Making Money in the Age of Aquarius

Trend prediction is always an interesting past-time and one that often results in the trend becoming reality, simply because people believe in it. In the 21st Century, the so-called Age of Aquarius, there is a strong trend towards socially and environmentally friendly business. It does not matter whether we come to the concept as aging hippies or as business people with an enlightened self interest, the trend itself seems undeniable.

This trend shows up in many guises: in “green” products, environmentally friendly industrial processes, corporate social responsibility (CSR), sustainable business (sustainable on many levels) and so on.

Part of the trend involves customers voting with their fee, the power of the internet in spreading official and unofficial news about the activities of corporations being such that a wrong decision can catch a company on the back foot and dramatically reduce its share value overnight.

Increasing consumer demand for fair trade products and organic foods and eco-friendly materials, although still relatively small, shows an insatiable desire and growing demand for businesses to step beyond PR and demonstrate commitment to so-called enlightened approaches.

It seems that in the 21st Century, acceptable models of business involve some sort of responsibility for society and the environment. Even for the most cynical amongst us, we have to accept that the best commercial interests of an organisation are represented by adopting new approaches to business.

Ethical investment and lending institutions such as Triodos Bank and The Co-operative Bank favour such businesses and indeed will only invest in certain types of business consistent with their declared values.

Law firms are having to come into line, offering services that support companies’ effort to take on these fresh approaches. These services range from contract reviews (to make sure that they “walk the talk” in all their dealings) through to corporate governance advice (to make sure that in key corporate decision making the company is on track to benefit from this trend).

The more sophisticated adoption of CSR and other related approaches can involve a thorough re-appraisal of a corporation’s entire approach to the way it conducts business and negotiations, having regard to the impact of saying on the one hand that they are “socially responsible” and then finding that perhaps in some dealings they are less than fair to some business partners. Lawyers advising in this area are faced with the challenge of having to stand back from pure legal advice and help corporations assess the impact of their approaches, seeing whether existing strategies are fair or whether they are imbalanced, tending to create relationships that do not work.

Accountants, too, have to adapt more flexible approaches to improving their bottom line, not simply by pushing for ever-increasingly low supply costs and reduced overheads. We are seeing a trend towards improved profitability in what would have been previously considered unlikely circumstances, where being fairer on prices and being committed to their approach produces customer loyalty that enhances the bottom line.