#208 - What is Sustainable Business and Why Does it Matter

January 25, 2022

#208 - What is Sustainable Business and Why Does it Matter
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Today, host Cory starts a new mini-series in which he unpacks the central concept of sustainable business. The next few episodes will expand on the points that are raised here. Things kick off with a few new perspectives on why sustainability matters.


Today, host Cory starts a new mini-series in which he unpacks the central concept of sustainable business. The next few episodes will expand on the points that are raised here.

Things kick off with a few new perspectives on why sustainability matters, and from there Cory gets into some definitions, as well as why defining what a sustainable business is so important for the practices that follow. 

Listeners can expect to hear about the main factors that make a business sustainable and why these need to be baked into the core of any business with such aspirations. 

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🗣 TOPICS DISCUSSED:

  • A few, possibly surprising, reasons why sustainable business matters
  • Broadening our understanding beyond business to systemic change for the better
  • The problem with the lack of definitions around sustainable business
  • Laying the foundations for helpful new definitions of business and sustainability
  • The pillars of sustainable business that are espoused by The Grow Ensemble 
  • How the B Impact Assessment can help businesses evaluate their sustainability  
  • Looking at companies through the lens of governance, community, environment, and customers 
  • Governance and transparency; how companies need to communicate
  • Unpacking the community aspects of civic engagement, business operations, and partnerships
  • The environmental concerns that need to be taken into account, including carbon footprints, and water and energy usage
  • Asking questions about how companies address economic and social issues through their relationships with customers

 

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Transcript

Cory Ames  0:00  
What is sustainable business and why does sustainable business even matter? Hey, y'all, it's Cory here with the social entrepreneurship and innovation podcasts as always so grateful to have you listening in. Today we're kicking off a little series here in introductory series on sustainable business. In this series, which I originally released as essays on my site at Cory Ames.com, C-O-R-Y-A-M-E-S.com. explains exactly what is sustainable business breaks it down in specific detail the practices the day to day policies and philosophies. And as well make something of a call to action, why we need to demand businesses become more sustainable now why business leaders need to take this action to make strong commitments towards protecting and preserving the planet and as well, that people that live on it. So here, this first episode starts the first of a few which will release over the span of the next week or so. Today we're talking about why does sustainable business even matter? And with that we're providing a very important critical definition. What is sustainable business? Exactly? Before we dive in, though, as always, I want to invite you to sign up for a better world weekly newsletter. It's a newsletter I write, curate and publish send out myself every single week. This is my exploration with our community at grow ensemble of what exactly it takes to actually build a better world together. So go to grow ensemble.com backslash newsletter to sign up for that so you can get the next one in your inbox. Alright, y'all, let's talk here about why sustainable business is important. And what is sustainable business anyways? Alright, y'all, welcome.

Welcome to this introductory series on sustainable business. Before we explain what is a sustainable business exactly in a bit, we'll show you examples of sustainable business in practice. We need to start with why sustainable business matters. And my answers might not be the answers that you'd expect.

So first off, the race isn't to meet consumer demand. No, it doesn't matter that businesses adopt sustainable practices, so that they can meet consumer demand. Even though trends show consumers are caring more and more about how businesses are impacting the environment. That reason isn't big enough. Businesses must be sustainable because we need to change consumer demand faster. We need to change culture faster, because of the resources at their disposal. Brands have the power to dictate culture, the savvy advertising campaign, visionary CEO, they can dictate what's cool, or what's admirable. If businesses and business people can lead and say that it's not okay to take home a profit unless the people in the planet are taken care of first. What could that do for our culture? What might be different about the state of our world? If businesses said that the people in the planet are more important than profit? What if we all truly began to believe that it wasn't money that made the world go round, but it was the planet and the people on it? That spun it? So let's imagine a world with truly sustainable business. We have to acknowledge though that business is not the solution for everything. But business can be an incredible solution for many things. As much harm as businesses doing. It's equally possible that business could do good, serious, good. And if a business can't stop doing such harm, should it even exist? I think the truth of it is, we are in an all hands on deck situation. We are acting on the climate crisis fast enough. Capitalism has amassed a great deal of resources for a few but not for enough of us. There's no reason that Elon Musk's net worth should be near 300 billion and Bezos, whose permanent earnings well exceed what the average American earns in a year, while at the same time near 700 million people globally, still live in extreme poverty. And so it's not just about business. It can't be just business, because the world just can't take it. Perhaps if a business can't turn a healthy profit without exploiting people and extracting from the planet, then maybe they just can't be in business. And so who does that leave to do business? Well, that's the subject of the next phase of this episode, where together we'll define what is a sustainable business.

