Challenges

A focus on sustainability brings undeniable benefits for companies, but it also presents risks and challenges that companies must manage if they hope to be successful.

The most obvious is balance. Sustainability encompasses environmental, social and economic goals that can conflict. Companies need to achieve a level of economic health - so that they can provide employment and wealth to the current generation -without compromising the opportunities of subsequent generations. During tough economic times, companies are challenged to make investments in their communities and in the technology needed to improve environmental performance. Conversely, the demand for social change and environmental improvement must be balanced against companies' needs to achieve adequate financial results to survive.

Companies face another challenge in finding the right balance between transparency and confidentiality. Individuals and organizations have an almost unquenchable thirst for data on companies' activities. While most companies acknowledge their responsibility to provide a reasonable description of their practices and progress toward environmental, social, and economic goals, they must also hold some information confidential. In some instances, the release of information on product composition or unpatented manufacturing processes would have grave economic consequences. The dilemma for companies is that they must maintain a reputation for sustainability and transparency while resisting calls for additional information.

A more subtle issue is the concern that sustainability can stifle innovation. More than most employees, researchers and product developers are intimately aware of any potentially detrimental impacts - again, environmental, social, or economic - from a new product or process. These impacts cannot be ignored, but they must not be allowed to quash a project too early, since alternatives can often be found if other technical and marketing issues can be resolved. Furthermore, even if alternatives are not found, experience teaches that potential negative impacts can often be managed so that the risk is minimized.

As real as these challenges are, they are offset by the opportunities presented by the pursuit of sustainability. Much has been made of so-called "disruptive technologies" - the advances rewrite the basis of competition and force abrupt changes on markets and the companies that participate in them. Whenever a disruptive technological change occurs, companies that have pushed the advance, and others that have the capacity for rapid adaptation, enjoy dramatic successes. Slow-moving, backward-looking companies falter.

Sustainability could be considered a "disruptive perception" that causes similar consequences. As customers and end-users (as well as regulators) become even more attuned to the desirability of products and processes that reflect the principles of sustainability, markets will change. Companies that can seize the opportunities presented by this shift - either because they are leading the change or because they can respond quickly to it - will thrive in this new environment.

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