Businesses that understand and embrace this new path gain competitive advantage, markets, relationships and more. Businesses and managers that ignore this new reality court risk, potentially catastrophic risk.
Because the path shifted, it’s more important than ever to keep your eyes on the road. Drive recklessly and you will lose value, efficiency and results.
Indeed, success on this new path to profit requires a laser-like focus on value and efficiency rather than some willy-nilly “throw money at every hip social and environmental issue-of-the-day” approach.
Success in this new paradigm requires that managers and companies understand how to align, optimize and integrate social responsibility, environmental stewardship and the Sustainable Development Goals.
These are not compliance checkboxes or nice to do things. They are strategic opportunities that contribute to profit, business growth and competitive advantage. Sustainability is a profit agenda, not a charity scheme.
Demands for operational and financial performance are growing at the same time as the demands for improved social impact and environmental stewardship. Managers and businesses that are unable to align and optimize across these dimensions will struggle and fail.
There is simply no room for ad-hoc, zero-sum approaches to sustainability based on charity and philanthropy.
The path to profit may have shifted, but the importance of being strategic and efficient at creating value remains.
The difference is that today, value must be delivered simultaneously on three dimensions, shareholder value, social impact and environmental stewardship. It is more important than ever to be strategic and efficient.
Each dimension of value must be probed and understood. Social value and environmental stewardship are not disconnected from shareholder value, not in any business that wants to be successful.
It is critical to understand how these dimensions connect, where the synergies are and how they can be developed. They cannot be seen as detours or side-roads. The Path to Profit passes through social value and environmental stewardship.
That is the only way to be efficient and to meet the demands of Business 2030.
Focused value propositions are key. You and your team need to thoroughly explore questions such as:
- How does our business create shareholder value?
- What are the social and environmental priorities of our key stakeholders (including internal stakeholders)?
- What social value can we create and how does that contribute to, or take away from, shareholder value? [and, what does it mean to our key stakeholders]
- Where can we improve on our environmental stewardship and natural capital efficiency. And do so in ways that will reduce costs, improve competitive advantage and position us for future success?
- What partnership opportunities can we develop that will extend impact and improve efficiency at creating social value, improving environmental efficiency and creating shareholder value?
- What impacts are we having now on the SDGs and where are the opportunities to efficiently do more?
- What business value (marketing, B2B, employee recruiting and retention, regulatory relationships, stakeholder relationships, etc.) can we gain from
- improving social and environmental performance?
- How can we use reporting and communication to enhance that value?
When you work through these questions, and others that are specific to your business or project you will start to see a roadmap emerge.
A roadmap that will be your path to sustainable profitability and competitive advantage.
It will take your business through social value, SDG impact and environmental stewardship.
Business today isn’t easy. You cannot afford to sacrifice efficiency on any dimension.
Don’t let yourself fall into the trap of throwing financial and other resources at social and environmental issues hoping they will go away just so you can get on with “your real business.”
In today’s world social and environmental stewardship ARE your real business and are critical touchstones on the path to sustainable profitability and competitive advantage.
Learn them, understand them, and don’t hit the ditch on the Path to Profit!
ESG, Sustainability & CSR should be as much a business value driver as it is a social and environmental value driver. If it gets out of balance it creates risk and makes the sustainability and indeed, even the business itself, potentially less sustainable.
Business is about creating value. CSR, ESG and Sustainability are also about creating value; value for society, for environment and for shareholders.
Thanks for reading
Prof. Wayne Dunn
President & Founder