Expanding the bottom lineâ€”everyone wins when companies adopt sustainable business practices
News + Events : Expanding the bottom lineâ€”everyone wins when companies adopt sustainable business practices
One of the biggest challenges to getting corporations to â€œgo green,â€ 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.
Murray Silverman is one of five faculty members teaching in SF Stateâ€™s MBA Emphasis in Sustainable Business program, one of the major reasons State ranked 23rd nationally in the Aspen Instituteâ€™s 2009-2010 â€œBeyond Grey Pinstripesâ€ survey. The survey gauged schoolsâ€™ effectiveness in training students â€œfor (the) environmental, social and ethical complexities for modern day business.â€ 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 facilitiesâ€™ toxic chemicals. â€œIt became a community right to know act,â€ recalls Silverman. Soon, Silverman says, â€œCompanies began thinking about environmental issuesâ€”not just compliance but also the opportunity to go beyond compliance.â€
Part of that opportunity was economical. â€œPollution prevention saved companies like 3M literally billions of dollars,â€ says Silverman. â€œTheyâ€™d been spending a huge amount of money dealing with waste.â€
As ancillary benefit, Silverman adds, companiesâ€™ public reputations improved. By the late 1990s, â€œThe top 1,000 companies in the world (had begun) issuing sustainability reports.â€
Meanwhile, 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. â€œWhat weâ€™re not teaching our students is to try to get businesses to do things that will hurt their bottom line,â€ he explains. Even though theyâ€™ve had two decades-plus to get used to the idea, some businesses still think tree-hugger when they hear the word sustainable. â€œThatâ€™s a rear-view mirror, unfortunate point of view,â€ Silverman says. â€œFirms that see things like that will be at a competitive disadvantage. Theyâ€™ll be playing catch-up.â€
While the SF State program has produced its share of green entrepreneurs, such as 2010 MBA graduate Luke Wilson who recently launched â€œ(B) earth,â€ 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. â€œOur idea is not to produce sustainability managers,â€ Silverman says. â€œWhat companies need are MBAs in marketing or finance who understand sustainability.â€
Companies engaged in sustainable business practices speak of a â€œtriple bottom line,â€ defined by Andrew W. Savitz and Karl Weber in their book â€œThe Triple Bottom Lineâ€ as, â€œcaptur(ing) the essence of sustainability by measuring the impact of an organizationâ€™s activities on the world.â€
â€œA positive Triple Bottom Line,â€ they continue, â€œreflects an increase in the companyâ€™s value, including both its profitability and shareholder value and its social, human and environmental capital.â€
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. â€œThey set up a network of independent tailors around the company, who assemble the clothing locally. Thereâ€™s a big opportunity for someone whoâ€™s clever.â€
Larger companies, Silverman cautions, can only practically approach sustainability incrementally. â€œWal-Mart is engaged in a huge transformation,â€ he says. â€œTheyâ€™re doing a lot, but every step is incremental. But theyâ€™ve changed their culture; management has begun thinking about sustainability.â€
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, â€œEverything I teach says thereâ€™s no need to do anything (sustainable) that wonâ€™t contribute to your company being more profitable. Itâ€™s not about sacrificing. We can list 20 initiatives; if any one of them canâ€™t be justified on business grounds, we wonâ€™t do it.
For information about the MBA Emphasis in Sustainable Business, see Graduate Programs : MBA : Emphasis in Sustainable Business