by Larry Berglund, CPP, MBA
What may appear to be an emerging issue has actually been around for a long time—a concern for the planet and its people. What is changing, however, is the ability to affect these issues directly and positively through business management practices.
When global leaders in the resource sector (Placer Dome), assiduous retailers (Wal-Mart) and innovative manufacturers (Interface Inc.), as examples, take increased responsibility for sustainable business practices, others are taking notice and are beginning to accept this role. Society needs businesses to be profitable, but the expectations are that the profits will be generated through the principles of sustainability. Corporate social responsibility (CSR) is not an option in the minds of most shareholders or stakeholders. It is a must.

Dealmakers have always been good at economic assessments—can we make money on this deal or not? In the late 1970s, we started to include environmental criteria in our decision-making. The preservation of natural resources and improving the quality of our air and water are hard to argue against. Today, economic and environmental factors are well-accepted as being important to weigh in the final agreement. In this century, we will be applying social values to our criterion.

An example of this issue for investment recovery departments is the disposal of end-of-life electronics, historically a process filled with companies that broker deals offshore driven by the economics of the deal. Many companies claim to be recyclers, which sounds good, but questionable or exploitive practices abound. In December 2006, a joint investigation by federal agencies exposed the role of companies in Canada as major illegal exporters of hazardous waste to developing countries. Fifty containers loaded with about 500 tons of metal and plastic scrap destined for China and Hong Kong were seized at the Port of Vancouver. On the other hand, conscientious companies assist manufacturers to protect their brand name by ensuring that the asset recovery process meets local and international laws and regulations—and is perceived as being responsible.

There is no industry or sector not affected by the issues which relate to CSR and sustainability. There is also a need to present pragmatic ideas and take actions that can affect social change. Decision-makers should be conscious of how their decisions have a ripple effect across a culture, community or country. Innovators are providing cost-effective, profitable and responsible solutions to meet these needs, and the corporate asset or investment  recovery group has a significant opportunity to provide leadership for every department within its organization. The subject of sustainability will continue to drive debate between advocates and detractors. Business should be doing its homework on sustainable practices and having dialogue with its suppliers and customers.

The issues to address are complex, ambiguous and controversial. Long-term solutions to this global
problem will require input from business schools, government and entrepreneurs. First, it requires a consensus that there is a problem; second, identifying options to make a difference; and finally—doing something about it.
Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 2, 2007
© The Investment Recovery Association