Joining Forces: Collaboration and Leadership for Sustainability

Collaboration and Leadership for Sustainability

by: David Kiron, Nina Kruschwitz, Knut Haanaes, Martin Reeves, Sonja-Katrin Fuisz-Kehrbach, Georg Kell

The importance of sustainability as a business issue has steadily grown over the past two decades. Most businesses understand that their sustained success depends upon the economic, social and ecological contexts in which they operate. But the stability of those contexts can no longer be taken for granted. The physical environment is becoming more unpredictable, a more interconnected global economy is altering social conditions, and technological innovation is transforming the nature of consumption and production.

Sustainability has got to be something that we all care about. We need groups to collaborate that never have … everybody’s got to work together. We need to begin to manage this planet as if our life depended on it — because fundamentally, it does.

— Jason Clay, senior vice president, WWF

Corporate sustainability has evolved from expressing good intentions and looking for internal operational efficiencies to addressing critical business issues involving a complex network of strategic relationships and activities. As sustainability issues have become more global and pivotal to success, companies are realizing that they can’t go it alone. Through their strategic networks, business can, and arguably must, tackle some of the toughest sustainability issues, such as access to stressed or nonrenewable resources, avoiding human rights violations in value chains2 or moderating climate change.

Given the implications of sustainability’s evolution within the corporate sector, we — MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG) — focused this year’s research on the critical role of sustainability collaborations that address systemic issues, and on the role of the board of directors in guiding their companies’ sustainability efforts. To better understand these two topics, we surveyed nearly 3,800 managers and interviewed sustainability leaders from around the world (see About the Research).

About the Authors

David Kiron is the executive editor of MIT Sloan Management Review’s Big Ideas Initiative. He can be reached at dkiron@mit.edu.

Nina Kruschwitz is MIT Sloan Management Review’s managing editor and special projects manager. She can be contacted at ninakru@mit.edu.

Knut Haanaes is a senior partner and managing director in the Boston Consulting Group’s Geneva office, as well as global leader of BCG’s Strategy Practice Area. He can be contacted at haanaes.knut@bcg.com.

Martin Reeves is a senior partner and managing director in the Boston Consulting Group’s New York office and head of the Bruce Henderson Institute worldwide. He can be contacted at reeves.martin@bcg.com

Sonja-Katrin Fuisz-Kehrbach is a knowledge expert for sustainability at the Boston Consulting Group’s Hamburg office and core member of BCG’s sustainability team. She can be contacted at fuisz-kehrbach.sonja-katrin@bcg.com

Georg Kell is the executive director of the United Nations Global Compact. He can be contacted at kell@unglobalcompact.org.

Contributors

Laura Brämswig, associate, BCG

Sean Cruse, senior manager, research and communications, UN Global Compact

Carrie Hall, head of communications & information, UN Global Compact

Olivier Jaeggi, managing partner, ECOFACT

Rachael Post, writer

Holger Rubel, senior partner and global sustainability lead, BCG

Edward Ruehle, writer

Ingvild Soerensen, manager, Global Compact LEAD, UN Global Compact

Philip Specht, consultant, BCG

Gregory Unruh, professor, George Mason University

Acknowledgments

Daniel Aronson, founder, Valutus; Christine Bader, author, The Evolution of a Corporate Idealist: When Girl Meets Oil; Tima Bansal, director, Network for Business Sustainability; Naty Barak, chief sustainability officer, Netafim; Betsy Blaisdell, senior manager of environmental stewardship, The Timberland Company; Andreas Bluethner, director of food fortification & partnerships, BASF; Peter Bryant, partner, Clareo Partners and senior fellow, Kellogg Innovation Network (KIN), Kellogg School of Management; Jason Clay, senior vice president, WWF; Robert Eccles, professor, MIT; Shelly Esque, vice president of legal and corporate affairs, Intel and chair of the board of the Intel Foundation; Thomas J. Falk, CEO, Kimberly-Clark; Brian Gonzalez, director of global education sales, Intel; Aida Greenbury, managing director of sustainability & stakeholder engagement, Asia Pulp & Paper; Amy Hargroves, director of corporate responsibility, Sprint; Dan Hesse, former CEO, Sprint Corporation; Patrick Hynes, deputy director of member relations, Clinton Global Initiative; Jason Jay, director of the MIT Sloan Initiative for Sustainable Business and Society, MIT Sloan School of Management; Michael Meehan, CEO, Global Reporting Initiative; Paul Polman, CEO, Unilever; John Ruggie, Berthold Beitz Professor in Human Rights and International Affairs, Kennedy School of Government at Harvard University; Ryan Schuchard, associate director, climate change, Business for Social Responsibility; Wood Turner, former vice president of sustainability innovation, Stonyfield Farm; Ulrich Wassmer, professor of strategy, EMLYON Business School.

