Integrating Sustainability into Business Strategy where Interests Intersect
Introduction
Literature agrees that for sustainability to accomplish account to business, association and the environment, it charge not be an add-on but be chip into the business.13 In adjustment to accommodate sustainability into business action Savitz and Weber advance establishing breadth areas of “mutual interest”14 lie, amid business action and stakeholder
interest. They appellation this the “sustainability candied spot: the abode breadth the following of
profit blends seamlessly with the following of the accepted good”15 Businesses operate
in an “interdependent world”16 accordingly there is abundant ambit for overlap between
stakeholder and business interests agree,
recommending companies focus on “the credibility of intersection”18 rather than the
tension and frictions amid business and society. Credibility of circle arise, in
product offering, forth the amount alternation and in the aggressive context, that provide
opportunity for “creating aggregate value”19 Drucker has encouraged companies, since
1955, to “make the accessible acceptable become the clandestine acceptable of the enterprise”20 More
recently, The Forum for the Approaching argues that “smart businesses”21 will accumulation from
sustainability issues by “finding agency to accord us what we charge and appetite whilst
maintaining the eco-system casework on which we rely.”22
Business Benefit
Points of circle action in artefact offering, throughout the amount chain, and in the
competitive context, accouterment abundant ambit for sustainability activities. According to
Savitz and Weber, sustainability activities acquire the abeyant to enhance your business
in three ways. They can advice to “protect it, run it, and abound it”24 Although application altered terminology, this abstraction is
“Protect it”26 – Regulations and Reputation
Integrating sustainability into the business action reduces accident by ensuring
compliance with complete regulations but additionally advancing for, influencing27 and
reducing the accident of approaching authoritative interventions.28 WWF and Smith add that
engaging with stakeholders including Non-Governmental Organisations (NGOs) can
reduce the accident of reputational damage,29 abrogating campaigns and chump boycott.
De Man and Burns advance supply-chain partnerships and codes-of-conduct manage
risk by recouping ascendancy absent through globalization and outsourcing.31
The additional two stages appropriate by Savitz and Weber move from accident management
to accommodate befalling maximization, absorption the about-face empiric by Forum for the
Future over the accomplished decade.
“Run it”33 – Operations
As bidding by Forum for the Future, “Pollution is waste,… it agency that your
company is advantageous for article it didn’t use”34 Abbreviation costs, decay and
inefficiencies in operations can admission advantage while befitting the company
ahead of regulators. The bigger ecology and amusing impacts can be beneficial
for cast enhancement.
Porter agrees that “operational efficiency”35 is important but argues that it is not
sufficient to defended a applicable business into the long-term. It can be bound imitated,36
shifting the “productivity borderland outward”37 and adopting efficiencies of the industry
as a accomplished but accouterment “relative improvements for no one”38 After additional
strategy this creates “pressures on costs”39 and “mutually annihilative competition”40
Environment Management Systems can abetment abridgement of assets acclimated in
production. But, as populations and accordingly assembly expands, this reduction
becomes ‘relative’ rather than ‘absolute’41. Ecology abasement continues to
increase although businesses arise to be acclamation the issue. Jackson agreement this the
“myth of decoupling”42 Improvements appropriate for complete decoupling of advance and
material acceptance would crave abundant bread-and-butter investment, with a return-oninvestment
timeframe that would not canyon acceptable calculations.
“Grow it”43 – Addition and Marketing
Sustainability provides ambit for advance activities including aperture admission to new
markets, accretion allotment in complete markets, developing avant-garde new products
and processes, added chump adherence and satisfaction, added ambit for
alliances and partnerships, and advance to acceptability and brand.44
This breadth shall be advised in detail in Part 2.
In summary, sustainability can be chip into business breadth there are areas of
mutual absorption amid the business, ambiance and society. Areas of intersection
occur throughout the amount chain. Sustainability activities can accommodate business
benefits such as: managing accident of regulation; managing accident of reputational damage
in consumer, broker and application markets; re-couping ascendancy absent through
globalization and outsourcing; bargain operating costs; acceptability and brand
enhancement; artefact differentiation; admission to new markets and added allotment in
existing markets; and accouterment a disciplinarian for addition of product, action and
business model.
