Capitalism and sustainability: a love-hate relationship

Showing leadership in turbulent times
PostedJanuary 08, 2014, in  Step 8: sustainable society
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‘Management is doing things right, leadership is doing the right things,’ said the well-known management consultant Peter Drucker at one time. A statement continuing to gain strength as we live in turbulent times with massive challenges for mankind and its societies. How can we make management start doing the right things?

Source: The Guardian Sustainable Business

Growth versus sustainability

Right: sustainability is in the spotlight. Multinationals communicate only too eagerly about the way they give meaning to corporate social responsibility. But at the same time economic ambitions are expressed, and these are usually synonymous with growth. But this concept is hardly reconcilable with a sustainable future....  

Pyrrhic victory

Take Unilever for example, a multinational in the field of personal care, cleaning products and food. Unilever sells products in over 190 countries and creates around € 50 billion in revenue annually. Every day more than 2 billion consumers use a Unilever product. The company presents itself as an organisation working hard towards reducing its ecological footprint. They claim to have reduced their greenhouse gas emissions by 6% since 2010. At first glance this seems to be a good development, but the company has also expressed the intention to double their size by 2020. Compared to that, the actual saving is not more than a Pyrrhic victory...

Commitment to the environment

It can be done differently: the Brazilian company Natura Cosmetics was named the second most sustainable company in the world in 2012. The reason: CEO Alessandro Carlucci drives towards financial success for all stakeholders, but at the same time commits himself to the environment and the local communities. The rationale: we are all connected and a healthy balance between them now is more important than the economic growth target of one business.

Personal beliefs

The strategic direction of Natura is strongly influenced by the personal beliefs of Carlucci. His sustainability goals give the company personality. This also has an impact on the customers and other stakeholders, because they identify with people rather than with companies. A CEO who puts on a human face, is more persuasive. This is a useful tip for the ‘average’ CEO as their attitude is generally characterized as business-like (meaning: impersonal).

The power of the market

But not only CEO’s should think about what face to put on their leadership. We also need to ask ourselves: what do we expect from business leaders? A business savvy instinct, decisiveness and a well thought through vision? What else? But to what extent do we expect our leaders to drive sustainability? When market expectations change, the industry changes. The market is powerful. We are the market. A valuable insight.

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PostedJanuary 08, 2014, in Step 8: sustainable society
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