Many companies are starting to realize that addressing sustainability is as much about responding to the needs of stakeholders as it is about the needs of the planet at-large.
As these organisations manage growth opportunities and challenges within their industries and markets, they have an eye to the horizon and a broader environmental sustainability in big and little ways. “Using business as a force for good doesn’t always have to be a grand gesture,” explains Ilian Mihov, Dean of INSEAD. “It can present itself in small and subtle ways.”
In the first part of this two-part series, we looked at some of the things businesses can do to make the world a better place, both internally and externally. Now, let’s look at some more ways that businesses can be a source for good.
Embedding UN Sustainability Goals into Overall Business Strategy
In 2015, the United Nations developed a list of 17 sustainable development goals or SDGs. One of these is to revitalise global partnerships between governments, the public sector, and private industry to encourage sustainable development. The UN writes about these unions as a transformative way to bring funding where it is needed most, but embedding the UN sustainability goals into your overall business strategy can mean important for your organisation as well.
“Becoming a sustainable brand requires organisations to put processes in place at every level of the organisation, ensuring they all work in harmony to achieve the sustainable goals,” explains Martin Roll, INSEAD MBA alumnus and brand strategist.
Overall, customers are willing to pay a premium for products that have environmental benefits. Many also take into account the social responsibility of the organisation’s activities when making decisions to buy. Companies that have a social element in some product lines and not others report seeing a significant difference. For instance, Unilever reports that when one of its brands has a social mission, like its Lifebuoy program that encourages children to wash their hands regularly, it grows twice as fast as its brands that don’t have a social imperative.
Harnessing the Potential of Circular Economies
Many business models are linear. An organisation takes raw materials, transforms them in some way, then sells the resulting products to customers who then use the products until they are spent. At that point, they end up in the trash bin and ultimately a dump. If modern production sounds like a conveyor belt that keeps dumping waste, that’s because it is to a large degree. Circular economies eliminate or significantly reduce that waste. They produce minimal waste or pollution because everything natural is recycled and everything inorganic is reused or repurposed.
However, “companies need to have a clear idea of the whole supply chain before they make the changes necessary to achieve the circular economy,” says Luk Van Wassenhove, INSEAD Professor of Technology and Operations Management.
Procter & Gamble has been a leader in the circular economy space. In 2017, the conglomerate announced that it was rehabbing its operations so that all of its manufacturing efforts would send zero production waste to the landfill, thereby reducing the waste the firm produces by 95 percent, by the year 2020.
Unlocking Growth Opportunities From the Needs of the World
Sometimes, the needs of the world can present some of the most promising growth opportunities. In addition to gaining usable materials from waste, solving problems like greenhouse gas emissions or even poverty is less about disrupting existing industries and more about creating new ones.
This is called non-disruptive creation and it involves creating new jobs were there were none instead of displacing or reconfiguring jobs. Some examples of non-disruptive creation at work include microfinance, life coaching or online dating. These industries were brought to fruition without detracting from any existing business model.
Through creative non-disruption strategies, the world can be a little better and your organisation can be both more profitable and inspiring. “Those who open new frontiers of opportunity, growth, and jobs are the true forces for good at the most primal business level,” says W. Chan Kim and Renée Mauborgne, INSEAD Professors of Strategy and co-directors of the INSEAD Blue Ocean Strategy Institute.
Businesses can be a source for good when they make changes that are best for themselves and best for the world in which they operate. Internally, hiring leaders who walk the talk can make a big difference as well as providing opportunities for employees to exercise their core competencies. Operationally, organisations can form partnerships that draw awareness to specific causes or work to incorporate circular economies into the way they do business. In turn, your company can uncover growth opportunities when it addresses specific sustainability challenges. Look at UN sustainability goals to guide your business strategy and unlock growth opportunities. Everybody wins.