Beyond the Green Corporation

Meeting humanity's needs without harming future generations. It's an old ideal, broadly endorsed by economic development experts, environmentalists, and human rights activists, but formerly too touchy-feely for many American business leaders. Now, however, it's at the top of the agenda of growing numbers of U.S. CEOs, especially young ones.

BusinessWeek introduced sustainability to its audience in a recent issue that looked at the progress corporate social responsibility has made in recent times. Sustainability is no longer the fad that businesses pay lip-service to in order to appease employees and customers, while they continue to reap the rewards of plunder. Sustainability is now a strategic business imperative, that corporations gambol with at their peril. In the developed nations, corporations are no longer secure in their stations in industry. Product differentiators are fast disappearing, while the importance of lifestyle marketing and brand value is on the increase. Loyalty is transient, as more choices become available from the global market. Regulatory constraints likewise continue to put the squeeze on businesses to adapt to survive.

The playground of third world nations is not so nice anymore, either. Product, brand and price loyalty are all in a flux as the state of consumer behaviour evolve rapidly. The value of brand however, remains important. While regulations remain in disarray, they are also catching up to those of the developed nations, and companies that abuse their stations, flout their future for tactical gains. Today's corporate giants are being supplanted by homegrown businesses in the developed nations. Where does that leave today's high flyers? In strategically precarious terrain. Seems apt, since these corporate powerhouses have been on a feeding frenzy for so long without any payback.

So why are businesses doing it? Fear would seem a big motivator, but if only it was that simple. Corporations are motivated to create shareholder value -- to be greedy, in simple terms. And it's turning out that sustainability isn't such a bad gig after all. More and more, evidence is mounting that doing good actually does have a payoff. With the shifts in consumer behaviour and focus on the environment, smart businesses are seeing the lucrative payoffs in store for those that get on the bandwagon early. While the evidence remains mixed on short term financial performance, more CEOs, especially younger ones, are placing bets that longer term, being socially responsible is bound to payoff. Logically, it does make sense. Do good to the environment, communities you operate in and the needy-world at large, and you're bound to have happier employees, welcoming communities and customers that give you a place in their lives.