The New Social Contract for Green Business
“The relationship businesses have with society is undergoing a fundamental, permanent change,” says Bob Lurie in a recent commentary for the Leading Green blog. This new “social contract” will bring new demands and relationships for business leaders to consider around the issues of sustainability and environmental resources. There is one problem, though: “From my talks with corporate leaders, I can see that many companies are unprepared,” says Lurie.
Why are they so ill-equipped? Many of their corporate cultures, organizational capabilities and processes are not ready to support sustainability as central to the business, says Lurie:
Over the last 20 or 30 years, firms have, for the most part, put sustainability issues into “the compliance bucket.” They decided there was no advantage to be had from doing better on environmental issues than what the law required. Many corporations set up compliance organizations to meet established rules, and then went back to business as usual.
But there is no more “business as usual” because the public now has great interest in, and willingness to act on, sustainability as citizens and consumers. The rise of non-governmental organizations, like the Sierra Club and The Nature Conservancy — which are devoted to challenging how business practices impact the environment — also have put pressure on government and business to raise their commitment to sustainability, says Lurie. This increased focus will influence the relationship companies have with government, NGOs and society at large.
That’s why business leaders today must realize that being in compliance is not enough. Leaders need to treat sustainability as a new dimension of their operating strategy by “creating a high-level, centralized view of green business practices with associated responsibility and accountability to making measurable progress on articulated goals,” he says.
Since sustainability is a continual process — and businesses pursuing it will do so under a new social contract and the watchful eye of the public — don’t be surprised by the new demands. Says Lurie:
Until leaders of a firm can say they are engaged in a process of continuous sustainability improvement — akin to continuous improvement and investments in other parts of their business — they are out of step with our changing world.
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