Managing Sustainable Business in a Rapidly Changing World
By Alison Taylor, Director, Sustainability Management, BSR
At our 25th anniversary Conference in October 2017, BSR launched an effort to collaborate with our member companies to redefine sustainable business. Our new report launched today, Redefining Sustainable Business: Management for a Rapidly Changing World, provides a new framework for how leaders can reimagine sustainable business inside their own organizations.
When we looked in detail at the state of sustainable business in companies today, we saw that disruptive new trends and drivers—in particular, climate change, new technology, and structural economic shifts—are reshaping the business landscape. Companies are highly aware of these dynamics in the external environment, but there is also a sense that rhetoric has not yet caught up with reality. Our survey and interviews revealed misalignment between the external stakeholders who most influence companies’ sustainability agendas and the people and internal departments that are most frequently engaged on sustainability issues.
We believe that the best response to this situation is not to continue advocating for further integration of sustainability into business strategy, but to change the very way that companies design strategy and create value. The era of stand-alone sustainability strategies, with subsequent integration of sustainability into company strategy needs to end; the creation of resilient business strategies that take sustainability as their foundation needs to begin. New types of leadership and a reimagined sustainability function can address these challenges and build company capacity to design and deliver resilient business.
What, exactly, do we mean by this?
First, companies need to act to transform strategy, governance, and management within their boundaries. This involves creating strategies that account for disruptive change and use strategic foresight and futures thinking to embrace uncertainty and build resilience. This approach will naturally place sustainable business issues front and center—because sustainability issues can no longer be separated from core business issues. Boards and senior executives need to develop the expertise and insights to plan for the longer term and build on the momentum from investors we see today to explain and demonstrate social purpose. The sustainability function also needs to be reimagined as a driver of influence and innovation. Change leadership will become the single most important skill a sustainability practitioner can develop.
Companies also need to proactively enable their external environments to understand and provide input to their sustainability efforts through new approaches to transparency and engagement with all stakeholders, not just shareholders. Technology tools like Polecat provide enormous new opportunities for companies to understand the social and environmental systems they operate in and gain deep insight into stakeholder perceptions. Too many companies have yet to take advantage of this; they have resisted increased transparency and interactive engagement with new stakeholders. There is a need for business to proactively shape the company narrative by reconsidering both reporting and engagement in the context of wider societal needs and debates.
Finally, companies should influence the policy and legal environment via vocal support for sustainable business. Silence on key policy issues is no longer an acceptable stance: The public—and your employees—wants to see more concrete evidence of business values and want business to take a more active role in shaping policy for the long term.
Our report sets out a framework for action that is also a vision for the future. We have no doubt that the perspectives shared in this paper will evolve as the world changes, ever more rapidly, around us. However, we believe the fundamental tenets of the “act, enable, influence” blueprint will remain a constant, and we are eager to further refine this approach in partnership with our member companies.
We invite our member companies and other interested stakeholders to engage with us to continue to shape the future of sustainable business. To that end, we will host a series of dialogues, events, and debates throughout 2018 to shape a future for business that meets the needs of all stakeholders. We look forward to continuing this conversation.