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Doing Well by Doing Good

The Core of Profitable Sustainability: The Future of Business Conference

By Karl Ostrom and Mary Rose, NBIS/Future 500

The key to successful business strategy includes answering the challenge to extend corporate citizenship beyond charitable giving, and to embody concern for public good within the design of products and services – “Doing well by doing good.” This new standard is, in part, a matter of self-enlightenment – we all need clean water, air, and the security of a global society that is not divided into “haves and have-nots.” But this elevated concept of corporate citizenship is also becoming a business requirement for success in the marketplace.

Customers, shareholders and the general public are demanding that businesses do more to make sure that products are healthy and safe, that manufacturing processes cause as little pollution as possible, and that employment polices are beneficial to local communities. Businesses are increasingly being held accountable for assurance that environmental and social standards are being upheld throughout their supply chains as well as in the distribution of final products.

U.S. business, at its best, has had a tradition of returning a share of its profits to communities through charitable support of public needs and projects. But those same profits were often garnered without regard for the externalized costs associated with energy use and air emissions, material consumption and waste streams that included toxins and non-biodegradable residues. “Externalized costs” was jargon for “somebody else’s problem.” The summer issue of Green Money called them “The Elephant in the Room.” Well, this “elephant” is no longer sneaking around unseen. Consumer groups, corporate public-relations officers and many CEOs are being affected by the dawning awareness that how business is done has an exponentially greater impact on social well-being than the sharing of profits after business deals are done.

“Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth,” notes Oystein Dahle, Chairman of WorldWatch and former VP of Esso Norway. Dahle is one of several presenters at the forthcoming conference, Profitable Sustainability: The Future of Business, who will underline the message that sustainable profits cannot be based on externalized costs. This message will be expanded upon by both leaders from the investment community and executives from companies that are raising the bar for defining corporate social responsibility.

Sean Hartigan, chairperson of CalPERS, the nation’s largest public pension fund, noted in a recent address to CERES, that their overriding fiduciary responsibility to their members means “We have a special duty to invest our dollars in a way that will bring the best risk-adjusted return for our members.” CalPERS translates their concerns into a policy that demands recipients of their investments to have both climate policies and governance accountability to their extended stakeholders. And, CalPERS is not alone — when it comes to leveraging investments to advance corporate climate policymaking, they have joined Investor Network on Climate Risk, a coalition that includes seven other state pension funds plus Calvert.

“Environmental efficiency can be a plus for a stock. Really,” notes Fortune magazine writer, Abrahm Lustgarten in the July 26 issue. Referring to the analysts at Innovest, Lustgarten highlights their research which shows that a company’s environmental performance is a window into the company’s management ability and that the more “eco-efficient” a company is, the better its stock performance is likely to be compared with others in its industry.

Innovest’s Director of Research, Frank Dixon notes that while we can be encouraged by the progress that has been made by focusing on the improvement of corporate, environmental, and social performance within individual corporations, we need to do more if we are truly to attain sustainability. We need to expand our focus to the level of system change wherein we create a level playing field for businesses that requires full accountability for the costs and benefits of business practices.

The Profitable Sustainability conference, which will take place in Seattle, Washington, September 26-29, 2004, is designed to encourage the type of networking for system change that Dixon advocates.

Conference Directors Mary Rose and Karl Ostrom, note that the conference program highlights the business incentives and opportunities within the sustainability imperative, showcasing best practices and innovative technologies and strategies that will enable businesses to move forward on the sustainability agenda.

New production technologies, clean products, and new marketing strategies will be highlighted by leading research experts and tangibly illustrated through corporations that are profitably implementing these innovations into their operations. Hunter Lovins, co-author of Natural Capitalism, will address the topic, “How to Increase Your Profits by Behaving Responsibly toward Both Nature and People.” Her presentation will be followed with opportunities for participants to explore the substantive lessons that have been gained by Boeing’s experience with lean manufacturing in the aviation industry and by leaders from within the Green Building and Renewable Energy industries.

Michael Braungart, co-author of Cradle to Cradle, will address the conference on “Producing Products within the Circle of Life.” His address is enhanced by opportunities to learn about new technologies for the production of bio-based products. Brent Erickson, Vice President of Industrial and Environmental Biotechnology for the Biotechnology Industry Organization will be heading up a forum presentation that will include not only research developments but also such practical applications as evidenced in Cargill Dow’s production of bio-plastic.

Cradle to cradle is a metaphor that implies total product responsibility throughout the lifecycle of a product: from the extraction of materials, processing of the product, marketing it to consumers, and finally, closing the loop on all of the waste streams associated with the product’s manufacture, use and disposal (or reuse). Sue Mecklenberg, Vice President of Corporate Responsibility for Starbucks will be part of a forum on supply chain management providing leading-edge corporate experience on how to encourage fair trade and fair labor practices in the midst of global business transactions. Dwight Collins, Rita Schenck and other experts in industrial ecology and life cycle analysis will be sharing knowledge and strategies for maximizing the materials efficiencies and supply chains and closing production and waste stream loops.

Bryan and Mary Nattrass, co-authors of The Sustainable Corporation and Dancing with the Tiger, will be sharing their wisdom on how to embed sustainability within corporate and organizational cultures, drawing upon their experiences in successful consultation with Starbucks, CH2M Hill, the Department of Defense, the city of Seattle and others. Bob Willard, author of Sustainability, the Competitive Advantage, will be putting it all together in terms that will help companies and individuals make the business case for advancing sustainability innovation within their business plans. Profitable sustainability, of course, depends upon successful marketing as well as eco-efficient production. Joel Makower, of GreenBiz.com, Frank Lampe, co-founder of LOHAS, and Laurie Demeritt, President of the Hartman Group will present a unique and dynamic roundtable exploring the challenges and opportunities of bringing sustainable products to the mainstream marketplace.

Gifford and Libba Pinchot, authors of Intrapreneurship, and co-founders of the Bainbridge Graduate Institute, the nation’s first MBA program developed around a core of sustainable business practices, will be presenting a forum and workshops designed to release a wellspring of ecopreneuring ideas among conference participants and within the businesses and organizations that they represent.

Most importantly, the entire conference is designed not only for profound learning but also to help participants make lasting connections with business peers and others in related fields with whom they can collaborate to advance the cause of profitable sustainability, “Doing Well by Doing Good.”

There is a sea change taking place in the world of business, and the Profitable Sustainability conference will help equip businesses to take advantage of the opportunities and be prepared for the changing marketplace.

Carly Fiorina, Chairman and CEO of Hewlett-Packard remarked in a recent speech: As leaders, now more than ever before, we have a responsibility to redefine the role of the corporation on a world stage – and to leverage our ability to impact individuals, companies, communities, nations-for the better.

We must remake our businesses to be far more active corporate citizens-creators not only of shareowner value, but also of social value, in ways that are systemic, and sustainable. It becomes our job to use a profit engine to raise the capabilities, extend the hopes, and extinguish despair across the globe…It’s a greater mandate-one that our customers increasingly demand of us, one that is deserved by every country in which we do business and one, I’d argue must be undertaken because it can be undertaken.

First printed in GreenMoneyJournal.com