Finding The Sweet Spot to Run a Sustainable Business (Part 1)

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Home > Articles > Finding The Sweet Spot to Run a Sustainable Business (Part 1)

 Finding The Sweet Spot to Run a Sustainable Business (Part 1)

Jenson Goh | Today's Manager
September 2, 2019

Want to be a sustainable business? Find out how in part one of this two-part series.

Ms Greta Thunberg. If you have not heard of her name, Google her now. At a tender age of 15 while all of her peers were schooling, Ms Thunberg had a personal mission. She wants to change the mental models of people about the climate change challenges that we are facing today and move people to action. Every Friday, you will see Ms Thunberg skipping school to hold a silent protest outside of the Swedish Parliament House to demand that the politicians heed the mounting scientific evidences and manage the climate change problem like a crisis. This caught media attention and soon, one thing led to another and Ms Thunberg was presenting on various world stages (e.g. in COP24, which is the informal name for the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change and World Economic Forum) and calling out for leaders in politics and businesses to make combating our climate change issues the top priority in their agenda.

One of her famous quotes during COP24 that had inspired millions of youths and adults:

“So we have not come here to beg the world leaders to care for our future. They have ignored us in the past and they will ignore us again. We have come here to let them know that change is coming whether they like it or not. The people will rise to the challenge. And since our leaders are behaving like children, we will have to take the responsibility they should have taken long ago.”

Ms Thunberg’s words are a warning to all of us who have taken the climate change problem as just one of the many problems we face today. She reminds us that the climate change problem is THE problem. It calls for action.

Since then, Ms Thunberg’s words have taken the world by storm. Ms Thunberg’s School Strike for Climate movement and her speech (that she drafted by herself) have moved millions of students worldwide. On two occasions, first on 15 March 2019 and the second on 24 May 2019, million of students from more than 110 countries joined her call in striking and protesting to get their governments to view the climate change problem as a crisis and to start the process of acting on it.

The youth have spoken loud and clear.

Motivated by the actions of Ms Thunberg and many youth all around the world, the scientific community has also come together to put up a concerted message to the entire world. The Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5 degree, a joint report by hundreds of scientists, spelled out the depressing results that as a world community, we are not meeting our carbon emission reduction targets and that missing this target will likely result in massive suffering and irreversible damages to our environment in a foreseeable future. Thus, dooming the future of our youths. More than 20,000 scientists have signed the ‘Letter to Humanity’ directed to policymakers demanding that they act decisively and promptly to avoid these dire consequences. 1

Under this context, I believe that businesses being one of the most dominant forms of organisation in the world, while are in large part responsible for this climate crisis, can also be the solution. But how? Transformation from a profit driven business to one that emphasises on sustainability is hard and has potential to fail. And that is the purpose of this two-part series on how company can transform itself towards sustainability.

First, a transformation in any business towards sustainability can never be possible without first having the senior management committing to the cause. More importantly, senior management must acknowledge the possibility that their businesses could take a hit in its profit margins first before it could transform into a profitable model based on sustainability. This is one of the risks that most leaders wouldn’t want to take especially if the business is already a successful one. It will take courage from senior management to commit to the transformation process and these leaders need to take that step. A good framework for senior management to consider while thinking this through is the triple bottom lines sustainability framework as shown in Figure 1.

Economic sustainability refers to practices that support long-term economic growth without negatively impacting social, environmental, and cultural aspects of the community. 2 Environmental sustainability is defined as responsible interaction with the environment in order to avoid allow for long-term environmental quality. 3 Social sustainability refers to the ability of a community to develop processes and structures which not only meet the needs of its current members but give future generations the ability to maintain a healthy community. 4 The framework provides an overarching model to guide the business leaders to steer its organisation from a traditionally economic sustainability frame of mind to the sweet spot that includes environmental sustainability and social sustainability



Many organisations have already embarked on this movement to reach the sweet spot by including corporate social responsibility in their business activities. But this is not enough. In my view, to make the transformation a success, the articulation of the sweet spot needs to be expressed within the mission, vision, and values of an organisation. Take for example, the company Itaipu Binacional, the world’s largest generator of hydroelectric energy for Brazil and Paraguay as of 2016. 5 Despite being a for-profit organisation, the company’s management decided in 2003 to make this commitment towards social and environmental sustainability. They included these two sustainability dimensions as an integral part of its mission and had invested millions into a suite of outreach and environmental initiatives. The company’s mission now reads: “To generate quality electrical energy via socially and environmentally responsible practices, fostering sustainable economic, tourist, and technological development in Brazil and Paraguay”. 6 This is an excellent example of putting action and money into what they believe in. To date, the company has amassed a large number of sustainability awards for its efforts in transforming its businesses towards this sweet spot. One noteworthy award is winning the first place in the “Best Practices in Water Management” category in the fifth edition of the United Nations (UN) Water for Life

Award in 2015. Unfortunately, companies like Itaipu Binacional are not common in the industry.

I feel that the first step towards finding the sweet spot is to instil moral courage within the senior leaders to recognise that existing practices are not sustainable to the environment and signal the intention to transform the organisation by incorporating social and environment sustainability into the organisation’s mission and vision.

In the second part of this series, I will provide examples of how organisations can systematically transform this translated ‘sweet spot’ mission, vision, and values into concrete strategies and actions from perspectives of a large, medium, and small enterprises. In doing so, I hope to demystify the transformation journey towards the sweet spot of sustainability and provide a roadmap for any organisation to transform itself towards it.

All hands need to be on deck to solve this climate crisis. We know how to act, now we need to act. Our future depends on it.

References
1 A Griffin, 7 March 2018. 20,000 scientists give dire warning about the future in ‘letter to humanity’—and the world is listening, Independent. Accessed via https://www.independent.co.uk/environment/letterto-humanity-scientists-warning-climate-change-global-warming-experts-a8243606.html

2 Uni-Mary-Wish, 2019, Economic Sustainability. Accessed from http://sustainability.umw.edu/areas-of-sustainability/economic-sustainability/

3 Gillaspy R, 2019, Environmental Sustainability: Definition and Application, Study.com. Accessed via http://study.com/academy/lesson/environmental-sustainability-definition-and-application.html#

4 Business-Dictionary, 2019, Social Sustainability. Accessed via http://www.businessdictionary.com/definition/social-sustainability,html

5 Itaipu-Main, 2019, Itaipu Main Page. Accessed via http://www.itaipu.gov.br

6 Itaipu-Mission, 2019, Itaipu’s Mission. Accessed via http://www.itaipu.gov.br/en/company/mission

IMAGE: 123RF

​Dr Jenson Goh is the Director of Studies, Residential College 4, NUS. He is a multi-years teaching award winner who is known for his ability to induce learning through play. He is a certified LEGO® SERIOUS PLAY® and Six Bricks facilitator.

 

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Today's Manager Issue 3, 2019

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