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Investing in Sustainability: Should it be done just because it is the right

thing to do, or because it is good business?

In starting a small technical and financial study to be focused on the reuse of biologically treated
wastewater in the Brazilian pulp and paper industry, there seemed to be a need by this writer
to try and quantify the potential marketing and financial return on an investment taken from a
business viewpoint. To be more specific, the original idea was to try and estimate the investment
and operational cost of some new and specific technologies for wastewater treatment. Then
using some basic time and interest rates, it would be possible to estimate and compare the
present value for each investment possibility with the option of not investing at all. Since these
investments would obviously generate positive environmental impacts, it was thought that
these impacts should or could be quantified in dollar terms.
So, a Google search was started on how much do environmental gains improve the bottom
line?. One of the first references found and studied was a paper by Ron Robins on the site called
Investing for the Soul. The title of his paper is: Does corporate social responsibility increase
profits? It immediately appeared to worth studying.
Comments and references cited by Robins readily confirmed some first premises. Just to
mention a few:

They [corporate executives] understand that CSR can promote respect for
their company in the marketplace which can result in higher sales, enhance
employee loyalty and attract better personnel to the firm. Also, CSR activities
focusing on sustainability issues may lower costs and improve efficiencies as

So, the research generally indicates that CSR/CC/CSP, no matter how you
define it, does offer potential benefit to corporate profits.

For those that are not familiar with the abbreviations used above, CSR means Corporate Social
Responsibility, CC means Corporate Citizenship and CSP means Corporate Social Performance.
However, on further consideration of some of the included readers comments, an uncertainty
as to what really is important started to form. That uncertainty came to be expressed as in the
title of this blog: Investing in Sustainability: Should it be done just because it is the right thing
to do, or because it is good business? And more importantly, what does this writer believe is
the best or correct answer.
Comments such as the following, led to the mentioned uncertainty that was created:
From Darren Wheelers comments in Ron Robins paper:

. if the motive for CSR in a firm is based on increasing profitability, then

the firm's leadership has missed the point...see Kant. Second, CSR is not a
substitute for ethical practices but should rather be a natural outcome of
ethical practices in an organization. The fact that many business schools are
focusing on CSR programs/curriculum vice [as in immoral or corrupt] ethics
programs evidence this approach. Ethical practices need to be taught in the
home, reinforced in the education system and demanded in the workplace.
[] What this article implies is that if CSR is not profitable, then there would
be no reason to do it.

From James Dempseys comments in the same paper:

There may well, in addition, be an argument to be made for firms pursuing
ethical aims besides profit; this possibility is captured, in business language,
by the idea that some businesses have fiduciary duties to parties beyond
shareholders. These might, for example, be the duties that professional firms
have to their clients.

Another interesting and extensive study was found in the Harvard Business Review on
sustainability and CSR in general entitled The comprehensive business case for sustainability,
and was written by Tensie Whelan and Carly Fink. Some relevant conclusions are reproduced as

Firms that adopted environmental standards have seen a 16% increase in

productivity over firms that did not adopt sustainability practices.

Executives can no longer afford to approach sustainability as a nice to

have or as solid function separated from the real business. Those
companies that proactively make sustainability core to business strategy will
drive innovation and engender enthusiasm and loyalty from employees,
customers, suppliers, communities and investors.
Pertinent to the initial question this writer found, in a recent book published by the Editora
Technological Evolution in the Brazilian Pulp and Paper Sector) (ISBN: 978-85-61701-02-4), a
chapter entitled A sustentabilidade no setor de celulose e papel (Sustainability in the pulp and
paper sector).
Some relevant comments, as translated by this writer, are reproduced as follows:
There is a: "... consensus that sustainable practices can generate value, in terms of the
image and reputation of businesses among consumers."
"... Sustainability is already failing to be a differential, and has become a matter of
business survival."
"The priorities pointed out by industry voices show that sustainability can no longer be
restricted to the ideas of being economically practical, environmentally correct and
socially fair. For most respondents, sustainability should be employed with a view to
ensuring the continuity of business.
As in the chapter of the above book, these comments were also discussed in more detail by
one of the authors during the ABTCP 50th congress during the environmental technical session.
Eduardo Toshio Sugawara from the Fundao Espao Eco, presented a paper called TEMAS
Relevant themes related to sustainability in the pulp and paper sector. Sugawara confirmed
during a question and answer period, exactly the conclusion that was becoming clearer
through these readings.
And so, after reading about and reflecting on the question posed in the title of this blog, what is
the answer? Simply put: BOTH! Investing in sustainability should be done because it is the right
thing to do AND because it is good business. Thus, in the above proposed technical and financial
study for investments, and which has a significant potential to reduce costs and reduce
environmental impacts, a conclusion might be said as: there is no need to quantify and separate
out a specific dollar value relating to an environmental return. This is the because the quantifying
of the financial returns due to a reduction of the environmental impacts seems to negate the
ethical reasons. One might still try to quantify or dollarize any eventual environmental returns,
but it does not seem necessary.