Pathways to Success

Case Studies for Mainstreaming Corporate Sustainability

Suzanne Farver

• Publisher: J. Ross Publishing
• Year: 2019
• Print ISBN: 9781604271713
• eBook ISBN: 9781604278170
• Edition: 1
• Topic: Economics
• Subtopic: Business Strategy
• Index: Economics

Used as a companion guide to Mainstreaming Corporate Sustainability, this case book provides specific examples of companies who have incorporated successful techniques to promote sustainability within their organization. Combined with the textbook, it provides a full curriculum for any introductory course on corporate sustainability. Through the examples of companies from around the world, the reader will learn about best practices and helpful tools, including international standards and performance frameworks, that can be adapted to any company. These resources are described in a manner that allows the reader to successfully integrate sustainability into a company's corporate culture. It is useful for students, faculty, and practicing sustainability professionals.

CHAPTER 1

INTRODUCTION TO SUSTAINABILITY

What is corporate sustainability? Most sustainability experts today argue that corporate sustainability involves three basic resource areas that are impacted by any company: environmental, social, and economic. Some refer to these as the three responsibilities or the triple bottom line. You may sometimes see other factors being included in the definition for sustainability: governance, transparency, local engagement, or longevity. How do you drive a company toward responsibility in these areas? In this book we offer you a chance to dig deeply into various companies that practice corporate sustainability and how it helps their businesses thrive. But in this chapter, we’ll try to stay at the thirty-thousand-foot level and attempt to understand what corporate sustainability means from a broad perspective.

The Brundtland Commission defined sustainable development as follows—it is a broad definition that doesn’t mention the specifics of environment or social well-being (Bärlund 2004–05):

Development that meets the needs of current generations without compromising the ability of future generations to meet their own needs.

The United Nations Global Compact defines corporate sustainability in the following manner—note they add ethics to the mix (UNGC 2014):

Corporate sustainability is a company’s delivery of long-term value in financial, environmental, social, and ethical terms.

In Mainstreaming Corporate Sustainability, the following definition of corporate sustainability is offered (Farver 2013):

Corporate sustainability means balancing environmental stewardship, social well-being, and economic prosperity while driving toward a goal of long-term success for the health of the company and its stakeholders. A sustainable corporation is transparent in its management of these responsibilities and is held accountable to its stakeholders for its results.

Which definition makes the most sense to you? Can you find other definitions that may clarify the appropriate values and at the same time provide guidance to an organization to achieve those values?

Various experts prescribe steps that must be taken to achieve corporate sustainability. Having stepping-stones and guidelines can help to drive sustainability and incorporate it into a company’s management systems. We will delve into some of these frameworks throughout this book, but for now, just know that it is helpful to have guidance and that there are choices available that can be customized to a particular company’s culture and values.

SUSTAINABILITY RANKINGS

There are many sustainability ranking systems worldwide, and these rankings can help to determine the leaders in this field. Or do they? Sometimes you may be surprised to see who is leading in these lists.

Newsweek publishes one of the most popular sustainability lists. It has been published annually since 2009 (well, almost annually—they missed 2013 due to some system changes). They have partnered with various analytical firms, including Trucost and Sustainalytics, to formulate their listings; their most recent partner being Corporate Knights. The Newsweek Green Rankings 2014 list raised some eyebrows. Former top ten companies were shuffled to lower rankings and others fell off the list entirely.

The reason behind this shift was due to the methodology of the ranking—that is, the types of information collected and the weight given to each factor. Newsweek had been tweaking its methodology over the years, but in 2014 it made a major shift when it even changed which types of information were most important for the rankings. They seem to have settled in now with a methodology that has been used for the past three years. The following indicators were retrieved from their website (Newsweek 2016a):

• Indicator 1: Combined Energy Productivity—Weight: 15%
• Indicator 2: Combined Greenhouse Gas (GHG) Productivity—Weight: 15%
• Indicator 3: Combined Water Productivity—Weight: 15%
• Indicator 4: Combined Waste Productivity—Weight: 15%
• Indicator 5: Green Revenue Score—Weight: 20%
• Indicator 6: Sustainability Pay Link—Weight: 10%
• Indicator 7: Audited Environmental Metrics—Weight: 5%
• Indicator 8: Sustainability Board Committee—Weight: 5%

The top ten companies chosen by Newsweek for 2016 are shown in Table 1.1:

Table 1.1 Newsweek Top Ten for 2016 (Newsweek 2016b)

1. Shire PLC	Ireland	Health Care
2. Reckitt Benckiser Group PLC	Britain	Consumer Staples
3. BT Group PLC	Britain	Telecommunication Services
4. Swisscom AG	Switzerland	Telecommunication Services
5. Essilor International S.A.	France	Health Care
6. Nike, Inc.	United States	Consumer Discretionary
7.Unilever	Britain	Consumer Staples
8. Sky PLC	Britain	Consumer Discretionary
9. Siemens AG	Germany	Industrials
10. Schneider Electric SE	France	Industrials

There is also an interesting commentary on Newsweek’s methodology shift in an article on GreenBiz.com by GreenBiz chairman and chief executive editor, Joel Makower. In his article, he notes that the new methodology is more data driven and quantitative, which allows for better tracking and checking of results. However, this approach eliminates some of the qualitative analysis that may inform some of the better choices. In addition, it can eliminate the context of some of the data. He uses the example of comparing water efficiency between IBM, largely a hardware manufacturer, and Adobe, whose products are largely based in the cloud. Such a comparison would put IBM’s results at a disadvantage (Makower 2014).

Another interesting part to the story is that Corporate Knights, one of the partners in producing the Newsweek list, also publishes its own sustainability rankings, and this is a completely different list! See their results in Table 1.2.

Table 1.2 Corporate Knights Top 10 for 2016 (Corporate Knights 2016)

1.BMW	Germany	Automobiles
2. Dassault Systèmes	France	Software
3.Outotec	Finland	Construction and Engineering
4. Commonwealth Bank of Australia	Australia	Banks
5.adidas	Germany	Textiles, Apparel, and Luxury Goods
6.Enagas	Spain	Gas Utilities
7. Danske Bank	Denmark	Banks
8.StarHub	Singapore	Wireless Telecommunication Ser...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Preface
• Acknowledgments
• List of Appendices
• About the Author
• Chapter 1: Introduction to Sustainability
• Chapter 2: Making the Business Case for Sustainability
• Chapter 3: Investigating the Sustainability Footprint of Patagonia
• Chapter 4: Cisco Systems: Leader in Governance and Ethics
• Chapter 5: Engaging Stakeholders: Levi Strauss & Co
• Chapter 6: Environmental Responsibility: Alcoa Corporation
• Chapter 7: Unilever: Leader in Social Responsibility
• Chapter 8: Economic Responsibility: ING Groep NV
• Chapter 9: Strategy: Nestlé and Shared Value
• Chapter 10: Sustainability Management and BMW
• Chapter 11: Supply Chain Management and adidas Group
• Chapter 12: Sustainability Metrics: Considering Materiality at Marks & Spencer
• Chapter 13: Reporting on Sustainability: Novo Nordisk
• Chapter 14: Sustainable Design at Jones Lang LaSalle
• Chapter 15: Conclusion: Innovation and Sustainability
• Appendices