Corporate Sustainability: Far from just plain green

· by · in The Academic Eye. ·
Sustainability is far from just plain green. Professors Karoline Strauss and Jan Lepoutre, ESSEC Business School, argue that sustainability requires unique change in organizations and explain how employees across different levels of the organization can support it.   

Sustainability is far from just plain green. Professors Karoline Strauss and Jan Lepoutre, ESSEC Business School, argue that sustainability requires unique change and explore how employees across different levels of the organisation can support it.   

Corporate Sustainability is Fifty Shades of Far-From-Pale-Green, by Karoline Strauss and Jan Lepoutre. Related research: Strauss, K., Lepoutre, J., & Wood, G. (2017). Fifty shades of green: How microfoundations of sustainability dynamic capabilities vary across organizational contexts. Journal Of Organizational Behavior. doi:10.1002/job.2186

Not just a greener shade of pale

There are many preconceived ideas about corporate sustainability – so many that there is a tendency to see sustainability as just plain green. ‘Plain’ in the sense of being a rather unexciting and non-essential aspect of company activity – and ‘green’ perhaps even in the sense of simply naive. But becoming (more) sustainable necessarily involves change for businesses. And how sustainability can be achieved, and how individuals throughout the business can contribute to sustainability, varies. This makes corporate sustainability all a shade more interesting.

Some firms aim to simply reduce the environmental impact of their services or products, for example, by reducing waste or pollution, by implementing recycling or car-pooling programs, or by constructing more efficient company facilities. These sorts of programs do not create radical change; they do not dramatically alter the firm’s business model or require it to venture into uncharted territory. Change is gradual and based on continuous improvement. Often, they “involve incorporating off-the-shelf innovations or practices into the company’s operations”[1].

For others, sustainable business practices reflect not simply a desire to reduce environmental damage. For them, sustainability means producing in a way that can, theoretically, be maintained indefinitely into the future[2]. This involves radical innovations and often implies changes in companies’ business models. For example, in its bid to become more sustainable, Interface, one of the world’s largest carpet manufacturers, shifted from a business model based on selling as many carpets as possible to a leasing-based model. Indeed, these sorts of changes are complex and highly disruptive.

There are no general prescriptions for how a company should “go green”. What works and what doesn’t work depends on the shade of green the firm is aiming for: a “light green” strategy of reducing environmental damage will have different implications than a “dark green” strategy which aims at producing in a sustainable way.

Greening from the roots

Whether a firm is aiming to be light green or dark green, individuals throughout the organization are the crucial link between a sustainability strategy and its outcomes. However, how leaders and employees can effectively contribute to the greening of the organization varies depending on the shade of green.

> Adapting to change:

Light green or dark green, sustainability necessarily requires change, and for employees this means adjusting their ways of working. In the case of “light green” strategies, change is incremental and comparatively predictable. This allows companies to be clear on how employees should change their behavior, and to provide motivation by setting goals and implementing incentives. In the construction industry, for example, setting targets for the reduction of waste materials can improve efficiency and motivate employees to adjust their ways of working.

“Dark green” strategies pose different challenges. It is often not possible to set specific targets for employees, and because change is happening at a rapid pace, it may even be counterproductive to incentivize and reinforce behaviors that soon become irrelevant. For “dark green” strategies to succeed, companies rely on employees who are comfortable with high levels of uncertainty, and who are willing to continuously change and adjust the way their job is done.

> Bringing about change:

No matter what shade of green a company is aiming for, employees can play a critical role in being proactive and in bringing about change that contributes to sustainability. In the case of a “light green” approach to sustainability, the strategic decisions involved are usually based on leaders’ knowledge and experience. As such, leaders typically set goals to be achieved, such as specific targets for emissions. However, employees play an important role in figuring out just how such targets can be met. For example, when companies in the manufacturing sector set pollution prevention targets, it is the production employees who work on solutions[3]. They are frequently the only ones who are in a position to notice the problems that cause pollution.

Sustainability is far from just plain green. Professors Karoline Strauss and Jan Lepoutre, ESSEC Business School, argue that sustainability requires unique change in organizations and explain how employees across different levels of the organization can support it.   

For companies aiming for a darker shade of green, it is not always members of the top management team who are the initiators of change processes. When greening an organization in radical ways, relying on what has worked in the past can be a disadvantage. Instead, individuals across the organization need to generate new knowledge and generate ideas for radical change. For example, the home cleaning products company Method aims to change how home cleaning products are made and relies on constant innovation of new products and services that mostly come from their employees or their customers[4].

How employees adapt to and bring about change constitutes the building blocks that allow organizations to put their sustainability strategies into practice. How these different ways of greening organizations can be encouraged depends once again on the shade of green. When taking a “light green” approach to sustainability, companies can typically anticipate the skills and knowledge their employees will need and can provide them with the necessary training. For example, research shiows that environmental awareness training and campaigns can be effective in improving energy preservation and recycling behavior[5]. Suggestion systems and workgroups can generate “best practice” and ideas for incremental improvements, and rewards can be offered to encourage even employees who may not be intrinsically concerned about the environment to contribute to sustainability.

When aiming for a darker shade of green, different approaches are needed. Employees suggesting ideas for such radical change need to be resilient and able to cope with the push-back and resistance their efforts will be met with[6]. Companies will need to count on risk seeking, long-term-focused employees who feel strongly about sustainability, and to encourage exchanges across different functions to help knowledge and ideas flow. Once again, the home cleaning company Method recruits employees who are confident that they can “keep Method weird” and facilitates direct exchange between employees and customers[4].

Life at fifty shades

Sustainability is not a uniform shade of green with a one-template-fits-all solution. There is no general advice on how to “go green”. Instead, Strauss et al argue that organisations are better helped not by bigger pictures and grandiose templates for action regarding their sustainability initiatives, but more by fine-grained advice that takes into account the specific shade of green an organization aims for. How organisations contribute to a more sustainable world, therefore, is very much in the end in their own hands. And a shade challenging.

Karoline Strauss and Jan Lepoutre
Karoline Strauss and Jan Lepoutre

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The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.  Now Open for Registration! The CoBS 2022 Student CSR Article Competition. Topics: There is a debate around the potential cost of a green transition. "Greenflation" would be caused by a higher demand for greener solutions, and the consequences of new public policies (e.g. green taxes). How can we deal with the social tensions that could possibly arise with greenflation? The consequences of the Covid pandemic have reached every country in the world, causing a huge rise in poverty and social vulnerability even in rich countries. What can Business Schools do in order to address this situation? What are the main barriers preventing the world from reaching Net-Zero carbon emissions, both at the macro level (geopolitics, industrial barriers, etc.) and at the micro level (individual behaviour)? How do corporations create new value through low carbon practice? What is the potential negative social impact of AI, and what are the possible solutions accordingly? What has been the impact of increased investor attention to Environmental, Social and Governance (ESG) issues on corporate sustainability performance and reporting? How can we balance the social costs and benefits of the advance of digital and robotic automation with respect to the future of work? Do we have to trade off wellbeing for productivity, or can we have both?

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