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Nothing new about sustainability - Sustainability column
1. Sustainability column for Link
Nothing new under the sun
‘Sustainability’ existed in the ancient world and in the old Dutch Republic – even in 21st
century corporations, enlightened self-interest is alive and well.
It may seem surprising, but sustainability – or corporate social responsibility – is not
really a new idea. It‟s existed in one form or another for hundreds, if not thousands, of
years. In ancient Mesopotamia, there were laws against „negligent‟ builders, innkeepers
and farmers. Four hundred years ago, shareholders in the Netherlands were already
protesting against excessive executive pay. And in Britain, in the 19 th century, corporate
paternalists, like the Cadbury family, were providing workers with homes, education and
healthcare.
These were, by and large, businesses and individuals acting to protect their own
interests – and, despite all the various theories and philosophies about „triple bottom
line‟ and „shared value‟ – that‟s still the case today.
Social and political change
The modern sustainability movement got its real break in the 1960s and 1970s. These
were decades of profound social and political change – and, importantly, a growing
environmental awareness. Organizations like Green Peace and Friends of the Earth
became more influential, while in the United States Rachel Carson‟s book „Silent Spring‟
shattered preconceptions about modern farming techniques and the use of pesticides
and fertilizers.
Increasingly, companies were being held to account for what they did and the impact
they had both on the environment and society as a whole. When companies fouled up –
as Union Carbide did at Bhopal in India in 1984 – there were serious consequences,
both for the company‟s finances and for its reputation. For the first time, big corporations
were being challenged. Pressure was growing on businesses to think of more than just
the bottom line. Gradually, corporate social responsibility was expanded to include
customer service, human rights, executive pay and fair trade – as well as the
environment.
Friedman’s maxim
Not everyone bought this argument, of course. For some, the purpose of a private
company was to make money for its shareholders – and nothing more. In 1962, the
economist Milton Friedman came up with his famous maxim: “the business of business
is business”. Friedman‟s idea was that businesses had no legitimacy or interest in
getting involved in wider social issues.
2. This argument still rumbles on, but Friedman‟s maxim is not as far from modern-day
notions of corporate social responsibility as it first appears. These days, companies that
look beyond the short-term bottom line do so not out of altruism but because they
believe it will reduce risk and improve performance.
Businesses have begun to talk about the „triple bottom line‟ – people, planet and profits.
Leaders in the field – like Unilever and General Electric – argue that there‟s money in
sustainability. After all, happier employees means higher productivity and better
customer service. Lower energy consumption brings down costs and is good for the
environment. And the better you treat your customers, employees, business partners
and other stakeholders, the better your reputation, the stronger your brand and the
more likely you are to sell your products and services. In the United Kingdom, retailer
Marks & Spencer says its sustainability program made it an extra GBP 50 million last
year. Meanwhile, companies like Akzo Nobel and Philips are deriving an increasing
share of their revenues from „eco-premium‟ products like environmentally friendly paints
or energy-saving appliances.
For such companies, the lesson is: sustainability pays – just as it did more than a
hundred years ago for the Cadbury family and their workers. And if society as a whole
benefits at the same time, well, all the better.
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