Business More than Government or Civil Society is Equipped to Lead us Towards a Sustainable World

Monday, August 13, 2007

Can a business go green and yet make a profit? Professor Stuart Hart, a leading authority on sustainability and business strategy thinks it is just a matter of changing mindsets. Hart is the SC Johnson Chair of Sustainable Global Enterprise and Professor of Management at Cornell University. In his book, Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World’s Most Difficult Problems’, Hart argues that companies can become the catalyst for a truly sustainable form of global development – and profit in the process. With noted economist C.K. Prahalad, Hart also wrote the path-breaking 2002 article The Fortune at the Bottom of the Pyramid’, which provided the first articulation of how business could profitably serve the needs of the poor in the developing world. He has a lab in Cornell and now in India that seeks innovative green business strategies. He is in Agra to talk to some of the biggest corporate heads in India. Professor Hart spoke to Sonu Jain What’s the philosophy behind the Bottom of the Pyramid’ approach? The BoP Protocol is a business incubation process that enables multinational corporations to generate new business opportunities at the base of the pyramid. It marries MNCs’ resources, technologies and best practices with those of the community. We are starting a lab in India with Indian School of Business in Hyderabad. One thing has become clear to the business community – a focus on corporate social responsibility or environmental management by itself will not generate the dynamic new growth needed to satisfy the demands of shareholders, society and nature. We believe it is essential that social and environmental challenges be framed as unmet market needs to be addressed by business solutions. What is the difference between a company that is trying to be green and a company that would use the BOP approach? At best, companies try to reduce the cost so that they can sell to the rural population. But they go there with the same management tools and marketing practices. Their products are a one-way flow, mostly shoved down the pipeline. I call these BOP 1.O which means they are at the first level of evolution. They have successfully taken the cost out of products or have introduced new, affordable packaging. Hindustan Lever in India is a classic example. In our model, a corporate will not go there with preconceived notions. It will evolve strategies with the locals. The Grameen family of services is a classic example. It views the poor as partners, not as consumers or clients. Isn’t this opposed to the idea of globalisation as we know it? Not really.

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Source: Calibre (link opens in a new window)