“The reality facing all business is that it’s becoming increasingly difficult for nature to sustain us,” says His Royal Highness the Prince of Wales, who for more than half a century has cautioned of the perils of treating nature as an inexhaustible resource. “To move forward, we must continue to show that sustainability and profitability are not mutually exclusive.”
The environment and our global economy
The Sustainable Markets Initiative places sustainability on par with profitability
As global business has advanced over the past century, it has made great strides in creating opportunity while also spurring innovations to drive social progress. Despite such achievements, industries ranging from aviation to energy to construction are faced with their greatest challenge yet as they look to the century ahead.
In partnership with a coalition of business leaders, nonprofits and government organizations, the Prince of Wales is leading a global effort to encourage and help entire industries rethink how they operate. The Sustainable Markets Initiative (SMI) is a global forum through which industries innovate ways to restructure their operations in order to grow in a manner that respects and protects the world’s limited resources.
Launched in early 2020, the SMI seeks to overturn a longstanding misconception that companies must choose between business success and sustainability. “We recognized that as a false choice more than a decade ago,” says Brian Moynihan, president and CEO of Bank of America and co-chair of the SMI. “We believe that we must continue to deliver great returns while also delivering progress on social and environmental priorities.”
Across industries, the SMI aims to promote a more balanced economy, in which industries, as part of their production processes, replenish the resources they consume. “Nature’s contribution to the global economy is estimated to be worth more than $125 trillion annually,” His Royal Highness notes. “What profit we make, we have to also make a profit for nature by putting something back.”
To demonstrate that business can work in concert with the environment, SMI announced the Terra Carta which provides a roadmap to 2030 for businesses to move towards an ambitious and sustainable future: one that will harness the power of nature combined with the transformative power, innovation and resources of the private sector. “The Terra Carta is a comprehensive roadmap for the private sector to help drive toward a sustainable future,” said Moynihan. “By integrating sustainability into our operating models, the private sector can marshal the resources that will be needed to reach the climate, biodiversity and development goals.”
Additionally, in September 2020 SMI launched Re-TV.org, a content platform highlighting inspiring, real-world sustainability practices. Examples on the site run the gamut from rethinking agriculture in South Africa to recycling coffee grounds into solid fuels or bioplastics, and from recovering and reprocessing waste water in India to how green corridors are helping Medellin, Colombia, reduce average temperatures throughout the year.
Serving all stakeholders
The SMI’s efforts reflect an ongoing global shift from shareholder capitalism to stakeholder capitalism, Moynihan says. While profits and shareholder value remain vital, stakeholder capitalism places a high value on environmental, social and governance (ESG) issues. Stakeholder capitalism repositions capitalism to play an essential role in solving climate change, poverty, hunger and other challenges outlined in the United Nations Sustainable Development Goals (SDGs). While the SMI looks for solutions for entire industries, another recent initiative can help individual companies reach their goals. With the International Business Council’s new Stakeholder Capitalism Metrics, businesses can measure their own progress in advancing ESG priorities in their operations.
Growing evidence suggests companies committed to ESG tend to be more resilient and perform better financially than companies that neglect such considerations. In the same way, industries that learn to thrive and produce in a way that supports nature position themselves for long-term success. “If the true costs are taken into account,” notes His Royal Highness, “being socially and environmentally responsible should be the least expensive option because it leaves the smallest footprint behind.”
Through the SMI, says Moynihan, “We have created a framework to provide tangible, actionable pathways for the private sector, governments, NGOs, and others to realize the long-standing ambition to protect and preserve our planet while sharing prosperity with all.”
Work with the SMI is just one part of Bank of America’s strategy to support social and environmental progress through investment, philanthropy and responsible business operations.
Learn more about Bank of America’s commitment to advance sustainability and address some of the world’s toughest challenges through its global business strategy, work with partners, support of employees and efforts to make its operations sustainable.
Originally published 01/22/2021