“The business of business is business” – this could have been an apt statement a few decades ago when business leaders were primarily concerned about economic profits. Social responsibility seemed too amorphous a concept that pro-business critics preferred to shrug off their shoulders. The focus was predominantly (and solely) on profits. This business paradigm dominated most of our history that followed the industrial revolution. The plumes of smoke that rose into the air – were considered as harbingers of prosperity and a symbol of success. Nobody thought it relevant to question the limiting factors that circumscribe our natural wealth.
However, things began to change until a few years ago when instances of corporate greed came to light. Infamous among them being the multinational corporations, such as Nike – for its sub-standard labour policies that forced children to work under harmful conditions in shoe assembly units in South East Asian countries; Union-Carbide for the Bhopal gas tragedy in India, and its relentless effort to evade responsibility for the damage it caused; Monsanto – for promoting DDT as a one-stop solution, coercing the world into depending on hazardous chemicals that would have long-term dangerous consequences on our ecosystem; Wal-Mart – for its discriminatory employee policies in U.S. that made waves in 2005; Exxon-Valdez – for the massive oil-spill that was responsible for catastrophic environmental disasters; British Petroleum – for its oil spill off Mexico Gulf in 2010 that raised eyebrows on safety of such operations; Tepco – the Japanese nuclear company that was operating the Fukushima nuclear power plant – that endangered human lives in an unprecedented way.
Many such examples of corporate greed, callousness and unethical practices exist and they all point out a few serious questions, the biggest of them all being – Is the business of business ONLY business?
Realization seems to have dawned on us. Society has started raking underlying issues and asking questions revolving around Responsibility - Who is responsible for the social and environmental damage? - and Accountability - Who must pay for these costs? Who needs to be penalized?
Over the last few years, these developments have somewhat shattered the corporate belief that social and environmental responsibilities are concerns of the State (or Government). In today’s business paradigm, corporate cannot pass away these responsibilities to others. These changes have brought about new dimensions in the business world. Industry needs to be sensitive to all its stakeholders.
Large scale industrial projects have come under a scanner - a world-wide trend that has been fed by a 24*7 active television set and social media on internet. So, in effect, something that was getting largely ignored for a long time has come out to be the real inseparable determinants of business longevity – Environment and Society.
Thus, in the new paradigm, the business of business is NOT only business but also to ensure that business is socially conscious and environmentally sensitive.
This has also spelled opportunities for proactive organizations to take lead and design innovative practices to build trust and confidence among stakeholders. Building nurturing relationships with key stakeholders has become the new mantra for building a sustainable competitive advantage for businesses. The focus has shifted from mere technology to 'technology that cares' about the environment through energy efficiency, green buildings, renewable energy, low carbon technology, etc. This has opened up vast opportunities for sustainability innovation – that is concerned with developing products that are eco-friendly.
While companies are getting along this sustainability agenda by publicly reporting their sustainability performance, much needs to be done to bring about a momentum. This would need both corporate initiative and state-level intervention.
G V P Rajan is Vice President (Sustainable Strategies) at ThinktoSustain.com and can be reached at firstname.lastname@example.org.