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The Business Case for Sustainability

Business Case for Sustainability

For businesses to remain viable, leaders must manage the bottom line. However, when making the commitment to operate in an environmentally and socially responsible way, a singular focus on the bottom line may be morally myopic.

Most successful companies have established an acceptable payback period for investments through which they filter investment decisions.  Andrew Winston, author and founder of Winston Eco-Strategies, proposes a bold idea—to make the business case for sustainability, leadership should look beyond the bottom line to bring “doing the right thing” into the equation.  Winston’s strategies on navigating and profiting from humanity’s biggest environmental and social challenges are sought after by leading companies worldwide.

Business initiatives for sustainability fact boxWinston identifies four types of business initiatives companies decide whether or not to invest in. Three create some recognizable degree of value for the business; one is more about creating value for society.

Four Types of Business Initiatives

  1. Short-term projects that meet all selection criteria (particularly, payback requirements)
  2. Projects with clear financial benefits but with longer paybacks
  3. Investments with less certain paybacks but that create indirect value to the company, such as enhanced branding or increased customer or employee loyalty
  4. Investments that result in value to society (Winston calls this the “save the world” value bucket)

Winston points out type 1 and 2 initiatives are pretty much a slam-dunk. Most companies motivated by sustainability spend their time calculating, pondering, and evaluating type 3 investments. A business that can quantify the indirect value received from environmental or social investments. This is an easier sell to a decision maker.

Business Case for Sustainability: Understanding Type 4

It’s type 4, the “save the world” value bucket, that’s the conundrum. How do you make a business case for something that may only tangentially benefit the company? Winston believes it is time to bring the moral dimension into decision making.

Organizational culture reflects the values of its leaders. Ultimately, leadership will be the moral authority governing business decisions.  Bold leaders must ask themselves, in terms of sustainability, are we part of the problem or part of the solution? To have a bold impact and really make a difference, is it time to add morality to the business case for sustainability?

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