The Five Stages of Adopting Corporate Sustainability
Adopting sustainability as a goal now will help corporations develop business models that will leave competitors scrambling to catch up, according to a new report from the Harvard Business Review.
The report, “Why Sustainability is now the Key Driver of Innovation (PDF),” lays out five stages for successfully adopting corporate sustainability. Authors came to their conclusions by looking at best practices at companies such as HP, Wal-Mart, Clorox and others.
Stage 1 – Viewing compliance as opportunity.
The stick is sometimes more compelling than the carrot, but companies should not view sustainability in this light. Instead, develop the internal ability to anticipate and help shape regulations. This requires working with other companies, including rivals, to develop industry standards.
Stage 2 – Making value chains sustainable.
By learning how to address carbon management and life-cycle assessments, and designing operations to use less energy and water, companies can discover sustainable sources of raw materials, components and energy. By addressing waste throughout the supply chain, a company will reduce its costs.
Stage 3 – Designing sustainable products and services.
Companies should conduct a full product review to determine which ones are most harmful to the environment, then work to improve the product or phase it out. Effectively doing so helps a company be seen by the public as a true “green” company, and not one that is engaged in greenwashing. Developing compact and eco-friendly packaging is a good first step, but companies also should consider the notion of biomimicry in product design.
Stage 4 – Developing new business models.
By adopting more sustainable practices internally, a company begins to better understand what today’s eco-minded consumer wants to purchase. Opportunities include developing new delivery methods or technologies to save costs and creating monetization models that relate more to services than to products. Companies also are urged to develop business models that combine digital and physical infrastructures.
Stage 5 – Creating next-practice platforms.
By looking beyond its current core competencies with an eye toward sustainability, a company can begin to redefine itself as a next-generation operation that may even involve expansion into new and different industries. One of the key drivers in this stage is creating business platfroms that enable customers, suppliers and partners to manage energy in radically improved ways. Another opportunity is to develop products that require less or no water, as compared to similar products that are water-intensive.
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