Business

Description

This driving force intends companies' attitude to sustainability. Corporate Social Responsibility has become a key word for company CEOs. NGOs are checking whether products are being produced in a fair labor environment, and boycott movement worked as a strong power to correct companies’ attitude. The concept of Social Responsibility Investment changed attitude of pension funds to invest in companies which meet criteria regarding sustainability. Due to a survey by Eurosif, 17.5% of financial assets managed in Europe has SRI policy. Thus, profit is still important figure to measure companies’ achievement, but not an exclusive measure now. Even though companies are more concerned about sustainability, some of them are reluctant to increase capital expenditure in order to reduce CO2 emission. It is said companies need more effort to achieve the target set by Kyoto Protocol in 1996, but this means that they have to choose wheter to give up part of their profit or to change their business strategy. A lot of famouse strategists are talking that companies can aim both profitability and sustainability, and some of them emphasize that companies cannot survive without changing their strategy.

Public’s interest in sustainability is creating new businesses. A Green New Deal which was advocated by British researchers, and became famous by Obama administration, states that government should spend its budget on training ‘carbon army’ of workers to provide the human resources for environmental businesses. Thanks to huge amount of economic stimulus packages in developed countries, new businesses are expected to grow.

Enablers

People’s interest

More people get interested in sustainability and companies’ social activity, sustainable business will be more popular. Also, people can be a shareholder of sustainable company, and help its business as a provider of risk money.

Inhibitors

Shareholders' requirement for higher profit

Managements cannot ignore shareholders even if they try to look at society. If shareholders require higher profit with low expense on sustainabilities, managements will have difficulty in changing their companies to sustainable companies.

Reference

Eurosif

http://www.eurosif.org/publications/sri_studies

A Green New Deal

http://www.neweconomics.org/gen/z_sys_publicationdetail.aspx?pid=258

Stuart L. Hart (1997) Beyond Greening: Strategies for a Sustainable World, Harvard Business Review