Sustainability as Core Strategy

So there it was, on the front page of the Philippine Star yesterday — ‘Ayala adopts sustainability as new business strategy’.

With this (i’m assuming) much-discerned strategic direction, Ayala will be reorganizing its multiple businesses around sustainability. Meaning to say that they won’t just be focusing on financial returns; they will now be ardently looking over social and environmental impact as well.

And since it’s core strategy, then this has implications not only on which businesses they decide to play in — whether it be real estate, telecoms, IT, retail — it also has deep implications on how those businesses are run as well. All the way from business model design, reporting/accounting, organizational structures, sustainable supply chains, human resource management, environmental impact assessment, community involvement, and so on and so forth. This is a big ship that is reinventing itself mid-journey.

Now, while this notion of triple bottom-line and blended value accounting isn’t entirely new, one can argue that it hasn’t been fully embraced by the business mainstream. And so for the metaphorical 800-pound gorilla in the room to say that it is fully integrating sustainability as core strategy, then it most certainly paves the way for other business behemoths – as well as the relatively smaller businesses – to emulate and follow. A most-welcome development which I hope will be treated with care, sincerity, and diligence as companies make this transition.

But here’s the rub. I think that beyond the feel-good and PR value of adopting sustainability as strategy, it just makes perfect business sense.

Consumers are demanding ethical and responsible businesses, and are voting with their wallets. Enlightened employees are looking for companies whose vision and values they can fully believe in. And the eroding environment – now very real with climate change – simply necessitates it. And so what we’re looking at here is really the next logical step for business.

I previously mused on Large-Scale Social Business Entrepreneurship; This move of Ayala might very well be a hint of what this space is evolving into.

for the full news article, click here.

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This entry was posted on Friday, November 6th, 2009 at 8:00 am and is filed under A Better World, Innovation+, Philippines 2020, Social Business Enterprise. You can follow any responses to this entry through the RSS 2.0 feed.