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The Bumpy Road to Sustainability

Posted by: Graham Hales on November 28, 2011

Creating a sustainable economy takes time, but this reality is severely challenged in today's corporate environment – one that feeds off quarterly results and gives CEOs a four-year life expectancy.

Organisations understand the need to do the right thing if they’re going to have businesses with tenure and longevity. If they ever lose sight of their social responsibilities, their consciences will soon be pricked by the threat of social media saboteurs. While all of us can appreciate the fundamental long-term benefits of sustainability, it’s hard to break out of the cycle and make the necessary investments if we want to achieve truly sustainable businesses.

In a perfect world, the economic downturn affords organizations the opportunity to roll up their sleeves and work harder on their corporate citizenship strategies. Early promises of sustainability now exist in a world that wants proof and is quick to expose attempts at ‘green washing.’ But there is also a climate of encouragement that allows organizations to show their understanding, participate in the debate and catch up on delivering appreciable results against consumer’s preconceptions of corporate citizenship.

It’s easy to blame the corporate world, but much of the fault lies within human nature and the culture we created for ourselves. Symbols of success have been overtly consumer-centric, fueling our desire for instant gratification.

If we just consider our own investment portfolios or pensions, we can see the need for our own investments to outperform the market. If they are sustainable, that’s a bonus, but to be sustainable and perform below the market is difficult for any investor to accept.

In many cases, we are passive investors, placing the responsibility in the hands of fund managers. They create reports for us that we give cursory glances towards -- just to see if they’ve outperformed the market, not to consider the real value of the businesses into which we’re inadvertently investing.

These all-too-rare personal voyages of self-reflection are exactly what are taking place within the corporate world. Can organizations temporarily separate themselves from their short-term results and sacrifice some of that desirable performance to deliver a more sustainable business?

It’s easy to see what has to happen in the long term, but our addiction to short-term results distorts our line of sight.

Graham Hales is the CEO of Interbrand London.

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