When General Electric CEO Jeffrey Immelt addressed the graduating class of the NYU Stern School of Business earlier this summer, he spoke of a “bold pivot” - a move away from a reliance on the global business model, as a result of the rise of protectionist policies and market sentiment.
“We will localize,” said Immelt of GE’s near-term prospects. “In the future, sustainable growth will require a local capability inside a global footprint.”
Leaders in corporate sustainability can take a page from these comments.
The transition from global to local isn’t just limited to sales, marketing and other core business functions. It also applies to how companies create positive and lasting impact on our land, water and communities.
A bit of context: the modern era of sustainability can be traced to the Brundtland Commission, a United Nations-led organization that coined the phrase “sustainable development.” Above all, it introduced the concept of meeting the needs of the present without compromising the needs of future generations to live and thrive. In the nearly 30 years since, sustainable development has yielded aspirational goals and genuine action among companies, governments and individual consumers.
For leading brands, we’re also witnessing a significant shift. A 2014 survey of top executives by research firm McKinsey found that 43 percent of companies are working to align sustainability with broader business goals, mission or values, compared to 30 percent just three years earlier. The McKinsey data reinforces a longstanding argument among leaders in sustainability: doing well by doing good is no longer just a slogan, but a reality across most sectors. When the organization first started researching key trends in 2010, “reputation” far outweighed “alignment” as the primary motivation for sustainability. Today, the reasons are squarely reversed.
This brings me back to my assertion that the sustainability leaders of tomorrow will need to embrace local and community-based strategies that go well beyond zeroing out their operational footprint in faraway lands. Value and values are coming together to create triple bottom-line results where customers and employees live, work and play.
Case in point is the growth of partnerships focused on creating jobs and improving quality of life in coal-impacted communities across Central Appalachia. Leading conservation, recreation and banking experts are working with small businesses to create lasting jobs and community economic vitality, all while using natural resources responsibly.
Earlier this year, a lending program by Wells Fargo helped African American farmers and local business owners access capital in return for a promise to grow their businesses with the environment in mind. In August, the Appalachian Regional Commission furthered its investment in the region’s future based on ecotourism. Its funding is part of President Obama’s Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative, which distributed awards totaling $38.8 million to 29 economic and workforce development projects across multiple states, creating an estimated 3,418 jobs. These investments are rooted in economic and environmental sustainability, and will help redefine the makings of successful business in a region that was once heavily powered by extraction of natural resources.
Another example is urban conservation, which is on the rise as U.S. cities experience a renaissance. With more than 80 percent of Americans living in or moving to urban areas, there’s a growing need for a balance of green/gray infrastructure, often in the form of strategically placed parks throughout cities.
In Atlanta, U-Haul and The Conservation Fund are bringing together public and private sector leaders to build parks in some of the city’s neighborhoods most impacted by flooding. The parks do more than create spongy soils to absorb and filter storm water. They employ neighbors to improve quality of life for local residents.
Finally, leading companies are increasingly using infrastructure to address longstanding challenges at the community level. As an example, 23 million Americans have limited or no access to fresh food, in part due to local producers not having the ability to get their product to market. Since 2014, the transportation company CSX has been providing grants (as well as expertise) to local governments and non-profit organizations to enhance transportation and distribution of healthy food, including a focus on areas that serve at-risk children and families living below the poverty line.
Beyond the clear societal impact, this type of initiative directly supports local farmers and the markets that support them.
As global businesses contemplate local models, there will be opportunities to shift our focus and drive lasting positive impact unlike ever before. Fortunately, there are countless best practices that will help shape this new approach. We need to continue to aim for global reach, but make our impact measurable, local and lasting.
Stated simply, it’s the future of corporate sustainability.