The challenge of sustainability of business quests

Blog Action Day is the initiative that leads me to posting a few thoughts based on the simple fact that business has been the main driver of environmental impacts we've been hearing about over the past decade or so. By business I mean the more and more systematic use of limited resources and innovation (technical and non-technical) to achieve commercial benefit.

The topic is huge and I do not have sufficient knowledge and time to tackle it in an exhaustive manner, but I've started putting some thoughts together as to what causes business to contribute negatively to the global environment because I believe that understanding that is a key to structuring business practices that can be both sustainable and competitive on the market. In essence, what I'm saying is the following:

1. today's situation is not something that happened overnight: it is the result of two centuries of industrial revolution



2. the current status is a by-product of economic and business processes as they were structured for the industrial age



3. some of those practices are at fault while other should be kept (i.e. let's not throw the baby with the bath water)

An the question is: can we use market mechanisms and financial vehicles similar to those that created the problem to solve it? In other words, if we could use existing assets (i.e. including good practices created with industrialisation) and resources to build successful businesses whose activity will have as a by-product solutions to the deteriorating environment, then we probably have a winner. And since it all starts with proper measurement of what is actually going on on the font of sustainability, I will mention a trend that is picking-up steam, as testified by posts like this one:

1. socially responsible investing, a global movement to which Triodos, one of my customers has been contributing for the past 25 years or so, another example being the Domini Fund



2. the creation and publication of sustainability indexes like the one recently launched by KLD. Their common ancestor is the Domini Social Index, whose companies seem pretty decent on their returns by several accounts.

I have started working on a mindmap of key areas and causes explaining the contribution of business to the deterioration of the global environment. It's still very much a draft. My goal is to examine the relevance of setting-up an investment vehicle dedicated to taking over a specific target group of European companies (allow me to keep that bit for me) in view of boosting their performance (in an integral sense, i.e. including environmental and human development aspects). After all, most companies are incorporated without an end date, so I guess it is in the nature of business to be seeking sustainability. The question being of course how to achieve sustainable consistent positive performance... Perhaps I'll have more on this within the next couple of months.