The Wall Street Journal published a compelling article recently linking the profitability and success of multi-national corporations to the improvement of the local community in which it operates.

“But here’s a lesson many executives have yet to learn: A commitment to improving social and environmental conditions in the developing countries where a company operates is the key to maximizing the profits and growth of those operations.”

In today’s capitalistic society with one of the most challenging economic environments that we have seen in years, it is an optimistically curious discovery that rather than cutting costs and pinching pennies, a way to grow profits lies in sustainable management. An improvement in the developing nation where these organizations operate benefits both employer and employee. By providing an environment in which stability and worker morale (through honest pay and benefits) are strong, the reputation of the company improves locally and abroad. As the study shows, an increasing amount of consumers are paying more attention to the conditions under which their products are made and are shifting more towards companies that provide better working conditions for their employees.  And a good reputation locally in the developing nation not only improves the image of the company in the local consumer’s mind, it also becomes a great marketing tool to recruit talented employees.

By developing environmental improvements in order to align with sustainable mentalities, an attractive by-product is a more efficient production process.  Again there exists benefits to both parties involved.  To a country and town in which the company sets up shop, nothing can help ease tensions and improve relationships more than good stable employment and attention paid to reducing the footprint left by the facilities.  Helping employ and empower the locals, thereby boosting the economy, and ‘cleaning up after yourself’ environmentally leads to a positive reputation and more efficient production.

In a time in which many companies are focused on ways to cut costs in order to improve their bottom line, it has been shown that focusing on the two other P’s of the triple bottom line (People and Planet) can lead to growth of the third P (Profit).

- Chris