The purpose of a business has traditionally been to make profits. But today, performance is not measured solely in numbers: it is judged by a series of factors that reach well beyond simple financials.
Salmata Ouedraogo presents this new reality, where profits and social responsibility are two sides of the same coin.
Dr. Ouedraogo is a professor in the department of economics and administration at Université du Québec à Chicoutimi. Her research explores sustainable development from an economic perspective.
A new definition of sustainable development
The definition of sustainable development generally accepted since the 1990s is as follows: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
But this definition essentially refers to the physical and material needs of individuals.
Salmata Ouedraogo prefers that of the Organisation Internationale de la Francophonie — it is more recent (2016), and, crucially, more comprehensive:
Sustainable development is “an effort targeting continuous improvement of the quality of life of citizens by taking into account the indissociable character of the environmental, social, economic, and cultural dimensions of development from a perspective of intra- and inter-generational equity.”
This broader way of seeing sustainable development is beneficial, because a narrow vision of sustainable development does not make it possible to prevent a form of non-monetary poverty: an equity gap.
In short, the addition of fundamental and nonmaterial notions such as culture, quality of life, and happiness are enriching, in every sense of the word. And as a result, performance evaluation grids for businesses need to be revised.
The new way to look at a company’s performance
A company is not judged solely on its profitability; it is also judged on the impact it has on society and stakeholders.
In this, there are two opposing currents of thinking.
1. The first sees a negative connection between sustainable development and financial performance. It starts from the principle that the business has neither the skills nor the knowledge to make sustainable development profitable, which negatively affects a company’s profitability, possibly even its competitiveness.
2. The second, on the contrary, sees sustainable development as an opportunity to boost profitability. This is the point of view of Salmata Ouedraogo, for whom competitiveness, financial performance, and environmentally responsible management are perfectly reconcilable.
The increase in stakeholders
Another factor to consider is the increased number of stakeholders who have an eye on a company’s affairs, and who want to weigh in, judge, and be heard.
From this point of view, corporate management has grown increasingly complex in recent decades. Gone are the days when management happened behind closed doors and companies weren’t accountable to shareholders.
With the Internet, it is easy to find out everything there is to know about a business. And with social media, people can readily express themselves about businesses.
This creates what Dr. Ouedraogo identifies as a paradox, i.e., that businesses must satisfy stakeholders with sometimes divergent, even incompatible, interests:
- consumers want quality, readily accessible, affordable goods
- shareholders want to maximize their profits, and investors want to maximize their investment
- employees demand to be treated well and work in a safe, respectful environment
- the community wants businesses to be environmentally responsible and good corporate citizens
- governments expect businesses to pay taxes and respect regulations
- pressure groups call for organizations to play an important role on a specific social or environmental issue.
But how do you keep everyone happy?
It’s hard, Salmata Ouedraogo explains, but through a series of small efforts and engaging in transparency, inclusion, accountability, and solidarity, we can move beyond tensions and head in the right direction.
Is it easy? No.
Is it possible? Yes.
Desirable? Absolutely.
By turning toward good practices in sustainable development, businesses can:
- maximize their productivity
- have easier access to financing
- reduce operating and resource exploitation costs
- consolidate markets, develop new ones
- attract and retain labour
- innovate and learn
- generate customer loyalty
- improve risk management
Yet, businesses do not respond the same way to sustainable development. Salmata Ouedraogo identifies three different attitudes:
1. Ecodefensive — environmental regulations are seen as a constraint by the company, which can go as far as trying to influence public authorities to have them modified or circumvent them. Some organizations even prefer to pay fines for failing to respect the regulatory framework rather than respecting it.
2. Ecoconformist — regulations exist, I follow them, but unenthusiastically.
3. Ecosensitive — describes businesses that fully espouse the principles of environmental protection and integrate them to all their activities.
Obviously, Salmata Ouedraogo advocates for the third category, if only because of the many benefits, and it is the avenue to medium-term success and endurance.
This article was written after watching the webinar “Prendre des décisions socioéconomiques responsables” led by Salmata Ouedraogo. The presentation is meant to be inspiring, with philosophical flourishes that are not seen as often in the business world.
In partnership with Cascades, Evol presents a series of 3 lunchtime conferences to help you become a socially, environmentally, and economically responsible business. It is our pleasure to invite you to watch the recordings available in the Toolbox section. Enjoy!
Presentation of our partner
Cascades, a world of possibilities!
Founded in 1964, Cascades offers sustainable, innovative, and value-added packaging, hygiene, and recovery solutions. The company employs approximately 10,000 talents across a network close to 80 facilities in North America.
Their mission: to improve the well-being of people, communities, and the planet by providing sustainable and innovative solutions that create value.
Cascades wants to play an essential role in the success of its clients by paving the way in sustainable packaging, hygiene, and recovery solutions.
To find out more about Cascades’ services: https://www.cascades.com/en/products-services/our-services
Salmata Ouedraogo is a professor at Université du Québec à Chicoutimi (UQAC).
She holds a Ph.D. in applied economics from HEC Montréal, as part of the joint doctoral program that includes the four major Montreal universities, Concordia University’s John Molson School of Business, the École des Hautes Études commerciales de Montréal (HEC), McGill University, and Université du Québec à Montréal. She specializes in the microeconomics of development. She also holds an advanced studies degree in environmental economics from the University of Ouagadougou (Burkina Faso).
Since August 2008, Dr. Ouedraogo has been a professor and researcher in the department of economics and administration at UQAC, where she teaches in the bachelor’s, master’s, and doctoral programs.
Driven by her passion, as part of her research, she and her colleagues study problematic development practices, such as multidimensional poverty, sustainable development, social economy, gender, health and education, all applicable in the socioeconomic context of Quebec and the regions.
She has lived in Saguenay-Lac-Saint-Jean since 2008. She began as a professor and went on to become director of recruitment and international mobility and director of the master’s in organizational management at UQAC. She is currently the director of the master’s in project management and the academic director of the UQAC’s distance learning programs in Senegal.
On December 6, 2019, she received the title of the Chevalier de l’Ordre de l’Étalon. This honour, the highest in Burkina Faso, rewards personal merit and distinguished civil or military service to the nation. It was awarded for her body of work and involvement in teaching, research, and training.
With a book project in the works, this caring intellectual volunteers in the community and advocates for an understanding that the economy is not just numbers; it is above all a multidimensional social sphere and stakeholders have the power to create palliative measures to reduce gaps between social classes, particularly during the pandemic.
