Written by Elizabeth J. W. Spencer
This might seem like a crazy time to be considering sustainability when people are simply trying to survive a global pandemic, but we believe this time has brought our responsibilities into clearer focus. Here are 4 compelling reasons why not having a sustainability strategy wasn’t an option for us, why your company needs one now, and why it is more important than ever.
- The interconnectedness of the globe has been highlighted.
- Sustainability creates resiliency.
- The future of the global economy is sustainability.
- Fiduciary duty is extending beyond quarterly earnings.
The interconnectedness of the globe has been highlighted. The globe was interconnected before this coronavirus pandemic, but our connectedness has become more apparent as this virus has swept across Earth and locked down the world. The way we conduct business has an impact on the environment. The way you hire, as well as how you treat employees and customers, has a social effect beyond the four walls of your office. The leadership you show to your investors, stakeholders, and board can pull us all into a brighter future.
Sustainability creates resiliency. How are you going to weather the next crisis? Historically, sustainability was the last thing to be considered because it didn’t seem to directly affect the bottom line of business. Or does it? Companies that have a deeply thought-out sustainability strategy have an increased likelihood of success. According to Robert Eccles’s article Investor Revolution, firms with greater sustainability than their rivals “produced higher three-year returns, were more likely to become high-quality stocks, were less likely to have large price declines, and were less likely to go bankrupt.” They will be better equipped and more resilient to withstand the rapidly increasing threat of catastrophic events globally, whether from a financial crisis, political fallout, terror attack, climate change, or a global pandemic.
The future of the global economy is sustainability. The world has changed and we don’t want to just be keeping up—we want to lead sustainably. The world markets and global capitalism were already changing before the COVID-19 pandemic, but now the focus on sustainability and the answer to “what are you doing to make the world a better place?” is going to be more central than ever to doing business in both global and local markets. Companies that have not adopted a strategy for impact and sustainability will be left behind in this generation of business. The companies at the forefront of sustainability won't do business with companies that aren't taking sustainability as seriously as they are. Great examples of companies leading the way are Microsoft, Interface Carpet, The North Face, Sierra Nevada, and Patagonia.
Fiduciary duty is extending beyond quarterly earnings. Doing good is the new bottom line, and it extends beyond quarterly earnings. Fiduciary duty now includes sustainability in Canada, the UK, and Sweden, and we can expect the US to follow. According to Will Martindale, Head of Policy at Principles for Responsible Investment (PRI, a UN-established collective of corporations), “Failing to integrate ESG issues is a failure of fiduciary duty.” So what is the bottom line if it isn't just profitability, business models, and competitiveness? A good place to start with your sustainability strategy is ESG: Environmental, Social, and Governance.
Since most companies aren’t operating in “business as usual” mode, now is the time to deeply think and consider the long-term impact you want your company to have on this planet. Rather than try to schedule more Zoom calls or put out fires all day, take a step back and consider how to avoid some of these fires in the future, with a dynamic bottom line as a result of a sustainability strategy. While thinking about the future can be difficult at a time like this, we think it's the perfect time to think about how we—companies, consumers, society—want to move forward. A sustainability strategy couldn’t be more relevant in what seems to be an increasingly volatile world. What mark will you, and your company, leave on this world?
About the Author
About Elizabeth J. W. Spencer
With a varied career in international politics, social enterprises and a tech start-up, the common thread for Elizabeth over the past decade has been the pursuit of sustainable development in emerging markets. Writing has been the medium to synthesize her experiences in between changing diapers and kissing skinned knees. Elizabeth believes that power of purpose-driven businesses to deliver profitable products at the intersection of societal and environmental benefits can change the world. She lives in an ‘01 converted Blue Bird school bus with her husband, two kids and a Vizsla.