What it Takes for Companies to Flourish

From the moment they form, through their periods of expansion, companies borrow from the communities that take a genuine interest in and generously contribute to said companies' growth and success. As such, companies have a wide range of responsibilities and accountabilities to those communities, which are chiefly:

• Environmental Responsibility — Managing the environmental impact of their operations, which can affect the quality of life in surrounding communities (e.g., waste management, emissions reduction, natural resources conservation)
• Social Responsibility — Contributing to the economic development and well-being of the communities in which they operate (e.g., creating jobs, paying fair wages, engaging local and marginalized businesses; supporting education, healthcare, and other social services)
• Governance Responsibility — Complying with all applicable laws and regulations and conducting themselves in a way that is inclusive, equitable, transparent, and to protect the communities in which they engage from harm (e.g., truthful advertising, respecting human and civil rights, avoiding exploitative practices; exercising fair labor practices as well as responsible consumer and environmental protections)

However, far too often companies move onward and upward — amassing unimaginable wealth and other gains — without repaying the capital they owe to the investors, creditors, employees, customers, suppliers, regulators, local communities, etc., in which these companies serve, impact, and are impacted by. Instead, they continue forward, creating culture and environment debt and accruing interest.

Culture Debt

"Quick to borrow is always slow to pay." — German Proverb

When companies positively engage their stakeholders, they begin to build reputation capital. The more favorable the interaction between company and stakeholder, the more companies earn increased trust; gain stronger perceived product, service, stock, and overall value; and experience wide approval as a brand identity. Companies "bank" this capital so that they might withdraw from it when interactions with stakeholders are unfavorable. As long as companies maintain reputational credit, they realize constant and consistent success. 

Companies accrue a culture deficit when they outspend their reputational capital and overdraft on stakeholders' deposits of grace, goodwill, and trust. Each debit that companies make becomes a stress test of stakeholder patience which, over time, leads to a lack of confidence, less patronage, and greater unforgiveness of company errors, mistakes, omissions, and lapses in judgment. 

Companies take risks to gain exponential rewards. The dogged pursuit of these rewards often instigates a diffusion of responsibility and adverse behavior toward stakeholders. As such, companies accumulate culture debt, which is the social good, social justice, and social safety owed to their stakeholders for their past wrongdoings (e.g., unethical behavior, discriminatory practices, contributing to systemic oppression).

Paying off a culture debt requires a long-term commitment from companies. Here are concrete steps they can take to address the underlying issues that have caused culture deficits in the first place.

• Acknowledge the debt and take responsibility for it. The first step in paying off culture debt is for companies to acknowledge that they owe it. They must take responsibility for their actions and their impact on their stakeholders, including publicly apologizing for past wrongs and actions, committing to change for the better, and restoring justice. 
• Implement changes and be transparent throughout the process. Companies should thoroughly analyze their current policies, procedures, and practices to identify areas where they may be falling short. They should adopt equity, inclusion, purpose, and justice as organizational values and make tangible, material investments to ensure the same are prioritized in all facets of their businesses, including company communications, relationships, and transactions. Further, companies should be transparent about their progress in addressing the culture debt. Whether reporting on critical metrics or reaching milestones, they must provide regular updates on their initiatives.
• (Re)Engage and give back to stakeholders. Companies should (re)engage their stakeholders to get (re)acquainted with and to better understand their needs, concerns, and expectations, including holding focus groups or town hall meetings, conducting surveys, forming advisory boards, creating partnerships with local organizations, sponsoring community outreach programs, listening to feedback, and unlearning past harm-producing behaviors. Companies should also give back to their stakeholders — consciously supporting and conscientiously investing in them (e.g., volunteering time and resources, contributing to community-based development projects, partnering with organizations that are working to create positive change) — with the same spirit of goodwill, extension of favor, and beneficial impact they have enjoyed.  

Environmental Debt

"What we are doing to the forests of the world is but a mirror reflection of what we are doing to ourselves and to one another." – Chris Maser

In the same way companies are indebted to their stakeholders, they are likewise accountable to nature.

When companies engage in various industrial and commercial activities — such as resource consumption and waste production — they, directly and indirectly, create environmental risk and harm, some of which are permanent and irreversible. The ecological impact and collateral damage they leave on nature and its inhabitants, including humans, are excessive. Environmental degradation (e.g., atmospheric changes, rising sea levels, a scarcity of freshwater, rapid extinction of biodiversity) is just one of ten cascading effects companies cause but overlook, ignore, or outright deny. 

Companies owe outstanding environmental debt to the planet for the natural capital they have taken and continue to use unsparingly to operate. Rather than fulfill their environmental stewardship responsibilities and accountabilities, they consume renewable and non-renewable resources (e.g., plants, animals, air, water, soils, minerals) and exploit the same's benefits (e.g., water, wood, construction materials, energy, and medicines) in the unfettered pursuit of capitalism. 

According to the United Nations, "the world economy loses USD $7.3 trillion per year in damage to the environment, health and other vital benefits for humankind." Bloomberg reports that "Almost 10% (or five million) of global (human) deaths" can be attributed to climate change. The World Wildlife Fund shares that "animal populations have plummeted by nearly 70%", with some species "already extinct" due to companies' environmental deficit.

How companies flourish is a choice. Without profits, they cannot reasonably survive, let alone thrive. However, survival is also a choice. How long companies survive and how well depends solely on their raison d'etre (their purpose) and their willingness to repair their relationship with the earth. There are several ways that companies can begin to repay their debt and become more environmentally responsible, for example:

• Reduce carbon emissions: Companies can adopt sustainable practices such as using renewable energy sources, improving energy efficiency, and optimizing transportation.
• Invest in renewable energy: Companies can invest in renewable energy sources (e.g., solar and wind power) to reduce their carbon footprint and promote sustainability.
• Implement a circular economy: Companies can minimize the amount of waste produced and conserve resources by shifting towards a circular economy (e.g., implementing recycling programs and reducing waste).
• Adopt sustainable supply chain practices: Companies can help to reduce the overall environmental impact of their supply chain by working with their suppliers to ensure that they are also following sustainable practices. 
• Engage in reforestation: Companies can combat deforestation and promote biodiversity by engaging in reforestation efforts. Planting trees and supporting conservation efforts are effective. 
• Promote eco-friendly products: Companies can promote eco-friendly products and packaging to reduce the environmental impact of their products.

Overall, companies have a duty to operate in a way that is responsible, ethical, justice-focused, and sustainable. When they adopt a "Purpose, People, Planet, Profits" framework, the needs of the stakeholders in which they engage and the environment in which they operate are balanced.