Whether you call it inclusive growth, stakeholder capitalism, the triple-bottom-line, or simply doing the right thing, everyone’s talking about corporate sustainability. CEOs are waking up to the fact that what’s been thought of as an exercise in CSR or Public Relations is now a business imperative, and turning to sources like Harvard Business School (HBS) for expertise.
It may be no wonder, then, that the most downloaded HBS research paper in 2019 was “Corporate Sustainability: A Strategy?”, co-authored by professors Ioannis Ioannou and George Serafeim. The paper examines how sustainability practices can help companies establish a competitive advantage over time.
“Social impact and profit have long been misunderstood as mutually exclusive, but of course that’s not the case,” says Palladium Director Eduardo Tugendhat, who has also co-authored articles for Harvard Business Review with Serafeim. For him, the opposite is true: sustainability is key to unlocking value for all stakeholders, including employees, customers, communities and shareholders.
This was the subject of the Business Roundtable’s watershed statement in August 2019, which declared that the purpose of the corporation should go beyond shareholder value. The statement was considered long overdue by many, and while it has yet to translate into tangible outcomes, is credited with helping to move the conversation to the mainstream.
This mainstreaming of corporate sustainability as a viable business strategy has likely contributed to the HBS paper’s success.
Beyond trending conversations, Palladium Regional Director Christina Shim believes that Serafeim and Ioannou’s research provides validation.
“Responsible and innovative corporate leaders recognise that ‘doing well by doing good’ is feasible, but they may not have had the concrete, longitudinal data to back it up,” she says. “This is an exciting piece of research from a reputable source, which can help to get buy-in from stakeholders to make tangible changes.”
According to Shim, for those facing pressure from customers, regulators, and other stakeholders to move from business-as-usual to truly sustainable, inclusive growth, this research may enable them to “see that shift in a new economic light”.
Society is demanding more from companies and chief executives than ever before. If demand for this Harvard research is any indicator, they may be starting to listen.
Dr. George Serafeim is co-author of the HBR article “Inclusive Growth: Profitable Strategies for Tackling Poverty & Inequality” with Palladium’s Eduardo Tugendhat and Dr. Robert Kaplan. Contact firstname.lastname@example.org to learn more.