Sustainable business – a business that can survive in the long term Bashny.Net

According to the materials of the McKinsey Quarterly, MIT Sloan Management Review and Boston Consulting Group

Recently, the sustainable development of society, not depleting the resources of nature, are becoming increasingly popular, they drew the attention of the public, governments take them into account in their legislative activities. So, these issues are becoming increasingly important for business.

In the modern sense of the term "sustainability" has been widely used after the speech of the Prime Minister of Norway, Gro Harlem Brundtland, the UN in 1987, in which it outlined sustainable development as "meeting current needs without compromising the ability of future generations to meet their needs."





The problem of stability for the business environment in all its dimensions: social, economic, cultural and environmental (related to environment). Social aspects of sustainability is addressing issues of poverty, violence, injustice, education, health, employment and human rights. In economic terms, sustainability means the ability to meet the economic needs (of the business is making a profit, for individuals are food, water, shelter, household items). From an environmental point of view is the protection and restoration of the environment (control of climate change, conserving resources, preventing waste). In the cultural dimension of sustainability refers to the support and awareness of the value of diversity (which provides the identification of the communities and the transmission of traditions).

It is not only and not so much in what can be the impact of the business on the sustainable existence of society, or how to achieve it, but also as a solution to issues related to sustainability affects business. The company may not treat sustainability strategically important or not to consider these issues, however, the need for sustainable existence will still determine how it does business. Sustainable business is a business that can survive in the long term. The problem of availability and variability of input prices, consumer demand, pressure from investors, attract and retain talent, the emergence of new markets and the disappearance of old, changes in financial transactions – this is only a partial list of what influences the problem of stability. If the issue of sustainability embedded in the company's approach to doing business, in strategic terms, this leads to lower costs, create new consumer base and recruitment and development of talents in the organization. Company involved in sustainable development, receives a long-term goal, which would be consistent with its core activities and strengths, to motivate its employees and contractors and to give optimism.

In 2009 a group of employees of MIT Sloan Management Review together with a team of BCG (Boston Consulting Group) explored how the need to address sustainable development issues affecting the business.

The study consisted of three stages:
1. a survey of specialists from MIT and BCG on issues related to sustainability and its impact on management;
2. a survey of more than 50 industry leaders known for awareness on relevant issues;
3. a survey of more than 1500 CEOS and managers.

The aim of this study was to find answers to the following questions: How leaders relate to the changes (in activities, the environment, business conditions, etc.) related to sustainability? What are the implications for business? What should you do to fully take advantage of the emerging opportunities and cope with emerging challenges? What changes should be made in organisations to enable them to remain competitive in a changing environment?

How managers treat the issue of sustainability, how they understand it? How important they consider the relevant issues?

According to the study, different companies have different understandings of sustainability, focusing on different aspects in which it manifests. However, most companies recognise the importance of this issue and the impact that his decision has on the business. And those people who are closer and more likely to have sustainability issues, treat them much more seriously and see it as much more options than the beginners in this field. The more people know about sustainability, the more they think about it.

In the course of figuring out what are the main drivers, providing the attention to sustainability issues from business, there was a clear disagreement between informed and concerned leaders and ordinary managers and the CEO, far from the topic. However, the following were highlighted as key driving forces.

State legislation. Those who are not faced in its activities, often with the issue of sustainability, noted that state legislation is the main driving force of its decision and the main source of the corresponding business impact. More knowledgeable in the issues of sustainability professionals, by contrast, note that most the companies and their activities influence the formation of appropriate legal and regulatory frameworks, and not Vice versa.

The interests of consumers. Most leaders say that the interest of consumers (involved the company in sustainable development) has had a major impact on their company. Famous leaders with a more complete understanding of the issue of sustainability, I think the consumer interest is less important driving force. They point out other forces that have, in their opinion, more serious effects, such as, for example, climate change, and other environmental factors.

The interest of the employees. Many managers consider the interest of employees to the problem of stability is quite important factor influencing the activity of their company. Most knowledgeable leaders do not agree with this statement. They believe that for companies more important are the benefits from the implementation of projects related to sustainability, as a more careful selection, retention, enthusiasm of employees, etc.

In addition, the improved image of the company and/or brand the majority of respondents said the main source of benefits from attention to the problem of sustainability; experienced in issue leaders consider this impact minor. Much more important, in their opinion, the fact that the involvement in tackling problems of sustainability provides wide competitive advantages and opportunities.

The study found that, despite understanding the positive effects and benefits of participation in sustainable development, many companies either do not act strongly enough, or they will fail at the execution level. Why is this happening? There are three main reasons.

1. Not all companies have an adequate understanding of the issue of sustainability and its importance from the point of view of the organization.
2. Companies can't pick up the arguments (in terms of assets, costs and profits) to include sustainability in their activities.
3. Even if the first two barriers are overcome, often fails at the stage when need is real action.

