On the second day of the 9th World Knowledge Forum, Management Consultant of McKinsey & Company Sheila Bonini, Senior Advisor of Global Compact, UN, Fredrick Dubee, and Asia Area President of Dow Corning, Jean-Marc Gilson, gave a special lecture on green management.
Moderated by Sheila Bonini, Management Consultant of McKinsey & Company, the lecture was held for about 70-minutes touching on the broad topic of how companies can promote sustainable development.
Regarding how companies around the world should sustain energy and resources and maintain health and satisfaction of employees, Sheila Bonini underlined that firms should capture opportunities inherent in the current crisis, pinpointing that companies’ challenge is “to find a way to incorporate an awareness of sociopolitical issues more systematically into their decision-making processes.”
Concerning environmental issues, the moderator insisted that expectations on enterprises are arising in regards to ‘green growth’, particularly from consumers, calling on companies to act around social issues primarily on a set of environmental and social issues such as climate change given the low trust of companies. Consequently, in a bid to manage corporate social contracts -- sets of laws, regulations, and obligations that guide corporate behaviors -- companies were requested to master five areas: risk, renewal, regulation, relationships, and reputation.
According to the consumer market research conducted by McKinsey & Company on priority issues to be implemented by companies, stakeholders in the business were requested to deliver issues that aren’t necessarily operational issues. Following issues were chosen as the highest priorities: climate changes, inadequate education system, regulators in media, and benefits accessible to the poor and corruption. Conspicuously, consumers were willing to act when they see firms not acting in businesses’ best interests; 34 percent of the surveyed consumers was revealed to willing to pay retail premium for green products with the acknowledgement that they need more knowledge on ‘green products’.
The survey also proved that these crucial issues can be regarded as an opportunity since these subjects are concerned with areas of unmet social needs where businesses can perform best.
Regaining trust in consumers and stakeholders was also selected as the priority that firms should implement; particularly, building meaningful relationships with a set of stakeholders that range from regulator to NGOs to the media and thinking about when to collaborate with competitors around the social governance were asserted to be crucial.
One example of successful green management was explained by Fred Mason, Director of Caterpillar Inc., the world’s largest producer of construction and mining equipment, which had supported sustainable developments for over 80 years especially in promoting strategies to move a society forward.
Meanwhile, Asia Area President of Dow Corning Jean-Marc Gilson brought up one key idea for a green growth: ‘sustainability as in creating green and sustainable business should be carried out in relation with innovations’. He then explained how Dow Corning, the No.1 producer of silicon, provides sustainability with three Ps -- people, planet, profit. He continued: “The bigger the intersection among the three Ps is, the more sustainability will be guaranteed.” Consequently, he proposed firms to make a significant investment to enlarge the interaction among the three Ps while putting investment in resources at the same time.
The lecturers concluded the session by discussing the impacts of green and sustainable development on today’s financial crisis. Mr. Gilson, who considered the recent financial crisis as a ‘bump’, responded that enterprises should go back to ‘basics’ refocusing on innovation, relationship, group projects, and prioritizing best projects. However, he also mentioned that enterprises should progress their ‘green management’ very cautiously. Moreover, he advised firms to be discreet in turning over control to the government since the government’s huge mistakes will tremendously influence the whole market.
The greatest strategic danger for companies today was asserted to be the factors which jeopardize relationships among companies, stakeholders, and customers. Consequently, he requested companies to look after the needs of employees, supply chain, customers, and communities despite a large temptation that can breach faith in relationships. Lecturers also agreed that companies should focus on long-term goals rather than short-term goals.
[Eun-jung Kim / JYJ][ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved
