Paul Hohnen Sustainability Strategies

This letter was published in Financial Times on June 19, 2006 .

Worth the effort: sustainability is good for bottom line

From Mr Paul Hohnen.

Sir, Jonathan Guthrie's personal voyage of discovery from Monaco to the new world of corporate social responsibility seems to have left him confused.

He starts by saying that CSR is philanthropy, and ends by saying that actually it is a way to avoid regulation and a "lever for jacking up the bottom line". Regular FT readers may not be as surprised as he is that CSR is gaining momentum.

Last week's FT Special Report on Sustainable Banking explained how banks adopting CSR can earn better returns and reduce their risk, particularly by applying socially responsible investment criteria. The FT's sustainability awards shortlist several banks that apparently suffer from Mr Guthrie's ethical "rash": they transparently report their social and environmental performance using the voluntary Global Reporting Initiative, or the Global Compact. They use these internationally recognised tools to help manage change toward sustainability, and to ensure that their superior environmental and social performance can be independently evaluated. It is worth the effort because in the long run sustainability can save them money, reduce risk, help with product innovation and new market access, and differentiate their products from those of competitors.

Doing good is good for the bottom line, and being driven by more than just regulation or the fear of it.

Paul Hohnen, Sustainability Strategies, Amsterdam 1017 SL, The Netherlands