Fortune or virtue: the challenges of sustainable business practice

David discusses integrated reporting in a post financial crisis market and the choices that business leaders need to recognise and make. He questions the relationship between sustainable business practice and financial performance and the role played by regulation.

The integrated reporting consultation period, that has recently closed, has to be a welcome step forward. It's just a shame that it will take another set of regulations to help company leaders make progress in this area.

In 1971 Dr Suess published The Lorax. It's a fable about the potential dangers of an industrialised world and the threats posed to society, and the environment. The Lorax speaks for the Truffula trees and all the animals that rely on them for survival against the greedy Once-ler. Ultimately he loses the argument and the Lorax and all the other inhabitants leave. The Once-ler only realises the error of his ways when it is too late and the last tree is felled. I recommend it to everyone who runs a business as essential reading.

In the financial post crisis world in which we are operating, it is clear that we must make choices; fortune or virtue? We simply cannot reduce our work down to a post-modern ideal of pure selfishness. There is no reward in that.

Major business is a key part of the social fabric of society. I believe that most business leaders recognise that they are stewards with a key role to safeguard the jobs of employees, create new ideas and opportunities, add to the success of the countries in which they operate and represent all stakeholders. On that basis why wouldn't sustainable performance and financial performance be one and the same thing.

And the current winners seem to be those with business models that reward the greater good such as John Lewis and The Co-Op. If the public ownership model is to thrive, or even survive, it's going to have to change its priorities.

But to be fair, most of my clients recognise the importance of sustainable business practice to sustainable profits and would like to integrate reporting. The problem is that they simply don't have the support of their board to do so.

And by support, I mean the financial commitment to measured progress against meaningful targets as key performance indicators. The danger for integrated reporting is that we will end up with yet more data, but limited progress.

Still I welcome it because without this possible regulation, it is too easy for boards to underplay the importance of a real commitment to change. My challenge to Non-Executives is summed up in the words of Dr Suess:

"Unless someone like you...cares a whole awful lot...nothing is going to get better...It's not."

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