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To be sustainable, companies may need to change their products, processes, and business models to operate within defined economic, environmental, and social thresholds.
Sustainability remains a frequently discussed opportunity for business differentiation. Heralded as “the primary moral and economic imperative of the 21st century,” by Mervyn King, former governor of the Bank of England, it is considered to be “one of the most important sources of both opportunities and risks for businesses.”
MIT SMR and The Boston Consulting Group recently completed an eight-year collaboration on the topic of sustainability. Over the course of the program, the partnership produced cutting-edge research on business adoption of sustainable practices and the integration of sustainability into business strategy. We developed detailed analyses of the business cases for sustainability, sustainability-related profitability, and issues around collaboration and investment.
The intersection of sustainability and another powerful market influence, digitalization, however, represents largely unexplored territory. Each has spawned a massive set of research about how it will change management practice, and more broadly, business and society. MIT SMR intends to build on its research on corporate sustainability and digitalization, and is currently looking for a partner to join our research effort.
A strong governance with a steady hand assures that a company achieves a given purpose properly, within the boundaries of ethics and law.
Companies that want to leverage their business practice to support the SDGs need to do so in an effective, ambitious, and conscientious way.
The investor community increasingly demands that companies share their long-term plans, which they can orient around growth, strategy, and acknowledgment of risks.
Democracy is fundamental to business interests — yet business leaders have been mostly silent when it comes to the recent cyberattacks on elections in the U.S. and other western democracies. This needs to change, and fast.
Companies that seek to meet the challenge of operating both profitably and sustainably can benefit by learning which sectors have the most impact on sustainable development goals.
AI’s most potent, long-term economic value may lie not in the thousands of new startups, but in the ability of AI to augment the discovery and pursuit of basic scientific advances that could be the foundations of new industry.
Digitalization and sustainability are two of the most powerful market influences in the current business landscape. Each will change management practice, and more broadly, business and society. What happens when the two trends start influencing one another?
As digital technology advances, the opportunity to use it to create a more sustainable, equitable world should not be overlooked. The first step: Define key terms and set up a framework for understanding how the digital revolution can also become a revolution for sustainable development.
As the effects of climate change become more prominent, business needs to grapple with its own attitudes toward government. A more destructive physical environment requires a more nuanced relationship in which government is viewed as a partner in enabling and supporting markets rather than as a regulator that needs to be managed.
It’s not smart to base any part of your strategy on what you see in the rear-view mirror — and that’s particularly true when you develop strategies for navigating modern, thorny environmental and social challenges. The norms and expectations about how companies manage sustainability issues are shifting fast: Just six years ago, only 20% of the S&P 500 companies produced sustainability reports, while by 2016, 82% did. Change is coming to business — and executives need to adjust.
Meeting the recommendations for disclosure put forth by the Task Force on Climate-related Financial Disclosures might seem like a tough job. But if the oil & gas industry is any example, it’s not as difficult as some might imagine — and there are excellent reasons for corporate boards to consider it.
Most CEOs have detailed long-term plans, which are often closely held secrets out of concern that competitive advantage may be undermined by detailed disclosure. Yet disclosing a long-term plan provides an opportunity to identify financially material sustainability issues and demonstrate how the company manages business-critical issues — information that’s valuable to investors.
Your company’s commitment to sustainability depends on finding sustainable suppliers. What if there aren’t any? Such situations may arise more often than not — so keeping your commitment to a sustainable supply chain may mean taking a long view by making incremental improvements and encouraging suppliers to examine and change their own practices.
The U.S. withdrawal from the Paris Accord stems from a fundamental disagreement over whether industries and markets have world-changing power. The irony: Despite his strong stance on market solutions, the President’s position on climate change assumes markets to be weaker, not stronger.
U.S. corporations still have considerable incentive to move forward on their own climate plans, despite the softening of federal government support. Organizations as diverse as Anheuser-Busch, Duke Energy, and Timberland have robust programs in motion around renewable electricity, reduction of greenhouse gas emissions, and tracking the climate impact of manufacturing. These plans were built on tangible business cases, not just goodwill.
Business needs to show leadership in sustainability as it never has before. As regulations and guidelines loosen, some organizations may give in to the temptation to let profit motives soften their own environmental policies. To do so would be shortsighted — and not only for the most obvious reasons.
In the final report of our eight-year study of how corporations address sustainability, MIT Sloan Management Review and The Boston Consulting Group examine the crossroads at which sustainability now finds itself. Despite sociopolitical upheaval that threatens to reverse key gains, our research has shown that companies can develop workable — and profitable — sustainability strategies to reduce their impact on the global environment by incorporating eight key lessons.
Companies know climate change is relevant to their businesses, but they don’t address it in corporate reports because corporate leaders don’t believe it’s material to their business. The effects of climate change are beyond their planning horizon, they think, or they just aren’t clear whether or how climate change might be a material business risk. The Financial Stability Board (FSB) is hoping to change that.
Integrating sustainability into company operations often means partnering with government agencies as well as nonprofits. For new businesses, two important points to keep in mind are that (1) it’s never too early to start, and (2) the collaborative approaches for each partnership may not be the same.
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