Sustainable Success

For companies operating in developing countries, it pays to commit to improving social and environmental conditions.

A series of scandals over the years have taught Western companies an important lesson about operating in developing countries: Any indication that a company or one of its suppliers is exploiting workers or damaging the environment in these regions can have devastating effects on a company’s reputation—world-wide. The result is fleeing customers and investors.

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.

That’s the conclusion we drew after studying more than 200 companies. As a group, the companies most engaged in social and environmental sustainability are also the most profitable.

What does sustainable management entail? …