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December 02, 2003
Book Review--The Sustainable Company: How to Create Lasting Value Through Social And Environmental Performance
    by William Baue

A new book makes the business case as well as the moral case for sustainability through socially and environmentally responsible business practices.


The Sustainable Company reads more like a business plan, complete with schematics, diagrams, and graphs, than a philosophical treatise. Readers might therefore expect author Chris Laszlo to hedge the business case over the moral case for sustainability. Interestingly, however, Mr. Laszlo insists on retaining the ethical rationale alongside the economical argument for practicing corporate social and environmental responsibility.

“The emergence of a new ethics in business is rapidly changing what we mean by the term corporate responsibility” writes Mr. Laszlo, who italicizes the term that he considers synonymous with sustainability. “The new ethics is market-driven but values-based.”

“It is not political in the sense of attempting to impose the beliefs of one group on another group; it is not moralistic because it does not exhort companies to adopt one or another moral ideology,” he continues.

Mr. Laszlo cites a case profiled in the June 2002 Harvard Business Review, wherein the Aspen Skiing Company repeatedly rejected a proposal to retrofit lighting in a hotel garage that would cut electricity by 65 percent when argued in economic terms. Although it seems counterintuitive, the project finally received approval many years later, only after it was argued simply in ethical terms--that it supported the company’s corporate values.

“The bottom line: Corporate Sustainability won’t occur without a company mandate that springs from ethics, not economics,” writes Auden Schendler in the HBR article.

While Mr. Laszlo similarly insists on the ethical underpinnings of sustainability, he does not prioritize it above economics, but rather considers ethics and profits to be symbiotic.

He makes his case in the book via three distinct sections. In the first section, he describes the landscape of sustainability, defining “planetary ethics” not as a prescriptive dogma but as a guidepost for business conduct. While he discusses how the development of tools to measure sustainability performance enhances the business case for corporate responsibility, unfortunately he does not sufficiently address the problem of competing yardsticks.

The second section profiles the sustainability practices of four companies: Patagonia, Atlantic Richfield Corporation (ARCO--which was bought out by BP in 2000), the Co-Operative Bank in the UK, and Bulmers. Mr. Laszlo generally presents an even-handed account. In the ARCO profile, for example, he discusses both the environmental benefits and hazards of f methyl tertiary butyl ether (MBTE), a gasoline additive. Some details were lacking, though. For example, he praises a plan to deliver all MBTE gasoline by truck to avoid exposure to pipelines used for transferring non-treated gasoline, but he does not examine the environmental cost of transporting by gas-guzzling trucks.

The final section may prove the most useful, as it presents both a sustainable value creation tool kit and a list of eight disciplines that companies need to create sustainable value. Here is where the charts kick into full gear, creating a road map that corporate executives, managers, and board members can follow to blend business success with social and environmental responsibility.

Interested social investors may want to examine the appendix, which offers a similarly detailed map of tools available to perform this very assessment. This short appendix offers perhaps the most concise but complete descriptions of resources for evaluating sustainability performance, from the Global Reporting Initiative (GRI) to Innovest to Total Social Impact (TSI).

 

 
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