Making sustainability work pdf download

After evaluating the inputs and their likely effects on sustainability and financial performance, leaders can develop the appropriate processes to improve sustainability. The sustainability strategy, structure, systems, programs, and actions have three major ultimate sets of impacts: corporate financial costs and benefits of actions; social, environmental, and economic impacts sustainability performance ; and long-term financial impacts through sustainability performance.

The managerial actions taken lead to sustainability performance positive or negative and stakeholder reactions, ultimately affecting long-term corporate financial performance. Also included in the model are continual feedback loops that leaders can use to evaluate and improve corporate strategies. Managers should customize this general framework to reflect their particular industry, geographical, internal, or external business context.

They must map a corporate performance framework that reflects their specific concerns and interests in sustainability performance and provides rewards for supportive managerial actions. A fundamental aspect of this framework is the distinction between intermediate results outputs and financial outcomes.

In Figure 1. Therefore, intermediate outputs, such as environmental, social, and economic performance but also public image, employee hiring, customer reactions, and market share must be monitored to determine the effectiveness of sustainability management practices.

Whereas arrow 2 portrays the effect of sustainability actions on social, environmental, and economic performance, arrow 3 reflects how, through stakeholder reactions, social, environmental, and economic performance affects financial performance. Thus, sustainability performance should be seen as both an intermediate output and as an outcome.

That is, it is important to understand, measure, monitor, and manage sustainability performance because of concern for societal, environmental, and economic impacts and for long-term corporate financial performance. So, the inputs, processes, and outputs are all critical elements of the process to drive the outcome of corporate profitability.

In the discussion below, the details of these inputs, processes, outputs, and outcomes are further explored. They are then discussed in greater detail in the chapters that follow. The local and global broader external context significantly affects the choices a corporation makes regarding the formulation and implementation of sustainability actions.

Pressure is exerted by government regulations for corporations to follow minimum standards of sustainability performance: for example, hazardous and other waste disposal regulations, pollution standards, nondiscrimination laws, and regulations governing working conditions. Regulatory pressure may vary by geographic region, with regulatory pressures typically stronger in some European and Asian countries. If these types of regulation are required by government, a corporation must respond effectively by developing a thorough sustainability plan.

Additionally, the appropriate level of wages living, minimum, or prevailing and the desirability of the employment of children are issues that have caused significant dismay to many widely recognized companies. In studies of corporations operating in China and in Mexico, it was shown that corporations selling to customers in economies with a relatively stronger culture of sustainability performance outperformed their peer companies in terms of environmental performance.

The Conflict Minerals Rule requires companies to trace the conflict minerals gold, tantalum, tin, and tungsten in their supply chains. The complexity and far-reaching effect of the new rule can be demonstrated by an estimate made by Hewlett-Packard HP , an American multinational information technology corporation, that about 1, suppliers in its chain ultimately provide a product to HP that may contain one of the conflict minerals.

Each supplier will be asked to do its part in the due diligence process required by the new rule. Companies making public anti-conflict minerals statements include Intel, Philips, and Samsung. Philips, a Dutch multinational engineering and electronics conglomerate, has committed not to purchase materials it knows finance armed groups in the affected countries. Samsung, a multi-faceted family of businesses, including high-tech electronics manufacturing and digital media, prohibits the use in its business units of conflict minerals identified as sourced from conflict mines in the affected countries.

Some companies want to go beyond the minimum of complying and reporting and make a perhaps costly effort to make sure none of their materials come from mines run by warlords in the affected countries. This comprises corporate and business unit missions, visions, strategies, structures, and systems; it is through the development and implementation of these that sustainability performance occurs.

Thus, companies that are striving toward improved sustainability performance must examine the various sustainability elements that relate to their current strategies, and assess whether and how their corporate and business unit strategies will probably impact issues such as human rights, employee rights, and environmental protection. Additional important considerations are the industry sector of the business, and the characteristics of customers and products.

Companies that operate in high social and environmental impact industries, such as chemicals, oil, paper, and mining, may exhibit relatively poor performance in terms of sustainability elements such as consumption of natural resources, emissions, and health risk of their products or services compared to companies operating in other industries.

The industry also impacts where companies focus their sustainability efforts. For example, oil and mining companies may focus more on environmental and health issues, while service-oriented companies may emphasize the social aspects of sustainability. Although all companies can improve their social, environmental, and economic impacts, some industries have greater opportunities and risks.

These include companies with:. Further, companies in different industries are exposed to widely different pressures from political institutions, customers, and community activists. These various pressures become important external drivers of corporate sustainability.

Issues such as labor practices and environmental management exist in many industries and have been of increasing community concern. Company and industry codes of conduct are widely and rapidly being established in many industries, including those in the apparel, toy, and footwear industries. Many companies are now working together to establish global labor standards and common factory inspection systems.

Another important input is the resources constraint of the corporation. The corporation needs financial resources to implement the various sustainability programs and to pay and train sustainability staff. In addition, organizations need educated and trained individuals throughout the organization who can be sensitized to sustainability issues, along with staff who can be specifically dedicated to sustainability programs. The amount of financial and human resources allocated to sustainability will significantly impact the ability to implement sustainability programs.

It is important for corporate leaders to consider all of these inputs if they want to formulate effective sustainability strategies. Research has shown that sustainability strategies are typically top-down and that the most effective ones are when top management is clearly committed to the strategy.

