Restoring Sustainability’s Good Name
Here’s this month’s piece from neuroeconomist Paul Zak. For those who might dismiss some of our thinking as the “soft side” of management, Paul puts “hard science” behind it.
I recently spoke at ING Group’s Sustainability Summit, held at the company’s headquarters in Amsterdam. I’m sure that some of you are now rolling your eyes, given the degree to which “sustainability” has become an overused—and impotent—term in business.
But I was surprised by ING’s broad definition of the concept, as well as the company’s deep commitment to putting it into practice.
ING is a financial giant, serving some 66 million private, corporate and institutional customers in more than 40 countries in Europe, North America, Latin America, Asia and Australia. Its HQ is a gleaming silver scoop known colloquially as “the shoe.” The company’s CEO, Jan Hommen, and other senior executives attended the sustainability summit. Many spoke there.
As ING’s Dailah Nihot explained it, the company views sustainability as having three facets: organizational longevity, human capacity and environmental impact.
Peter Drucker would have greatly appreciated this multipronged approach. “An important task for top management,” he wrote, is “to balance the three dimensions of the corporation: as an economic organization, as a human organization and as an increasingly important social organization.”
ING policies meant to ensure the company’s longevity include transparent accounting, risk mitigation and a strategy for continued growth at a reasonable rate—all of which are very Drucker-like practices.
“Strategic positions,” Drucker declared, “should have a horizon of a decade or more, not a single planning cycle.”
Meanwhile, ING’s focus on human capacity translates into a robust slate of personal and professional development opportunities for its 90,000-plus employees. This includes training seminars and educational subsidies that provide new skills and pathways for advancement, as well as 20 to 30 paid hours annually for employees to volunteer in their local communities.
As for being green, ING was recently ranked No. 1 for its environmental policies by a leading Dutch newspaper. Years ago, ING signed the Equator Principles, pledging not to make loans to projects that do not meet certain social and environmental standards. These principles have become widely accepted by major international banks and, as an early adopter, ING likely influenced others to sign.
As with its accounting, ING’s environmental practices are transparent, too. The company is taking part, for instance, in a Carbon Disclosure Project, which highlights how businesses in northwestern Europe are doing in terms of climate-change management. (ING’s assessment score rose from 64 points in 2011 to 93 points in 2012.)
Such transparency is a potent way to build trust among both employees and customers. As my research has shown, by being candid with all its stakeholders, ING may well be inducing the release of the “moral molecule” oxytocin.
If ING keeps it up, perhaps the company can help restore sustainability’s good name.