Monday 18 August 2008
Sustainability: Show Me the Money!
“Sustainability? We can’t afford that!” summarises the current understanding of sustainability by most corporate executives. This is reminiscent of the attitude of those same executives when they first heard about “lean”. And just like lean, the data shows that companies that start on a sustainability journey usually outperform their competitors from a purely financial standpoint. We are defining sustainability from a Triple Bottom Line standpoint: profits and people and planet.
Using this Triple Bottom Line approach, return to investors a group of sustainable companies completely outperformed broader market indices for the last 10 years in both rising and falling markets (refer to full document for LAMP 60 companies).
So what is the LAMP 60, and how is it different? The LAMP 60 includes 60 companies that mimic living systems; they “put a higher value on living assets (people and nature) than they do on non-living (capital) assets. They think and behave in ways that continually affirm life – from their corporate missions, vision and values to the ways they are organized and managed”[1] As a result, these companies have:
- consistently stronger balance sheets and significantly higher credit ratings
- more robust free cash flow
- longer life expectancies than the average exchange-listed corporation (the average age of a company on a stock exchange is 40 years; the average age of the LAMP 60 is more than 100 year)
- consistently higher stock market returns.[2]
LAMP 60 companies eschew Management by Objectives (MBO), instead emphasizing building productive capacity by developing people and relationships and practice called Management by Means (MBM).
To read
[1]Bragdon, Joseph H., Profit for Life: How Capitalism Excels, (Executive Summary) Society for Organizational Learning,
[2]Ibid.. p.5.
