Back 11.12.2018

Economic, Environmental and Social Success – And not Or

This text written by Markus Klimscheffskij is part of our new blog series on societal value creation and impact valuation.

By so far, if you haven’t duck-taped your ears and eyes and dug yourself a hole in the middle of New Mexico, I’m sure you are aware that we are facing a severe environmental crisis. The recent IPCC report portrayed a grim image of the coming century if we continue “business as usual”. We now need smarter and cleaner actions.

In the conventional way of thinking, there are fat-cat corporations that want to suck every dime from our precious earth, and then there are the protecting forces that seek to prevent this as much as possible within the realms of modern-day capitalism.

Needless to say, this way of thinking is undoubtedly outdated.

In fact, we are witnessing an unprecedented marriage of the economy and the environment where companies themselves set ambitious targets and go to great lengths beyond what is required by legislation. Companies are increasingly realizing that in the long term successful business is simply impossible without considering the well-being of the environment and people. The OR between nature and money is becoming an AND.

But where is the proof? How come greenness benefits the bottom-line? As one example, MSCI by their ESG-rating and found a striking correlation between the two . Similar stories are found throughout the world. As another example, Bloomberg nowadays provides ESG performance data of close to 10 000 companies globally as well as an array of other ESG-analysis tools. Simply put, doing business in a sustainable manner pays off.

But how can a company map, manage and thereby enhance the societal value it creates in terms of the economic, environmental and social dimensions? How can it put its “raison d’être” back to its core instead of quarterly results? After all, in the broader picture, a business with a wider purpose and a positive impact on society is always more successful than a business pursuing for quick wins at the expense of the society.

The Natural and Social Capital Protocols provide a 12-step framework on how to get started with assessing company’s societal value creation.

The framework uses materiality assessment in order to focus efforts on the themes and impacts that matter the most to the company and its stakeholders. These frameworks then assist in mapping how the company creates societal value in these themes, as well as how its main societal impacts are created and their magnitude.

Following on the footsteps of our previous blog on societal value creation, the following parts of this series will explain how Gaia has and is enabling companies to put all of this into business and to tap into their societal potential – to become more sustainable AND make more profit.

More information

  • Markus Klimscheffskij, Consultant, Gaia Consulting,
  • Lauri Larvus, Senior Consultant, Gaia Consulting,
  • Jonas Alam, Consultant, Gaia Consulting,