MIT Sloan Management Review - Fall 2009 Vol. 51 No. 1

Executive Briefings FALL 2009 • Volume 51 • Number 1

The Business of Sustainability: What It Means to Managers Now Maurice Berns (Boston Consulting Group), Andrew Townend (Boston Consulting Group), Zayna Khayat (Boston Consulting Group), Balu Balagopal (Boston Consulting Group), Martin Reeves (Boston Consulting Group), Michael S. Hopkins (MIT Sloan Management Review) and Nina Kruschwitz (MIT Sloan Management Review) pp. 20-26

Sustainability is garnering ever-greater public attention and debate. However, the business implications of sustainability merit greater scrutiny — and scrutiny of a different kind than the “green”-oriented focus that’s most common. Will sustainability change the competitive landscape and reshape the opportunities and threats that companies face? If so, how? How worried are executives and other stakeholders about the impact of sustainability efforts on the corporate bottom line? What — if anything — are companies doing now to capitalize on sustainability-driven changes? And what strategies are they pursuing to position themselves competitively for the future?

To begin answering those questions, MIT Sloan Management Review and collaborator The Boston Consulting Group conducted in-depth interviews with more than 50 global thought leaders, followed by the Business of Sustainability Survey of more than 1,500 worldwide executives and managers about their perspectives on the intersection of sustainability and business strategy, including their assessments of how their own companies are acting on sustainability threats or opportunities right now.

The study identifies three major barriers that impede decisive corporate action: a lack of understanding of what sustainability is and means to an enterprise; difficulty modeling the business case; and flaws in execution, even after a plan has been developed. The study also reveals that while novice practitioners think of sustainability mostly in environmental and regulatory terms, with any benefits stemming chiefly from brand or image enhancement, practitioners with more knowledge tend to consider the economic, social and even personal impacts of sustainability-related changes in the business landscape.

Reprint 51108. To order reprints of this article, see page 7.

8 Reasons (You Never Thought Of) That
Sustainability Will Change Management
Michael S. Hopkins (MIT Sloan Management Review) pp. 27-30

MIT Sloan Management Review’s first annual Business of Sustainability Survey revealed much about what executives are thinking and doing about sustainability-driven concerns right now — as well as what’s impeding their attempts both to capture opportunities and defend against threats. The most widely credited leading thinkers at the sustainability and management intersection, though, wanted to explore something else: the ways that many fundamental management and strategy practices will be transformed by the pressures that sustainability issues are already bringing to bear.

This article identifies eight significant ways that current management expectations and practices will be affected by growing societal and economic understanding about sustainability. Among them: how labor productivity can be dramatically increased by sustainably designed workplaces; how companies “bump into” sustainability-related choices, even when they don’t look for them; how a company’s sustainability profile will become a proxy for the organization’s overall management quality; how innovation results are improved by pursuit of sustainability-related outcomes; how sustainability efforts within an organization lead to more productive collaboration across typical organizational silos; and how transparency and trustworthiness will become increasingly consequential to competitive success.