Back in the 1992 US Presidential election, James Carville reportedly posted a sign on the wall at the Bill Clinton campaign headquarters reminding staff (and the candidate) to focus on what really mattered. The sign said simply: “It’s the economy, stupid.”
Last week in a meeting of chief corporate EHS and sustainability officers, I had to identify the one “hot topic” driving my clients now. Channeling my inner James Carville, I diplomatically said: “It’s the revenue, stupid.”
Certainly, some companies are moving ahead with sustainability because it is part of their core values. That’s likely to create deeper and more enduring commitment. Others are moving ahead out of sheer momentum, because they’ve already got so much invested in sustainability and so many people working on it. But for anyone working right now to get corporate executives interested or to reenergize flagging management attention, it really is all about the revenue.
That’s understandable. The external drivers for corporate sustainability are sending weak and mixed signals. The regulatory picture is fragmented, with governments everywhere distracted by debt and budget crises. The climate change picture is fragmented, with US policy in disarray and the multinational process COP-ping out. The consumer picture is fragmented, with markets still unclear about whether consumers are buying anything, let alone “green”. Investors speak long-term but buy and sell on 24-hour news cycles (mostly reacting to debt and budget crises). Even NGOs can’t agree on much besides “companies should report more.” No wonder some at the meeting openly wondered if sustainability is a fad whose time has passed.
What is getting senior executives’ attention to EHS and sustainability now? Anything that avoids risks and delays in creating new revenue streams. For some companies, that means getting much better at avoiding the thicket of environmental, health and safety requirements that can keep new products out of key markets. For others, that means getting much smarter about understanding, minimizing and managing the concerns that can stall or even shut down critical infrastructure projects. What are the biggest threats to many projects? “Non-technical risks”: the long-term social, economic and environmental impacts of those projects, whether real or perceived. That may not carry the sustainability label, but it sure matches the sustainability content.
Call it “strategy noir”; maybe it’s the result of reading too many dark mysteries (or campaign histories) on too many long plane rides. But if I had to get management’s attention now, I’d remember the old mystery mantra: “Follow the money.”
[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of ERM, its partners or clients.]