GoodCompany, the e-Newsletter for members of
Canadian Business for Social Responsibility (CBSR)
September 2002
Book Review – The Sustainability Advantage
By JAMIE BONHAM, CBSR Correspondent
Imagine that your corporation has drastically improved its bottom line through a company wide commitment to sustainability and social responsibility. Employees are happy and productive, expenses are down, and profits are increasing steadily along with customer recognition and satisfaction. Traditional economic theory implies that maximum profitability and environmental and social responsibility are antagonistic opponents in the world of corporate business management. It is assumed that pursuing environmental and social sustainability will inevitably have a negative impact on bottom line profits. In his book, "The Sustainability Advantage," Bob Willard makes the argument that not only can businesses that commit to sustainability stay alive in the corporate world, they can gain a competitive advantage because of it.
"The Sustainability Advantage" documents the business case arguments for corporate social responsibility, i.e. the profit motive for being responsible. In depth explanations of calculations used to define the "sustainability advantage" are provided in a straightforward manner that is easy to follow. Willard refers to a large number of case studies of corporations that have adopted CSR principles and have enjoyed economic prosperity because of it. The success stories of these flagship corporations provide the "hard facts" that business managers and CEOs are looking for when considering the results of following sustainability principles.
Willard creates a list of the 7 benefits of sustainability that are as follows:
- Easier hiring of the best talent
- Higher retention of top talent
- Increased employee productivity
- Reduced expenses for manufacturing
- Reduced expenses at commercial sites
- Increased revenue/market share
- Reduced risk, easier financing
According to Willard, the real power of the book lies in the spreadsheets he provides that outline the calculations used to determine the economic benefit of sustainability to a hypothetical software company. The worksheets can be copied and applied to the specifics of any company, giving executives the chance to see if sustainability will be profitable for them.
Proving the case for sustainability involves embracing a change in traditional accounting assumptions. Managers often discount or overlook entirely the importance of the social aspect of improving their company's environmental performance, namely the increased satisfaction and retention of inspired employees. In discussing the hiring and retention of top talent, Willard refers to the assumption that losing a good employee can end up costing a company up to 2 or 3 times the person's annual salary. Increased productivity of employees inspired by their company's vision is also accounted for in Willard's holistic view of the workplace. Expanding the horizons of economic forecasting by including these important social aspects of sustainability is an inspired twist to accounting that embraces the value of happy, effective employees.
The Sustainability Advantage is a useful addition to the growing movement of corporate social responsibility. The book is full of very relevant information and ideas and is backed by a plethora of examples from real world corporations. The book does focus on environmental actions and as such doesn't address social initiatives. The book also doesn't directly address small businesses, although he implies that what works for bigger companies can work for smaller companies too. These drawbacks are minor and don't detract from the strengths of the book. "The Sustainability Advantage" would be a very valuable resource for business managers looking to justify investment into sustainability.
The above page was copied with permission from the CBSR web site.