Understanding and awareness of the problems associated with the need for sustainable development and their relevance to the organization at the current stage difficult. First, businesses often do not have enough information, based on which they will be able to make decisions. They just don't realize the essence of the concept "sustainability" and the importance of sustainable development for the company. Managers do not have enough knowledge about the driving forces, problems and on tools to participate in addressing relevant issues. Second, there is no common definition of sustainability. Accordingly, there is no common terminology, no common language, which will allow you to freely to discuss issues concerning sustainability, especially in the business world. Thirdly, the benefits and the opportunities that can get a company, often have a very vague idea or meet a bad understanding in the organization. Also often lacking is the understanding of how to determine how the organization succeeded in addressing the relevant issues.

Highlight sustainability as an individual working problem allow for the following considerations:
— Sustainability can affect all aspects of the company, from development and production of the product and ending with sales.
— Resistance can also affect the different levers of value creation, in both the short and long term.
— Increasing the interest of employees, customers, consumers, partners in the supply chain, competitors, investors, tenants, press, society in General compels us to act.
— Decisions related to sustainability, integrated and interdisciplinary, so effective communication with stakeholders is very important.
— Decisions related to sustainability, we have to take under conditions of uncertainty, which is generated by such factors as government legislation, the interests of employees and consumers, and geopolitical events.

It is often difficult to find arguments to induce the company and employees to attend to sustainability issues. This happens for several reasons. First, sustainability is a very long-term investment and calculate the benefits using the traditional economic approach, is quite difficult. Second, managers often difficult to define, measure, and control business even in material aspects, so many don't try to understand such intangible side, such as the impact of their business on the environment, society and development of mankind as a whole. Thirdly, it is quite difficult to put the principles of sustainability as the main issues on the agenda of the company. And, of course, the most difficult to track and determine the success of actions related to participation in sustainable development.

The need to participate in addressing issues of sustainable development, will obviously affect the development of management approaches. A survey of top managers has helped to identify eight major areas of such influence.

1. Any company, anyhow, will have to face a problem of sustainability, economical and rational use of resources. This problem, at all desire, it is impossible to ignore. The heads of the companies that have already developed and use programs sustainable development, say that many of the circumstances and realities of the contemporary world prompted them to take this step. Such circumstances can be, for example, public opinion or disapproval of certain polluting methods of work, legislation calling on the economical use of resources and posing certain environmental constraints, unforeseen reduction of the resource base, competitors who early began to work in accordance with the principles of sustainability, which gave me a significant advantage in consumer demand, etc.

2. Many point to such benefits received by the company, operating on the principles of sustainability as a more efficient use of resources, saving energy, etc., but there is another important advantage, which somehow often overlooked. This productivity growth. According to research, when a company begins to harmonize their functioning with the environment, when the most cost-effective and adequate use of resources and careful attitude to the surrounding world becomes the credo of the company, employees are inspired, they have more desire to work, respectively, increasing productivity and quality of work. Also, such a restructuring of the company involves certain changes in the workplace employees, proper organization, which, of course, also a positive effect on their work.

3. In our day, how much a company cares about the environment, becomes one of the criteria by which to judge the company as a whole, the criterion of reputation. And really, because if the company cares for its resources if she cares about what she does and she is ready to face the consequences of their actions, then surely she has the same care and attention applies to finances, to consumers, to production, to the workers, etc.

4. When moving to a new style of work will inevitably have to reevaluate a lot of things. The principles of sustainability are forced to see not a single part of the company, and the entire system as a whole. In addition to new knowledge, such a view greatly expands the horizon and gives you the opportunity to find new solutions, to see some of the issues missed or overlooked previously.

5. The adoption of a new course of action, this also applies to sustainable development, is pushing leaders to find completely new solutions and ideas. The issue of sustainability is so multi-faceted that you have to look for a new style of work, perhaps even breaking the system, the boundaries of business sectors, which undoubtedly opens a sea of opportunities for development, positive changes.

6. The change of the company's work requires constant coordination of actions of employees, coordination of development of different branches of the company among themselves, coordination of interaction of the company with government agencies and even with competitors. This provides an invaluable communication experience, communication and benefits coordination and communication.

7. Today the fear of risk is particularly high risks it is quite difficult to predict, so the company, which is the most intelligently and thoughtfully about his work, supports transparency, will cause a much greater trust of stakeholders and possible partners.

8. As mentioned above, all companies will sooner or later have to rebuild your work style in accordance with the principles of sustainability. The sooner this happens, the greater the advantage the company will get, the more likely the company will occupy a leading position in the market.

The study allowed to distinguish five main arguments in favor in order to coordinate the work of the company with principles of sustainability:
— Prices of resources are constantly growing, companies that intelligently and economically manage resources (in accordance with the principles of sustainability), will be to a much lesser extent depend on changes in prices.
— Consumers, customers, shareholders, governments – they all pay great attention to sustainability.
— The government and the authorities promote and support a focus on sustainability. Accordingly, the company working on the principles of sustainability, are less likely to suffer from changes in legislation.
— On the stock markets also gave great importance to sustainability, it is one of the evaluation criteria of companies when making investment decisions.
— The sooner the company will adopt the principles of sustainability, the greater its chance to be among the leaders, the pioneers and the harder it is for competitors will be to keep up with her.

So, managers around the world believe that sustainable development is gradually becoming a pressing business problem. In order not to miss the potential business should start more broadly and carefully evaluate the potential application of sustainability principles. And go to action.

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