Is Corporate Sustainability Sustainable? March 2021
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"Stakeholder Purpose over Shareholder Profit" in Scan™ Patterns, April 2020, notes the increasing corporate interest in the purpose-over-profit ideal and highlights sustainability as a key feature of this growing interest. Calls for a rethinking of the purpose of companies continue. In a recent opinion piece for the Financial Times, journalist Martin Wolf asserts that the argument renowned economist Milton Friedman made in his now famous 1970 essay "A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits" is no longer valid because corporate power has distorted the "rules of the game" for competition, labor, the environment, taxation, and other factors. Some signs suggest that the covid‑ pandemic could accelerate the move to sustainable, purpose-driven companies. During a July 2020 study commissioned by the Carbon Trust (London, England), researchers conducted 453 interviews with large companies in France, Germany, Mexico, Singapore, Spain, and the United Kingdom. More than 70% of the interviewed companies and 69% of the interviewed companies that were experiencing substantial pandemic-related disruption said that prioritizing sustainability and environmental management would likely become "somewhat more important" or "significantly more important" for them because of the pandemic.
Agreement can come from unexpected sides. For example, Maxim Remchukov and Denis Rozhok from petrochemicals company Sibur Holding (Moscow, Russia) argue that the pandemic is increasing companies' awareness that they must focus on long-term sustainability over short-term profits. Remchukov and Rozhok highlight the strong performance of environmental, social, and governance funds in 2020 as one point of evidence. Despite these signposts, outcomes are far from certain. The pandemic has also created a rush for single-use plastics in health care. In addition, the real economic impact of the pandemic has yet to manifest; when it does manifest, priorities may change. A high-unemployment, low-growth environment may force companies, governments, and individuals to prioritize short-term economic benefits above all else. Even if stricken businesses were still prioritizing sustainability in summer 2020, a sustainability-first strategy may prove unsustainable during the pandemic's economic fallout.