The Path to Profit has Shifted. Today it passes through ESG Performance, SDG
Impact, Environmental Stewardship and CSR Engagement. Shortcuts are very risky.
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 & ESG Performance 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.
ESG may have shifted the path to profit, 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!
We can help you to navigate the Path to Profit in the Land of ESG and Sustainability. Email me if you’d like more information
We have a number of free online resources that may be helpful too
| ESG Strategy & PolicyESG Impact CommunicationsESG & Sustainability TrainingESG & Sustainable Finance | ESG & Sustainability MetricsHow to do an ESG SWOTESG Impact Reports |
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 CSR and indeed, even the business itself, potentially less sustainable.
Business is about creating value. CSR is also about creating value; value for society, for
environment and for shareholders.
Thanks for reading
Wayne Dunn
Founder and President
