“Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility,” said UN Secretary General Ban Ki-moon in opening remarks for the United Nations 2012 International Year of Co-operatives.
Owned by their workforces and their customers, co-ops have the perfect opportunity to dictate business decisions that drive social and environmental change. Unburdened by quarterly results, they have the luxury of growing slowly, focused more on long-term thinking.
Also posted in Business and Sustainability, Capitalism 2.0, CSR, Organizational Change, Organizational Culture Tagged 2012 abacus data, Blueprint for a Co-operative Decade, co-operatives, Corporate Knights, Desjardins Group, Groupe BPCE, Most Sustainable Co-operatives, The Co-operators Group
I was running an employee engagement workshop in one of the U.K.’s largest manufacturers when a plant operative, still in his dirty overalls, turned to me, shook his head, and said “They’ve put these stickers on the machines telling us to switch them off, but there’s nothing in the standard operating procedures. It is drummed into us from day one to follow those procedures so if it ain’t in there, it ain’t happening.”
This guy had precisely nailed the problem with the vast majority of attempts to ‘green’ employee behavior. At best they blithely ignore the prevalent culture in the organization and, at worst, try to change it wholesale.
The good news: There is a business case for sustainability
Several recent studies from leading scholars from Harvard and the London School of Economics confirm that companies with an operating model that integrates sustainability outperform their “old model” peers in the long run. Not just in terms of higher stock market returns, but also with lower debt costs and fewer capital constraints – this means improved risk management, less volatility and improved profitability .
The financial advantages of sustainability are not limited to lower debt costs and easier access to borrowed money. Perhaps more importantly it lowers the interest rate that professionally driven companies use to calculate the Internal Rate of Return for business ventures and projects. In essence it affects whether business ventures are accepted or rejected. An improved Internal Rate of Return means projects that would otherwise have been rejected will now be allowed to live and prosper, enabling companies to develop a higher ROI.