Can, Should Business Lead the Way to a Sustainable Future? – Who do you trust more, global corporations or the government?

Keith Cox Sustainability

In an interesting article titled “Will Green Corporate Giants Achieve What Governments Can’t?” on by Marc Gunther, the author explores the great strides many major, global corporations have made recently in the area of sustainability and he discusses the trend that some of these organizations are now “setting policy” which was once the domain of government (e.g., Walmart setting packaging standards versus the EPA).
Gunther questions if business filling the void left by government inaction is a good thing and that question certainly got me thinking.

On one hand, a strong case can be made that today’s corporation has surpassed even the state and the church as the core institution of the modern world. With some of the largest firms generating income and profits greater than the GNP of many small nations, some firms exercise their power in the pursuit of wealth with little regard to their often destructive effects on individuals, the environment, society, and the planet. In a time of increasing global consumption, many believe that our social and environmental problems can be traced directly to corporate greed and shareholder selfishness.

As an example, Bill George, Harvard Business School professor, former Medtronic CEO, and author, pointed out on his Facebook page that at the Wall Street Journal’s 2010 CEO Council in Washington the top five proposals voted on by the attendees from the CEO Council were:
1) Foster Global Trade
2) Presidential Leadership
3) Tort Reform
4) Invest in America Now
5) Reduce Debt, Fortify Dollar

While these may be worthy goals they hardly scream people, planet, and profit – more just like profit. So simply based of the traditional purpose of the firm (maximize profit) you have to wonder if business can truly lead the world to a sustainable future and if they can adequately play the role of government with all relevant stakeholders kept in mind.

On the other hand, business has the capacity to lead. As Harman and Hormann’s (1990, p.11) noted:

Business, the motor of our society, has the opportunity to be the new creative force on the planet, a force which could contribute to the well-being of many…the modern corporation is as adaptable an organizational form as has ever been invented, so that in a time of fundamental change it may be expected to be on the cutting edge.
There are many shining examples of global corporations raising the bar on business and taking aggressive actions on the sustainability front. Gunther highlights Unilever, Chevrolet, and Georgia Pacific in his article and there are numerous other examples we can point to. Many firms are adopting a triple bottom line and reporting on social and environmental measures along with their financial metrics. So perhaps business is our best bet.

I believe we need all major institutions, business, government, nonprofit, and education, to work collaboratively on the challenges of our time. However, if we can get the sincere buy-in and effort from the world’s largest companies the odds of a sustainable future increase dramatically.

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