Senior executives must be knowledgeable, support the organization, and effectively communicate the mission, vision, and strategy to the other members of the organization. The commitment of the board of directors and management encourages employees to act in ways that are compliant and consistent with company strategy. If leaders are not knowledgeable enough about sustainability to motivate their subordinates or institute the proper strategy, structure, or systems, then sustainability actions are unlikely to be successful.

It is the responsibility of top leaders to create an environment that encourages sustainability. Verizon Communications, the large telecommunications company, has created a Corporate Responsibility and Workplace Culture Council to foster a culture that encourages sustainability.

The council is chaired by the senior vice president for public policy development and corporate responsibility and by the vice president for workplace culture, diversity, and compliance, and consists of managers from each major business unit.

It is responsible for identifying and addressing challenges associated with corporate citizenship in key areas, including accessible product design, broadband deployment, and supply chain and environmental management.

Increasingly, companies also have committees of the board and other senior management committees devoted to issues of sustainability, and chief sustainability officers as members of the top management team.

The importance of board and CEO leadership on sustainability is discussed in Chapter 2. Top management of some companies have neither developed a strategy for addressing environmental, social, and economic concerns nor developed any systematic way of evaluating or managing their sustainability impacts. In many cases, this lack of corporate responsiveness is evidence of companies that:. Guidance in the development of a sustainability strategy sometimes comes from governments and industries that have established minimum compliance standards or best practices for corporations.

However, many companies go beyond a minimum compliance strategy. For example, prior to any industry standards, toy manufacturer Mattel established its own Global Manufacturing Principles for company-owned, -contracted, and -licensed facilities.

These Global Manufacturing Principles provide a framework for its worldwide manufacturing practices requiring fair treatment of employees and protection of the environment. Companies operating globally also have to choose whether to implement a global sustainability strategy or adapt it locally. As well as regulatory issues, cultural and environmental issues can complicate this decision. There are also significant implications here for corporate and sustainability structures and systems.

The process of formulating a sustainability strategy is discussed more fully in Chapter 2. Companies that define sustainability as a legal issue, or as solely an operations, community affairs, or human resources issue, often find themselves in a reactive position regarding sustainability issues and are missing significant opportunities to more fully integrate sustainability into their business practices. Companies need to leverage sustainability concerns throughout the organization.

A study of Mexican firms found that sustainability outcomes were significantly improved when more than two departments had functional responsibility for sustainability performance.

How to improve sustainability through organizational design is covered in Chapter 3. To drive a sustainability strategy through an organization, various management systems, such as product costing, capital budgeting, information, and performance evaluation, must be designed and aligned.

Many companies have revised their performance measurement and evaluation systems to help gauge the sustainability performance of business units and company facilities.

For example, Sony uses an intranet-based data system to collect sustainability information from its sites worldwide. Managers at each site input data on energy, water, waste, and other environmental costs, which allows Sony to track its impact on the environment. An effective performance evaluation system should integrate economic, environmental, and social objectives and reward the contributions of individuals, facilities, and business units toward meeting those corporate goals.

Many companies have been using the ISO environmental management system EMS for guidance on their environmental strategy. Indeed, a strong EMS is essential in helping companies systematically identify, measure, and appropriately manage their environmental obligations and risk. Without appropriate management systems, corporations may not reap all the benefits associated with sustainability performance. The alignment of strategy, structure, and management systems is essential in both coordinating activities and motivating employees.

The actions taken by the organization toward sustainability should be both internally and externally focused. Internally focused actions include:. Some actions are proactive, designed to impact sustainability performance for example, life-cycle analysis , while others are implemented reactively to respond to the performance indicators and to stakeholder concerns. There is a growing body of research that reports that the most effective sustainability initiatives, in terms of impacting organizational performance, are those that are proactive rather than reactive.

These can be minor changes of existing routines or radical new ways of doing business. They may also include programs to promote ethical sourcing, workforce diversity, or more stringent codes of conduct in terms of labor practices. And whereas with most other organizational initiatives the sole objective is improved financial performance, sustainability broadens the focus to include social and environmental performance, which is much more difficult to measure.

Now updated throughout with new examples and new research, this is a complete guide to implementing and measuring the effectiveness of sustainability initiatives. This is the ultimate how-to guide for corporate leaders, strategists, academics, sustainability consultants, and anyone else with an interest in actually putting sustainability ideas into practice and making sure they accomplish their goals.

Show and hide more. Table of contents Product information. Managing sustainability with strategic planning tools: A longitudinal analysis of multiple case studies. Over the last few years, laws concerning the waste sector have changed considerably. The European and national laws apply strict rules to companies in order to protect the environment and quality of … Expand.

Highly Influenced. View 6 excerpts, cites background. Effects of organizational culture on environmental management control system and performance of manufacturing firms in Pakistan. Although companies are continuously implementing the environmental discourse in their external reporting, yet, very fewer studies talk about how management control systems MCS support … Expand.

Abstract Purpose This chapter discusses how businesses can create alignment between their corporate sustainability CS efforts that focus on the triple bottom line of the financial, environmental, … Expand. The significant challenge of trying to simultaneously manage social, environmental and financial performance is one of the most critical challenges in the field of corporate sustainability.

This … Expand. With growing evidence of positive relationships between social sustainability and financial performance, there is a critical need for understanding how innovative organizations integrate … Expand. View 1 excerpt, cites background. Effects of corporate sustainability practices on performance: the case of the MENA region.