{"id":7227,"date":"2020-08-12T06:59:25","date_gmt":"2020-08-12T11:59:25","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=7227"},"modified":"2020-08-11T13:22:46","modified_gmt":"2020-08-11T18:22:46","slug":"future-sustainability-based-organizations-will-deliver-value-across-3-fronts-social-environmental-and-financial","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/future-sustainability-based-organizations-will-deliver-value-across-3-fronts-social-environmental-and-financial\/","title":{"rendered":"Future Sustainability-based Organizations Will Deliver Value across 3 Fronts – Social, Environmental and Financial"},"content":{"rendered":"

\"\"Corporate\u00a0Sustainability<\/a> is a matured approach towards doing business by meeting the needs of the customers without compromising the opportunity for future generations to enjoy natural resources.<\/p>\n

Rapid population growth, economic growth, the consumption of natural resources, and commercial activities have caused unintended negative social, environmental, and economic consequences.<\/p>\n

Researchers have agreed that sustainable development is unlikely without the sustainable development of organizations.\u00a0More and more business leaders have recognized that sustainability can serve either as a source of risk or a source of opportunity to long\u2010term competitive advantage and, thus, the future of the company.\u00a0For example, Internet of Things<\/a> and improved access to big data make it increasingly difficult for companies to prove that they are unaware of the potential negative consequences of company activities.<\/p>\n

Today\u2019s executives are dealing with a complex and unprecedented brew of social, environmental, market, and technological trends which requires sophisticated Sustainability-Based Management<\/a>.<\/p>\n

A large group of executives have their own reluctance of various levels toward Sustainability due to the mistaken perception that Sustainability costs outweigh benefits.\u00a0 We now have more academic research and business experience in place, to give them the right perspective and needed confidence to champion Sustainability-Based Business Management.<\/p>\n

Michael Porter and Mark Kramer pioneered the idea of \u201ccreating shared value,\u201d stating that businesses can generate economic value by identifying and addressing social problems that intersect with their business.<\/p>\n

Insights drawn from our own research, points at how Sustainability-Based Management impacts the bottom line by providing the following 6 key advantages.<\/p>\n

\"\"<\/a><\/p>\n

Brief Outline<\/h2>\n
    \n
  1. Stakeholder Management<\/a>:<\/strong>\u00a0Sustainable businesses are redefining the corporate ecosystem by designing models that create value for all stakeholders, including employees, shareholders, supply chains, civil society, and the planet.\u00a0Through\u00a0regular dialogue with stakeholders and continual iteration, a company with a Sustainability agenda\u00a0is better positioned\u00a0to anticipate and react to changes on crucial factors affecting the business<\/li>\n<\/ol>\n
      \n
    1. Risk Management<\/a>:\u00a0<\/strong>The risks posed by environmental changes to supply chains and production are subtle in the beginning, but becomes evident in the long term that it has created billions worth of \u201cStranded Assets\u201d.\u00a0McKinsey reports that the value at stake from Sustainability concerns can be as a high as 70% of earnings before interest, taxes, depreciation, and amortization (EBITDA).<\/li>\n<\/ol>\n
        \n
      1. Innovation Management<\/a>:<\/strong>\u00a0The Sustainability & Innovation Global Executive Study, a collaborative study between MIT Solan Management Review and BCG Consulting Group, reveals that there is a high gap in competitiveness when companies which embrace Sustainability as part of core strategy are compared against those which do not<\/li>\n<\/ol>\n
          \n
        1. Financial Performance<\/a>:\u00a0<\/strong><\/strong>Many business leaders have the erroneous perception that one can have profits or Sustainability, but not both.\u00a0This has its roots in Milton Friedman\u2019s 50-year old, but still influential, thesis that the only business of a business is profit.\u00a0The conventional wisdom, \u201cthe business of business is to make profits\u201d is now reversing.\u00a0Research has shown organizations with Sustainability practices exhibit much stronger Financial Performance than their peers<\/li>\n<\/ol>\n
            \n
          1. Customer Loyalty<\/a>:\u00a0<\/strong>Today\u2019s consumers gravitate towards products and services which are environment friendly and are seen to be loyal to those brands which exhibit commitment to sustainable business practices.\u00a0In fact, one study found that among numerous factors surveyed, the news coverage regarding environmental and social responsibility was the only significant factor that affected respondents\u2019 evaluation of a firm and intent to buy<\/li>\n<\/ol>\n
              \n
            1. Employee Engagement<\/a>:<\/strong>\u00a0Research is finding that 21st century employees are focusing more on mission, purpose, and work-life balance. Corporate Sustainability initiatives aimed at improving ESG performance and proving value to society can increase employee loyalty, efficiency, and productivity and improve HR statistics related to recruitment, retention, and morale.<\/li>\n<\/ol>\n

              Interested in gaining more understanding of these 6 core advantages of\u00a0Sustainability-Based Management<\/a>?\u00a0 You can learn more and download an\u00a0editable\u00a0PowerPoint about Sustainability-Based Management Primer\u00a0<\/strong>here on the Flevy documents marketplace.<\/a><\/p>\n

              Are you a Management Consultant?<\/strong><\/h2>\n

              You can download this and hundreds of other\u00a0consulting frameworks<\/a>\u00a0and\u00a0consulting training guides<\/a>\u00a0from the\u00a0FlevyPro library<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

              Corporate\u00a0Sustainability is a matured approach towards doing business by meeting the needs of the customers without compromising the opportunity for future generations to enjoy natural resources. Rapid population growth, economic growth, the consumption of natural resources, and commercial activities have caused unintended negative social, environmental, and economic consequences. Researchers have agreed that sustainable development is… Future Sustainability-based Organizations Will Deliver Value across 3 Fronts – Social, Environmental and Financial<\/span><\/a><\/p>\n","protected":false},"author":124,"featured_media":7233,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[408],"tags":[],"class_list":["post-7227","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-leadership"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/124"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=7227"}],"version-history":[{"count":9,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7227\/revisions"}],"predecessor-version":[{"id":7248,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7227\/revisions\/7248"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/7233"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=7227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=7227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=7227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}