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Expanding the bottom line—everyone wins when companies adopt sustainable business practices

News + Events : Expanding the bottom line—everyone wins when companies adopt sustainable business practices

12/07/2010

One of the biggest challenges to getting corporations to “go green,” says San Francisco State University management professor Murray Silverman, is convincing them that adopting sustainable businesses practices will actually help, not hurt, their bottom line.

Management Professor Murray SilvermanMurray Silverman is one of five faculty members teaching in SF State’s MBA Emphasis in Sustainable Business program, one of the major reasons State ranked 23rd nationally in the Aspen Institute’s 2009-2010 “Beyond Grey Pinstripes” survey. The survey gauged schools’ effectiveness in training students “for (the) environmental, social and ethical complexities for modern day business.” Only a few years old, the sustainable business emphasis was established after a long run-up which saw sustainable and socially responsible business tenets gain prominence in the business community.

Sustainable in business means corporations who do good economically, socially and environmentally. It is borne in part by the 1986 Superfund Amendments and Reclamation Act, which included language requiring businesses to publicly account for their facilities’ toxic chemicals. “It became a community right to know act,” recalls Silverman. Soon, Silverman says, “Companies began thinking about environmental issues—not just compliance but also the opportunity to go beyond compliance.”

Part of that opportunity was economical. “Pollution prevention saved companies like 3M literally billions of dollars,” says Silverman. “They’d been spending a huge amount of money dealing with waste.”

As ancillary benefit, Silverman adds, companies’ public reputations improved. By the late 1990s, “The top 1,000 companies in the world (had begun) issuing sustainability reports.”

guy with green recycle binMeanwhile, San Francisco State had been integrating environmental issues into their business curriculum for years. By 2000, the school was offering several environmentally-focused management electives. Turning those into an MBA emphasis meant simply packaging them together cohesively.

Business is business, and Silverman stresses that going sustainable does not change that. “What we’re not teaching our students is to try to get businesses to do things that will hurt their bottom line,” he explains. Even though they’ve had two decades-plus to get used to the idea, some businesses still think tree-hugger when they hear the word sustainable. “That’s a rear-view mirror, unfortunate point of view,” Silverman says. “Firms that see things like that will be at a competitive disadvantage. They’ll be playing catch-up.”

While the SF State program has produced its share of green entrepreneurs, such as 2010 MBA graduate Luke Wilson who recently launched “(B) earth,” an eco-thoughtful baby clothing company, the program also emphasizes the changes graduates can make within mainstream companies. Once established, alums work to integrate sustainable practices holistically. “Our idea is not to produce sustainability managers,” Silverman says. “What companies need are MBAs in marketing or finance who understand sustainability.”

Companies engaged in sustainable business practices speak of a “triple bottom line,” defined by Andrew W. Savitz and Karl Weber in their book “The Triple Bottom Line” as, “captur(ing) the essence of sustainability by measuring the impact of an organization’s activities on the world.”

“A positive Triple Bottom Line,” they continue, “reflects an increase in the company’s value, including both its profitability and shareholder value and its social, human and environmental capital.”

At San Francisco State, students are encouraged to see doing good and doing well as interchangeable. Silverman cites as an example a clothing company, able to offer their products in India for a fraction of their usual retail cost. “They set up a network of independent tailors around the company, who assemble the clothing locally. There’s a big opportunity for someone who’s clever.”

Larger companies, Silverman cautions, can only practically approach sustainability incrementally. “Wal-Mart is engaged in a huge transformation,” he says. “They’re doing a lot, but every step is incremental. But they’ve changed their culture; management has begun thinking about sustainability.”

Education is paramount, if only to get past the initial hurdle of convincing companies that adopting environmentally friendly and socially responsible practices will not cut into their profits. As Silverman says, “Everything I teach says there’s no need to do anything (sustainable) that won’t contribute to your company being more profitable. It’s not about sacrificing. We can list 20 initiatives; if any one of them can’t be justified on business grounds, we won’t do it.

For information about the MBA Emphasis in Sustainable Business, see Graduate Programs : MBA : Emphasis in Sustainable Business


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