Roche Vice Chairman Andre Hoffman is warning that short-term thinking is killing the planet and that corporations must engage in long-term sustainable strategies that limit any environmental harm and can help reverse some of the damage that’s already been done.
A staunch environmentalist, Hoffman, a member of Roche’s founding family, made his comments during an address at the Building Bridges sustainability summit in Geneva, Reuters reported.
“A financial return only cannot measure everything,” Hoffman said. “If you lose a couple of species, you lose them forever. If you have a business and have a bad year, a bad day, a bad month, you will work harder and you will compensate with another good month. So, on balance, you will be able to come out even.”
But, Hoffman said, if you lose one species, that’s forever.
“Extinction is forever. It’s not coming back,” he said in an excerpt of his speech.
Ignoring long-term consequences means, Hoffman said, that short-term goals really won’t matter that much as the world will not be a fit place to live. Hoffman said businesses must embrace a longer-term strategy to rein in human impact on the planet. He noted that many people are panicked about the future. Hoffman said even companies that try to be environmentally conscious and leave little in the way of carbon footprints must reshape their thinking to repair the damage done to the planet.
“Short-term profit maximization has destroyed the planet, environmentally and socially,” Hoffman said.
As an example, Hoffman pointed to his own company’s efforts to think in the long-term, specifically a new remuneration policy set in place for the company’s sales force in the United States. Pay will be more closely tied to the outcomes of patients as opposed to the quantity of medication sold. Hoffman is chairman of Roche’s remuneration committee.
“Society is destroying the planet. And that’s happening in front of our eyes. We can all say, ‘OK, it’s finished, let’s quickly make hay while the sun still shines.’ Or we can try to do something active about it. And I believe business is the way to do it,” he said, as reported by Reuters.
In a TEDx Talk earlier this year, Hoffman said when he was appointed to the board of Roche, one of the first questions he asked was how the company could better interact with nature. He was met with polite response, but was told it was important to focus on generating revenue. Hoffman said the other board members said with greater revenue, money could be donated to various environmental causes. That was a good example of short-term thinking.
That focus on the bottom line only has caused a significant portion of the population to lose trust in businesses. Hoffman said people and businesses are overusing natural resources and “living over our means.” Hoffman called for changing the way that businesses measure success. He suggested a model he called the “Three Ps,” which looks at the planet, the people and profit. Businesses cannot exist without a profit, so that’s essential, he noted.
“The planet is what we’re on. We need to use its natural resources in a way that will give us true sustainability… And, finally, people… people are our most important asset and it’s true,” he said. “We cannot do business without people.”
Like in his Geneva talk this week, Hoffman pointed to the importance of family businesses, like Roche. He said family businesses tend to think about the next generation. Hoffman said he wants to make decisions that will continue to benefit his “children’s children’s children.”