Is Climate Change A Material Risk To Your Company?

Could You Explain Why Climate Change is Not A Risk For Your Company?

What do 120 California-based companies know that has them willing to signing the Climate Declaration?  Why are business leaders urging federal and state policymakers to seize the economic opportunity of addressing climate change. They clearly see an economic risk if no action is taken.

Would you be able to explain to shareholders, and your other stakeholders, as Tim Cook of Apple did, that a concern for sustainability is good for business, when he soundly rejected the perspective of an investor group and suggested they stop investing in Apple if they don't like his approach to sustainability and other issues.

More Executive Say Business is More Than Just The Bottom Line

It is possible to have a purpose driven organization and a profitable one. Often our narrow focus on profits in the media obscures this fact. In addition to Tim Cooke of Apple other major corporations are willing to speak equally powerfully for purpose, principle and their commitments. Here are just two recent ones:

1. CVS to stop selling cigarettes even though it will cost them around $2B. Their commitment to being being a healthcare company trumps profits
2. Disney withdraws funding from the Boy Scouts over is ban on gay scouts. A concern for principle ahead of profits. And, they are joined by Lockheed Martin, Caterpillar, Major League Soccer, Merck, Intel, Alcoa, AT&T and UPS, all companies that have ended partnerships with the Scouts because of its anti-gay policy.

What Happens When It's Purpose And Profits?

The simple answer, profits improve – shareholders benefit when all stakeholders' interests are front and center. Raj Sisodia and his co-authors demonstrate this in their groundbreaking book Firms of Endearment.

The companies who are member of Conscious Capitalism demonstrate this in very competitive markets. I will return to this theme with more examples in future posts.

Yes! It Pays to Invest in People

A Good Return By Investing In People

Zeynep Ton, an MIT professor, in her recent book The Good Jobs Strategy, reveals that every $1 of salary increase for employees generated $4 to $28 in increased revenue for a major national company. Rather than looking to cut costs by squeezing employees, smart companies look to increase revenue by paying their people fairly and treating them with care and respect.

We often hear executives say things like, "people are our most important asset", for those for whom this is a genuine expression of a commitment to people, this is yet more evidence that it is also good business.