When it comes to sustainability, most of the attention is focused on how large corporations can minimize their environmental impact. Wal-Mart’s Sustainability Index, for example, received much fanfare when it was first announced, since the ripple effects of the world’s largest retailer greening its supply chain would be considerable. However, even solo service professionals have a supply chain and can take steps to reduce their carbon footprints. In fact, in many ways the issues are similar to those of a large corporation but on a much smaller scale. Here are some ways to reduce your impact:
These are just a few things to think about in terms of your environmental impact as a solo service professional. What else would you add to this list?
The triple bottom line is one of the fundamental principles of sustainable business. The bottom line refers, literally, to the last line on an income statement that shows the profits made by a business. Traditionally, business has been all about the bottom line and profits.
That is all changing now.
A business that focuses only on profits ignores two critical elements necessary to its success: human capital and natural capital. Simply put, a company cannot operate without people to carry out the operations or without natural resources to provide raw materials that can be turned into a finished product. Thus, to look at a business solely in terms of profit is to ignore two of the necessary components of a viable business.
The triple bottom line attempts to rectify this situation. Rather than looking just at profits, the triple bottom line takes into consideration both people and the planet as well. What are the social and environmental impacts of a business in its pursuit of profits? Or, how are people, planet, and profit interrelated in a business?
The triple bottom line has been recast in several related ways, such as environment, economy, equity and human, natural and financial resources. In the case of Cultivating Capital, I prefer to think of it as human, natural, and financial capital.
Businesses that work to implement the triple bottom line are recognizing that a business model focused solely on financial profit is inherently unsustainable. The focus on the triple bottom line provides a more holistic understanding about the business, which can also help savvy owners and managers identify both risks and opportunities that might not be readily apparent when taking a more traditional, one-dimensional perspective of the business.
A triple bottom line business, therefore, will consider its social and environmental impacts when making business decisions. In many cases, this means that the business will report not just on financial performance but also on social and environmental performance. This has also given rise to corporate social responsibility, the practice of businesses assuming responsibility for their social and environmental impacts.
Are you interested in learning more? If so, you might want to read the next post about “Natural Capital: What It Is and What It Means for Your Business.”
When I chose the name “Cultivating Capital” for my new business, a colleague whom I greatly respect asked me about the name. I explained that the triple bottom line of sustainable business requires us to think about people, planet, and profit. However, we can’t really build triple bottom line businesses if we’re primarily focused on the profit component and only addressing the people and planet components through recycling programs and the occasional company volunteer event. If we really are going to build triple bottom line businesses, we must grow our social, natural, and financial capital (people, planet, profit) for the long-term, to avoid the disasters that result from short-term thinking.
Then he made an astute observation: “Most people will assume that it’s a financial services firm,” he said. “Are you willing to have this conversation every time?”
I answered in a heartbeat, “Yes. We have to have this conversation.”
My reason for believing this is simple. If what we need to do is to rethink how business operates – and as we witness both environmental and economic crises, it’s obvious that we do – then we need to realize that the paradigms of the past are simply not suited to the needs of the future.
Take, for example, Wal-Mart. As the world’s largest company, it has obviously excelled at growing its financial capital. At the same time, it has neglected its human capital. How has it done this? By not providing proper benefits to employees, resulting in alienation from certain consumers and “boycott wal-mart” movements. It is also just starting to pay attention to its natural capital, with a sustainability index that asks its 100,000 suppliers to report on energy and climate, material efficiency, natural resources, and people and community.
At the other end of the spectrum are organizations that are great at growing their human capital, yet don’t manage their financial capital very well. In fact, we don’t even call these businesses – we call them nonprofits. They fulfill a social mission and excel at bringing people together. However, their focus on social capital over financial capital places them in a precarious position, as they often manifest the organizational equivalent of living paycheck to paycheck through their lack of adequate financial resources.
However, this distinction between companies that exist to make money (grow their financial capital) and organizations that exist to do good (grow their social capital) implies that making money and doing good are at odds with each other. Fortunately, there is growing evidence that it is possible to be profitable and beneficial at the same time. The rise of Green MBA programs and Benefit Corporations (B Corps) are but two examples of the opportunity to make money while doing good.
