Intellectual honesty is good for business

Chandran Nair spoke at the The Economist Conference on the ROI of Sustainability in Hong Kong on 6 June 2008.

GIFT founder and chief executive, Chandran Nair was invited to be the opening panelist speaker at The Economist Conference on “Just good business: The ROI of Sustainability” held on 6th June 2008 in Hong Kong. Looking to further the debate on progress in sustainability, the conference brought together a group of high-level senior business executives and commentators who discussed a set of topics ranging from measuring sustainability strategies to whether growth and sustainability are compatible. The Economist Intelligence Unit also presented the findings of a global survey of 1,200 executives to obtain insights as to what sustainability practices firms are undertaking. To find survey results, click here.

At the beginning of his remarks, Mr. Nair challenged the traditional question often posed about whether or not there are real payoffs for companies practicing sustainability. Putting aside semantics, he believed, that sustainability is fundamentally about understanding limits. Mr. Nair argued that the world is seeing a fundamental shift away from the conventional wisdom espoused by marketers and economists as surging prices in oil and food shortages as well as climate change impacts have cemented a general consensus that we are in unchartered water.

The realization that there is a limit to resources – and to levels of consumption – will be painful for some companies argued Mr. Nair but come to terms they must if they are to grasp the challenge. Businesses can expect regulators to get tougher and perhaps more draconian as they start to re-price externalities which have been under-priced for too long. Mr. Nair voiced that this should be seen as a positive development as governments will increasingly need to get more involved in protecting the public good from private interests. Businesses will in return find increasing pressure to obey all the laws of the land (taxation, labour, environment, competition etc) if they have not been doing so already.

However, rather than taking an automatic anti-regulation stand which has been the main stay of many business groups, Mr. Nair continued, companies need to start being honest with themselves and accept that private interest should not be allowed to run rough shod over public interest. A starting point, Mr. Nair pointed out, is for companies to be intellectually honest with themselves, particularly those at the top. Companies will need to need to start taking real action rather than relying on PR gimmicks or confusing environmental management issues or CSR with sustainability agendas. He suggested a real need for companies to build competence and have the appropriate internal institutional arrangements. A simple but critical step is in ensuring that the role of the sustainability manager wields true power with an organization.

Clearing the “ignorance gap” would mean that companies would need to get clear on what their strengths as well as limitations are. Mr. Nair concluded by stating that although this may not sit comfortably in many corporate quarters, this understanding can be a catalyst for new innovations and lend itself to long-term survival.

Other speakers at the conference included: Paul Mills, Asia Pacific Regional Sustainability Manager, Citi; Kenth Kaerhoeg, Group Communications Director, Coca-Cola Asia; Glenn Frommer, Head of Sustainability, MTR; Gail Kendall, Director – Group Environmental Affairs, CLP Holdings etc.

Mr. Nair is a frequent speaker at conferences and other corporate events around the world.