Sustainability-driven management has benefits beyond profit

Posted on March 2, 2011 by

Massachusetts Institute of Technology (MIT) Sloan Management Review has recently reported that companies which actively adopt sustainability practices experience positive effects on their bottom lines. The report analyzed a 2010 BCG (Boston Consulting Group) survey of 3,000 business leaders across the world. The respondents who have implemented sustainability‑driven actions are classified into “embracers” or “cautious adopters” by the report.

The report classifies embracers as those who say that “they have established a business case for sustainability, have put it permanently on their agenda and maintain that it is necessary to remain competitive.” Cautious adopters are “those whose activities are made up of short‑term, strictly measurable investments such as resource efficiency.” The report says that the embracers were more likely than cautious adopters to describe their companies as successful and significantly more likely to say that sustainability increased their profits.

The report says that “employee engagement” is an additional benefit of sustainability‑driven programs. The report recommends

  1. companies should offer financial and promotional incentives to encourage lower‑level employees to suggest and lead sustainability initiatives;
  2. sustainability should be integrated into the organization culture rather than making it a separate initiative;
  3. organizations should act early even if the potential benefits have not been fully (monetarily) analyzed;
  4. the effectiveness of their initiatives should me measured by designing metrics to do so since these are not readily available; and
  5. the sustainability strategy should be a mix of programs with immediate payoffs, such as reduced electricity usage and others that have longer‑term results, such as making more environmentally sound products, for future launches.
Posted in: Sustainability