Can Bad Companies Do Good?
There’s quite a few big names in the list of Tech With Purpose news articles in this week’s update, so I thought it would make sense to discuss the topic of companies that have had a “questionable sustainable past” and how we react to their new statements about sustainable futures.
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In June I posted a poll on LinkedIn asking whether or not companies with questionable track record of putting people and the planet first should be listened to when talking about their plans to become more sustainable, planet- and people-friendly businesses.
At the time of writing, the response to the poll was an overwhelming “yes, but…“. (Click the image to share your opinion, and let’s see if that changes?)
The genesis for this poll came while talking to a large international company whose business sits within an industry widely acknowledged as one of the worst carbon contributors on the planet.
After speaking with them, I researched their social media activity, finding some of the posts relating to their new focus on becoming more people and planet friendly, more sustainable.
Whilst a majority of the comments were congratulatory, positive or even thankful, there were also a number of brutally negative remarks about the historical, and in some cases ongoing, impact of the company’s existing products and services. There were of course those shouting “green-washing” as loud as their keyboards would allow.
As outlined before, the importance of sustainability in business has been recognised by a minority of companies for a while. However, with recent global events and changes in institutional financial attitudes (something this site predicted a few years ago), there has been a groundswell of awareness and action. This is making companies of all types and sizes realise that sustainability is crucial for their future.
However, not everyone is convinced, and “shareholder return” is testing the resolve of some. Warren Buffett’s opposition to ESG relate reporting, reaffirmed his company’s focus on shareholder rather than “third parties”. Similarly, while speaking with executive in another multi-national company, I heard of how their management are still struggling to deal with shareholder demand for clarity of focus on their 5 year returns, while also realising that without meaningful changes to the sustainability of the business, year 6 returns might very well be trending towards zero.
Beyond bothersome pasts
Like the changes to our climate, planet and societies, the ESG, SDG, Impact and sustainability movements aren’t going to abate anytime soon, and as such, it is imperative that companies looking to remain relevant in the future address their flaws and set out a path to a better future – whether they have a questionable past or not.
In fact, one could argue that those entities that have had the biggest negative impact, should indeed be more focused than any on creating a more sustainable future.
Some companies with bothersome backgrounds might struggle to find a way to move away from their legacies. Despite this, and regardless of their internal struggles, their markets and customers will undoubtedly migrate in the coming years.
Bad businesses doing good?
The oil industry is an interesting example. Today, many oil companies are already a long way down the transformation path towards energy companies, repurposing their scale and reach to research, generate, manage and distribute renewable energies. What’s driving this? The fact their businesses already faced an existential crises from a finite supply of fossil fuels, or a new sustainable future conscious? Indeed, does it actually matter, or is it the outcome that matters here? I think the answer here is “it depends…”.
The mobile telecoms industry is another interesting example. Depending on who you listen to, electricity consumption is the second largest cost in a mobile operator’s business, so it makes sense for them to commit to reduction in energy consumption, especially as price competition in that market continues their race to the bottom.
So, a mobile operator claiming a sustainable future on the basis of energy reduction and a switch to renewable energies alone is probably worth a little more scrutiny before applauding their sustainability achievements too much.
However, an operator that commits to 100% renewable, reduced consumption and the deployment of air quality sensors across its network (see KT’s GLOMO shortlist entry) or investment into education and schools (see Telefonica’s SDG alignment) should attract more positive attention and acknowledgement.
Of course, if you wanted, you could still argue that these companies benefit in the long term, and why shouldn’t they? Business by nature is about building benefit. The nuance here is that companies need to identify and acknowledge harmful practices, and develop new strategies to continue eliminate the harm, whilst growing the business and giving back more than it takes.
Green-washing or genuine commitment?
Reflecting the sentiment of my LinkedIn poll, I believe companies with questionable, or even down-right demonstrably bad, legacies should be not just allowed, but encouraged to address the past and develop more sustainable futures.
The first step in this processes will tend to be somewhat introspective, with independent analysis followed by public acknowledgement of the status-quo. From there, a path to a better future can be plotted, communicated and tracked.
As cited in a previous post, integrity will play a strong role here, for example, is the company using sustainability to just reach a new audience demographic, or are they genuinely looking to better themselves and humanity’s future on this planet?
To get a sense of integrity we need to look beyond the PR and social campaigns, and deeper into the annual accounts, investment strategies, the attitudes of employees and more broadly, how they engage with, and deliver to their stakeholders, not just shareholders.
A focus on stakeholders, rather than shareholders, helps understand the fullness of the sustainability drive, looking at how the business interacts not just with shareholders, directors, investors and employees, but also externally across customers, the environment, schools, communities, partners, suppliers and more.
Companies that put their heads-in the sand and don’t begin this process of introspection, adaptation and communication will not survive the transition. Companies who talk a talk, but aren’t seen to walk the walk, will also struggle to gain stakeholder acceptance. Only those that are seen to grow whilst applying sustainability with integrity will proposer in the new purpose-aware economy.
Tech With Purpose Companies of Tomorrow
As an independent platform, focused on purpose-driven leadership, technologies and companies, I am excited to engage in more of these discussions.
While, to date, a majority of the content and interviews on this site have focused on small to medium sized technology companies and leaders, the purpose of Well, That’s Interesting Tech! is to provide a platform to showcase companies and leaders who are developing or using technology to create a better, more sustainable world for all of us.
As such, in the coming months I will be speaking with larger companies, even those with historically questionable practices about their plans to be more sustainable and how they’ll help achieve the UN SDGs. If this is of interest, stay tuned, get in touch, or sign up for the newsletter. (I’ll plant a tree on your behalf, when you do)
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