There is also a shift from the perspective that shareholders as members of wealthy families are the only providers of capital for businesses to the new view, which suggests that every member of the society across the globe is the new provider of capital for businesses to thrive. Therefore, the individual has become an integral part of the company.
A classic example is the incident between Nestle and Green Peace that occurred sometime in 2007 when the civil society group blackmailed it for not creating value in a sustainable manner. In that incidence, the corporation was working directly with the Malaysian government who had cut down the entire wetland forests in Kuala Lumpur and replaced them with Palm Tree Plantation that spanned about 50km from the Kuala Lumpur International Airport just for the sake of securing an instrument for foreign exchange. This unsustainable activity had disrupted the natural habitat of many species especially the Orangutans whose new habitat was now in Zoos. As part of its sustainability activities, Green Peace approached the Malaysian government and suggested that it cuts down some of the palm trees and re-grows the wetland forests in order to restore the already endangered species back to their natural habitat. Besides, Kuala Lumpur itself was already choking as at that time, but the government declined.
A few months later, Green Peace approached the management of Nestle at their UK Headquarters so they can in turn re-negotiate with the Malaysian government to restore the wetland forests since they were the major buyer of the palm oil. Again, their efforts proved abortive. Green Peace then decided to create an online video as a guerrilla tactic against the company – a video that went viral on the Internet in just 10 days, with over 500 million emails and about 7 million tweets concerning it.
The lesson from this incidence is the power of the digital media and stakeholders in either making or marring a company’s reputation in the 21st century within a very short time. The Malaysian government is already working to cut down the palm trees and re-grow the wetland forests in a bid to restoring the orangutans to their original habitat, something that could have been done 7 years earlier. Companies that are now impacting the society and the environment positively had looked at the sustainability issues in their locality and grafted them into their business strategy and as such are attracting substantial support from stakeholders and of course, venture capitalists.
The great asset owners of the world have all signed up to the UN Principle for Responsible Investment that would ensure that investments and contracts could only be made and signed respectively after due considerations had been carried out concerning the company’s track record on Environmental, Social and Governance (ESG) factors.
The way forward
The orthodoxy way of expecting the developed industrial economies of the world to give aid to developing economies is yesterday’s thinking and unsustainable. Both developed and developing economies need to ensure that they carry out their businesses in manners that impact positively on the society; improving the quality of life of the people living in the environment where the company is located, enhancing the environment and reducing (if not eliminating) the negative impact of environment pollution.
Furthermore, it is pertinent to ensure a more sustainable capital market in order to attain a sustainable world at the end of the 21st Century so as to avert the colossal crisis facing the planet today.