How to become a sustainable company?

By: Carla G. Machado (PUCPR/Brazil), Edson Pinheiro de Lima (PUCPR-UTFPR/Brazil) and Sergio E. Gouvea da Costa (PUCPR-UTFPR/Brazil)

Professor Robert Eccles and Dr. George Serafeim from Harvard Business School and Kathleen Perkins, president of Miller Consultants, published some interesting results of a large research program on “Innovating for Sustainability” in the 2012 Summer Edition of MIT Sloan Management Review. They studied organizational models in more than 60 companies highlighting what differentiates sustainable companies from traditional ones.

They framed identity and cultural aspects that explain how to create a sustainable company, based on leadership commitment, external and employee engagement. According to their findings, some characteristics, which define sustainable companies, are:

Leadership commitment that supports and animates the process of creating a sustainable company.

– Companies that develop sustainable-based strategies realize the importance of coordinating activities and addressing resources and competences beyond their own internal boundaries to a large extent of external stakeholders.

– Sustainable companies collaborate with other companies and organizations to advance their goals and encourage their supply networks to adopt sustainable strategies.

– Sustainable companies actions are accompanied by clear and consistent messages to stakeholders;

– Sustainable companies have clear policies for engaging employees by (1) communicating the impact their contributions have on company actions; (2) articulating the connection between each employee’s work and sustainability goals, and (3) enabling cross-functional communication and idea exchange.

– Sustainable companies incorporate sustainability metrics into the capital budgeting process, develop valuation processes that take externalities into account, set clear targets for sustainability objectives and establish targeted programs linking sustainability objectives to business results.

– Sustainable companies have a consistent track record of implementing large-scale change successfully.

– Sustainable companies focus extensively on innovation regarding their processes, products and operations network and business models.

Thus, building a clear and consistent commitment to sustainability that is reflect on companies corporate culture, business and functional strategies, processes and structures, which in fact, these aspects per se define sustainable enterprise design principles. Governance structures and committed leadership  have the responsibility of building and transforming companies in active sustainable actors in our present and future society.

– Taking the challenge of transforming our organizations towards sustainability, what are the available options, pathways for pursuing a sustainable evolutionary trajectory?