How Can Large Corporations Become More Sustainable?

How Can Large Corporations Become More Sustainable?
What are the strategies to achieve sustainable goals in a corporation? Professors Frederik Dahlmann, Warwick Business School, Dave Griggs, Universities of Warwick & Monash, Wendy Stubbs, Monash University, and Kevin Morrell, Cranfield School of Management, explore how goal-setting approaches have been the backbone of corporate success and how they can be transposed to sustainable goals.

What are the strategies to achieve sustainable goals in a corporation? Professors Frederik Dahlmann, Warwick Business School, Dave Griggs, Universities of Warwick & Monash, Wendy Stubbs, Monash University, and Kevin Morrell, Cranfield School of Management, explore how goal-setting approaches have been the backbone of corporate success and how they can be transposed to sustainable goals.

How can large corporations become more sustainable? By Frederik Dahlmann, Megha Sureshkar and Tom Gamble.  Related research: Corporate actors, the UN Sustainable Development Goals and Earth System Governance: A research agenda, The Anthropocene Review 2019, Vol. 6(1-2) 167–176, sagepub.com/journals-permissions DOI: 10.1177/2053019619848217 journals.sagepub.com/home/anr

Impact of humans on the planet Earth

Humans have had such a significant and decisive impact on the Earth’s ecosystems, that the current era has been dubbed the Anthropocene. This is technically defined as the current geological epoch, viewed as the period during which human activity has been the dominant influence on climate and the environment.

To attract more focus on the pressing issues associated with the Anthropocene, various governance organisations, as well as universal guidance, guidelines and metrics, have been established. Earth System Governance provides a framework for developing new insights into governing this coupled socio-ecological system while the UN Sustainable Development Goals (SDGs) provide a shared blueprint for peace and prosperity for people and the planet, now and into the future. go – go

At the heart of the SDG initiative are 17 goals which serve as an urgent call to action by all countries – developed and developing – in global partnership. They recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all the while tackling climate change and working to preserve our oceans and forests.

While CSR is a happening topic in any corporation, what are the broader implications of the Anthropocene and the role of corporate actors in engaging with and supporting Earth System Governance by contributing to the UN SDGs? 

The path ahead

The Anthropocene faces unprecedented global challenges ahead and the assessment of these challenges can no longer be tackled by individual business practices and organisations. Unless the philosophy of ‘We don’t win alone and we don’t lose alone’ is adopted by all the stakeholders involved to create an immediate and significant positive impact in the Anthropocene, the path ahead seems very rough.

Effective Earth System Governance will require changes at a far broader level to promote and ensure collective and collaborative action by policy makers, civil society and the private sector. And moving away from the traditional concepts, this also requires new financial and business models that are compatible with the ‘requirement of flourishing life on Earth’.

Dahlmann, Griggs, Stubbs and Morell identify three potential high-impact strategies which, if implemented, could lead to significant new insights into how corporate actors display responsibility and accountability regarding Earth System Governance:

  • Integrating global goals into corporate target-setting
  • Integrating global goals into codes of corporate governance
  • And Integrating global goals into new business models.

Goal-setting in corporations

The philosophy of achieving the desired position through goal-setting has traditionally been successful in many corporations. The benefits of steering organizations through goals include setting priorities for attention and resources, galvanizing efforts, benchmarking and progress tracking, as well as overcoming short-termism.

The UN SDGs have been positioned as an innovative form of global governance that complements more traditional governance approaches such as norms and rules (i.e. legislation and regulation). While policymakers around the world have understood how to tackle the spatial, temporal and contextual factors of such goals, what is lacking is corporate understanding of how to translate and integrate the UN SDGs into their strategies and business models.

Indeed, organisations are coming up with solutions to address the issue. Inspired by the decades-long successful and central process of setting organisational performance targets, companies have recently adopted a variant of that approach wherein executive remuneration schemes depend on achieving sustainability targets.

The UK government and other non-profit organizations have also played a significant role in encouraging and supporting the corporations to place more attention on sustainability. Initiatives such as reducing greenhouse gas emissions and deforestation, or increasing renewable energy, energy productivity, and electric vehicles, and other sustainability metrics have helped companies in the context of corporate sustainability performance.

Integrating global goals into corporate target-setting

Prof. Frederik Dahlmann, Warwick Business School, explores how goal-setting strategies can help corporations become sustainable.