The unifying feature about these various developments is that they require new ways of thinking that did not exist too long ago. In short, the distinction of “for profit” companies that only make money vs. “nonprofit” organizations that only do good is a relic of 20th century thinking. The challenges of the 21st century require us to recognize the limits of such distinctions in a new economy in which the businesses that will succeed are those that can make a profit while also being socially and environmentally responsible.
This is why I answered “yes” when my colleague warned me most people would assume that Cultivating Capital is a financial services firm and asked if I wanted to have this conversation every time. We simply can’t expect business to change if we continue thinking that the only capital worth managing is financial.
My own green journey has been a long time in coming. I’ve never considered myself an environmental activist, nor have I ever actually hugged a tree. Yet somehow, the twists and turns of life have led me to develop a deep commitment to sustainability and in turn to green business.
The Early Years
Growing up in the 80s, I never gave a second thought to the amount of disposable goods that I was using. Who did, back in those days? Okay, there were some forward-thinking people, thankfully, who were starting to look at the issue and call attention to it. But the vast majority of us lived blissfully oblivious to the negative impacts, both social and environmental, of our consumerist habits.
In the 90s, when I went to college, green issues moved onto my radar, but they were primarily limited to occasionally recycling. In fact, it wasn’t until my first year after college, when I found myself working my first “real” job as an editor in Philadelphia, that I began to realize that there were alternatives to the mainstream lifestyle of consumerism that I was leading.
For this life-altering realization, I owe much credit to Utne magazine. Month after month, as I read through the magazine, I was presented with stories about people who were making choices to live a life aligned with their values and to actually do something about the problems that face our society. Looking back, I can’t recall any stories that were particularly noteworthy or brilliant in their ingenuity, but I believe that their power to grab my attention lay in their ordinariness.
One example that I can recall was a story about a couple of people in Denver, I believe, who were organizing a local merchant’s group to encourage consumers to buy local. Now, I know that buying local is hardly an earth-shattering idea; however, at the time, I had spent my entire life accepting that making purchases at large chain stores was the only option. Up until that point, it had never even occurred to me that there might be alternatives and that they might be better in terms of their social and environmental impacts.
A Glimpse of Green
Fast forward to 2004, when I found myself back in the Bay Area after finally getting tired of living through actual changes in seasons. As Health & Safety Director at the American Red Cross, I worked with volunteers on a daily basis, people who were passionate and committed to preparing and responding to emergencies and disasters. While I had deep respect for the dedication of these volunteers, and I loved working for a humanitarian organization whose mission was to help people, I also realized that their passion was not my own. Instead, I found myself spending my evenings after work reading and learning more about sustainability (and spending my weekends volunteering at the local animal shelter, indulging my other passion for dogs).
Although I had never been particularly passionate about environmental issues, I have always felt strongly about issues of social justice and inequity, both domestically and internationally. I simply don’t believe that turning our backs on the suffering of others is acceptable, especially in this day and age when some people have so much and others have so little. I believe that my passion for sustainability and green business was stimulated when I realized that this wasn’t just about environmental issues but about social issues as well. While as a consumer, I may not have been motivated to buy a particular shirt just because it was made from organic cotton, I would be greatly motivated to buy one and pay a premium if I knew that it had not been made in a sweatshop by exploited workers.
By this time, I was a member of Co-op America (before it became Green America), an organization whose mission is to harness economic power to create a socially just and environmentally sustainable society. I received their notice about an upcoming Green Festival, and off I went to check it out. I was amazed at what I found – there was a whole green world out there! Up until this point, I had not been particularly surrounded by like-minded people; not that anyone was against sustainability, but among my family and friends, no one was particularly green either. For the first time, I came into contact with people who were actually working towards developing a green economy, who were creating businesses that were socially just and environmentally sustainable, and I caught a glimpse of the potential for transformation if we could actually make the shift from our current economy to a green economy.
