THE BLOG

Where Profits Aren't Enough

05/29/2014 12:42 pm ET | Updated Jul 29, 2014

In developing this commentary on corporate responsibility, I kept thinking about a statement made by one of the most influential CEOs in America.

At Apple's annual shareholder meeting earlier this year, their usually mild-mannered chief executive Tim Cook delivered an angry retort when asked by a representative of a conservative D.C.-based think tank if the company would commit to making only profit-driven decisions. This was preceded by another question, from the representative of The National Center for Public Policy Research, scrutinizing the wisdom of Apple's green energy investments and a demand to disclose the cost of its green energy and sustainability programs.

To which Mr. Cook responded: "When we work on making our devices accessible by the blind," he said, "I don't consider the bloody ROI (return on investment)."

Apple does "a lot of things for reasons besides profit motive," Cook said, according to several accounts of the February 28 shareholder meeting. "We want to leave the world better than we found it."

Mr. Cook, along with a growing number of corporate officers and boards, acknowledges a truth that cannot be ignored: business can no longer be just a profit-driven machine.

More so than ever, because of the delicate state of our environment, we need leaders in Corporate America to change the way business is done. We need leaders like Mr. Cook -- leaders who aren't afraid to push back at shareholders who lack long-term vision.

While the importance of profit cannot be denied -- whether that is for the mom-and-pop corner deli or for huge multibillion-dollar multinational corporations -- there is no genuine profit in plundering nature's capital, pillaging its ever-depleting stock of life that sustains life for us.

If we can't step away from short-term economic thinking and take into account the long-term consequences of our actions, our thirst for energy and sustaining a highly wasteful material culture, we must acknowledge that we all will eventually cut into the bottom line of the 7.1 billion people on this planet. We need to strike a stronger balance that puts the value of profit, society and environment on equal footing.

Fortunately, there is hope. Companies like Ben and Jerry's, Patagonia, Dr. Bronner's Magic Soaps and Seventh Generation, to name a few, have incorporated sustainable practices into their business management agendas. While a lot of work needs to be to done to transform large and small businesses into better stewards of the planet, this line of thinking is gaining momentum. And, it will likely bolster their bottom lines as well.

A survey of nearly 3,000 commercial business executives revealed that 70 percent of the companies now include sustainability as part of their management agendas. Two-thirds of those surveyed indicated that sustainability "was necessary to being competitive in today's marketplace," according to the study conducted by the MIT Sloan Management Review and the Boston Consulting Group in 2012. A majority of the respondents said that sustainability practices are boosting their profits.

But let's not declare victory just yet.

While the data may have us believe Corporate America is moving in the right direction, those surveyed indicated that sustainability was not a top priority -- ranking eighth in importance compared to other management priorities. Some efforts are marginal; some are exemplary, like Google's aim to fuel its business entirely by renewable energy and Apple's large investment in solar power to energize its data center in North Carolina.

There may be up-front costs to steering a company toward a philosophy of corporate social responsibility and environmental concern, but the potential payoff can be enormous through smarter and locally focused supply-chain management, developing water conservation plans, acquiring only recycled materials, and, of course, improving energy efficiency.

U.S. corporations could be returning billions of dollars to their coffers -- and their shareholders -- through investments in renewable energy and developing energy conservation plans that may include merely behavioral changes (turning off your computer when not in use, or turning off the lights when you're not in a room), according to a study, "The 3% Solution, Driving Profits Through Carbon Reduction," by the World Wildlife Fund and Carbon Disclosure Project.

If you're a small business owner, you don't need thousands of dollars of investment to do what is right for your community and environment. Simple changes -- why print that 10-page memo when you can email it -- add up to a colossal positive impact for the environment when every small business has that state of mind.

Natural Capitalism Solutions, a Colorado nonprofit that has helped numerous government and corporate clients strike that perfect balance of economic growth and environmental stewardship, put together a report showing how companies as widely divergent as Goldman Sachs and North Carolina carpet manufacturer Interface have proven that sustainability does indeed pay -- for the bottom line and our planet.

Fortunately, there are heroic companies practicing corporate social responsibility and emphasizing sustainable business practices. It is no longer an Ivory Tower topic, dominated by stifling case studies, all talk and no results. While there are many examples, two companies stand out: Patagonia, a California-based outdoor clothing and gear company, and Ben & Jerry's, a Vermont-based ice cream company.

Patagonia is very clear about their business model.

"Patagonia wants to be in business for a good long time, and a healthy planet is necessary for a healthy business," they state on a company webpage detailing many of their environmental and socially responsible initiatives.

The company offers an incredibly transparent look at its supply chain, chronicling where the materials for its products are sourced, which includes a partnership with an organic cotton cooperative in Texas. Going beyond manufacturing sustainable products, some companies are even taking corporate consciousness to a new level by creating environmental programs and media on issues of importance to the companies themselves.

At the Bonnaroo Music and Arts Festival in June, my organization will screen the film, DamNation. Funded by Patagonia, the film explores the terrible impact of dams on U.S. rivers and wildlife. It also serves as an awesome example of how a company can allocate its financial resources to advocate for environmental protection.

"I think it is clear that business needs to take a leadership role with respect to sustainability and environmental responsibility, but also in terms of social issues and social concerns," said Jerry Greenfield, co-founder of Ben & Jerry's ice cream. "Business is really the most powerful force in society."

Ben & Jerry's actively campaigned to require food makers in Vermont to place labels on genetically modified products. This month, Vermont became the first state in the U.S. to legislate mandatory GMO labeling.

Talk about putting your money where your mouth is.

Ultimately, companies like Patagonia, Ben & Jerry's and others realize that consumer culture is changing too. Nowadays, we want more than just a product. We want to do business with a company that values us and cares about our health and our world. I know I won't do business with you if you rob the earth and pollute my community.

No customers, no profits.

"One thing that is absolutely clear is that consumers want more transparency from businesses and they are looking for authenticity and genuineness. If you talk to marketing people... they are all talking about authenticity, how do you achieve authenticity as if it is some mystical thing," Greenfield told me. "I think the more honest and open businesses are, the more trustworthy they are and it benefits them from a business point of view."

While respect, admiration and love are not traditionally quantifiable business metrics; I say that's where true profit is found. The freedom of the free market offers many choices. Let's make social and environmental responsibility, the needs of the many, our guidepost of success and true prosperity.

About the Author

Marc Ross is founder and executive director of Rock the Earth. Rock the Earth works closely with the music industry and its fans, many of whom are concerned with the fate of public lands, air and water. Follow us on Twitter at https://twitter.com/RocktheEarth