In my next few posts i’ll be looking at 3 approaches to incorporating sustainability in business. It may sound counter-intuitive, since we often think of rapidly developing economies as putting growth before the environment; but that isn’t always the case. In fact, sustainable production can be less expensive than conventional production, making it an attractive proposition anywhere. These approaches, reviewed in more detail in the March Harvard Business Review by Knut Haanaes and coauthors, are remarkably successful, both environmentally and financially.
Approach 1: The long-term view
When you take the long-term view to sustainability, you invest in more-expensive methods of sustainable operation up front. The thinking is that dramatically lowered costs and higher output eventually result.
Sekem, Egypt’s first organic farm, successfully used this approach. Founded in 1977 when organic products were a luxury and the market was tiny, used biodynamic agricultural methods to reclaim arable land from the Sahara, absorbing carbon dioxide from the atmosphere, and used 20 to 40% less water for its organic cotton crops. These techniques lowered farming costs, improved average yields by almost 30%, and produced a superior raw cotton product in that it was more elastic than its non-organic counterparts.
Sekem’s leap of faith resulted in a financially and environmentally sustainable business model; from 2006 to the disruptions of the Arab Spring in 2011, Sekem grew 14% annually and is now one of Egypt’s largest organic food producers.
Questions for discussion
What Australian companies have adopted a similar sustainable business model to Sekem? How important do you think it is to consider environmental sustainability in business?