I just received and have “scanned through” the latest issue of the Harvard Business Review (July-August 2009) and wanted to share some of the articles, which focus on some key sustainability drivers.
The issue includes “10 Trends You Have to Watch” and “Managing in the New World.” These articles highlight the new importance of “sustainability business drivers” and how there is a new business paradigm.
The old business paradigm relied on abundant resources and few stakeholders, and companies were not very transparent. In the new paradigm, resource efficiency is essential, “everyone” is a stakeholder and companies are increasingly transparent.
Even in the midst of the recession, the business drivers for sustainability are ever-present.
A few quotes from selected articles:
• “Resources feeling the strain” (page 56):
o “We believe that, in the years to come, ‘resource productivity’ (the output achieved from every unit of oil, power, water, or other resource input) will become central to company competitiveness.”
• “Trust in business is running out” (page 57):
o “Regaining trust also means dispensing with the view that the only objective of management is to increase shareholder value. Broadening the list of key stakeholders to include employees, customers, suppliers, communities, the press, unions, government, and civil society will help companies rebuild credibility.”
• “Innovation marching on” (page 60):
o “Research shows that companies investing countercyclically in R&D during downturns tend to outpace their competitors on the upswing.”
• “How Gen Y & Boomers Will Reshape Your Agenda” (page 71) and in particular “Portrait of Gen Y” (page 74):
o “Portrait of Gen Y, 86 percent say it’s important that their work make a positive impact on the world.”
o “Gen Y workers want an employer who shares their eco-awareness and social consciousness, even down to the details of office energy use. Nearly one quarter say it’s very important to work in a green, environmentally conscious workplace.”
• “Understanding the Post Recession Consumer” (page 106):
o “Slowed Trends, Green Consumerism. Environmentalism is by now deeply rooted in the consumer mind-set and public policy arena, although consumers and politicians express widely varying degrees of engagement. Consumers are forgoing pricey green products and instead are cheaply and discreetly reducing waste.”
o “Dominant Trends, A Focus on the Boardroom. Outraged by corporate malfeasance, people are punishing companies for unethical governance.”
• Emerging Strategies to Beat the Slowdown (page 134) and in particular Shift 4 (page 136), the “Higher Stakes in Sustainability”:
o C.K. Prahalad (University of Michigan): “Companies that understand the opportunities engendered by sustainability will come out of this recession ready to capitalize on the low-carbon and clean-energy economy of the future.”
What does all of this mean?
In my mind, it answers the question posed by clients and peers late last year: “Will companies abandon sustainability because of the poor economy?”
The answer is no because the business drivers for sustainability have not disappeared into the background of business priorities. Instead, sustainability represents opportunities to reduce operating costs (reduced energy, water and material use) and to innovate. The successful companies in 2009 are reducing their environmental footprint and investing in innovating new products and services to thrive in a global economy where resources are constrained, the climate is changing, companies are transparent and everyone is a stakeholder.