Many companies are taking the first incremental steps toward sustainability, such as energy conservation and recycling. That’s a good start — but going further can yield significant competitive advantage.
The growing movement toward sustainability in business offers companies a powerful lever for creating competitive advantage. The key to applying this lever successfully is action across the full range of challenges and opportunities presented by sustainability, not just the limited subset that is currently guiding most business sustainability initiatives. To understand this full range, sustainability needs to be viewed from at least six different perspectives. Integrating insights from these six perspectives can improve many of a company’s business capabilities, not just those directly associated with progress toward sustainability.
Six Perspectives on Sustainability
1. Regulatory compliance. Most companies have already mastered this perspective on sustainability within their operations. The major outstanding issue is to what extent government regulations will raise the bar for compliance in the future. Moving beyond this limited perspective allows a company to get ahead of future regulatory requirements, thus reducing the risk of regulatory disruption to its operations.
2. Incremental mitigation. This is where the bulk of attention in the business world is currently focused: impact measurement and metrics, emissions and waste reduction, recycling programs, conservation of scarce resources and energy, alternative and more benign sources of supply, greener consumer products and green image-related marketing and public relations. All that is a good start and can lead to significant cost reduction, risk mitigation and new revenue streams. But such efforts are typically add-ons to what remain essentially unsustainable business operations.
3. Value alignment. Sustainability as a principle enjoys increasingly broad public awareness and support. As a result, it offers companies the possibility of increasing alignment between organizational values and the personal values of employees. Translating employee interest in sustainability into competitive advantage requires creating real opportunities for employees to apply their creativity and initiative to progress toward sustainability. The more such efforts cross traditional organizational boundaries, the more they can contribute to the development of an increasingly open, flexible and productive organization that is likely to perform better in the dynamic and uncertain business environment of the future.
4. Whole system design. To a great extent, the physical infrastructure of modern society was designed without much consideration of environmental sustainability. Instead, attention was focused on issues such as short-term costs, narrow and immediately evident efficiencies and return on financial capital. The result was massive economic development — but we are now threatened with equally massive environmental disaster.