The Sweet Spot of Sustainability Strategy

When it comes to sustainability, today’s fringe issues often become tomorrow’s mainstream and generic market expectations. And between these two extremes — the “fringe” and the “generic” — lies a third territory, which I call “strategic.” It is in this strategic territory that proactive companies have the best opportunity to influence the sustainability standards for their industry. I define the three sustainability territories as follows:

1. The “fringe,” populated by newly discovered sustainability issues.

However, these new issues have not yet materialized as business concerns; nor have normative voices yet proposed specific, credible business responses. Organizations should monitor these issues, but need not take action on them — not yet, at least.

2. The “strategic,” where various norm-setting groups — including businesses — are working to establish new market standards.

“Strategic” in this context means that a window of opportunity exists for proactive companies to assert a leadership position and help shape the market’s sustainability solutions. The window arises because standard resolutions to the issues are still developing. Therefore, any company that takes decisive action will be a leader — with the potential to define future sustainability standards for their marketplace and competition.

For example, the issue of dolphin deaths from tuna harvesting became a strategic issue for companies like StarKist and Bumble Bee in the 1980s. Faced with concern from activists about the issue, StarKist in April 1990 chose to enact its own unilateral “dolphin-safe” policies. The move was quickly copied by its major competitors, Bumble Bee and Van Camp Seafood and consolidated “dolphin-safe” tuna as a marketplace norm, which in turn drove supply-chain changes. By taking the lead on this issue, StarKist was able to influence standards in its industry.

3. The “generic,” where standard solutions have already emerged for discovered issues.

Standard solutions usually take one of two forms. They can be specific technological solutions, such as water-saving toilets or energy-efficient LED lighting, or best practice solutions, such as Fair Trade certifications.

For executives, the first step is to determine if sustainability issues emerging from the fringe should be mapped onto the strategic or generic territory. This article proposes a three-question framework for doing so.