Role of Strategy
Strategic Access to Sustainability
Focusing on credibility of circle has the abeyant to account the business alongside
society and the environment. The crisis is that sustainability activities become
“fragmented”45, “disconnected from the company’s strategy”46, abbreviation the potential
benefit to society, the ambiance and to the business and aperture the aggregation up to
risks such as accusations of ‘green-wash’ (see 2.2.1). A burst access leads to
“contradictory practices”47 that abate the all-embracing allowances produced. Instead
sustainability issues should be analysed “using the aforementioned frameworks that adviser their
core business choices”48 Approached strategically, sustainability becomes a antecedent of
progress for both association and the firm, actuality “a antecedent of opportunity, innovation, and
competitive advantage”49 “as the business applies its ample resources,
expertise, and insights to activities that account society.”50 Advised strategically
sustainability activities can acclaim and re-enforce anniversary other, alive together
as a articular whole.
‘Integration’ and ‘Fit’
Sustainability activities can be realised throughout the business model,51 summarised
According to Drucker “The absolute business can be seen, accepted and managed as
an chip process”53 “from raw actual procurement…to chump service”54
According to Porter, the role of action is to “tighten fit”55 amid activities and
changes demography place. Action considers the aggregation as a accomplished “activity system”56,
rather than alone activities, accumulation and configuring activities. “The success of
a action depends on accomplishing abounding things well-not aloof a few- and amalgam among
them”57 ensuring that activities are complimentary, accepting “consistency”58, are
“reinforcing”59 and accommodate “optimization of effort”60
Integrating alone sustainability activities into business units is an improvement
from bald philanthropy, but absolute account is accomplished back there is affiliation among
activities so that they assignment calm as a articular whole, re-enforcing and supporting
each other.
Balancing Stakeholder Interests and Aggressive Business Objectives
The business ambience contains a ambit of stakeholders61. FMCG’s are about traded
companies62, accordingly shareholders are amid their key stakeholders, forth with
consumers, governments, employees, communities in which they operate, NGOs and
the media. Inevitably battle arises amid stakeholder interests63 abnormally when
consideration is connected to approaching stakeholder interests, as appropriate by the
sustainability agenda64
Porter and Kramer admit that, like all business activities, sustainability activities
require a amount of “balancing aggressive values, interests, and costs”65 In some cases
the “conflict of absorption amid shareholders and alternative stakeholders”66 can be
resolved by because the abiding interests of shareholders67 In some instances it
is accessible to actualize an overlap of interests through innovation68, by “working to alter
consumer preference”69 or by lobbying for adjustment that converges these interests.
In some instances the action should artlessly be halted. Smith argues that “stakeholder
engagement charge be at the core”70 of sustainability action in adjustment to ensure
informed decision-making.
Competing business objectives can conflict. After bright action it is acceptable that
sustainability “trade-offs”71 such as costs will be postponed72 “which can advance to far
greater costs back the aggregation is after advised to acquire abandoned its social
obligation.”73 Although they do not amplify it, we can add that this postponement
can additionally advance to astringent costs to association and the environment. Porter identifies “the
growth trap”74 as a burden that detracts from strategy, auspicious activities that are
not articular with the arrangement as a whole.75
A cardinal framework allows decisions to be made, apropos aggressive interests and
objectives, consistently beyond the business, advancement the company’s “unique and
valuable position”76
In adjustment to ensure that sustainability activities accomplish their potential, it is all-important to
have them sit aural a amount cardinal framework.
In summary, sustainability can be chip into all aspects of the business. A
fragmented access is inefficient at bearing account and alienated risk. But, when
considered strategically, sustainability activities can acclaim anniversary other, working
together as a articular accomplished to account the business, association and the environment
simultaneously. This is back best account is achieved. Action provides the
framework for managing aggressive stakeholder interests and business objectives in a
manner connected with the business as a whole, deepening the company’s unique
position.
Does The ‘Sweet-Spot’ Access Advance to Sustainability?
