SUSTAINABILITY STRATEGY: HIGHWAY OR WHICH WAY?
Perhaps, you have gotten a piece of advice from that learned uncle in the family where he said you have to be strategic. Strategy is like a buzzword, we all use it.
The Oxford Learner’s Dictionary defines strategy as a “plan of action to achieve a particular purpose”.
Sustainability on the other hand is most notably defined as meeting the needs of the present without compromising the ability of the future generations to meet their own needs. I like to say it is a case of intra/intergenerational equity. Sustainability is a journey, it requires commitment as well as a well-defined set of actions to achieve its goal.
Thus sustainability strategy can be defined as a series of prioritised actions through which an organization strives to drive sustainability performance and create value for all stakeholders with a long-term focus. Sustainability issues are numerous and more are emerging every day. It therefore means that to have good results and create value, there must be a strategy behind the approach.
Professor Mike Rosenburg, Associate Professor at IESE Business School proposed some interesting approaches to sustainability strategy. It speaks to the DNA of executives and looks at sustainability issues from the perspectives of business executives. Our experiences with different companies, resonate firmly with us. Underlisted are brief notes on the concepts:
Break the law: Here he opined that some companies can choose to break the law and this is more likely in environments where the consequences are not profit-damaging. These kinds of companies will choose not to comply with legal requirements but rather work around the law. Breaking the law is an unsustainable action and will hurt the business in the long run.
In the same vein, some companies simply obey the law i.e. taking the low road. These companies only do what the law says and the executives here will often say show me where it is in the law. The strategy here is to simply do what is the legal requirements. It is important to note here that simply obeying the law may not be enough to gain a solid social license to operate.
Another popular strategy is the wait-and-see approach. Here the executives are aware of sustainability issues and are keeping a good eye on the trends. They are waiting to see what’s next to determine their next action.
Show and tell approach: These companies are doing fine, they are implementing sustainability measures and are quite vocal about it. This is a good thing, the only challenge is making sure factual information is being communicated. Otherwise, the company could be at risk of greenwashing.
Pay for principle: Nothing drives action in the company more than the deep conviction of its shareholders. If the shareholders are convinced of the business case for sustainability, then they are often within to do way more to achieve sustainability objectives.
Ultimately thinking ahead, these kinds of companies do more than is required. They follow the trends and anticipate changes in regulations. They commit resources to making sustainability the DNA of their business.
In conclusion, Prof Mike Rosenburg has proposed these strategy options looking at the environmental sensibility of stakeholders and the level of compliance. It is important for an organization to consider its unique context to determine how to approach its sustainability strategy. Whatever the strategy, it is important that the business remains profitable and sustains its growth. There is no sustainability in bankruptcy.