Corporate Sustainability Learning Curve

To business, sustainability thinking is really about creating new knowledge, connecting the dots differently, mining through the plethora of information and data points that all firms have available, but looking at them differently with respect to management decision-making. This almost always requires connecting different functional areas, working between business silos. A company moving along the sustainability learning curve must extend the boundaries of consideration from traditional EHS aspects to those that include workplace and labor practices, often found in Human Relations, and community concerns, often handled through Community Relations or other related functional groups. Similarly, the impacts of the aspects extend from more traditional considerations of risks and their reduction to the area of opportunity enhancement and increased related benefits. Impacts are also extended out along the value chain, from consideration of those impacts generated at the facility level to impacts produced by suppliers upstream and in use by customers downstream. The time dimension is also extended beyond traditional boundaries of consideration when moving up the sustainability learning curve. Rather than just focusing on the short term of quarterly earnings, companies must anticipate the longer term view. Where does the company want to be positioned in the future; what will be the future demand of the company as a socially responsible actor; how can future generations be protected by current management decisions; and so on?

The progression of corporate practices - from compliance with government policies to risk management, to ensuring sustainability by building integrated sustainability approaches and systems, to creating new opportunities through technical, business process, and social innovations, and finally to leadership, leading by example, mentoring other players in the supply chain, extending corporate social responsibility - are all logical building blocks for moving toward corporate sustain-ability. They represent organizational steps commonly found in practice, from inward, exclusive and reactively focused, to outward, inclusive and more proactive. Such a journey is necessary to produce the organizational and system changes required to promote greater sustainability. Understanding a company's history in moving along these dimensions can contribute to a comprehensible planning effort in moving a company toward sustainability. Figure 4.2 captures the elements of the corporate sustainability learning curve.

The Planning for Sustainability section of this book offers a range of planning frameworks, from an elaboration on the elements to consider in planning for sustain-ability and steps to be taken, to broader conceptual frameworks regarding the systems in which business operates, what contributes to their unsustainability, and how to make the systems as well as the companies operating within them more sustainable.

It should be noted that these frameworks are offered for consideration of how an enterprise may address the issue of planning and implementation of sustainability. Any of these approaches may be used or, alternatively, a company may decide to utilize an existing business management framework and "fit" sustainability planning and implementation into what is already in place. Regardless of the approach a company takes, this chapter attempts to capture the essence of these alternative "frameworks" as a way of demonstrating the breadth of ways to move sustainable development into management practice.

Figure 4.2. Corporate sustainability learning curve. (Adapted from a conceptual model developed for The Stanley Works by BRIDGES to Sustainability and Convergence Consulting, 2004.)

Section 4.2 is titled "GEMI's Approach to Sustainable Development Planning." The Global Environmental Management Initiative (GEMI), a nonprofit association of leading companies dedicated to fostering environmental, health and safety excellence, developed a strategic planning approach supported by a software tool called SD Planner ™ to support companies embarking on the SD journey. The approach enables companies to better understand the context of SD, create internal awareness of the importance of addressing SD, assess SD status, provide a basis for developing a SD strategy, highlight opportunities to create business value, and provide a roadmap for taking action.

Section 4.3 is titled "Environmental Management Systems (EMS) Frameworks for Sustainability." At the very basic level, a management system provides a structure that allows an organization to systematically manage a particular issue by:

• Defining, assessing and understanding the issue within its boundaries;

• Planning and implementing controls and improvements; and

• Monitoring and evaluating performance of associated efforts.

These functions of a management system are reflected in specific processes, procedures, and tools necessary to manage relevant issues. These can easily be adapted to include issues that are of importance to sustainability practice. In this section, an overview of adapting management systems to sustainability will be presented, but specific management systems and approaches that have been adapted for these purposes are also highlighted. They include RCMS, EMAS and ISO 14001, OHSAS 18001, and Six Sigma management initiatives.

Section 4.4 is titled "The Natural Step Framework: Backcasting from Principles of Sustainability." In the late 1980s, a group of Swedish scientists set out to develop an approach to sustainability that would not be based on an exhaustive understanding of all variables, but rather on the discovery and disciplined use of principles by which sustainability-oriented decisions are determined upfront and "upstream," or at the original point of decision of whether or not to use a particular input - not after the damage has already occurred. This approach, called The Natural Step Framework for strategic sustainable development, has been developed and published in numerous scientifically peer-reviewed papers. It has also been applied within businesses to enable decision-makers to understand sustainability issues and begin planning based on these new insights. This piece describes this planning and decision-making framework and how it is developed and applied within a business context.

Section 4.5 outlines "Natural Capitalism for the Chemical Industry." Despite the successes of the Industrial Revolution and the growth of the chemical industry, the conventional economic theories that were the foundation for growth and prosperity had a serious flaw. Natural capital, the asset that was the cornerstone of the industrial machine, was left off the balance sheet and has resulted in significant environmental consequences. Most financial and business systems account and manage for physical and financial capital - the assets that have represented wealth. But there have been other forms of capital that have been ignored in the decision-making and managerial algorithms as well: natural, human, and social capital. The sustain-ability framework, Natural Capitalism, addresses this omission.

In Section 4.6, "Sustainable Value in the Chemical Industry" is discussed. This article describes the financial and societal challenges the chemical industry faces and offers a practical approach to building enduring value through simultaneously creating shareholder and stakeholder value. Stakeholder value - based on the economic, environmental, and social impacts a company has on its diverse constituents -is a rapidly growing source of business advantage, fuelled by rising societal expectations and the swelling ranks of social change agents newly empowered by information and communication technologies. Taking advantage of this source, however, requires a change in the mindset of leadership and a disciplined approach to planning for and integrating stakeholder value throughout the business.

Section 4.7 details "CSR/SRI Reporting Complexity and the Future 500 CAP Gap Audit™: An Opportunity for Improved Strategic Business Planning and Stakeholder Alignment." Today, leadership companies are expected to respond to a proliferation of corporate social responsibility (CSR) and socially responsible investing (SRI) standards. Leading companies report not just their return to shareholders but also their "return to stakeholders." But with more than a dozen major standards organizations - each representing a variety of stakeholder perspectives - and even more questionnaires for reporting on CSR/SRI accountability and sustainabil-ity practices, how should a company approach this emerging field? And, even more critical for the business bottom line, what strategic opportunities are indicated? The Future 500, a nonprofit environmental and stakeholder engagement organization, offers an approach and tool, the CAP Gap Audit™, to help cut through the confusing array of guidances regarding stakeholder expectations.

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