So what is sustainable business? We've covered now why sustainable business even matters that urgency behind needing businesses to be more sustainable. And now we're talking definitions. First, let's talk about the problem with not defining sustainable business, sustainability and sustainable business have been left widely undefined. This poses a potentially major issue. If these terms remain left undefined. The standards on sustainability can be set by those with the largest budgets, infrastructure, and PR tips. Remember what we said brands can dictate culture, right? For example, we have Marc Benioff, the CEO of Salesforce, who's positioned as a leader on NPR in a piece published late in 2020. For stakeholder capitalism, Benioff is quoted in a section titled defining stakeholder capitalism, saying that, in addition to their shareholders, the planet in the local homeless community in San Francisco, our sales force is stakeholders as well. Salesforce also didn't pay a cent in federal income taxes, while earning 2.6 billion in profit, and Mark personally earn 26 million in total compensation that year. Or we have Walmart, who's set a stake in the ground, claiming that they will become a regenerative company. This after Walmart has had decades of labor disputes and scandals from union busting to employing sweatshop labor forces abroad. So who are we gonna let define what a better sustainable business is the Marc Benioff's of this world who made 26 million in 2020? Well, his company evaded any federal tax liability. And yes, might be able to say that companies like Salesforce have navigated the US tax system legally. But first, these companies have lobbied incessantly to make our tax rules as they are. Second, the private sector argues to limit regulations and government intervention in markets, but at the same time, they defer any accountability for our unequal tax system by claiming they're just playing by the given rules. I don't think you can switch positions to whatever is most convenient for you at the time. And finally, I find it just absurd to take the position of defending companies making billions of dollars in profits. At a time when the national in some cases global discussion centers around how we pay for addressing the climate crisis, providing parental leave for working families, offering universal pre K, you're increasing the number of Americans who have access to quality health care. How can we allow those who have historically been the greatest exploiters of broken and convoluted systems to be in charge of reimagining those same systems for good, I just don't believe it's a good idea. It's like putting arsonists in charge of the fire department. And don't get me wrong. I'm all for getting the biggest offenders to make changes. But I'm less interested in handing them a megaphone and inviting them to be the spokespeople. So this is why I believe the exercise properly defining which businesses are sustainable is critically important. We're defining sustainable business for objectivity say here, we need to start here, so that the terminology used in this conversation can be as objective as possible. This is so that we can first bring this conversation into objective terms, right? For example, a business might want to assess say its profit. A business is either profitable, or it's not. Right? Likewise, I believe a business should either be sustainable or not. If a business isn't profitable, it needs to work towards being so in the same way, if a business is determined, unsustainable, it should work toward becoming sustainable as diligently and urgently as it would if it were not turning a profit. So let's get to define the Oxford Dictionary defines sustainable as able to be maintained at a certain rate or level. So what does that mean for a sustainable business? Well, we've hit a tipping point. For business to be maintained at a certain rate or level, a business must be leaving the world, the communities, the people and stakeholders it encounters as a result of its existence better off. Our world needs repair our planet, our ecosystems in our economies need to be restored. The models for economic growth that got us into this climate crisis in massive economic inequality won't be the models that get us out of it. For business to be done for the economy to function, it must have a positive impact on people in the planet. And so as it grows ensemble for a business to be sustainable, it must leave the world around it better off as part of its operation, not as some sort of supplemental charity, or corporate social responsibility program. They must have positive social and environmental impact at its core, they must continue to be an advocate for change in standard setting in their industry. By persistently redefining and reinventing the level of sustainability and positive impact that any one industry or sector can have. They must be kept accountable, not by themselves. But by working with in pursuing third party certifications, external evaluations and oddity, it must be radically open and transparent. By knowing what their footprint is being able to trace where and how their products are made, and making a diligent and consistent effort to share this information publicly. It's no longer fair that for a business to succeed, to profit, the planet in the people must sustain it. A sustainable business is sustainable only if the world is truly better off because they're doing business in it.

In our next episode, we're going to be breaking down specific examples of sustainable business practices, the day to day policies, overarching philosophies and methodologies behind continual improvement. We'll talk about what actually makes a sustainable business sustainable. That next in this series here are introductory series on sustainable business on this social entrepreneurship and innovation podcast. Alright, y'all, that's a wrap on another episode of the social entrepreneurship and innovation podcast as always so grateful to have you listening in. If you love the show, please leave us a review on Apple podcasts or hit subscribe wherever it is that you get yours. And as well, I want to invite you to sign up for our Better World weekly newsletter. This is our weekly discussion with our community of social entrepreneurs and changemakers on all things building a better world is a newsletter I write and publish send out myself every single Monday go to grow ensemble.com backslash newsletter, to join in on that discussion, all things building a better world. Go to grow ensembl.com backslash newsletter, to get the next one in your inbox. And finally, if you know of a company work within a company or run a company that might be interested in sponsoring the social entrepreneurship and innovation podcasts, we always love starting conversations with potential partners who share our vision of building a better world together, go to social entrepreneurship.fm backslash contact. There, you can fill out a quick form, start that conversation with us. These sorts of partnerships fuel our mission to build a better world together. All right, y'all. Until next time,