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Wednesday, November 17, 2010

Sustainable Excellence

Sustainable Excellence: The Future of Business in a Fast-Changing World

By Aron Cramer and Zachary Karabell

Publisher: Rodale Books

ISBN 978-1605295343


Today's business landscape is changing in fundamental ways. Natural resources are growing ever more scarce and expensive. Technology and changing consumer expectations are making transparency a fact of life. The rise of emerging economies creates vast market opportunities for companies - and better living standards for hundreds of millions. In Sustainable Excellence, Aron Cramer and Zachary Karabell tell the stories of companies that are transforming by responding to these paradigm shifts and reshaping the future of business.


Aron Cramer and Zachary Karabell saved the best for the last. The penultimate chapter of this book is called "Ten companies that will shape the world in 2020." The list is not what most of us might expect. Of the 10 companies mentioned, only five are US-headquartered global businesses, the other five are from China, India, Brazil, Spain and Israel. This is a list I am sure you could not have guessed, and may not even be able to completely comprehend without reading the other chapters of Sustainable Excellence. Whilst the authors confirm this list is "hardly exhaustive", they point out these companies "illustrate what it will take to thrive in the coming decade." Important lessons are to be learned from these companies, and the many more find their place in this outstanding overview of everything that impacts business, planet, society, sustainability and everything in between. The goal of the authors is to "help, over the next decade, sustainable excellence become simply excellence"; and despite the many obstacles along the way, Cramer and Karabell believe there are "ample signs that this transformation is on its way." Whether you subscribe to this viewpoint or not, Sustainable Excellence is an impressive work, highlighting both well-known and lesser-known examples of companies not doing business as usual.

Of course we might expect Aron Cramer, who has headed up Business for Social Responsibility (BSR) for the past six years and driven its expansion as the global guiding light of sustainable business practices, to produce an optimistic view of where sustainability is heading and who is doing it right. Similarly, Zachary Karabell, a Harvard PhD economist and author, is a Senior Advisor to BSR. How could these two produce anything other than a persuasive validation of sustainability? It is true Cramer and Karabell have delivered on this expectation; but as with sustainability itself, much of the success of the "what" is in the "how." Their arguments make sense, the case studies are appropriately selected, the writing is balanced and their approach is flavored with forward-looking anticipation, inspiration and enough realism to provide a good platform of authority and credibility (and perhaps a little hope that they might just have got it right).

The book's 14 chapters follow a logical path, starting with a definition of "sustainable excellence" and moving through a broad scope of related subsets, including a potted history of the sustainability movement, the relevance of sustainability to strategy, the role of leadership, a selection of emerging companies that are leading the way in sustainable practices, the importance and complexity of value chains, aspects of product stewardship, role of financial markets and socially responsible investing, positioning of commodities and influence of energy markets, the age of Green IT, smart-grids and sustainable urbanization, a view on authenticity, integrity and the greenwash factor in corporate practices, communications, cross-sector partnerships and the influence of NGOs. Sustainable Excellence is also a 'who's who' of every business that has made headway in sustainability practices over the past few decades, including Shell, Marks and Spencer, Pepsico, Walmart, SC Johnson, General Electric, Nike, Vale, Procter and Gamble, Unilever, TNT, Siemens, Du Pont, Samsung, Ikea, Levi Strauss, Unilever, Duke Energy, UPS, Novo Nordisk, Ford Motors, Ben and Jerry's, China Mobile, Clorox and many more. All have interesting stories woven into the book by Cramer and Karabell.

Sustainability, according to these meisters, "has become the defining factor in business success" and "in order to survive and thrive, business leaders must discover the formula for sustainable excellence." Achieving sustainable excellence involves attention to five core elements:

1.Think big: create business strategies that meet global challenges.
2.Use sustainability to drive innovation.
3.Set the right incentives internally and externally.
4.Embrace the transparent world and collaborate.
5.Make consumers your partners.

One of the many case studies described in the book stands out as an example of how these elements are applied. The story is of Freeport McMoRan Copper & Gold, Inc. - one of the largest mining companies in the world. One of the key strategic mines for Freeport is in New Guinea, and over the years, the company's operations there attracted negative attention due to environmental damage and labor rights abuses. This attracted a lot of media attention, including an article in The New York Times that significantly reduced the attractiveness of Freeport stock to ethical investors, and raised practical issues such as not being able to renew political risk insurance. Eventually, "senior managers concluded that profitability alone would not be enough to ensure the future growth of the company." As a result Freeport developed a sustainability program, took positive steps on human rights, invited external audits and published the results and engaged with NGOs on core issues. This transformation of a business at the extreme end of the un-sustainability spectrum, despite historic profitability, is as good an example as you can get to understand the risk and opportunity that the "fast-changing world" is presenting to businesses.

Finally, a personal note: when I read CSR books, I mark in green highlighter all the interesting pieces of information I want to be sure not to forget. Sustainable Excellence has so much green on every page, I now need to buy a new pack of highlighters. I think I will send the bill to Messrs. Cramer and Karabell!

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via  on Twitter or via my website

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