Sustainable Environment

A step change to protect sustainable environment

Business Roundtable and Environmental Sustainability

Since 1978, Business Roundtable (BRT) for the Americans corporation has been a forum to periodically issue Principles of Corporate Governance in a statement.  As a tradition, maximizing shareholder values, probably at any cost, was the focal center of the statements since 1997. With the recent movement of societies toward more conscious shopping to protect the environment, the last statement that was issued on August 19th 2019, incorporated one of the most global pressing issues: Sustainable Environment.

By definition, sustainability consists of 3 parts: Economic, Social, and Environmental. However, sustainable economy is an implicit assumption in a business, and should not be the main concern, as all efforts have already been directed to achieve it. The Society also cannot be happy without a healthy environment; therefore it may not be the first priority. This would lead to the significance of the sustainable environment, which can be simplified as “Sustainability” as a whole.

181 CEO’s of big public companies signed up for a healthier environment

The recent statement of 181 CEO’s of big corporation, including Apple, Amazon, Coca-Cola, P&G, IBM, Johnson & Johnson, explicitly replaced the word “Shareholders” by “Stakeholders” in the statement for the first time and cited that “We share a fundamental commitment to all of our stakeholders”, in which the stakeholder constitutes of customers, employees, suppliers, communities, and shareholders.

Although there are a lot of media hype around this new statement by reporting that “Shareholder value is no longer the main objective of the companies”, the statement itself does not reflect such interpretation, but rather the focus of the statement is mainly on the commitment to deliver value to all of the stakeholders mentioned above.

In fact, when it comes to explain the commitment to the shareholders, the statement says “Generating long-term value for the shareholders”, which implicitly emphasizes that corporation may scarify the short-term or even mid-term values to “embrace sustainable practices across all businesses”, not only to protect the environment, but also to respect people in the communities.

What the future may look like?

Despite the fact that this is not a legally binding statement, if the companies decided to encompass the redefined purpose of their corporation into their mission statement, the implication of such shift in the purpose of corporation would hopefully have positive and profound effects on our lonely planet. In other words, “Take care of yourself, take care of others, and take care of the planet.”

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