Business isn’t all about Money, Honey

By Antony Motha

“Dad, the objective of business is to make oodles of money for its shareholders, isn’t it?”

“Business is certainly about making profits, Son - but it’s not only about making profits. How profits are generated is as important as how much is generated. Business needs to be conducted responsibly.”

“How do you say that, Dad? All that you Management-types keep talking about is PAT, RoI, EVA and such three-letter acronyms that are related to money… In addition to market share and the share market, of course!”

“Not really, Son, there’s much more to it nowadays. We have finally figured out that companies cannot exist in isolation…”

“The saying ‘No man is an island’ seems to apply to companies too, Dad...”

“Responsible companies are realising that we are not just living on the earth, Son, but off the earth too. Even the simple act of cutting down a tree has some detrimental impact and takes its toll on the planet, in terms of global warming and disrupting the ecological balance.”

“I didn’t realise that, Dad.”

“…And then, Son, some companies have not been particularly responsible about disposing of waste materials that are generated during their production process. These effluents damage the environment too.”

“But, if companies stick to norms that are legislated by the government, and do not contravene environmental limits, everything should be tickety-boo, right, Dad?”

“No, Son – unfortunately, governments have been known to be laggards in this respect. They normally wake up to a problem after it has occurred, like closing the stable door after the horse has bolted. It takes a rare sense of foresight on the part of governments to pre-empt something like environmental degradation. We are always in damage-control mode when it comes to legislation on such matters.”

“So, you’re saying that it’s up to companies to take the lead, Dad…? I read that the world woke up to the ozone-layer problem in the nick of time, and has managed to stem the rot.”

“Stem the rot is a brilliant choice of words, Son… Another aspect that companies have erred in is by disregarding the communities that they operate in. An island of prosperity in an ocean of poverty is unstable. Corporate houses may have realised this a long time ago, but only now are they beginning to do something about it.”

“I see, Dad. Organisations cannot go on utilizing the earth’s resources without being conscious of the impact of their actions. They should use stuff like wind energy and solar energy instead of non-renewable energy sources…. But how will they benefit?”
“I could regale you with stories of companies that failed to heed environmental concerns and failed, Son… Like Hershey Foods, which lost a US$ 12 billion deal because it failed to heed the social and economic concerns of the town it was based in.”
“That’s twelve with nine zeroes… in dollars! Wow!”

“Then there are other tales of companies that grew in popularity and profitability… Like PPL which agreed to remove its hydro-electric dam from a river – and became the darling of environmentalists.”

“What about in our own country, Dad?”

“Take polythene bags, for instance, Son…”

“You’ve been telling us not to take polythene bags – and now you’re asking us to take polythene bags, Dad?”

“No, Son… No polythene! The government has finally thought it fit to ban polythene, but responsible companies have already started doing something about it. Some companies have adopted bio-degradable packaging. There’s a retailer who used to give a sizeable discount to those who do not ask for polythene packaging. The retailer lost a little money, of course, but the gains to the environment were significant.”

“Are there any other things, Dad, other than environmental pollution..?”

“I know of another company that has scrapped certain carcinogenic substances in favour of a healthier substitute for the welfare of its employees and customers. Another company trains and employs underprivileged sections of society."

“That is good, no, Dad?”

“It certainly is, Son. Companies must realise that they are living off society. Merely paying their taxes and expecting the government to handle everything else may be legally okay, but it is neither ethical nor does it exhibit good corporate citizenship.”

“Exhibiting citizenship? Is that like showing your National Identity Card when asked to do so?”

“No, Son – It is about companies behaving in an exemplary manner towards the environment and society that they operate in. Companies are persons too, and have to do what is right for the country and community. In fact, my job has become thrice as fulfilling – My organisation is talking of ‘Triple Bottom Line Reporting’.”

“Three bottom lines sure sound more interesting than one, Dad, but what does it mean?”

“Earlier, Son, companies used to focus on one bottom line – that is, profits. But now, they have started reporting results on three dimensions: economic, societal and environmental. Organisations like Commercial Bank and Dialog are already doing a lot in this regard.”

“What can a company do about the society, Dad?”

“They can cater to the needs of the underprivileged, Son - in terms of their educational and health needs, for example.”

“What else, Dad?”

“There is a move towards green, Son – and I’m not making a political statement here. Business should be sustainable and should make a positive contribution to the environment and the societies that they operate in. What comes from the people should go back to the people many times over.”