People + Planet = Profit
Our business schools have taught us to focus on profit. Period. So we have created budgets and focused on hitting the budget. And our business schools have taught us to break large goals into smaller goals for each functional area in our company, with the assumption that if we optimize the performance in each of those functional areas, our company will thrive. Unfortunately, it doesn’t really work that way. Most of the time, the goals of one department conflict with the goals of other departments. And budget-setting time is really a win-lose power play in which each department tries to get as much of the pie as possible. As long as we continue operating under these fundamental principles, we’ll keep getting the results we’ve been getting. But there is another way.
This new way focuses on process and people, with the assumption (which has been validated by extensive research) that the company will thrive and will produce greater and more reliable profits. The charts below show that Sustainability produces outstanding financial results
The Living Asset Management Program includes 60 companies, located in countries around the world, that have a culture rooted in Sustainability’s principles. These companies are deeply committed to people and the planet. The graph on the right shows the cumulative return to their shareholders of those 60 companies (in royal blue), compared to other broad indexes.
Profits and People
Fortune magazine publishes its Best 100 Companies to Work For list every January, starting in 1998. The graph on the left shows the return to shareholders of those companies in royal blue, compared to the magenta line of CRSP, a very broad index of all traded securities.
Profits and Planet
In Green to Gold, Esty and Winston identify 50 companies (25 in the US, and 25 based internationally) who are environmental leaders. The graph on the right shows the return to shareholders for the 50 environmental leaders (in royal blue) compared to the S&P 500 (magenta) and the FTSE 100 (yellow)
Not sure how to make this happen in your company? Click on Our Approach.
Not sure about the payback or the risk? Click on Value Proposition.