It may seem a fanciful exercise to imagine what the corporation of the future will look like, but for businesses grappling with how to incorporate social and environmental goals into their business models, it is not.
More and more companies have come to the conclusion that in order to stick around, they must look beyond quarterly profits at how business may impact society in the long run. Such a paradigm change takes leaders who have a long-term mindset and support the mainstreaming of sustainable practices throughout the company.
One linchpin in changing the corporate mindset and the way a business operates is getting buy-in from the board of directors. These boards generally have a singular purpose: to protect shareholders’ interests.
The United Nations Global Compact’s board program, which was launched at an event held at the U.N. headquarters in New York last week, seeks to help companies work together to illustrate to their boards how sustainability and profits can go hand in hand.
The formula is not “one size fits all” — industry-specific challenges do exist, after all — but companies are proving they can grow business while focusing on sustainability.
Focus on the long term
The mismatch between short-term profits and sustainable growth makes embracing change difficult for companies and their boards. But some companies have found a way to embrace a sustainability strategy despite today’s financial reporting requirements and temptation to go for quick profits.
For Yara International, a fertilizer company, having the government of Norway as a major shareholder has been key to success, said Bente Slatten, Yara’s chief communications and brand officer, last week in New York.
But, Slatten said, even a corporation without a state presence can make the case to its board to have “patient money.” That is in part because despite the Norwegian government’s stewardship in sustainability, the company must continue to grow sales and make a business case for projects that may seem more development-oriented.
Sometimes that means reframing how particular programs are viewed, as Yara has done with its fertilizer sales in rural Ghana. There, the company has been educating farmers on the proper and controlled use of fertilizer. Corporate leaders framed what could be seen as a short-term cost as a form of market development and a way to build the brand’s reputation in places with tremendous growth potential >>>