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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.
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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.
It’s possible that humankind has created complex, systemic problems that exceed our human capacity to solve them. Some companies, particularly the tech giants, are recognizing this possibility and looking to AI as a tool for solving environmental and social problems. One of these companies is Microsoft. In December 2017, it committed $50 million to its new “AI for Earth” program to fund innovators who are making progress in four critical areas — climate change, water, agriculture, and biodiversity.
The old story of business says that maximizing shareholder profit is goal number one. The new story says that shareholders matter, but not more than other stakeholders — which include customers, suppliers, employees, other financiers, and the communities in which companies operate.
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.
Business leaders are often selfish. They honestly think they are entitled to more resources than anyone else, and that they have earned the right to take more. Their self-serving behavior is usually enabled by their organizations. But three strategies can help: Organizations can choose leaders who tilt away from self-serving frameworks; create systems that reinforce fairer evaluations; and recognize the added complexities that arise on the global stage.
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.
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.
Sustainability Insurgents are professional insiders who seek to align their organizations with a global vision of a peaceful, prosperous, and sustainable world. This article explores how two insurgents, working for dramatically different organizations, developed a peer-to-peer network to help spread the sustainability insurgency.
As SOI matures and becomes more refined, businesses are finding more opportunities to use it as an alternative to their usual innovation processes, but more opportunities require a reliable framework for decision making.
While global custody banks provide the unseen but essential support system that ensures proper functioning of capital markets, they may soon become key players in the global battle against climate change. But whether that will happen depends on the boards that govern them.
How much information should a company disclose about its supply chain? In addition to having to be lean, agile, and sustainable, today’s supply chains are increasingly the focus of growing attention from a variety of external stakeholders. These stakeholders often want information beyond what the company is legally obliged to disclose. But many companies have limited visibility of their supply chain information and have not fully considered their disclosure strategy.
The G7 summit in June of 2015 and the G20 meeting in November both upheld the idea that businesses have a responsibility to respect environmental and human rights principles. As such concerns take center stage, business leaders must recognize their role in navigating the new regulatory environment. As environmental and human rights risks rise in importance, board members are at risk of being seen as negligent if they fail to ensure that their companies comply with the G20/OECD Principles and the standards to which the Principles refer.
While the most basic form of Sustainability-Oriented Innovation has led to combining sustainability practices with revenue generation, more refined forms of SOI target innovation at different stages and in different contexts. Jay, the director of the Sustainability Initiative at MIT Sloan, along with Gonzalez and Gerard, write that “SOI allows companies to push beyond their usual innovation boundaries and their typical business protocols.”
The Aspen Institute’s Business and Society Program is focused on developing business leaders for a sustainable society. One of its fundamental founding questions was, “If we want business to operate in a way that’s attentive to long-term value creation and an array of stakeholders, what kind of leadership do we need?” The solution: Aspen’s “First Movers” program, cultivating creative intrapreneurs dedicated to products and management practices that enhance profitability without negative social and environmental impacts.
A new breed of social entrepreneurs has evolved. “Social scalers” focus on market-based solutions that can be scaled up to create social change. Their goal: transform social problems into business opportunities on a national or even global scale. The authors of Strategy and Competitiveness in Latin American Markets: The Sustainability Frontier (Edward Elgar, 2014) look at how companies seeking to address social issues can learn from these social scalers.
The next generation of business executives will face a choice: What kind of companies do they want to lead? Organizations that will treat most employees as costs to be minimized — or ones where both employees and the company prosper together? So-called “high-road” companies begin with different values and assumptions about the workplace. But few MBAs are learning about high-road strategies in their courses, and they don’t learn that they will have distinct choices in how to compete.
Shareholders are just one audience a board of directors considers when making decisions for the corporation. Others include employees, customers, suppliers, and NGOs. In the face of limited resources, directors must make choices regarding the significance of the corporation’s many audiences. Given obligations to multiple stakeholders, the authors suggest that boards of directors issue an annual “Statement of Significant Audiences and Materiality” to identify the company’s significant audiences.
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