What is a Sustainable Business?
Welcome back to my Sustainable Business 101 series.
In my last post, we covered why sustainable business even matters.
And today, we’re talking definitions.
The Problem with Not Defining Sustainable Business
Sustainability and sustainable business have been left widely undefined.
This poses a potentially major issue. If these terms remain undefined, the standards on sustainability can be set by those with the largest budgets, infrastructure, and PR teams (remember the last email: brands can dictate culture).
For example, we have Marc Benioff, the CEO of Salesforce, positioned as a leader on NPR for stakeholder capitalism.
Benioff is quoted in a section titled “Defining stakeholder capitalism,” saying that, in addition to their shareholders, the planet and the local homeless community in San Francisco are Salesforce’s stakeholders as well.
Salesforce also didn’t pay a cent in federal income taxes in 2020, while earning $2.6 billion in profit. And Marc personally earned $26 million in total compensation that year.
Or we have Walmart, setting a stake in the ground by claiming that they will become a “regenerative company.”
This, after Walmart has had decades of labor disputes and scandals, from union-busting to employing sweatshop labor forces abroad.
So, who are we going to let define what a better, sustainable business is?
The Marc Benioffs of this world, who made $26 million in 2020 while his company evaded ANY federal tax liability?
And yes, companies like Salesforce have navigated the U.S. tax system legally, but:
1 – These companies have lobbied incessantly to make our tax rules as they are.
2 – The private sector argues to limit regulations and government intervention in markets, but at the same time they defer any accountability for our unequal tax system by claiming they are just playing by the given rules.
You cannot switch positions to whatever is most convenient for you at the time.
3 – It’s just absurd to take the position of defending companies making billions of dollars (in profits) at a time when the national (and in some cases global) discussion centers around how we pay for:
- Addressing the climate crisis.
- Providing parental leave for working families.
- Offering universal Pre-K.
- Increasing the number of Americans who have access to quality healthcare.
How can we allow those who have historically been the greatest exploiters of broken and convoluted systems to be in charge of reimagining those same systems for good?
I just don’t believe it’s a good idea. It’s like putting arsonists in charge of the fire department.
Don’t get me wrong, I’m all for getting the biggest offenders to make changes; but I’m less interested in handing them a megaphone and inviting them to be the spokespeople.
So, I believe the exercise of properly defining which businesses are sustainable is critically important.
Defining Sustainable Business for Objectivity’s Sake
We need to start here so that the terminology used in this conversation can be as objective as possible.
This is so that we can first bring this conversation into as objective terms as possible.
For example, a business might want to assess, say, its profit.
A business is either profitable or not, right?
Likewise, I believe a business should either be sustainable or not.
If a business isn’t profitable, it needs to work toward being so.
In the same way, if a business is determined unsustainable, it should work toward becoming sustainable as diligently and urgently as it would if it were not turning a profit.
So, let’s get to defining.
The Oxford dictionary defines “sustainable” as
“able to be maintained at a certain rate or level.”
So, what does that mean for sustainable business?
Well, we’ve hit a tipping point. For business “to be maintained at a certain rate or level,” a business must be leaving the world, the communities, the people and stakeholders it encounters as a result of its existence, better off.
Our world needs repair. Our planet, our ecosystems, and our economies need to be restored.
The models for economic growth that got us into this climate crisis and massive economic inequality won’t be the models that get us out of it.
For business to be done, for the economy to function, they must have a positive impact on people and the planet.
And so, in my opinion, for a business to be sustainable, it must:
- Leave the world around it better off, as part of its operation (not as some sort of supplemental charity or corporate social responsibility program).
- Have positive social and environmental impact at its core.
- Continue to be an advocate for change and standard setting in its industry by persistently redefining and reinventing the level of sustainability and positive impact that any one industry or sector can have.
- Be kept accountable (not by itself) by working with and pursuing third-party certifications, external evaluations and auditing, etc.
- Be radically open and transparent by knowing what its footprint is, being able to trace where and how its products were made, and making a diligent and consistent effort to share this information publicly.
It’s no longer fair that for a business to succeed (to profit), the planet and the people must sustain it.
A sustainable business is sustainable only if the world is (truly) better off because of it.
In the next essay, we’re going to be sharing specific examples of exactly which businesses exemplify our definition of a sustainable business.
Until then, don’t hesitate with comments or questions.
What points of my definition do you agree with? What might you contest? Leave a comment below.
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Cory Ames
I’m Cory Ames. I’m a writer, podcaster, social entrepreneur, and the Founder of Grow Ensemble.
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