Business Society: Strategic approaches to Corporate Sustainability

Strategy

The direction & scope of an organisation over the long term.

Strategic decisions areas

- The entire firm

- The future of the firm

- The firm's competitive advantage

- Stakeholder expectation

Financial performance

A subjective measure of how well a firm can use assets from its primary mode of business to generate profits.

Environmental, Social & Governance (ESG) performance

A subjective measure of how an organisation impacts the natural world and society.

Business Case for Sustainability

Argues that adopting environmentally friendly & socially responsible practices can lead to improved financial performance, brand value and long-term viability.

Core elements of The Business Case for Sustainability

Visser (2023):

1. Brand reputation

2. Business models

3. Stranded assets

Operational elements of The Business Case for Sustainability

Visser (2023):

1. Prices & regulation

2. Operational disruption

3. Productivity & engagement

The Business Case for Sustainability & profit

Salzman (2008)

Argued that sustainability is pursued when it supports profit, treating ESGs as strategic business opportunities.

When businesses take action:

- Benefits competitiveness

- Reduces costs

- Improves brand image

- Improves profits

Performance Alignment & Framing Device

Hahn (2014):

Sustainability is aligned with corporate strategy through measurement using financial performance & ESG performance indicators.

Sustainability as a Cultural Artefact

Schifeling & Etzion (2024):

Sustainability tools (artefacts & narratives) which act as shared cultural symbols, guide organisations' sense-making and influence what is considered sustainable.

10R's of Return on Thriving: Business Benefits of Regeneration

Visser (2022):

- RISK reduces

- REPUTATION increases

- RESILIENCE increases

- RESOURCE EFFICIENCY increases

- REGULATION increases

- RECRUITMENT & RETENTION increases

- REVENUE increases

- RETURNS increase

- RESEARCH & DEVELOPMENT increases

- REASON FOR BEING is clarified

Strategy-Sustainability Alignment

Strategy-Sustainability Alignment: Outside-In

1. Factor (input) conditions

2. Demand conditions

3. Supporting industries

4. Strategy context

Strategy-Sustainability Alignment: Primary Inside-Out

- Inbound logistics

- Outbound logistics

- Operations

- Marketing & sales

- Services

Strategy-Sustainability Alignment: Support Inside-Out

- Procurement

- Technology development

- Human resource management

- Firm infrastructure

Different Views on The Business Case for Sustainability: Believers

Schifeling & Etzion (2024):

SUFFICIENT - if there is a business case more sustainability will automatically follow.

NECESSARY CONDITION - without a business case no (further) sustainability action.

Different Views on The Business Case for Sustainability: Hopeful

Schifeling & Etzion (2024):

ENABLING TOOL - helps guide sustainability innovation.

CHRYSALIS - can catalyse deeper institutional change.

Different Views on The Business Case for Sustainability: Sceptic

Schifeling & Etzion (2024):

FIXATION - determined by 'economic ideologies' that undermine sustainability efforts.

IMPEDIMENT - focus on low-hanging fruits rather than transformative action.

Limitations of the Business Case

Ferns & Amaeshi (2019):

Despite many arguments for a business case for sustainability, there is still a lot of corporate inaction in addressing this issue.