Ethics and sustainability bring peace of mind and long-term benefits for businesses. However, building an ethical and sustainable business doesn’t necessarily lead to happiness all the time. Even the Greek word “eudaimonia,” translated as happiness, means living virtuously that sometimes make us unhappy, as explained by Aristotle.
Ethics in business sometimes requires presenting an honest state of affairs that can be upsetting. However, in crisis times, companies fostering honesty in relations with their stakeholders have more chances when asking for help. For manufacturing companies, suppliers’ understanding, support by partners, employee effort, and customer loyalty are a make or break of their business.
Moreover, connection with the community and care for the natural environment are also ethical considerations. Opposed by many, but this behavior leads to profitability. Number one leadership and management expert by Inc. magazine, John C. Maxwell, confirms long-term gains of being ethical. Furthermore, all management gurus suggest guidelines built upon corporate values. This way, there are no ethical dilemmas when leading an ethical and sustainable business.
How to be Ethical in Business?
In John C. Maxwell’s book “There’s No Such Thing As Business Ethics,” he suggests there’s only ethics. And we should follow it as individuals before everything else.
For stoic philosophers, ethics in life means to lead a virtuous life, where reason shapes our impulses and guides our actions. For example, courage is simply knowledge of what to endure, not the impulse and thinking whether to endure or not. Therefore, simplified, subduing one’s impulses is the key to virtue and happiness. And knowledge about what is good, bad, and indifferent is the heart of virtue.
When running an ethical and sustainable business, there are no blur lines either. However, some discussions about sustainability at Start Summit 2021, raised questions about ethics in business. For example, if a manufacturer can sell a product at a lower price, should it?
From one point of view, lower price makes more people able to buy the product. Therefore, there is an apparent social impact of this act. At the same time, companies will benefit from increased market share, driving the economy of scale. If not monopolistic, competitors will have the incentive to lower their costs or improve processes. As a result we have lower prices and better business practices.
A different point of view suggests the profitability that could lead to R&D and making even better products. In this case, the prices are the same, but society has a better quality of life. As a result, this could foster a chain of innovation, as one breakthrough leads to another.
However, unethical behavior would mean that company’s stakeholders could reap profits in the first example. Similarly, the second example holds the danger of dumping prices for ruining competitors in other markets.
Ethical and Sustainable Business Practices
Neither of the abovementioned examples resides with ethics nor favorable outcomes in the long run. However, some profit-oriented enterprises take advantage of the current state of affairs. It is because it favors sustainable business as those that are likely to get the support and investments.
Therefore, as sustainability is gaining prominence, many see it as a chance for opportunist behavior. Sometimes, companies and individuals with other good practices go astray in riding this wave. Luckily, easily identified, these unsustainable practices have their terms:
Investopedia defines greenwashing as a process of conveying a false impression or providing misleading information on environmentally sound products. In the case of corporations, setting sustainability as a goal has a threat of including these practices. It is a type of claim that deceives consumers, and for all the abovementioned, not sustainable.
Regarded as yet another deceiving model, moral licensing is an unsustainable and unethical practice. Psychological study on this subject describes people who have been good in the past believe they can balance some wrong moves. Sometimes, celebrities that build their reputations behave in a way that contradicts their public personas.
Even if applicable in the short-term, these types of behavior could lead to devastating effects on businesses. Moreover, in the world of social media, it could lead to long-term consequences as loss of reputation and sales. Since not virtuous, it hardly leads to happiness.
Infidia Support for Ethical and Sustainable Businesses
For this reason, Infidia tends to examine the set of values and procedures of our clients. It helps to review the overall business practices when making records in the blockchain. Of course, the purpose of policies and guidelines is both clarities in decision-making and efficiency of processes.
The extinguished example of these guidelines is in the book of “Principles” by Bridgewater Associates, the world’s largest hedge fund. However, that set of principles deriving from a fruitful career is changing ever since. It is because his company’s corporate culture is fostering opposite opinions and freedom to suggest a change.
Interestingly, Bridgewater Associates’ founder is regarded as an opponent of Bitcoin, as he suggests the new leading cryptocurrency will emerge. However, there is an excellent remark about this opinion by Victoria Gago from the European Blockchain Convention that “it won’t be a cryptocurrency, it will be a new invention that we can’t imagine now.”
For this reason, we believe that sustainable business practices require innovation and futuristic thinking. Simultaneously, to keep themselves on the right path, these companies should follow the ancient philosophers’ ethical teachings. Therefore, and supported by John C. Maxwell, one should be innovative and innovative when building a company. Seemingly, it is the secret to reach “eudaimonia,” both for ourselves and for our business.