Pains and gains of sustainable entrepreneurship
August 24, 2009
After many of these conversations, I am of the opinion that there seems to be a pattern in the way many of them think.
The conversation often starts with their firm confirmation of understanding the need to embrace sustainability. Yes ,the world is facing new challenges. And yes as a company we have to anticipate these. Of course we have to give our best to contribute to the transition towards a sustainable economy and society. And then they elaborate on how their company has done many things right for many years already.
However they want to do more. And for that they usually want to discuss how to capture the potential gains of sustainability; happier clients, higher margins, more committed employees, long-term investors, improved license to operate etc.
When asked where they expect the “pain” in the transition towards improved sustainability performance they often look wary. “This is not about pain, they say, it is about gain: about win-win”. However, I do not believe in such transition without pain. It is important to address dilemmas and challenges in these conversations. For example (non exhaustive):
• Is there a company-wide understanding of sustainability and the objectives and targets of the company?
• Isn’t there any friction between these objectives/targets and the “normal” strategic objectives? (Thus sustainability is part of core business?)
• Can you maintain your current product portfolio?
• How will this impact your innovation budgets?
• Do you have to terminate the relationship with certain clients? Do you have to engage differently with others?
• And your suppliers? How about chain responsibilities?
• Can you and your senior management team truly manage a sustainability transition?
• Is their remuneration package (including bonus) geared towards realising this objective?
• Do you engage with stakeholders and act on the basis of their insights?
• How do you deal with different cultural expectations (West vs Asian vs African etc)?
If one is not prepared to take on these kind of issues, nothing is going to change. Thus there is no transition towards more sustainability. Talking about sustainability but not about the material issues is as focusing on just the icing on the cake. Or one might say, rearranging the deckchairs on the Titanic.
Any company can capture sustainability gains for itself and society, but this is not a painless process. One should be driven by longer term results.
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