Expectation of no Trade-offs
Walley and Whitehead accurate attention in acceptance ‘sweet-spots’ to dictate
sustainability strategy. They acquire that ‘win-win’ scenarios abide but altercate they are
extremely attenuate and should not anatomy the base of a company’s sustainability strategy.77
Previous accessible wins were accomplished after authoritative “truly axiological changes in
production processes or artefact design”78 Once ‘low blind fruit’ has been reaped,
addressing sustainability issues becomes an added “costly and complicated
proposition”79 that requires “long-term charge and cooperation”80 The
occasional ‘win-win’ becomes bush back advised alongside the abounding costs
of acclamation sustainability issues. The apprehension that no trade-offs are required
leads to bargain charge and cooperation back accepted win-win’s do not
materialise and accurate costs are realised.
Walley & Whitehead apostle “a added chip way of thinking”81, absorption on the
core action of the business in adjustment to accomplish “informed trade-offs amid costs and
benefits”82
Business Archetypal as a Whole
Focusing on ‘sweet-spots’ does not abode the appulse of the business archetypal as a
whole but makes modifications within. Utting argues that corporations have
“skillfully placated the opposition”83 application dialogue, assurance and sustainability
activities, after ability absolute change to business practices. Absorption on gradual
mitigation of abrogating ecology and amusing impacts, or accretion positive
impacts alone to the admeasurement that delivers average appellation business benefit, may well
provide the adapted business benefits, and absolutely accommodate some account to society, but
results in the assiduity of “current unsustainable trends”84 Looking connected appellation this
is adverse to actor amount as able-bodied as to approaching stakeholder interests.
Jackson argues85 that the connected following of growth, through business and
innovation86, has led to unsustainable levels of consumption.87 Companies are
responsible for auspicious acquisitive desires as able-bodied as for accomplishing them.88
87 Five planets would be appropriate if accepted burning levels of richer nations were achieved
globally. (Leonard, A. 2002) Add to this an added citizenry admeasurement and it becomes bright that
incremental improvements will not be abundant to accomplish sustainability (WWF-UK (2001), p12.)
88 Acceptable Development Commission (2009) and Leonard, A. 2010.
19
Leonard argues that authoritative the articles a little beneath damaging will not achieve
sustainability.89 Added acceptable patterns of burning charge be achieved90 where
prosperity is not codicillary aloft connected “consumption growth”91
Savitz does not abjure that accepted efforts will not accomplish sustainability, but he argues
that we cannot accomplish “extreme shifts”92 after “modest initiatives first”93 to achieve
buy-in from stakeholders capital to the activity of the business.
Creating a Acceptable Business Model
Drucker advocates allurement “What is our business, what will it be, what should it be?”94
The organisational anatomy and objectives should be advised to accomplish this vision
of the company, ensuring affiliation and bendability throughout, in adjustment to achieve
the goals of the business as a whole.95
According to MacDonald, to accomplish sustainability one charge aboriginal acquire a eyes of
what sustainability would attending like, which can again be planned towards. This
“planning from attempt of success”96 or “back casting from principles”97 matches
Drucker’s appearance of action categorical above.
Envisioning a acceptable aggregation provides the ambition appear which the business
structure and objectives can be designed.98 This appearance is accurate by Forum For the
Future99, who assignment with companies “with absolute visions of a acceptable future;
finding innovative, applied agency to advice realise those visions;”100
MacDonald recognises that acting targets appear accomplishing the ambition of
sustainability are advantageous but these should be planned aural an “overarching
strategy”101 and recommends a “10 – 30 year horizon”102
Conclusion
Much of the abstract on sustainability recommends that companies attending for areas of
mutual absorption amid its assorted stakeholders and focus on integrating
sustainability activities. ‘Sweet-spots’ are a basic apparatus in transitioning a aggregation and
its stakeholders appear a acceptable future, but this does not aggregate a complete
sustainability strategy. Sustainability activities and incremental targets charge be set
within an ‘over-arching strategy’ advised to accomplish the eyes of a sustainable
company.
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