I think businesses that want to prosper in the long term need to take a soul-searching look at what it means to operate in a sustainable way. The truth might hurt, but the rewards are worth it.

Today, most shareholders, communities, governments and employees demand that corporations shoulder their fair share of social responsibility. Many fund managers now consider environmental, social and governance (ESG) issues in their investment decision-making.

In this increasingly transparent world, businesses need to consider the implications for their business policies and practices. They need to account for the true cost of doing business – including carbon taxes, responsible waste disposal and other environmental impacts. And they need to pay attention to their brand, making sure they walk the talk.

This isn’t easy given demands for financial performance and the differing views on what sustainability really means. It requires uncompromising leadership.

The truth hurts

This kind of scrutiny can be disturbing and challenging. New risks, compliance requirements, shifting competitor strategies, increasing customer demands and changing societal attitudes will all be part of this picture. But ignoring society’s demands for business to operate more sustainably will only defer the pain, leaving the next generation of leaders to deal with it instead.

Making the fundamental changes needed to achieve a more sustainable business also requires substantial investment. But witness the enormous cost to brand and profitability of failing to do so – as companies such as Union Carbide, Exxon and Orica have found.

The truth is, you need to do the hard work

My experience leading a world-renowned creative agency showed me that businesses must address the story and substance of their sustainability agenda in tandem. If you try to put a communications spin on age-old bad habits, you’ll soon be found out. Conversely, being a quiet achiever focused on all the right things but failing to engage stakeholders in the journey is a recipe for ending up misunderstood and under-appreciated.

It’s an all or nothing situation – and doing nothing simply isn’t an option. Efforts to transform a business into a sustainable, socially responsible entity must include baking the new way of doing business into products, services and customer experiences. And internal and external communications must be aligned to ensure the brand promise is faithfully delivered.

Engaging leaders and staff in a dialogue about the changes required to organisational culture, behaviour and decision-making is equally important. And any changes must include transforming governance and management structures to re-frame how business performance and value are measured.

Do you believe that such change is possible and can pay off in the long run? I’d love to hear your thoughts.