Earth Day 46 years later? Businesses are friends with the earth

It’s hard to believe that Earth Day is 46 years old. It was founded the same year as the Environmental Protection Agency and the U.S. Clean Air Act, both of which presaged a bevy of federal and state laws regulating business.

Back then, environmental activism had a militant strain to it that often saw business as the enemy. Executives retreated to their board rooms to fashion social responsibility as a necessary cost. Oh, how times have changed!

Today the majority of CEOs say that environmental and social responsibility is critical to competitive advantage. They embed sustainability into their supply chains, conserving energy and cutting waste to save costs and increase customer appeal. They promote products that are less harmful to our communities and to the environment.

As we mark Earth Day once more, there are signs of another impending transformation in business. This one will be more difficult and far-reaching, but it can offer a silver lining at a time when politics gather storm clouds around us.

A small but significant number of companies are evolving from profit strategies that seek only to do less harm — as in fewer carbon emissions, less packaging, less disease, less inequality — to ones that aim for positive impact.

Companies such as Unilever and Kingfisher based in the U.K., IKEA in Sweden, New Resource Bank in the United States and Natura in Brazil are making social value their defining competitive edge. They represent a new generation of “flourishing enterprises” that seek to do well by doing good.

These companies are embracing the notion of operating for world benefit. Their profit strategy is to create economic prosperity for all (not just the top 1 percent), to contribute to a healthy natural environment (not just reduce their negative footprint) and to increase human well-being.

Their reasoning is not primarily moral or doing good for its own sake. Rather, they recognize new market forces that favor greater purpose, wholeness and relational ways of being, along with — dare we say it in a business column? — love and compassion.

Paying attention to employee wellbeing and social good is opening new, untapped markets. It is leading to greater employee engagement. It is promoting authenticity and collaboration at work. In other words, there are a lot of dollars at stake.

Many people today want to support businesses with missions that serve social outcomes. While old Wall Street hands may snicker at such idealism and perceived corporate PR, the real message is that business for social benefit is not contradictory with business as a profit-making entity.

Quite the opposite, in the years ahead there will be increasing profits for businesses that help address a growing number of social and global issues from energy independence to greater personal fulfillment at work.

Graduate business students everywhere are eager to mesh mission with profit and are demanding such a shift in corporate strategy. The Weatherhead School of Management at Case Western Reserve University offers graduate students a course called “Sustainability for Business Advantage.” Dean Robert Widing believed that making the course mandatory was essential for a school whose mission is to “develop transformational ideas and outstanding leaders for the advancement of business and society.” This is the future direction of business leaders.

At the heart of Weatherhead is the Fowler Center for Business as an Agent of World Benefit, which is witnessing worldwide movement among business leaders and cataloguing innovations in business through its initiative, AIM2Flourish.

As stories come in from business school students from institutions across the globe, it becomes more apparent that the next generation of leaders is serious about their power and responsibility to use business as an agent of world benefit.

For the transformation to spread, businesses need to recognize the opportunity to “innovate for good” in response to market changes. Consumers around the world want to buy products they know were produced responsibly and can be used in ways that positively impact society and the environment.

New research at Case Western Reserve University suggests that executives who are more deeply connected to their self and to others are better leaders. They inspire and engage employees who want greater meaning and wholeness at work. Thus, part of the transformation is changing who leaders are being, not only what they are doing.

For any doubts about this new breed of leader, consider Paul Polman, CEO of publicly traded Unilever.

“I don’t think our fiduciary duty is to put shareholders first,” Polman said in a 2012 interview. “I say the opposite. What we firmly believe is that if we focus our company on improving the lives of the world’s citizens and come up with genuine sustainable solutions, we are more in sync with consumers and society, and ultimately this will result in good shareholder returns.”

In 2020, when Earth Day turns 50, the world will take measure not only of the environmental movement but also of business. Hopefully, we will celebrate the evolution of business leaders as custodians of the world for future generations — the original intent behind sustainable development. We will be able to point to corporate leaders who transformed their organizations from ones that do less harm to ones that do good, for their own business success and for all of us.