Too many companies have approached sustainability initiatives in a way that is just plain unsustainable. To foster more lasting change, it’s important to address six of the biggest stumbling blocks.

The current corporate sustainability movement is unsustainable. Not because companies are pursuing the wrong goals — but because they are going about them the wrong way. Never before have companies been more conscious of the need to run their businesses in an environmentally, socially, and economically responsible fashion. Yet never before have theory and practice been wider apart. When it comes to practicing and not just preaching sustainability, many companies struggle, and most flounder in developing and implementing a sustainable business model. Executives know and feel the importance of making their businesses sustainable. But many of them can’t make the transformation occur. Worse still, many don’t even know they’re failing.

In our combined experiences as an educator and consultant (CB Bhattacharya) and as the CEO of a large consumer products company and the chairman of the World Business Council for Sustainable Development (Paul Polman), we have had the opportunity to observe and work with multinationals that have had various degrees of success developing and implementing a sustainable business model designed to integrate environmental and societal concerns into business decisions. Based on observations of a number of companies, we have now been able to identify six “pain points,” or thorny challenges, that seem to be the biggest stumbling blocks. (See “About the Research.”) Below, we identify these challenges and offer practical advice on how to surmount them.

1. Sustainability is more than just a change initiative.

References

1. J. Shin, M.S. Taylor, and M.-G. Seo, “Resources for Change: The Relationships of Organizational Inducements and Psychological Resilience to Employees’ Attitudes and Behaviors Toward Organizational Change,” Academy of Management Journal 55, no. 3 (June 2012): 727-748.

2. M. Friedman, “The Social Responsibility of Business Is to Increase Its Profits,” New York Times Magazine, Sept. 13, 1970.

3. R. Isaksson, P. Johansson, and K. Fischer, “Detecting Supply Chain Innovation Potential for Sustainable Development,” Journal of Business Ethics 97, no. 3 (December 2010): 425-442.

4. J. Wollmuth and V. Ivanova, “6 Steps for a More Sustainable Supply Chain,” Jan. 24, 2014, www.greenbiz.com.

5. M. Khan, G. Serafeim, and A. Yoon, “Corporate Sustainability: First Evidence on Materiality,” Accounting Review 91, no. 6 (November 2016): 1697-1724.

6. Coca-Cola Enterprises, “Our Sustainability Plan,” 2015, www.cokecce.com.

7. Wollmuth and Ivanova, “6 Steps.”

8. D. Kiron, N. Kruschwitz, K. Haanaes, M. Reeves, S.-K. Fuisz-Kehrbach, and G. Kell, “Joining Forces: Collaboration and Leadership for Sustainability,” Jan. 12, 2015, https://sloanreview.mit.edu.

9. Asset Management Working Group of the United Nations Environmental Programme Finance Initiative, “Integrated Governance: A New Model of Governance for Sustainability,” June 2014, www.unepfi.org.

10. Kiron et al., "Joining Forces: Collaboration and Leadership for Sustainability.”

11. R.G. Eccles and T. Youmans, “The Real Duty of the Board of Directors,” Sept. 16, 2015, www.forbes.com.

12. Kiron et al., "Joining Forces: Collaboration and Leadership for Sustainability.”

13. SAP, “SAP Integrated Report 2015,” http://go.sap.com.

14. J. Peloza and L. Falkenberg, “The Role of Collaboration in Achieving Corporate Social Responsibility Objectives,” California Management Review 51, no. 3 (spring 2009): 95-113.

5 Comments On: Sustainability Lessons From the Front Lines

  • M L Bhatia | December 13, 2016

    The above is just an Introduction of the project. Have not been able to read the whole report (being not made available). Hence, not in a position to comment. Otherwise I would have loved to comment.
    M L Bhatia
    12-13-16

  • Jean-Louis Roux Dit Buisson | December 15, 2016

    This is a great review article. One could think of adapting the bonii calculation forms to include a 15-25 weight on items linked to sustainability.
    The wallet is one of the 3 major engines of change.
    when it s your customers applying it to you it might turn out to be a boycott.

  • Ranzi RUSIKE | January 4, 2017

    A very good and informing article for managers in these high economic turbulent times How ever,some advice offered such soliciting for services of sustainability experts may be unattainable to some companies in the developing world. Some of the suggested solutions may have to be adapted bearing in mind the contextual Macro and Micro issues.
    The article should be expanded into a book.

  • Lakshmanakumar Loganathan | February 26, 2017

    I would add water stressed crops Rice, Sugarcane to the list. Mostly the Cash Crops are causing the major impact in the water stressed areas of India.

  • Kanti Savla | May 28, 2017

    I would add real estate industries in India where initiative such as waste processing, water management, generation of renewable energy, IOT etc will make huge impact with little capital cost which can be recovered within 2 to 3 years beside this initiative will reduce carbon footprint to a considerable extent.

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