– Thoughts on Strategy and Management

The corporate sustainability strategy

A couple of days ago I had an interesting conversation with colleagues in terms of sustainability. The issue was, whether organizations in Europe focus on true sustainability these days or just focus on a PR effect. I think the truth can be found in both sectors: There is a (also) an unpopular side of the interest in sustainability, an effect that can be described as “greenwashing”: when organizations focus more on communicating their green efforts than improving their measures and practices. Next to this PR aspect there are several approaches which put an emphasis on certain aspects only, i.e. economic goals or even environmental goals. But this is not sufficient enough. There is a large number of organizations which wants to be truly sustainable since they see many advantages arising from this concept.

Sustainability is basically not that new. In 1987 the word was presented in a UN report by the former Norwegian Prime Minister G.H. Brundtland. Brundtland presented a definition for sustainable development as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. Transferred to enterprises and organizations, a sound and holistic sustainability strategy has the following attributes. It drives several different strategies:

  • A bottom line strategy to save costs, i.e. by reducing materials consumption.
  • A top-line strategy to reach a new customer base.
  • A talent strategy to win, hold and develop employees, customers and the surrounding community.

Hence a holistic sustainability addresses 4 coequal components:

  • Economic (in the sense of operating profitability, this considers that organizations have economic needs),
  • Social (in the sense that actions and conditions will affect members of the society),
  • Cultural (in the sense of valuing and protecting cultural diversity) and last but not least
  • Environmental (in the sense of protecting and retaining the ecosystem)

It has to be taken into account that environmental and social issues affecting an organization can be subdivided into 3 different categories:

  1. General social issues: These issues are important to the society. But the organization is not able to influence them.
  2. Value chain social issues: These issues are affected by the organizations’ measures and activities.
  3. Social dimensions of competitive issues: Issues and matters in the external environment which have an impact on the drivers of competitiveness where the organization runs its business.
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One Comment

  1. Want to learn more about Strategy and Management? Chet Borucki, Professor of Strategy and Management at TiasNimbas Business School: http://www.tiasnimbas.edu/Index.aspx?objectName=FacultyPersonDetails&psn=3402&type=all