciting to be a part of that project. It really opened my eyes to different kinds of solutions that I never thought about, from packaging to logistics to how long a piece of produce stays on the truck. There are just so many opportunities to tackle the environmental problem. It saves money and that is the reason companies like Wal-Mart are taking food waste so seriously right now. We see sustainability as not just a risk management tool, but also a piece that should be embedded in the business. If it is not fundamentally embedded in the way we run the business, then it really will not be lasting.
The role of the corporation and the expectations for corporate leaders are changing. Consumers are demanding more transparency. They care not just about what a product is and what it costs, but they also care about how it was made and where it was made. Sustainability is all about internalizing risks in your supply chain, in your workforce, the way your product is made, distributed, and then thrown away. It is all about recognizing that our natural resources are limited, that the way we treat our workers is critical to operations, and that it’s not something that we can consider as charity anymore. It is something that is central to the way that we operate businesses.
When I began working at DuPont in 2004, I think most corporate leaders thought about sustainability in terms of the imprint their company had on the environment. So what were the emissions coming out of their manufacturing plants? What was coming out of the water effluent? How did that affect the environment? In addition, most businesses were focused on reducing that. We used to have a government on one side, environmental groups on the other side, and companies were sort of in the middle. Now companies are kind of leading environmental issues. It is no longer okay for companies to leave environmental and social issues up to the government to solve. Companies that are forward-thinking really need to be aware of this shifting global context. The corporate started thinking about how they are going to innovate sometimes very radically to do business in this changing context.
Corporate Social Responsibility & Risk Mitigation
It has moved from being a footprint reduction to an opportunity. How do I grow my business by bringing products that are going to make society more sustainable? The corporate mindset has changed again from looking internally to looking externally. As companies get into sustainability, they realize that there are strategic opportunities around sustainability as a way of driving innovation in their products. It can be seen a way of understanding their supply chain better and finding both more efficient and effective ways to manage their broader business system, as well as understanding where there is kind of red flags embedded in their broader business system that they need to address now before those become liabilities to the company.
We are beginning to see a shift of companies away from a traditional focus on the footprint. In other words, all the impacts that they have and the way in which manage or minimize those impacts to realizing that business is an incredible vehicle for delivering solutions for exactly these kinds of problems. When we think about innovation and sustainability, the possibilities are truly endless. We can look at the challenges presented to us, climate change, and challenges related to our changing world not only as challenges and problems but also as business opportunities. I think that our opportunities are endless to create new types of energy, new types of ways to run and fuel our world. I think that actually, we are at one of the most incredibly opportune times in our existence.
“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”
Sustainability Management as a Business Study
The opportunities are tremendous. Today’s students are going to be the ones leading change and innovation in the future. We want healthy food, environment, and communities. This is in the limelight today since the current availability of information and access to technology has made it a realistic idea to grow even small startup ideas relatively in a small amount of time. We can achieve that through a mix of making smarter decisions and developing smarter technologies. These solutions are well within our reach. It is about identifying them, then helping them grow, and helping them become central to our day-to-day lives. There has been a fundamental shift in the mindset of organizations toward a more sustainable practice and a more sustainable mindset and a more long-term view.
We are seeing markets are rewarding sustainable actions amongst businesses and consumers are valuing it. We can continue to make that impact, and more now than ever need to focus on it. No matter what industry you decide to work in, for the rest of your career, you can be a sustainability champion. If you are going to work in marketing, you can work to make the product design or the packaging choices better to minimize waste. If you are going to work in supply chain operations, you can advocate for better sustainability and labor standards with your suppliers. If you are working in investment banking, you can be a champion for impact investing, for green bonds or low-carbon portfolios. Anywhere you work, you can be the person in your office that changes the culture to more of a sustainability mindset.
Useful Resources
- Wiki – https://en.wikipedia.org/wiki/Entrepreneurs_for_Sustainability
- Facebook – https://www.facebook.com/E4S-Entrepreneurs-for-Sustainability-277136144337/
- Yale Young Global Scholars – https://globalscholars.yale.edu/sustainable-development-social-entrepreneurship
- Springer(Book) – https://www.springer.com/gp/book/9783030154943
- E4S – http://www.e4s.org
