Corporate Sustainability: Sustainable Profitability

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Courtesy of SolaVis

Since there is no agreed definition of what corporate sustainability actually is, it will not make any difference to add another to the long list of entrances. In essence, corporate sustainability consists of very few main pillars that influence the way management decisions processes are taken. In most ways, it is a continuation of existing management paradigms.

  • Based on clear vision of the future, and the place of the company  in that future
  • Based on common-sense cost/benefit analysis
  • Based on realistic and measurable targets
  • Corporate sustainability is adding new elements to this basis.

Profitable sustainability

Corporate Sustainability is an evolution of past management processes. It’s not a revolution.

  • The basis of common-sense analysis is widened: the cost/benefit of intangible assets and activities are included and measured
  • Further into the future: decisions are made under considerations of how megatrends change the future of costs & benefits
  • Measured with specific tools to evaluate current and future value of intangibles

Corporate sustainability is a beginning of the end to short-termism. It’s also the beginning of sustainable profitability.

Sustainable profitability

Implementing sustainability management means broadening the basis of decision making. In other words: management and investment decisions are based on a stronger fundament that have a much higher chance of standing the success test in reality. Sustainable management therefore leads to lower cost and higher service/product quality.

  • Lower operational cost
  • Better public perception, i.e. the basis for increased sales/revenues
  • Higher investor and market trusts, leading to lower capital cost
  • Higher employee identification and motivation, the basis for continued innovation

Corporate sustainability means maintaining or increasing competitiveness against the markets. It means sustaining profits: sustainable profitability

Implementing profitable sustainability

Corporate sustainability is not complex. Achieving sustainable profitability & profitable sustainability is based on a simple pyramid of materiality measurement and good old planning (project management)

  • Evaluation the materiality of things. Equally on the strategic and operational levels, Corporate-wide
  • Based on the materiality: development of a clear vision for the company. And goals.
  • Formulation of policies that guide the way things are implemented
  • Development of the relevant management tools. And systems to measure value and progress.
  • Communication: dissemination and education. Internal and external stakeholders need to know where the company wants to go. They need to understand why the company wants to go where it wants to go. And the employees need to have and understand tools to integrated sustainability in their day-to-day work
  • Regular monitoring and review. No policy, no management system is ever perfect at incubation. Continued strength/weakness analysis form the basis for continued improvement

It’s simple. Everybody can do it. And sustainability does not cost. Sustainability leads to sustainable profitability.

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