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3 Questions on How we Assess What Makes a Business Truly Sustainable

How can we ensure that we encourage and reinforce progress made by companies that are truly working towards greater commitments to sustainability, while also pursuing profits?” – Kathy Miller Perkins

In her July blog, Transatlantic Solutions to Becoming Truly Sustainable, Katrin Muff contends that it is important for businesses to have a yardstick for measuring their progress in becoming truly sustainable.  Moreover she describes two assessments, one from the B-Corporation movement and the other from the Economy of the Common Goods.  Both do indeed enable companies to measure the impacts of their sustainability-related efforts.  As I examine both assessments, I can easily understand the benefits of both. I believe Katrin would agree that their value lies mainly in enabling companies to track progress towards reaching their environmental and social impact goals. However, I fear that in discussing the categories to which we assign companies based on the results of their assessments, we may be implying that we are subjecting them to litmus tests which serve no useful purpose.  Thus, in this blog, I am sharing with you, the readers, questions I have been pondering and have not yet been able to resolve to my satisfaction. Please let us hear your thoughts on these issues.

Question 1: Is it harder for large, and perhaps older corporations to achieve the status of Muff and Dyllick’s Business Sustainability Typology 3.0?   A B-Corp website FAQ states that  “Most businesses that use the B-Impact Assessment are firms that have between 0 and 50 employees.” My question is why this is so?  I’m guessing that it is much easier for a smaller start-up company to establish a problem-solving mission and provide the means to carry it out, as compared to larger, more complex, publicly-traded companies.  If this is the case, does that mean the smaller, newer companies are more praise-worthy? Or should we be more affirming of the efforts of larger, older companies as they attempt to jump potentially higher hurdles?

Question 2:  How can we ensure that we encourage and reinforce progress made by companies that are truly working towards greater commitments to sustainability while also pursuing profits?  Recently I conducted a research study with George Serafeim from the Harvard Business School that looked at, among other things, the stages that companies go through in pursuit of sustainability.  We found several companies with missions to solve social and/or environmental problems and at the same time were profitable.  I have not found any of the organizations such as the B-Corporation or the Economy of the Common Good to directly assert that to be truly sustainable, companies cannot actively pursue profits.  However, some of the language we all use may indeed lead to this conclusion, as very often our words do imply that pursuing profits is not a worthy goal.   For example, in explaining the B -Impact assessment, the B- Corporation web site differentiates what they refer to as Sustainable businesses from B-Corporations.  They suggest that Sustainable businesses are those “whose primary objective is to both pursue positive impact and generate returns” while B- Corps are “Businesses that are primarily trying to solve a social or environmental issues.”  In my opinion, how companies are categorized is less significant that the degree to which they are using the assessments to measure and improve their

Question 3:  If a large, multinational company has dedicated only part of its business to solving world problems, where does it fall in the classifications?  Does this company fall outside the label of “truly sustainable”?  If so, are we hinting or implying that companies which have not completelytransformed their business models are, indeed, taking only superficial steps towards sustainability?

As I stated in the beginning of this blog, I am entertaining these questions because I do not have definitive answers myself. My purpose is raising these issues is: (1) to challenge you readers to share your thoughts; and (2) to caution all of us who are working with the development, administration and review of these sustainability assessments to take care to consider the complexity of the issues and to avoid looking for black and white answers. Complicated concerns deserve multifaceted solutions.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.

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