It seems clear to me that far more people are interested in a company’s balance sheet than the officials of the finance department. How a company does business is becoming as important, for its reputation and for its shareholders, as the profit it makes. The CEO’s legacy is now much more long-term than they might imagine.
In an era when social media can make and break corporate reputations and a focus on communities can leave companies that don’t engage locally with a very bloody nose, both accountability and openness are all-important.
Whilst generally people are not anti-profit for profit’s sake, they are more concerned than ever about what they see as fair play. The impact that companies make on the economy, the environment and society at large – both good and bad – does affect how they are perceived and how much they are valued.
I believe Corporate Social Responsibility is evolving and the acid test is whether sustainability is really embedded into the way a company does business. This is measured on a moral scale – is a company leaving future generations compromised or better equipped to meet future challenges?
What appeals to me about that question as a benchmark, is that it leaves no room for piecemeal solutions. It means that in every aspect of our activities from resource management to climate change and workplace diversity to the benefits to society, we are increasingly accountable to everyone who comes into contact with our business.
BUT, I hear you say, doesn’t this emphasis on sustainability come at a cost and with a negative impact on the bottom line? NOT in my view, and certainly not if you take the single biggest step towards sustainability by embracing the so-called circular economy which replaces the existing take-make-dispose model and is designed to ensure raw materials have at least a second and third life.
Ever since the Department for Environment, Food and Rural Affairs (Defra) put a figure of £23 billion forward as the amount of savings that businesses in the UK could deliver by moving from a linear approach to a circular one, it’s obvious that we should all be moving towards that.
For us at Veolia the benefits are obvious and we believe that already 20% of our business is circular. But for businesses in general, resource conservation has immediate benefits in terms of not just benefit to society, but reduced overheads, security for our suppliers, and carbon management.
Therefore I would say that just as the focus of sustainable development is far broader than just the environment, so a company’s balance sheet is about much more than making money.
You can indeed profit from being sustainable.
Estelle Brachlianoff is Veolia Senior Executive Vice-President UK & Ireland. Estelle joined Veolia in 2005, was appointed to her current position in 2014 and is a member of its Executive Committee. She sits on the CBI’s Infrastructure Board and President’s Committee and heads up the BitC’s Environment Leadership Team.