As much as goal-setting in corporations is an important starting point, the key question is whether such individual target-setting approaches are effective in the face of a global biophysical and socioeconomic system. More worrying is the fact that corporations as central actors – and arguably drivers of the Anthropocene – explicitly feature only once in the 17 UN SDGs. 

Moreover, there have been various efforts to highlight the commercial opportunities from integrating the UN SDGs – however, general awareness in the private sector remains ambiguous, limited in scale and largely anecdotal.

Whether and how companies can reconcile corporate impacts on people, planet and prosperity while at the same time satisfy their overriding raison d’être of (short term) profit and shareholder returns is a billion-dollar question that is worth billions of people’s lives.

While businesses are increasingly recognising the various economic and strategic benefits from being more socially and environmentally responsible, such approaches are predominantly driven by corporate assessments rather than concerns for finding solutions to global challenges that may require a departure from ‘business as usual’. 

This calls for a better understanding and more in-depth research of the corporate perception of high-level issues such as the Anthropocene, Earth System Governance and the UN SDGs, and whether and how sustainability goal-setting could be more effectively integrated into the corporate sector.

Integrating global goals into codes of corporate governance 

Current corporate governance, as complementary as it has been to corporations, treats companies as individual actors and not as part of an interconnected network. Even the few forward and inclusive corporate governance models based on stakeholder perspectives remain silent on the need for systemic integration into wider external governance systems.

Such gaps in current governance models expose a need to examine corporate governance codes as well as rules and regulations, both at national and international levels, to support the implementation of the UN SDGs. Relevant legislation, codes and norms therefore need to be updated to reflect the wider sectoral and value chain implications of businesses’ products, practices and actions, and encourage boards of directors to look beyond the narrow confines of their organizations when monitoring, controlling and steering them.

Integrating global goals into new business models

How Can Large Corporations Become More Sustainable?
What are the strategies to achieve sustainable goals in a corporation? Professors Frederik Dahlmann, Warwick Business School, Dave Griggs, Universities of Warwick & Monash, Wendy Stubbs, Monash University, and Kevin Morrell, Cranfield School of Management, explore how goal-setting approaches have been the backbone of corporate success and how they can be transposed to sustainable goals.

Research suggests that the majority of businesses are focused solely on short-term profit-maximization and would not hesitate to exploit resources such as the natural environment and people. As such, it is now more important than ever to transform companies’ fundamental understanding of business models.

As a result of major crises such as the global financial crisis and political blindness to social and environmental challenges – and as a response to the critics of capitalism and business-greed –  innovative initiatives based on constructive concepts such as Shared Value, Net Positive, Future Fit, Conscious Capitalism and Blueprint for a Better Business have risen to prominence.

Such initiatives are covered under the blanket term ‘Purpose Ecosystems’ because of their shared efforts to redefine the purpose and nature of business and focus upon broader non-financial performance outcomes. These purpose ecosystems offer concrete action frameworks, business templates and other practical guidance such as audit and certification to improve businesses’ legitimacy in society.

The ultimate objective for companies should be to try and adopt business models with a sustain-centric orientation in order to address the interconnected set of seemingly incompatible social, ecological and economic challenges with the help of all the stakeholders involved to form a unified network. This also requires businesses to develop new ways of creating and accounting for value for society that goes beyond the financial bottom line.

Billions of dollars vs billions of people

Unlike other dominant animals that were at the top of the food chain, humans reached the podium in a very short span of time, largely thanks to their cognitive abilities. The consequences of this, however, are profound. The fundamental nature of Mankind’s relationship with the planet, and society that has been fashioned over time, has been altered to an almost irreversible condition in several ways.

In the end, it is our moral duty to care for our society and planet so that future generations avoid the consequences or worse, miss out on an opportunity to indeed face the consequences. Typically, this is achieved by inspiring changes among people, corporations, governments and every other stakeholder part of the natural ecosystem.

Big corporations who have been both the beneficiaries and causes of much of these changes should be more accountable and responsible for their actions. While they have guidance and guidelines in many sources and forms, true change can happen only if they decide to embed sustainable values in their business models, corporate codes and goals. Will they be on time or will it be too late? 

Frederik Dahlmann, Wendy Stubbs, David Griggs, and Kevin Morrell on how large companies can become more sustainable. CoBS Insights.
Frederik Dahlmann, Wendy Stubbs, David Griggs, and Kevin Morrell

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2 responses to “How Can Large Corporations Become More Sustainable?

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