Leading a “green” enterprise
Last week, we celebrated the Earth Day with companies setting up new initiatives and creating green task forces to help employees protect and improve the environment. We have witnessed a frantic pace of organizational changes in the last decade, mainly due to technological growth and globalization. This transformation has raised questions on how organizations interact with the world – community, society, and the Earth. Corporations are facing a new type of challenge – the sustainability challenge. There is a huge attention to issues around environment, sustainability, and social responsibilities. Business leaders are facing unprecedented challenges to address these issues and not just adopt green solutions, but to lead their businesses through a green evolution. The main challenge of these leaders is to define the scope of sustainability and how it applies to their core businesses . In addition, they face the challenge of converting the sustainable green practices into a competitive advantage.
Corporations are in the business of creating wealth. Their fiduciary responsibilities, some would argue, end when they develop newer products, achieve consumer delight, and deliver on promises to its stakeholders. This is the argument by famous economist and Nobel laureate, Milton Friedman, who said “the business of business is business”. He argues that there is no place for social responsibility in a business. However, proponents of the corporate social responsibility, provide arguments to how CSR can be an opportunity than cost (David Grayson and Adrian Hodges, 2004). Michael Porter explains how no business can solve all social problems, but how each business can choose to take upon social issues that intersect with the companies business and address them. Elkington (1999) developed the concept of the Triple Bottom Line which proposed that business goals were inseparable from the societies and environments within which they operate. A recent survey by the Synergos Institute says that 95% of the consumers view companies as debt-holders to both the employees and the community.
The challenges of integrating the concept of sustainability in an organization is multi-fold, and it is a more onerous task in organizations where environment-friendly practices would undermine their core business practices (in the case of oil or mining industries). Many of the oil companies have now hired sustainability execs, and have begun investing in renewable energy. Marathon Oil is blending ethanol with gasoline for a more environmentally friendly mix. Chevron is building its geothermal business. BP is funding solar power. Royal Dutch Shell is consulting with Chinese refineries on ways to reduce their carbon footprints. Other sustainability challenges facing today's business leaders is to identify whether “going green” is part of their business process or an end goal. The key is to turn the concept of sustainability into a workable practice that is balanced and makes the most strategic business sense.