About the Sustainability & Innovation Project

MIT SMR’s Sustainability & Innovation project is an exploration, in partnership with BCG, of how sustainability pressures are transforming the ways we all work, live, and compete. S&I’s research, reporting, and community help managers to better understand the new forces that will affect their organizations, to navigate through the overwhelming mass of information about sustainability, and to fend off the threats and capitalize on the opportunities that sustainability issues present.

About MIT Sloan Management Review

MIT Sloan Management Review leads the discourse among academic researchers, business executives, and other influential thought leaders about advances in management practice that are transforming how people lead and innovate. MIT SMR disseminates new management research and innovative ideas so that thoughtful executives can capitalize on the opportunities generated by rapid organizational, technological, and societal change.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. BCG is a private company with 81 offices in 45 countries. For more information, please visit www.bcg.com.

About the UN Global Compact

The UN Global Compact is a call to companies everywhere to voluntarily align their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of UN goals and issues. Endorsed by chief executives, the UN Global Compact is a leadership platform for the development, implementation and disclosure of responsible corporate policies and practices. Launched in 2000, it is the largest corporate sustainability initiative in the world — with over 12,000 signatories from business and key stakeholder groups in 150 countries, and more than 80 Local Networks. For more information, visit www.unglobalcompact.org.

References

1. Institute of Directors in Southern Africa. “The King Code of Governance for South Africa,” http://c.ymcdn.com/sites/http://c.ymcdn.com/sites/www.iodsa.co.za/resource/collection/94445006-4F18-4335-B7FB-7F5A8B23FB3F/King_Code_of_Governance_for_SA_2009_Updated_June_2012.pdf.

2. Jaeggi, O. “Human Rights: The Next Frontier.”https://sloanreview.mit.edu/article/human-rights-the-next-frontier/.

3. “New UN program tasks corporate boards with heading sustainability efforts,” The Guardian, November 19, 2014, http://www.theguardian.com/sustainable-business/2014/nov/19/united-nations-boards-directors-sustainability/.

4. Food and Agriculture Organization of the United Nations. The State of Food Insecurity in the World 2014. http://www.fao.org/publications/sofi/en/.

5. Macondo. Global Compact International Yearbook 2010. New York: United Nations, 2010: 72.

6. Transformational collaborations were defined in the survey as “changing rules and markets, i.e., engagement that changes the rules of the game.”

7. Survey respondents who characterized their collaborations as strategic or transformational “to a great extent”

8. Kiron, D., Kruschwitz, N., Haanaes, K., Reeves, M., Goh, E. “The Innovation Bottom Line: Findings from the 2012 Sustainability & Innovation Global Executive Study and Research Report.” https://sloanreview.mit.edu/reports/sustainability-innovation/.

9. Sustainable Food Laboratory. “Bringing Value Closer to the Farm: The CAPE Project.” http://www.sustainablefoodlab.org/newsletter/17-news-spring10/242-newsletter-may-2013.

10. Turner, W., Kruschwitz, N. “Working Toward Totally Transparent Yogurt.” https://sloanreview.mit.edu/article/working-toward-totally-transparent-yogurt/.

11. Blaisdell, B., Kruschwitz, N. “New Ways to Engage Employees, Suppliers and Competitors in CSR.” https://sloanreview.mit.edu/article/new-ways-to-engage-employees-suppliers-and-competitors-in-csr/.

12. Jaeggi, O. “Human Rights: The Next Frontier.” https://sloanreview.mit.edu/article/human-rights-the-next-frontier/.

13. The Thun Group. UN Guiding Principles on Business and Human Rights: Discussion Paper for Banks on Implications of Principles 16–21 (October 2013). http://www.menschenrechte.uzh.ch/publikationen/thun-group-discussion-paper-final-2-oct-2013.pdf.

