The definition of social capital is trust, says one of the world's foremost advocates of corporate responsibility and sustainable development.
"The lower the level of trust, the higher the level of friction and the slower the social change," John Elkington told a Vancouver Board of Trade luncheon last week.
Elkington is the founder and chair of SustainAbility, a U.K.-based think tank specializing in assessing the risks and opportunities of corporate sustainable development.
He is perhaps more widely famous for authoring The Green Consumer Guide, a bestseller in the '80s and '90s, and is the author or co-author of 14 other books and more than 40 papers on sustainability and best practices in business.
Since well before the publication of the guide, Elkington has been helping companies find a way to best meet the "triple bottom line" - sustainable economic, social and environmental performance.
"Our view is that for a business to be profitable and deliver long-term shareholder value, it must deliver across all three of these dimensions," he told the board audience.
The external pressures that contemporary businesses face include such diverse vagaries as climate change, the emergence of new diseases and the threat of terrorism. How can companies work with their shareholders, asked Elkington, to meet the changing needs of today's more educated and demanding consumer?
With a portfolio of clients that includes blue-chip companies such as Nike, Canon, Ford and Bayer, Elkington says corporate focus is increasingly on moving businesses and markets into a more sustainable footing. He recently visited China for the first time, and while awed by the scale of the challenge there, was also surprised by how open the country was to the concept of sustainability in business. "In places like China they need to make a sustainable agenda that combines with a human rights agenda," Elkington said.
Today's consumers are demanding more of business, said Elkington, and corporations need to respond by accepting increasing levels of corporate responsibility while accounting for issues of eco-effectiveness, fair trade and human rights. He added his most difficult task over the past years has been converting a sustainable agenda into a language that business could speak.
The result is what Elkington calls the "four Bs" of blended value - boards, business models, balance sheets and brands. "Get the voices of environment, social issues and (other) concerns sitting at the board tables," he says. "Establish business plans that attract those affluent enough to pay the costs required by sustainability."
Elkington said that in 2004, SustainAbility partnered with Standard & Poor to produce an assessment of the balance of risk and opportunity under a best practices system of non-financial reporting. "These issues are becoming increasingly important for companies and public awareness is being raised on many levels," he noted.
He also cited the positive influences of celebrities such as U2's Bono on public awareness of sustainability issues.
The number of hybrid vehicles Elkington saw on the streets during a recent visit to San Francisco brought the brand issue home, he added. "Toyota is funnelling Prius vehicles into places like San Francisco to build the brand in selected markets," he said, which allows the company to increase its strategic positioning on low carbon technology while reducing its costs.
"The triple bottom line is just the beginning - a first step in getting businesses to engage with the environment and society as much as with their profits and loss accounts."
Elkington sees a future where business is a part of innovating some of the solutions to the world's most pressing environmental and social challenges. "As the marketplace starts to reward the companies that bring forward this blended value, more mainstream players will join in," he predicted.
Web Watch: www.sustainability.com
(Karen Dyer can be reached at karen@businessedge.ca)
