By Mark Brownlie
I went to a presentation on the business case for corporate sustainability the other day. I have to admit, I’ve made very similar presentations. I saw the typical slides expounding the benefits of cost avoidance, resource efficiency and staff optimization. But when the lights came up, I wondered: Are we taking the right approach when we focus solely on the business case? Should we inject a bit more balance and humanity into our arguments by stating a strong moral case too?
Of course a company shouldn’t undertake a new initiative if it doesn’t pay off. Companies should be financially prudent and spend money on activities that generate a good return on investment. But that return isn’t always in immediately measurable dollars; for example, an improved reputation is priceless. We can’t monetize everything.
The business case involves different drivers for different people, so it’s difficult to appeal to all in the audience. The product manager likes reduced operating costs. The marketing manager likes expanded product offerings. The procurement manager likes a more efficient supply chain. But it’s highly likely that they all value fairness, robust communities, a clean environment, and leaving our children a better world. Unlike the business case, the moral case has more universal appeal.
Business case reasoning often leads to incremental improvements, not transformational changes. It takes a bold CEO to propel a company in a new direction. No doubt, companies conduct comprehensive financial analyses of the impact of major changes. But for companies like pharmacy giant CVS Health to quit selling cigarettes, or for Tesla to make its patents open to the public the moral case was a big part of their decisions. CVS said “the sale of tobacco products is inconsistent with our purpose – helping people on their path to better health.” Tesla explained their move as a way to encourage further development of the electric vehicle. Neither of these significant actions seems precipitated solely by the business case.
Even a rock solid business case might not be enough to get a new program adopted and implemented. I’ve seen a compelling business case ignored as summarily as an amber traffic light.
If what a company is trying to achieve by implementing a sustainability initiative can be measured solely by dollars, then making the business case makes sense. However, if a company is trying to achieve results that aren’t only measured by dollars (e.g., customer, shareholder and employee loyalty), then a non-financial and/or moral case could be helpful. Relationships are difficult to factor into a strict business case.
Customers are increasingly expecting companies to have a purpose beyond profit and to act with high principles. Most new employees state something other than the company’s strong financials as their reason for joining. Business success isn’t only measured by financial factors, why should our arguments for sustainability activities be limited to such factors?
A 2014 study by creative agency gyro and The Fortune Knowledge Group found that “nearly two-thirds (65%) of executives say subjective factors that can’t be quantified (including company culture and corporate values) increasingly make a difference when evaluating competing proposals. Only 16% disagree.”
The pillars of the business community are real people too. They have feelings. We shouldn’t be afraid to appeal to their emotions.
In our personal lives we don’t use only a business case to make our housing, purchasing, and employment decisions. Financial considerations certainly loom large, but so too do less tangible factors. Does the house have character? Do these pants make me feel good about myself? Will I feel challenged at my new workplace? Why should we limit ourselves to just dollars when making corporate decisions?
Some sustainability initiatives are moral imperatives. Do we need to make a business case for avoiding workplace fatalities, abolishing child labour, behaving ethically, protecting the Amazon forest? For issues like reducing greenhouse gases or achieving equal pay for women, shouldn’t the moral case be just as strong as the business case?
Image credit: Pixabay
Mark Brownlie is Founder and Principal of Responsibility Matters Inc., a Calgary, Canada based firm that has developed sustainability strategies and communications since 2002 for more than 40 corporate and non-profit clients worldwide.