Why sustainability, purpose are two sides of the same coin for organisations

Over the past few years, society has witnessed a shift in organisations from shareholder value to stakeholder value and now to mutual value creation. These shifts in value creation have occurred as organisations have reimagined their role within society.

Top on that list is the licence to operate that society provides for organisations, stemming from an understanding that the externalised cost of production, which was traditionally borne by society, is now impacting the financial performance of businesses.

Organisations have implemented this shift by focusing on providing solutions to the myriad of problems facing society.

From inequality, financial inclusion, poverty, unemployment to corruption, organisations now see their long-term success in tackling these challenges, working with similar-minded partners and stakeholders to create value for all using a shared prosperity model.

This approach taken by organisations is at the heart of what it means to build a sustainable future.

Building a better future is why sustainability is not a passing fad. Policy pronouncements that approach sustainability as a short-term trend or interest will harm society and organisations in the medium to long term. This harm will result from failure to plan and make necessary investments to guarantee long-term competitiveness.

For example, climate change has become more centred around data, which informs us that extreme weather events are becoming more frequent and costly.

Therefore, failing to plan in the face of this data will be a great disservice to society and an organisation in the long run. For instance, economic data tells us that sustainable economic growth can be spurred by having women, who comprise half the population, actively participate and contribute fully to the economy at all levels.

This approach to economic growth and development is a proven fact and cannot be dismissed even in the face of short-term policy positions that play to the gallery.

The new reality is that in a more connected and complex world, organisations across the public and private sectors must draw their sense of purpose from the societal challenges they are addressing, which build a sustainable future for society and the organisations, a win-win solution that demonstrates why purpose and sustainability are two sides of the same coin.

This article was first published on Business Daily and can be accessed here.