Monday, February 24, 2014

The Privatization of Regulations & Sustainability

According to a new report on sustainability trends by the network 2degrees, the primary aim by companies and organizations for taking a sustainable business approach is cost savings 53%, followed by regulatory compliance 46%, reputation 39% and branding 38%.

But of those businesses and organizations that put sustainability as a central, strategic focus, brand and reputation also leapfrog compliance, a signal that sustainability is considered first and foremost, just good business.

Some, as I will share below, are even privatizing regulations to establish higher standards.

This movement also leaves the “whiner economy” more transparent.  These are the special business interest lobbies who are bottom feeders.  These are the interests that feel their only way to create value is to undermine government and sustainability.

By this, I mean they hammer public servants into submission and open their wallets wider and wider to influence election campaigns as a means to secure favorable legislation at the expense of the public interest.  This includes lowering the bar as every opportunity.

Of those businesses and organizations focused on cost savings as the reason to be sustainable, 57% put energy efficiency as the top priority, 50% put reducing waste at the top and 25% want to reduce or improve water usage.

Among businesses and organizations of various types, retail is leading the way with sustainability as a central focus (41%,) ahead of telecoms/media (39%,) utilities, heavy industries and even government (37%,) and far above finance (15%,) and logistics (13%.)

Engaging management and co-workers remains the biggest hurdle to sustainability efforts including, as there is with local governments in Durham, North Carolina where I live, a huge disconnect between sustainability goals and budgets to reach them.

This is a strategic failure.

A long-time friend of mine was an executive at a major router manufacturer for many years and involved in the company’s first cross-functional teams responsible for making packaging more sustainable.

He jokes to me that when they did their first assessment, it seemed as though those responsible had set out to make the company’s product packaging as environmentally unfriendly as possible.

It made me take a close look at the environmental performance reviews and reports that Apple, now #6 on the Fortune 500, provides on each of its products including the one at this link for the iPhone 5s.

Even more telling is the company’s newest Supplier Responsibility Report.  It covers not only the environment but health and safety performance, education and empowerment of workers, labor and human rights, business ethics and most interesting, accountability and performance audit results.

In addition to the results of 451 annual audits at all levels of its supply chain, Apple released for the first time 100 pages of its comprehensive requirements for suppliers.  In other words, Apple has set up its own system of regulations as well as compliance transparency.

At the very time that the “whiner economy” is fast at work in states like North Carolina seeking to undermine regulations, high-value, global concerns like Apple are not only practicing sustainability as good business but raising the bar for the businesses in its huge, global supplier network by raising the bar with its own, tougher regulations.

Elected officials and public servants at every level who are obsessed with deregulation need to read this best practice report.  They are going in the wrong direction.  But they know that.  For many, it is purposeful.

Elected officials and regulators should also take a look at the ethics practices and systems requirements Apple requires of its suppliers including audits of business integrity, disclosure, handling of complaints and protection of intellectual property.

I suspect those with interests in roadside billboards who pushed through a sacrifice of publicly owned roadside forests would fail the test to be a supplier for Apple products such as smartphones and tablets.

Unfortunately, it is this cozy relationship with special interests that will undermine any reaction to the tragic chemical and toxic sludge spills recently in West Virginia and North Carolina.

Maybe until democracy is restored and decisions made in the public rather than private interest, we’d all be far better off under Apple management.

Just sayin’.

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