Partnerships for Business SustainabilityWhereas corporate sustainability refers to the balance of the financial, social and environmental aspects of an organization, exponential sustainability is the achievement of such a synergy on a society level. This happens when companies begin to reach out and look beyond their own perceived interests. Companies are increasingly building coalitions and partnering with non-profits in order to achieve this goal, and in the process, realize several associated benefits.

by Anna Clark, President of EarthPeople and Author of Green, American Style: Becoming Earth-Friendly and Reaping the Benefits. Follow Anna Clark on Twitter.

As the business sector searches for new and better ways to go green, a strange but wonderful phenomenon is emerging.  Increasingly, companies are partnering with non-profits and building coalitions with each other to further green initiatives.  A good partnership can help participating entities maximize resources, grow their client base and enhance visibility.  We used to call this synergy.  Yet, the outcomes of such arrangements can be so far-reaching that “synergy” doesn’t describe it.  I propose a new term: exponential sustainability.

If corporate sustainability is the balance of the financial, social and environmental aspects of an organization, achieving this balance at a society level can lead to exponential change, hence exponential sustainability.  This begins to happen when companies reach outside themselves to pursue green initiatives that go beyond their own perceived interests.

Numerous case studies illustrate the ripple effect of positive partnerships and coalitions.  A good example is the Clinton Climate Initiative.  The William J. Clinton Foundation has created an arrangement among four energy service companies and five global banking institutions that will result in major environmental upgrades in 16 of the world’s largest, most polluted cities.

Collectively, the banks, which include Citigroup, Inc., Deutsche Bank AG, JP Morgan Chase & Co., UBS AG, and ABN Amro, will commit $1 billion to finance energy efficient building upgrades in municipal buildings in participating cities.  “They’re going to save money, make money, create jobs and have a tremendous collective impact on climate change all at once,” Mr. Clinton said of the partners in the initiative in a prepared statement.  That is exponential sustainability in a nutshell.

Another coalition leading to sweeping change is the U.S. Climate Action Partnership (USCAP). The group’s mission is to urge the federal government to cut greenhouse gas emissions 60-80 percent and to create business incentives.  The 22 USCAP member companies, including GM, Shell and Dow Chemical, represent industries critical to slowing climate change.  The corporate partners join six non-profit advocacy groups in this mission.

Fred Krupp of Environmental Defense says of the USCAP, “We chose a cap-and-trade approach because it guarantees the emissions cuts we need, while it unleashes cash and creativity from the private sector. This plan is a jobs winner as well as an environmental winner.” By teaming up with non-profits, big businesses are able to proactively shape and promote creative solutions before they must face potentially less- favorable regulations.

Even just one company together with one non-profit can change the course of an industry.  One example is the partnership between Allianz Group, one of the world’s largest insurance providers, and WWF, a global leader in environmental conservation.  The partnership seeks to address the growing impact of climate change-induced damages, such as flooding, forest fires and storm damages, on the insurance industry.

Allianz started the project to protect the interests of its customers, as climate changes could make insurance unaffordable for customers in high-risk areas.  In fact, in states vulnerable to hurricanes, insurance rates are already increasing and in some cases, insurers are exiting these markets altogether.  In the process of addressing the possible consequences of climate change, this partnership has been engaging governments and regulators to work with the insurance industry to find solutions.

The business sector used to focus purely on financials, leaving the job of curing societal ills to non-profits.  However, one recent survey revealed that 81% of MBA students polled said that business should work toward “the betterment of society.”  As more large companies embrace sustainability as a strategic goal, they recognize that non-profits may have superior experience in the business of “betterment.”

Partnering with non-profits was once a philanthropic endeavor.  Today, companies are discovering that by partnering with non-profits on green initiatives, they can gain expertise, resources and recognition without the costs of going green alone.  Such partnerships represent more of a symbiotic, rather than subordinate, relationship between the business and non-profit sectors.

As the threat of global warming becomes reality, sole focus on competitive advantage is giving way to cooperation among industry contenders, many of which are now building coalitions for the greater good.  Can this paradigm shift be the silver lining to climate change?

