The Business of Sustainability

by: Maurice Berns, Andrew Townsend, Zany Khayat, Balu Balagopal, Martin Reeves, Michael Hopkins, and Nina Kruschwitz
Already a member?
Not a member?
Sign up today
Member
Free

5 Free Articles per month, $6.95/article thereafter. Free newsletter.

Subscribe
$75/Year

Unlimited digital content, quaterly magazine, free newsletter, entire archive.

Sign me up


Sustainability is garnering ever-greater public attention and debate. The subject ranks high on the legislative agendas of most governments; media coverage of the topic has proliferated; and sustainability issues are of increasing concern to humankind.

However, the business implications of sustainability merit greater scrutiny. Will sustainability change the competitive landscape and reshape the opportunities and threats that companies face? If so, how? How worried are executives and other stakeholders about the impact of sustainability efforts on the corporate bottom line? What, if anything, are companies doing now to capitalize on sustainability driven changes? And what strategies are they pursuing to position themselves competitively for the future?

To begin answering those questions, the MIT Sloan Management Review and knowledge partner The Boston Consulting Group, with sponsorship support from business analytics provider SAS, are collaborating on a project called the Sustainability Initiative. As part of that effort, we recently launched a global survey of more than 1,500 corporate executives and managers about their perspectives on the intersection of sustainability and business strategy. (We plan to make this an annual survey.) Prior to the survey, to form hypotheses and shape its questions, we conducted more than 50 in-depth interviews with a broad mix of global thought leaders. Our interviewees included executives whose companies are at the cutting edge of sustainability (including General Electric, Unilever, Nike, Royal Dutch Shell, and BP) and experts from a range of disciplines such as energy science, civil engineering, and management. The insights of these two groups yielded a fascinating glimpse of sustainability’s current position on the corporate agenda — and where the topic may be headed in the future.

This report presents high-level findings from those surveys and interviews and offers interpretation and analysis of the results, along with a diagnostic tool. We hope that it provides executives food for thought as they consider how they can take their sustainability efforts to the next level.

For more about this work in sustainability, including exclusive in-depth interviews and additional feature articles, please see the online exploration at MIT Sloan Management Review’s Sustainability Initiative website.

Executive Summary

There is a strong consensus that sustainability is having — and will continue to have — a material impact on how companies think and act.

  • More than 92 percent of survey respondents said that their company was addressing sustainability in some way.

Read the Full Article

References

1. Drivers include government legislation, pressure from consumers and customers, employee interest, pressure from society, the impact of ecological factors (for example, climate change, pollution, and the supply of resources such as food and water), and sociological factors (such as population growth, urbanization, and inequities in health and labor).

2. Intangible impacts include enhanced brand awareness and equity (which leads to customer loyalty and the ability to command a price premium), improved employee recruitment, retention and engagement, and lower risk premiums (which improve valuations and enable easier access to capital and insurance).

3. Stakeholders include consumers, business-to-business customers, competitors, regulators, nongovernmental organizations, society overall, financiers, lenders, and capital-market analysts.

4. Capabilities and tools include but are not limited to frameworks for developing the business case; measurement, tracking, and reporting tools; scenario-planning capabilities; technologies for product design and manufacturing; supply chain technologies; capabilities in partnering with stakeholders; and regulatory expertise.

More Like This

Add a comment

You must to post a comment.

First time here? Sign up for a free account: Comment on articles and get access to many more articles.