The Green Wave: Global and Sustainable Business

Sustainability: Triple Your Bottom-Line
by Kevin Ferrell

Across the world, consumers are realizing the power their dollars have on decisions made by major corporations.

Before the labor and environmental movements in the United States, not much attention was paid to the business practices in many leading companies.


However, because of the many social, health, and environmental consciousnesses reviled in the past century,more emphases was made on businesses to maintain ethical standards for social well-fare instead of just relying on governmental regulations.

This was mainly due to the slow pace it has taken for regulators to make changes in laws to protect workers and communities. An example is how most major companies use maximum chemical exposure data from independent research associations rather then that provided by the Occupational Safety and Health Association (OSHA) because of the lack of up-to-date standards.

This trend is not only in the United States. Illnesses caused by vinyl chloride exposures in Italy, sweat-shop allegations in Southeast Asia, and deaths caused by methyl isocyanate gas in Bhopal, India has caused many within these communities and across the world to demand for companies to implement socially responsible practices greater then the local and national laws require. And many changes have been seen since. Companies in South Africa now provide education, support and medical services to help fight the spread of A.I.Ds.. The auto industry is developing more and more alternative to gasoline dependent vehicles. And, labor intensive industries are using more ergonomic assessment data to determine less hazardous ways in performing job tasks.

This new way of doing business in communities has sparked the term “sustainability”; where social and environmental impacts are weighted in with economic considerations in order to develop, ideally, win-win situations for everyone. The theory of sustainability itself is that if the true costs associated with a product or service are accounted for and valued in the business decision, then overall their will be less detrimental impacts to societies across the globe. Many will argue on paper sustainability is great…but in reality it is a pipe dream. In fact, if you look at most organizational charts of leading companies, you won’t see many that have vice-president or director positions in sustainable practices.

If social and environmental impacts are truly equally valued the same as quality, operational, and financial impacts then why haven’t we seen more organizations include such positions within their companies?

This is because of two main reasons: the lack of a preferred framework with dealing with sustainable issues and the difficulty assessing many impacts. The framework issue is important because many businesses work in this type of mindset. For instance, there have been years and years of financial, organizational , and operational data to develop best practices. The flavor may change year by year on how to do it; but most companies know how to deal with these types of issues. However, how do you determine how much a person should be able to lift with their back without causing future health consequences? What should be the living wage of an average person living in a particular region of China? And should fast food companies be responsible for the obesity epidemic growing worldwide?

The answer, of course, is never simple. Most businesses have competitive advantages that allow them to stay in business for prolong periods of time. However, many advantages could be detrimental to others such as cheap labor and non-protective environmental requirements in Third World countries. And, many argue, that the Fortune 500 companies that would have the resources to implement sustainable business practices don’t have as big of an impact overall on the world as people would think.

However as difficult as these answers maybe to find, it is important for companies to continue to strive for the best business practices. This is because any negative impact caused by a corporation will eventually have an effect on their bottom line.

Many shoe companies didn’t monitor suppliers closely until Nike was accused of supporting child labor in many of their vendors manufacturing facilities in Southeast Asia. Coca Cola and Shell Oil have also dealt with negative press concerning alleged violence against union organizers in factories overseas by either local governments or security forces. However, by implementing an ethical framework in a company’s business practices these type of situations can be avoided. Not only does it keep the company from effecting communities in a negative way, it also shows internally that the business is more then just a business. It can be a source of real change that can help reduce or eradicate many of the ills people and the environment suffer from on a daily basis. And it also shows consumers that the price they pay is going to a truly thought out product that can help change our society for the better. Companies like Johnson & Johnson, 3M , and now Nike have used this model and have found financial success in doing so.

So while many companies may argue that there is not enough value in developing ethical standards to prevent such occurrences, many of those who have come under fire in the past would disagree. In the short term, it may not look as feasible, but in order to truly value the return that can be gained for shareholders it will take the evaluation of all three impacts- ecological, social, and economical- to ensure the business is running as “productively” as possible.

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