The concept of exponential sustainability may still lie at the far end of the sustainability spectrum.  Most companies would do well just to start evaluating their emissions and improve energy efficiency within their own walls.  But if you decide that exponential sustainability belongs on your company’s strategic horizon, the right partnership can rapidly propel you there.

Where does a company source partnerships opportunities?  How does a company begin to build a coalition?  Large companies are more likely to be approached by groups than small and mid-sized companies, although exponential sustainability can work for any-size enterprise.  Smaller companies can hire a sustainability consultant to help them craft a sustainability strategy that includes finding partnerships within their industry or community.

If you are the owner of a smaller company, there is no reason to reinvent the wheel if you can join an initiative in your town or neighborhood that is already gaining steam.  Seek out opportunities to support local programs spearheaded by your community or city council.  By adding your resources and contacts to the effort, you gain visibility and standing among the very people you would like for customers and clients.

Small businesses may find that by tying green initiatives to their communities, they can inspire employees and existing clients to participate. Even small-scale partnerships and collations can create momentum around sustainability.

I can’t help but think of the recycling container at my daughter’s school, filled to capacity every week by moms eager to see the school reap financial rewards from their refuse.  Yet, moms all over Dallas, when left to their own devices, often fail to put out their recyclables every week if the relatively low recycling rate in our city is any indicator.  My point: people will work harder when coming together to reach a collective goal than they will when acting alone.

Economist Milton Friedman said, “The most important single central fact about a free market is that no exchange takes place unless both parties benefit.”  In the scheme of impeding climate change, partnerships and coalitions based on this principle do more than benefit the partners; they give hope to us all.   Now that is what I call exponential sustainability.

Photo Courtesy of Svilen Milev.

© 2010, Anna Clark. All rights reserved. Do not republish.

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Author: Anna Clark (5 Articles)

Anna Clark is president of EarthPeople (www.earthpeopleco.com), a consulting and communications firm that helps organizations of all sizes create and execute profitable green strategies. A featured blogger for Greenbiz.com and SustainLane.com, Anna writes on sustainability and leadership. Her first full book,<a href="Becoming Earth-Friendly and Reaping the Benefits Green, American Style, is scheduled for release in April 2010. Anna lives with her family in Dallas in one of the first residences in Texas to earn a platinum LEED-certified rating from the US Green Building Council. For the more on sustainable living and green business, follow her on Twitter at anna_m_clark or visit www.annamclark.com.

  • http://www.cose.org/blog Tim Kovach

    This article addresses an important tool that businesses, including small businesses, can utilize to mitigate their footprint and gain a competitive advantage – strategic alliances. At COSE, we have been promoting the notion of developing strategic alliances as a sustainability issue to our membership for a while now. By forming strategic alliances with other businesses and non-profits, small businesses can meet the demands of their customers at a lower cost, while increasing their reputation and name recognition within the marketplace. They can also form lasting, key partnerships with other businesses and organizations that can drive down their costs, increase their collective profits, and cut the larger footprint of their supply chain. While small businesses may not be able to do it on their own, teaming up to tackle a collective goal is an effective, important tool that they can utilize to meet the needs of the triple bottom line approach.

    COSE is trying to play an important role in this framework, as well, and not just by advocating for it. We have created several programs and partnerships to promote energy efficiency and sustainability among our members. For instance, we have partnered with the Institute for Sustainable Development (gogreenplus.org) in North Carolina to provide our members with an outlet to become more sustainable and receive recognition and certification for doing so, at a reduced upfront cost to them.

    We feel that these types of relationships and programs are essential for getting businesses, especially small businesses, to take that step towards becoming more sustainable. Thank you, Ms. Clark, for writing this article and bringing this issue to the forefront.

    Please check out this blog post on sustainable strategic alliances by Nicole Stika (COSE’s Director of Energy Products). http://www.cose.org/News%20and%20Media/Blog/Sustainability%20as%20a%20Strategic%20Alliance.aspx