Can Corporations Hug Trees and Make Profits?

Corporate CitizenshipJonathan Fields has a provocative post called Tree-Hugging For Money. A former SEC lawyer, he makes it clear that U.S. law requires corporations to maximize shareholder profit and that the measure of that profit is only share price. Which, obviously, is one of the reasons we on this small planet are in trouble.

Of course, many deny we’re in trouble, although I’ve heard less of that denial since the BP oil disaster, as any of their admittedly fascinating web cams show. This continuing outpouring of oil into the Gulf of Mexico could be a blessing of sorts, IF it moves us toward a crash program of sustainability.

The seeds for true sustainability are already available. Jonathan points to Patagonia, the clothing manufacturer long recognized as perhaps the greenest profitable company in the world. Of course, it’s privately held so isn’t required to maximize shareholder profit. But note, it is profitable – enough so it donates at least 1% of its sales to environmental causes. (Also see 1% For The Planet and note that not one Fortune 500 company is there.)

Jonathan also talks about Interface, the floor covering company that is moving toward zero waste. Founder Ray Anderson talked to TED on the business logic of sustainability – worth a listen.

Those two company understand that we are all part of the whole and that they have an obligation not to pollute, or if they are polluting to not only stop it, but turn their efforts toward restoration.

There are, of course, some signs of some improvement. Products That Are Earth-and-Profit Friendly is the headline in the June 11, 2010 New York Times. I’m not particularly reassured, however, when the approach to “earth friendly” is driven by cost-cutting rather than an understanding of the environmental costs of business as usual and a commitment to change at core.

But it’s obvious isn’t it that long-term sustainability is the only real answer? If Patagonia, Interface and other 1% companies can make a profit moving toward sustainability couldn’t they all? I think so. I don’t understand why there is so much resistance to moving in that direction.

What do you think? How can we move corporations toward sustainability?

Anne Wayman

~Photo by Flavio Takemoto; found at: http://www.sxc.hu/profile/flaivoloka

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