Are our quarterly profits as high as they can be? Is our stock trading at a high enough price? Do we have the cash flow to make good on our loans? Questions like these often come front and center for businesspeople; in the modern business environment of international competition they are hard to ignore.
Are our products contaminating the local environment? Do our production methods minimize the amount of pollution we release? Is our packaging environmentally friendly? All too often, these types of questions are left on the wayside. As a result, we see crises like millions of barrels of oil spilling into the ocean or a garbage patch twice the size of Texas floating in the Pacific.
Why is it that businesses often seem to ignore the second set of questions, even if the results can be catastrophic? Simply put, they think that the expenses incurred trying to resolve those questions only serve to reduce their profit margins. They believe that there is an inherent tradeoff between addressing questions of profitability and questions of sustainability. And since businesses compete with each other for higher profits, they feel as though the choice has been made for them. As much as I wish businesses could be easily convinced by calls for preserving our ecosystem and safeguarding our environment for future generations, the unfortunate truth is that many companies will be better convinced by a profit-based argument.
Thankfully, consumers are growing more and more concerned about the environment. They want to see our government take action to address the climate crisis, but they also express this concern with their buying patterns. While browsing through grocery stores or convenience stores, they take notice of products with more environmentally friendly packaging. They pass over the individually wrapped candies for something a bit more sustainable. When choosing where to shop, they pass over the chain notorious in the news for ignoring pollution regulations. Perhaps instead they pick the one that just announced their clean energy initiative a few weeks ago.
The power of buyers to reward companies that uphold their commitments to environmental and social responsibility creates a compelling argument for companies to take a hard look at their packaging practices. Instead of managing their company just to improve their bottom line of profits, companies should instead take a broader view, and consider their bottom lines in improving the lives of people and helping the planet. If they can take their company out of the red on the people and planet bottom lines, consumers will reward them on their profit bottom line; the triple bottom line is inherently interconnected. The tradeoff between profitability and sustainability is not as cut and dry as might be thought.
The rewards for adopting the frameworks of corporate social responsibility and a triple bottom line will be greatest for the pioneers who take the leap first. Until the climate crisis can be addressed in full, consumers will continue to grow more concerned, and demand environmental sustainability as the new norm. However, there is no need to wait until then. Companies ought to take the first steps now, adopting environmentally friendly packaging among others, to position themselves to have the strongest bottom lines in the future.
Essay by: Felix Moisand
Northeastern University