MIT Sloan Management Review

Since 2010, MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG) have been charting how organizations are responding to sustainability as a source of competitive advantage. This year we found that nearly 50 percent of companies have changed their business model because of sustainability opportunities. In this presentation, David Kiron, executive editor at MIT SMR, and Eugene Goh, a principal with BCG, cover highlights of the report and discuss specific company examples.

Last year, we probed the business dimension more deeply and discovered that sustainability had become a permanent element of many company agendas and a source of profit for some. This year, the trend towards profit continued: key measures bumped up and showed that sustainability is paying off for a growing number of companies. Overall, the portion of respondents reporting profit from sustainability went up 23 percent to 37 percent of the total. The number of respondents saying their organizations had created a business case for sustainability went up similarly.

But perhaps most important: nearly 50 percent of companies have changed their business models as a result of sustainability opportunities — a 20 percent jump over last year. As the report and presentation explore in detail, business-model innovation is the crux of sustainability profits. Companies reporting that it adds to their bottom lines leverage these innovations to translate sustainability opportunities and pressures into profits.

The presentation includes a discussion of several companies: Kraft, which pioneered sustainable sourcing for new consumer segments that resulted in double-digit growth; Dell and its packaging innovations that increased customer satisfaction; and Marks & Spencer, which made progress in seven different areas of sustainability. The presentation concludes with five recommendations, and includes a question and answer session with webinar participants.