SUSTAINABILITY

By Norma Juma & Sunita Rao

The United Nations defines sustainable development as “… development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” UN further asserts that for sustainable development to be achieved, it is imperative to synchronize three fundamental pillars: economic growth (Profits), social inclusion (People) and environmental protection (Planet). Scholars, institutions and practitioners alike have embraced these three pillars in their endeavor to deliver on their sustainability efforts. Different entities have adopted different approaches to sustainability.

For instance, Washburn University considers all 3Ps before implementing a proposed sustainability project. A project may seem good for the environment, e.g. installing solar panels on campus, however such a plan would be assessed against its economic and social impact since it involves university funding and deploying personnel to work on roofs. Businesses must identify strategic relevance of sustainability initiatives. Great examples abound among small, medium and large size businesses in our community

SOCIAL IMPACT | PEOPLE

Federal Home Loan Bank (FHLBank) Topeka in collaboration with The Topeka (KS) Chapter of The Links, Incorporated awards $15,000 in scholarships annually to minority students majoring in the field of business and information technology. FHLBank identified a gap in the talent pool and decided to do something about it. FHLBank’s intention is to increase graduate rate at college level among minority students in the field of business and information technology. FHLBank is not alone in this space.

On June 2, 2020, Advisors Excel announced the creation of three $5,000 scholarships intended for minorities and women to pursue a degree in Kansas State University’s Personal Financial Planning (PFP) program. Advisors Excel Co-Founder, Cody Foster decried the paucity of women and minorities in the financial services industry. He also cited the current countrywide demand for social justice and inclusion, “In light of everything we’ve witnessed over the past few weeks, investing in solutions has to start taking place.” Both organizations are very intentional on how they identified the areas of social inclusion. The initiatives are integrated in their core business model.

Target Foundation and Target Inc. is yet another business that has addressed social and environmental challenges over the years. More recently, it devoted its attention toward promoting social inclusion in MinneapolisSt. Paul region and reiterated its stand against racism. In response to COVID-19, Target gave a $2-per-hour wage increase through at least May 2. They granted vulnerable employees paid leave for up to 30 days if the employees preferred not to work. Additionally, Target gave funds to the team leads, local communities, national organizations and global organizations to help alleviate the impact of COVID-19. Investors and host communities are likely to view these sustainability initiatives favorably because they demonstrate operational and strategic relevance.

Haphazard investment in sustainability initiatives or “greenwashing” is prone to decline financial performance and any gains achieved are likely to be temporary. Prudent corporations use foundations to advance philanthropical initiatives and invest only in strategy relevant sustainability initiatives, also often referred to as materiality. A material issue is anything that influences the decisions, actions and performance of your business and its stakeholders. An issue is considered immaterial if it does not impact your core business.

Environmental Conservation | Planet

Walmart in collaboration with Unarco, produce and recycle carts in Wagoner, Oklahoma. According to Unarco, they have processed 3.4 million carts for Walmart, contributing immensely to Walmart’s goal to reduce its carbon footprints. The environmental savings amount to 485.3 million pounds of carbon emissions, 3.6 billion gallons of water and 407 million kilowatts of electricity. The social impact is equally evident employment opportunities for American workers. The economic impact is derived from the recycled steel. Recycling extends the life of the steel so that it can stay in use and out of the landfill. All salvageable parts of the cart, such as wheels and plastic handlings, get recycled to save money and reduce waste. These savings impact the business bottom-line and is transfer to consumers in the form of lower prices.

Economic Impact | Profits

UN espouses business models/ development models that are sustainable, inclusive and equitable. As discussed in the examples above, sustainability is not devoid of sound business principles, competitive strategies and operational efficiencies. Conversely, we opine that those are the very pillars that make sustainability work in business. We further opine that businesses should embrace the symbiotic stakeholders’ approach—acknowledging that stakeholders are interdependent and interwoven for their mutual success and wellbeing. Some oppose the idea of symbiotic stakeholders and advocate for two tier stakeholders view. Ultimately, businesses should always examine the materiality of each proposed sustainability initiative. Materiality or the strategic relevance calls for identifying and prioritizing the issues that matter most to their business model and stakeholders. Anything short of that tend to be unsustainable at best or simply greenwashing.

UN espouses business models/ development models that are sustainable, inclusive and equitable. As discussed in the examples above, sustainability is not devoid of sound business principles, competitive strategies and operational efficiencies. Conversely, we opine that those are the very pillars that make sustainability work in business. We further opine that businesses should embrace the symbiotic stakeholders’ approach—acknowledging that stakeholders are interdependent and interwoven for their mutual success and wellbeing. Some oppose the idea of symbiotic stakeholders and advocate for two tier stakeholders view. Ultimately, businesses should always examine the materiality of each proposed sustainability initiative. Materiality or the strategic relevance calls for identifying and prioritizing the issues that matter most to their business model and stakeholders. Anything short of that tend to be unsustainable at best or simply greenwashing.

It is indeed imperative to synchronize the three pillars of sustainability. Social inclusion creates access to wider talent pool and broadens market scope for businesses, environmental protection leads to a sustainable source of natural resources and economic impact avails livelihoods. TK