After four years with the Red Cross, I was also getting restless for a change. While I loved the nonprofit world, I was also becoming susceptible to the burnout that comes with trying to effect change with limited resources. However, one of my big realizations while working at the Red Cross was that I actually liked business; indeed, being a program director was like running a small business: I had to hire staff, manage inventory, prepare budgets, handle sales accounts, and more – all while ensuring that the programs continued running and preparing to head for the Gulf Coast on short notice during hurricane season (I ended up serving on two disaster relief assignments after the 2004 Florida hurricanes and Hurricane Katrina in 2005). At the same time, I also realized that in order to help advance the green economy, I would need to brush up on my own business skills. My liberal arts background had served me well – in fact, it’s now being recognized that liberals arts training can help in business – but my attention turned to going to business school to get an MBA.
Fortunately for me, some visionaries had had the foresight years ago to start an MBA program for people with strong social and environmental values. The Green MBA program was the first of its kind – an MBA in Sustainable Enterprise. It included the core business school courses – operations, finance, accounting, economics, marketing – but with sustainability considerations integrated throughout. In practice, this meant that in economics, for example, we learned not just about neoclassical economics but about ecological economics as well – an economics that recognizes that the economy is dependent upon finite natural resources. In marketing, in addition to learning the traditional “four P’s“, we discussed greenwashing – making a product appear to be environmentally friendly, when actually it is not. In accounting, we looked at the limitations of the traditional accounting system for addressing corporate social responsibility reporting and discussed ethical issues related to accurately reporting the financial performance of a company in a post-Enron business environment.
I was also lucky enough to find the perfect job while I was in school working for a company called Greenerprinter in Berkeley. As a small but deeply green business, Greenerprinter was the perfect place for me to take the learning that I was doing in school and see how it worked in an actual business with the day-to-day challenges of meeting sales targets, attracting and retaining customers, working with suppliers, and staying ahead of competitors. When I moved into the position of Sustainability and Marketing Manager, I experienced firsthand the challenge of getting the green marketing message out to consumers as well as learning about the process of attaining reputable third-party sustainability certifications, as we became certified through both B Corporation and the Sustainable Green Printing Partnership.
Between the Green MBA and Greenerprinter, my days and nights were immersed in the world of green business – and I loved it, soaking up all that I could. I spent my days working on sustainability certifications for Greenerprinter, my nights working on Green MBA projects, and my weekends in class talking with my classmates and instructors about the triple bottom line. I attended green networking events and conferences, kept up with the latest news about sustainable business, and let my own mind alternately wander from imagining the possibilities to doing the hard-core critical thinking about sustainability.
A Better World and Beyond
Now I find myself in a role that I never would have imagined back in the day – as a green entrepreneur and sustainable business consultant. For me, there was no turning back once I left the Red Cross to start the Green MBA program. Because of my deep passion for social justice, I know that I would have to work towards the alleviation of human suffering on some level. At the same time, having worked in the nonprofit sector, I know that they simply do not have the resources that business has to effect fundamental social change.
By developing businesses that are both socially just and environmentally sustainable – while also, of course, being financially viable – we can shift towards jobs in which workers are paid a decent wage, are not exposed to harmful toxins, and are taken into account by companies making decisions that will affect them. We can ensure that local communities are not harmed in order to maximize corporate profits. At the same time, we are placing unbelievable strain on the planet’s natural resources, witnessing mass extinction of species, and are already seeing the effects of climate change – all because of our erroneous, fundamental economic assumption of infinite natural resources. We can rectify this situation by recognizing the limits of natural resources, developing products that work within those limits, and re-aligning supply chains and distribution channels to minimize the environmental impact of those products.
When I delivered my final business plan presentation for the Green MBA, I stated that I was both an idealist and a realist. I am an idealist because I do believe that a better world is possible. However, I’m also a realist because I know that for that better world to come about, business must play a role in making that happen. I find that green business harnesses my own passion for social justice and environmental sustainability while also being brutally practical about how to effect change. I can think of nothing else right now that I would be prepared to commit to both personally and professionally than the transformative power of green business.
How about you? How did you become interested in green business?