Month: May 2014

Most of us are in business & all businesses want to grow & work for PROFIT.

I was reading about a company which contributes resources by identifying certain causes. This in turn leads effective & maximum impact  for the selected causes.

If instead of the current metrics of corporate performance measurements of profitability, growth vis a vis analyst expectations there was a BUSINESS SUSTAINABILITY INDEX, would the business ecosystem become more conducive for all the stakeholders?

There is no denying that ultimately sustainable businesses would survive and thrive. Nevertheless in the race for achieving the milestones set, at times the focus remains on that milestone only. In spite of the fact that many more milestones are to be achieved. So the course taken for achieving the current milestone should be sustainable.

Journey of every business is along with all its stakeholders together- shareholders, lenders, customers, suppliers, employees, society, environment, Government.

Whether the pace of business growth & objective of profitability adversely affects the environment in terms of pollution, effluents, wastage/ depletion of natural resources etc?  There are at least two alternatives for everything we do. That’s what needs to be addressed if not already. If an effluent treatment plant or use of alternate manufacturing process or alternate raw material; can turn the damage into a sustainable course for all, then why not. For instance, Caustic soda is globally manufactured by following three technologies of which two causes higher pollution and consumes higher electricity; while the third one over scores on both with the limitation that capital cost is relatively higher. Based on a research only a small % uses this method. In view of the long term effects I am sure shareholders and lenders would favour the third technology as in any case the rest two will be phased out sooner or later.

Engagement done by the corporation with other stakeholders  by contributing to overall social development – be it in education, healthcare etc goes a long way and ultimately supports business growth in the long run.

No doubt businesses are meant for economic welfare. They however can choose the course and bring some changes which contributes to stakeholder welfare & would ultimately help them meet shareholder returns – both in short term and long term.