Sustainability in German Business Culture

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germanblogThree car companies, two private equity firms, two start-ups, one department store, and both the world’s largest chemical and insurance companies. The German track, as was the case with our Lauder peers, visited a whirlwind of diverse industries during the course of our summer immersion.

Despite the diversity of the fields, each discussion, sooner or later, came back to the German concept of sustainability (Nachhaltigkeit). As we discovered, the German interpretation of sustainability reaches far beyond ecological questions of deforestation or recycling. It champions the efficient use of environmental, social, and economic resources, with view to the long term. Indeed, some argue that the concept of sustainability is originally German, developed in the early 18th century as a reaction to deforestation within the timber industry in Saxony.

In Germany, ample investment in research and development, continuing development of experienced employees, and company-sponsored childcare are practical examples of sustainability. Rather than viewing these obligations as a constraint, the companies we visited boasted that germanblog2these principles propel success. BASF’s success in the chemical industry can be attributed to its Verbund system, which reemploys waste byproducts of chemical reactions to synthesize further marketable chemical compounds until ultimately, no waste remains. One private equity firm we visited, which specialized in supporting medium, family-owned, globally active (“Mittelstand”) companies, advised that honesty is the most important aspect of sustainability.

We learned that in German business culture, if one party begins to act in anyway other than originally communicated and verbally agreed upon, the business relationship is often over. In this sense, being a reliable and honest business partner is the basis of long-term success. To the German track, we have come to view this comprehensive framework of sustainability as a roadmap to wise and ethical business.

By: Eva Nixon, Chakra Banerjee and Christopher Owen of the Lauder Class of 2016, German Track