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What is Business
Sustainability?
Lecture: 1
By Giovanni Tordi - Sustainability Company CEO
One must say however that for the This is why, to be sustainable means
scientific International community: something different from “informing
making charity or sponsoring an about undertaken charity
event having image as objective, initiatives”. It naturally means
does not mean being really operating in one’s core business
sustainable. respecting above mentioned
principles; it means pursuing the
Proof is that on the last years we increase of profit protecting
have seen the failure of important interests of shareholder and
corporations. These were considered stakeholders with the application of
until then solid and central realities medium and long term policies
in the economy world. These were which should not negatively affect
organizations like Enron, Worldcom, future generations and consequently
Arthur Andersen, which used to the environment.
employ thousands of employees and
without doubts were sponsoring This approach to sustainability is a
charity initiatives in favour of guarantee of growth and reduces
surrounding communities, besides risks of the enterprise. In other
CSR budgets. words it supports a medium–long
range growth improving governance
Another acceleration in the direction of company’s risks.
of defining new paradigms and new
rules for a sustainable economy was Even though in the last 7-8 years
determined more recently in 2008 we have watched the failure of
by the financial crisis deriving from international Organizations like
an uncontrolled policy of loans Enron, Worldcom, Arthur Andersen,
granting in the USA. This gave Lehman Brothers, which evidently
origin to a crisis in real economy had not assimilated the importance
which could not be imagined at that of this concept or, even worst, were
time. Particular emphasis must be operating through their own
given to the failure of rating management in an illegal manner.
systems - Moody’s, Standard & There are many organizations
Poor’s, Fitch - which assigned nowadays which are indulging in the
positive scores even to realities like adoption of a sustainable approach.
Bear Stearns, Lehman Brothers, They are operating now to really
AIG. But besides the failure of rating integrate this approach in the
systems we have remarked a failure business through dedicated
in the rules of markets and in the structure. MBOs (objectives used to
control system. measure performance of managers)
are starting to integrate
In order to be effective the above sustainability parameters; their
evidences the extent to which the sustainable objectives have an
concept of sustainability must be influence in their remuneration
integrated in the core business and plans.
in the company’s DNA.
Giovanni Tordi, CEO Sustainability Company