The book lays out a framework for companies to follow on the path toward integrating the triple bottom line of economic, social, and environmental sustainability.
SocialFunds.com: Book Review
By Bill Baue • July 13, 2006
Andy Savitz, formerly of the Environmental and Sustainability Services group at PricewaterhouseCoopers (PwC), has written perhaps the best, most comprehensive book to date on corporate sustainability. Along with co-author Karl Weber, he coins new terms and concepts to describe the evolving concept of corporate sustainability, and provides a cornucopia of real examples to illustrate his points. More importantly from a practical perspective (as the clunky subtitle suggests), he maps out how corporations (from the CEO to the middle manager) can traverse the landscape toward the The Triple Bottom Line of economic, social, and environmental sustainability.
Too much commentary in the business world on sustainability advances an emasculated version of the term, forgetting its roots in the Brundtland Commission's 1987 definition of development that nourishes (not impoverishes) global social and environmental health.
"[A] sustainable corporation is one that creates profit for its shareholders while protecting the environment and improving the lives of those with whom it interacts," writes Mr. Savitz. "It operates so that its business interests and the interests of the environment and society intersect."
This definition raises a bit of a red flag by not balancing social "improvement" with environmental "replenishment" (instead of "protection"). However, Mr. Savitz later reveals a deep understanding of the range of controversy surrounding the definition of sustainability by discussing in depth leftwing cynics and rightwing skeptics of the term. He admits many valid points of the cynics — such as progressive changes coming at the margins instead of the core of businesses and sustainability initiatives motivated more by a desire to avoid regulation than true commitment. He also reframes many of the skeptics objections, for example quoting Adam Smith's social conscience from The Theory of the Moral Sentiments to counterbalance his more famous claims of "enlightened" self-interest (the basis of free market thinking) in The Wealth of Nations.
Mr. Savitz also importantly distinguishes between sustainable and responsible corporate behavior, oting significant but not complete overlap. He illustrates this distinction in developing one of the most important conceptual coinages in the book, the sustainability "sweet spot" — namely, the locus where business interests intersect with social and environmental interests. He displays this convergence graphically in a four-celled matrix with two axes — one representing profitability, the other representing social and environmental benefits — with the goal of moving into the northeast corner of maximizing financial, social, and environmental returns.
"If it were possible for [an oil] company to shift its business so as to eventually supply clean and renewable energy (such as wind or solar power) or conservation services while maintaining or even increasing revenues, that would be a responsible and profitable choice," Mr. Savitz writes. "BP has since [1998, when it rebranded itself "Beyond Petroleum"] reduced greenhouse gas emissions from its own production processes (saving an estimated $650 million thanks to improved efficiencies along the way) and has invested heavily in alternative energy sources, including solar power."
"BP is not yet sustainable by any means, but it is acting responsibly as it marches toward an ever larger sweet spot," he adds.
This example also illustrates a much later set of concepts Mr. Savitz introduces, minimization (or "being less bad") and optimization (or "being more good.")
"Optimization aims not just to reduce pollution, but to restore the environment; not just to eliminate employee accidents, but to create a healthier, happier workforce; not just to decrease harm to the community, but to revitalize it," Mr. Savitz writes.
Note the espousal of replenishment over mere protection, suggesting a development beyond the initial definition of sustainability. Indeed, by the end of the book, Mr. Savitz is citing Global Reporting Initiative (GRI) co-founder Allen White's Corporation 2020 initiative to reformulate the corporate structure. He also praises the move toward "dematerialization," whereby companies substitute services for products (for example, VW re-envisioning itself as a "global mobility group" to focus less on the production of cars and more on the transportation services they provide.)
Counterbalancing these more theoretical leanings is an exceedingly practical focus, with an appendix charting the entire course executives and managers need to consider to move their companies toward sustainability. Suggestions include a "virtual sustainability department" that integrates expertise and knowledge from across the entire company, as well as strong encouragement to report sustainability policies and performance using GRI guidelines.
Finally, the book is incredibly readable. The chapter entitled "Renewing the Penobscot" is a page-turner. It chronicles the story of negotiations between PPL Corporation and environmentalists, fishing enthusiasts, the Penobscot Nation, and government officials to address problems with damming the Penobscot River in Maine. The story unfolds in a layered retelling, revealing the drama behind what is called stakeholder engagement but really boils down to human interactions. The episode vividly exemplifies how corporate sustainability plays itself out in real life.