November 2011

Date Archive

Paul HohnenThe participants in Rio+20 need to think  about the psychological and sociological dimensions of the public’s attitude  toward sustainability.

George Bernard Shaw saw the world as divided into two sorts of people. Those who looked at it and asked “why?”, and those (like himself) who dreamed of things that never  were and asked “why not?”

By Jonathon Hanks, writing for Anglo American’s A Magazine.

For many people the concept of mining companies being committed to sustainable development is a classic oxymoron. Not only is their business model entirely dependent on the extraction of a finite non-renewable resource – and thus by definition not sustainable over the long term – but the extractive sector also has a reputation (deserved or otherwise) for despoiling the environment, disregarding worker safety, and being complicit in human rights abuses in areas of weak governance.

While businesses generally are seen to pursue profits at the expense of people and the planet, the mining sector is perceived as being particularly egregious in seeking to maximise the private gains of its activities while ‘socialising’ the losses. Indeed, it could be argued that mining and resource companies have provided the feedstock – both real and metaphorical – for the global carbon-based economy that is beginning to show the symptoms of misplaced business and market values.

Another study finds that companies can do well by doing good! This recent working paper from Harvard Business School shows companies that take sustainability seriously – that integrate it into their business culture – perform better over the longer term.

What I like about this working paper is how the researchers  have put effort into overcoming methodological shortcomings perceived in previous studies (some of which have come to the same conclusion as this one) and how clear the results are: what the researchers call high sustainability companies significantly outperform low sustainability companies not only on stock market performance but also in accounting rate of return.