Environment as a “New Kind of Capitalism”.

NRM North column for Tasmanian Business Reporter. Feb 2010.

In a recent edition of the Harvard Business Review, a number of authors have begun promoting the need for business to not simply support environmental and social causes in a philanthropic manner, but to build, or rebuild their core business around products which enhance social and environmental outcomes. To use an environmental analogy, it is the difference between offsetting pollution and not polluting in the first place.

This is a substantive shift in thinking for many business owners who, mostly with really good intentions, have been good corporate citizens by supporting an organisation or cause. And this is still a very valid thing to do. Many not for profit organisations or causes are able to meet specific and immediate environmental outcomes or societal needs far more effectively than those businesses could themselves. And I suspect philanthropy and support of causes/organisations will remain an important way for business to engage in those needs.

But the authors in the Harvard Business Review were making the point that business must see environmental and social needs, not just as something to “offset” through sponsorship or philanthropy but as a business opportunity in itself. A “New Kind of Capitalism” they called it. Businesses and individuals grasping the opportunities to develop products and services which meet some of those needs and turns a good profit.

So what might it look like? There are many examples around of businesses which already do this in the environmental space. Developers who build sustainable housing and create developments which include environmental spaces for biodiversity as well as social interaction. Companies who produce and sell renewable energy. Primary producers who focus on sustainability. Small business owners who sell locally grown and made products. Architects who design for minimum energy use.

As we move into a more open and self conscious society, we have a great opportunity to do business which is directed at improving environmental and social outcomes and which turns a decent profit. And the first steps for businesses may well be letting their staff get their hands dirty in this space. (Other than customers, they are often the best innovators). And that is where NGO’s like NRM North can help. We are happy to find ways for individuals and organisations to participate in environmental and sustainability issues and activities. Who knows what profitable business innovation may come from it.