We all know about the natural disasters, increasing pollution and global warming assumptions in the recent years, but some might not see how these issues are connected with businesses in the big picture. I am amazed how simple reasonable solutions can be produced and applied as altered strategies or business models that can overcome these negative implications, and moreover, can become more efficient and produce cost savings for the businesses.
The earth’s ecosystem services are estimated to be worth at least $33 trillion annually, which is comparable to the global GDP (HBR Lovins et al., 1999). Knowing that ecosystem’s services are absolutely necessary to producing life on earth and that there are no known substitutes available, this proves how serious pollution effects are for our future generations. Corporations and people have been polluting the air and water to such extent that we damaged its quality, and therefore have made the clean air and water more scarce. The governments have already acted, especially northern European countries, by imposing regulations due to which corporations are charged for virtually “using the air and water” by polluting these ecosystem’s resources.
The outcomes of our past behaviours are not threatening only to our future generations, but as well to our generation today, to our friends and family. The violent weather in year 1998 caused the damage of more than $90 billion and displaced 300 million people. This sum is bigger than the one for the whole decade of 1980s. However, not only environmental degradation but also other global issues such as increasing poverty, inequality, and hunger are big problems for today’s society. Due to these and other reasons, including an increasing gap between the rich and the poor, businesses have become aware of their effects on the environment and society; not just the positive ones, but the negative ones as well.
Some corporations today have taken first steps toward sustainability and have begun to behave and develop sustainably in order to accelerate environmental, social, and also economic benefits. Some companies, like Wal-Mart, have defined their supply chains to detail and used their power to pressure suppliers and producers to act more sustainably. Some, like oil and gas corporations, have been damaging the environment so badly and finally started the attempt to minimize their negative impacts on the environment due government policies, pressure groups, and after all, us, their customers. Some, mostly mining or oil and gas conglomerates, have finally had to face and be pressured to pay for their devastating mistakes, when operating in the Third World after causing degradation to local communities. And, finally, some, like Body Shop or White Dog Café, have emerged as sustainable businesses and acted proactively in their industries, achieving success and acting as a role model to other firms and people. The latter have established the results that will never vanish and inspired others to act towards making this world a better place.
Another fine example of sustainable business model is Whole Foods. Mackey, its CEO, claims that the purpose of the business is not defined by profit maximization or shareholders’ value, but rather by each of the stakeholder’s groups, such as customers, employees, investors, vendors, communities, and the environment. He argues that the needs, desires and perspectives of all stakeholders are valid and legitimate for business and must be considered in order to operate optimally by all means. Mackey disagrees with core business perspective that social responsibility of business is to increase its profits and aim to achieve one single goal – maximizing profits for the shareholders. The business model that Whole Foods has embraced represents a new form of capitalism, one that more consciously works for the common good instead of depending solely on the invisible hand to generate positive results for society. The company proved that the stakeholder business philosophy works and produced tremendous value for all of their stakeholders (including the investors); of all the food retailers in the Fortune 500 (including Wal-Mart), Whole Foods has the highest profits as a percentage of sales, as well as the highest return on invested capital, sales per square foot, same-store sales, and growth rate.
As for the Wal-Mart’s case, I am doubtful whether it is possible for a corporation such as Wal-Mart to reach the third wave of sustainability and become the sustaining corporation. I am unsure due to the business’ nature whether it is possible to reach their three main “aspirational” goals: to be supplied 100% by renewable energy, create zero waste, and sell products that sustain their resources and the environment. Can their sustainability initiatives change the inherently unsustainable nature of their retailing business model? In any case, Wal-Mart’s initiatives to improve energy efficiency and reduce waste material proved to be environmentally and socially welcomed. Public is impressed by corporation’s proactivity and effective actions towards more sustainable business model. Still, the question of whether what they are trying to achieve is real or not remains, and their actions along the way contribute positively to Wal-Mart’s good Public Relations and growing reputation. In addition, despite the philanthropy initiatives of the corporation, some believe they would have to significantly improve their social sustainability line; Wal-Mart is known for paying the minimal wages to their employees and unreasonably low prices to its suppliers. As a financially established conglomerate, Wal-Mart has run a number of local stores out of business with its expansion and has disregarded the wishes of some communities in which it penetrated.

Unlike Wal-Mart, Body Shop is a good example of the sustaining corporation. For the time frame of Anita Roddick’s leadership, the Body Shop was close to the top of the latter of sustainability evolution. Even as a retailer, the company used refillable bottles as eco-friendly packaging and natural ingredients for production of eco-friendly cosmetics. In terms of social sustainability initiatives, Body Shop proved to have even more of a proactive role and establishing itself as an industry leader in sustainability initiatives. Which other company at that time has presented a petition against animal testing signed by 4 million people and has been instrumental in the government’s decisions like Body Shop was from 1996 and 1998? With Anita’s innovative and revolutionary “profits-with-principle” philosophy in business Body Shop has made it briefly to the third wave in sustainability evolution of the time. No, Body Shop was not greenwashing. However over time, being taken over by the giant L’Oreal has slightly decreased its image and changed its role. Even so, its ongoing efforts and sustainable results that contributed to today’s better world in the industry of cosmetics and elsewhere achieved throughout past years, Body Shop will always have the image of a sustainable and positive corporation.