14. Roundtable for Human Rights in Tourism: About Us. http://www.menschenrechte-im-tourismus.net/en/ueber-uns.html.

15. Unruh, G. “The Sustainability Insurgency” [series]. https://sloanreview.mit.edu/tag/sustainability-insurgency/.

16. Jaeggi, O. “How Nonprofit Organizations Use Reputational Risk Management.” https://sloanreview.mit.edu/article/how-nonprofit-organizations-use-reputational-risk-management/.

17. Senge, P., Smith, B., Kruschwitz, N., Laur, J., Schley, S. The Necessary Revolution. New York: Crown Publishing/Random House, 2007; p. 234.

18. Post, R. “For BASF, Sustainability Is a Catalyst.” https://sloanreview.mit.edu/article/for-basf-sustainability-is-a-catalyst/.

19. United Nations Environment Programme (UNEP). Integrated Governance: A New Model of Governance for Sustainability. June 2014. p.6. http://www.unepfi.org/fileadmin/documents/UNEPFI_IntegratedGovernance.pdf.

20. UNEP, Integrated Governance, p. 15.

21. From a total universe of about 60,000 companies, only 3,512 companies reported on at least one ESG measure [Ibid, p. 15].

22. Paine, L.S. “Sustainability In the Boardroom: Lessons from Nike’s Playbook.” Harvard Business Review 92, no. 7–8 (Jul–Aug 2014): 87–94.

23. UNEP, Integrated Governance, p. 15.

24. Heracleous, L., Lan, L.L. “The Myth of Shareholder Capitalism,” Harvard Business Review 88, no. 4 (April 2010): 24. https://hbr.org/2010/04/the-myth-of-shareholder-capitalism/ar/1.

25. Stout, L.A. The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public. San Francisco: Berrett-Koehler Publishers, 2012.

26. Gore, A. The Future: Six Drivers of Global Change. Random House, 2013: p. 35. The given source for this factoid is: Henry Blodget, “You’re an investor? How Quaint,” Business Insider, August 8, 2009. http://www.businessinsider.com/henry-blodget-youre-an-investor-how-quaint-2009-8.

27. Rose, J.M. “Corporate Directors and Social Responsibility: Ethics versus Shareholder Value,” Journal of Business Ethics, 73 no.3 (July 2007) 319-331.

28. Ibid, p. 319.

29. This is adapted from the UNEP Integrated Governance Report.

30. “Cermaq presents solid sustainability results.” http://www.wallstreet-online.de/nachricht/3140551-cermaq-presents-solid-sustainability-results.

31. Paine, “Sustainability In the Boardroom,” p. 90.

32. Ibid, p. 88.

33. Eccles, R.G., Krzus, M.P., Ribot, S. “The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality.” New York: John Wiley and Sons, 2014.

34. UNEP, Integrated Governance, p. 8.

35. “Corruption: Less Party Time,” The Economist, January 25, 2014. http://www.economist.com/news/china/21595029-communist-partys-anti-graft-campaign-has-had-surprising-impact-new-report-shows-how.

36. Kruschwitz, N. Is Hostility to Blame for Sustainability’s Leadership Gap? https://sloanreview.mit.edu/article/is-hostility-to-blame-for-sustainabilitys-leadership-gap/.

37. Watson, B. “Siemens and the Battle Against Bribery and Corruption,” The Guardian, September 18, 2013. http://www.theguardian.com/sustainable-business/siemens-solmssen-bribery-corruption.

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Comments (2)
Stephen Mathews
UN global compact, GRI, ISO 26000, all are institutional giant leaps towards responsible management which will lead to sustainable development.

hope the corporates will follow these initiatives and take the world to their set goals

Stephen Mathews
Nik Zafri Abdul Majid
This is indeed a very powerful and scholastic research. 

I wish there will be more similar researches conducted and be expanded further to cover topics like : 

- poverty eradication with a focus to change unsustainable practices that is not in the interest of protecting the social and economic natural resource base.

- sustainable energy e.g. nuclear - without environmental detriment, Energy Consumption, Carbon Emission, reduction of greenhouse gas emissions as a result of climate shift

- sustainable development and its' role in promoting security and peace, human rights including food/water, standard of living etc.

- sustainable certifications like LEEDS or EMS ISO 14000