1. Introduction:
I first heard Sustainability in a speech by CEO of our Company Tom Enders. He was addressing employees and he was stressing upon Sustainability as next major strategic step in organisation’s progress. And he was talking all about Environment and Climate change. So I was of the opinion that Sustainability is all about Environment and made sense that being a responsible citizen it is our duty to protect Environment and probably also an ideal way of conducting business. But when I attended Business ethics seminar I was shown the importance of sustainability in a new light of Ethics. It was a kind of revelation and provided me with some of the thinking as why Sustainability is important and as a manager what best can be done with this new found zeal. Hence my argument is all about Sustainability as new phenomenon which should be used to formulate next stage of strategies and strongly build foundation for future corporate success.
What is Sustainability – definition: “Sustainable development is development which meets the needs of the present without compromising the ability of future generations to meet their own needs.” Brundtland (1986)
2. Why Sustainability?
We all live in societal structure where we all depend on each other to lead our lives comfortably. This dependence creates an opportunity to do business and also establishes mutual trust. This trust is the foundation for all our actions. To keep this strongly going forward there exists a degree of fairness which internally depends on individuals moral values and culture. Hence In our lives we are bound to things morally and we are not independent in any sense. We live on the resources which presently in the danger of becoming extinct (Scarce Resources). So it is kind of necessary moral obligation for us to use these resources efficiently and for right purpose.
Agency theory pointed out at the perspective of looking at business as agencies whose only goal is to be profitable and managers are just agents who work for gaining Owners the profit. And further Milton Friedman in his theory says the only obligation Organisations and Mangers are bound by is to utilise resources and create profits. Well when I look at it these views it doesn’t make any sense at all. I feel these theories are made with narrow perspective and don’t consider the whole picture. These theories might be true with respect to a context and hence cannot be applied in general.
According to me Organisations are part of the very norms of the social structure we live in. For me more than profits what matters most are the holistic well being of Organisation with its environment. So that there is no scope of straining the relation in the Social ecology – the network where Organisation operates as an entity. For this Social ecology to operate well in equilibrium every entity has to respect the presence of others and behave ethically for mutual co-existence (Maturana & Varla, 1987). This can be achieved by having vision and synchronising actions for value creation by means of products and services which are environmentally, Social and economically viable and have positive impact on the lives of all its Stakeholders.
Stakeholder theory which upholds the notion of considering every entity in the organisational ecology to formulate best strategies and see the whole picture appeals me and make a meaningful attempt to help managers to perform potentially. I agree that Social, economical issue are interwoven and forms a complex system. In order to make any value creation, setting vision, goals, objective formulation and changes in an organisation an understanding of relationship of these systems with organisation is necessary. As a Manager I feel very confident to propose any change or to work efficiently in this network ecology only when I appreciate and understand these systems and their relationships. And these can only be achieved through Sustainability practices. Towards this goal I feel the UN GLOBAL COMPACT, BS8900 are some of the major steps and gives a framework to look, refer and apply in organisational practices.
As part of my Literature review I read some articles on Sustainability. Out of that I analysed and compared two case studies which I would like to discuss.
Consider the case of Shell-Nigeria in which there is a description of its operations in Nigeria vividly describes about the horrible state of people living in the Local community without proper access to basic necessity like water, food and other amenities. Being insensitive to its surroundings what Shell has achieved is nothing but a losing battle where it is struggling with its operations and has been fined by International court for $1.5billion. Its CSR is appalling and local community consider it has a threat and even gone to an extent of kidnapping Shell’s Employees to pay ransom as compensation for its dreadful activities.
On the other hand RIO TINTO a mining corporation with business of over 5 million tons of rock a day with big global footprint recognised the need to establish an identity of its brand as someone who considers environment and its local community as its members. In one of its projects in Madagascar islands Rio Tinto understood the need of involving local community and empowering them with the role of defining and shaping the future of their existence as well looking after the environment they live in. They along with community undertook the charge to protect environment and create economic opportunities by setting up standards and goals to meet. These initiatives helped Rio Tinto to align organisations aspirations of becoming environmental stewardship, social well-being, governance, and economic prosperity.
Some of Rio Tinto’s measures and actions were
▼ To protect biodiversity and water quality around mine locations
▼ Employing aboriginal peoples living near its mines
▼ Training programs for employees - manual labour into skilled positions
▼ Goals for greenhouse-gas emissions and energy use
With this Rio Tinto established a strong relation with its environment and obtained so called Social licence to operate. Doesn’t it feel satisfied and proud? It is just an example of how an organisation can build its strong successful business interwoven in the complex web of Social, Economical and Environmental surroundings.
Just see below the proud CEO of RIO TINTO his views on being Sustainable
“We have to be perfectly frank about what we do. We have a large footprint; we do move a lot of dirt. We have to create an environment where local (and to some extent global) stakeholders can see us moving that type of material in a manner respectful to the community, respectful to science, respectful to the environment, respectful of our employees, that is seen to be sustainable.” Tom Albanese CEO, Rio Tinto
So what are the benefits Rio Tinto reaped because of its actions?
Some of them are improved brand image, Employee satisfaction, Cost savings – Because of efficient operations, Competitive advantage, Process and Market innovation, Effective risk management and enhanced stakeholder relations.
3. Sustainability as a dimension of ethics
The 2009 Global Recession was mainly due to greed of few corporate who were involved in unethical business practices to create wealth for themselves. Because of few individuals the whole world suffered the financial crisis with impact on every household income and its survival in ever soaring prices and Inflation economies. Probably this would have curbed with Sustainability practices. Instead of entering into the real estate bubble, long term sustainable thinking would have suppressed the recession from happening.
The Moral compass which places us in the centre of being rational, being to our self (myself), being emotional and for living to others provides a good map on which we can place priorities as individuals or corporations to find the direction as where we need to move or which stance to take. From the case study of Rio Tinto I feel presently Sustainability is the direction/stance which we need to take, as it provides Corporations and individuals an ethical platform to enact and to be responsible ethically to achieve Goals and Objectives by fighting out the present challenges and creating new opportunities.
Also Sustainability provides an opportunity for managers to think about the available resources and how best it can be utilised. By doing so provides an opportunity to manage things both effectively and efficiently. Hence I think sustainability support managers to think ethical and be benefited in the long run.
4. Actions: What I can do?
As a manager I want to actively involve with Sustainability initiative. We have these Sustainability campaigns at work and to be very honest nobody knows the details of these initiatives like goals, objectives and means to achieve. What we need to do?
From research I was able to learn much of the theory and with literature review and case studies I was able to understand the opportunities and challenges to implement Sustainability aspects into work environment. As an enthusiast I would like to prepare a strong business case at work by analysing day to day work activities I am involved with and envisage better working practices and will discuss with my team members with a presentation to start with.
5. Conclusion:
In the ancient Sanskrit language there is a saying “VYAPARAM DROHA CHINTANAM” means Business is all about Cheating. Even our ancestors were of the opinion that businesses are means of unethical conduct and its only means is to make profit and oneself rich. This notion has existed long enough and now it’s time to embark on how best business can reciprocate to take and give back and also how best businesses can be well conducted in this complex network.
So instead on thinking Man as the Master and leading a life of Parasite, I prefer Nature as master and would like to live in harmony with its laws in order to lead a moral life. I think Sustainability is the only way forward.
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