Practically Balking at Sustainability

Although the positive ROI of many sustainability initiatives is proven and the continuing proliferation of sustainability work is the proof, many firms continue to balk at embracing sustainability and lag their industry-leading peer. Opportunities to improve operations by lowering costs, improving morale, increasing productivity and generating new sales through an improved brand position slip away as some firms lock their knees to sustainability.

I just read a great article by Paul Honen in The Guardian. He outlines five basic reasons that businesses just can’t get their organizations to focus on sustainability. I must note that a big reason is a difference in ideology and basic philosophy about value creation. Some people believe the best path to success for a business is in providing a product or service to prospective customers. I am part of a different crowd, where success and business goals can be attained by providing value to a community, and in that way, driving stakeholders to you, and thus generating regular customers and continuous cash flow / brand power.

Honen lists these issues:

  • Short-Termism: a fixation on quarterly results at the opportunity cost of long-term value creation.
  • Value Definition: accounting doesn’t see externalities that eventually affect a business. You can’t manage what you don’t measure.
  • Consumer Inertia: consumers also balk at premiums for green products, except for a niche market.
  • Regulatory Uncertainty: there is a confusion of governments, at different levels, regarding regulation and also incentivization of sustainability issues.
  • Transition Pain: investing in new technologies is scary, retraining staff and management about green issues is time-consuming.

Many businesses and organizations are, however, embracing sustainability – including Skanska, Boston Properties and even New York City among others. If you need help strategizing and learning more about sustainability, let us know!

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