How to Build a Sustainable Business
According to a study by Robert G. Eccles, Kathleen Miller Perkins and George Serafeim, comparing “sustainable” companies with “traditional” ones, building a sustainable company characterized by a culture of trust, innovation and change capabilities, is a two-stage process.
Stage One: Reframing your company’s identity
Reframing a company’s identity requires:
- Leadership commitment, i.e. making sustainability considerations part of the leadership’s commitment to the company. According to the study:
- 95% of the leaders of sustainable companies embed sustainability concerns into basic business decisions, compared to only 30% of traditional companies’ leaders
- 83% of sustainable company leaders show a personal commitment to sustainability Tweet This! (vs. 50% of leaders at traditional companies)
- External engagement: sustainable companies take seriously into account the expectations and concerns of key external stakeholders. According to the study:
- 72% of sustainable companies encourage employees to learn from sources external to the company, while only 20% of traditional companies do so
- 90% of sustainable companies send clear and consistent messages to their stakeholders (vs. 30% of traditional companies)
Stage Two: Codifying your company’s new identity
The company’s new identity will become a reality through:
- Employee engagement: the company should personally engage employees in its sustainability initiatives. According to the study:
- Sustainable companies are far more likely to have an employee engagement strategy in place (72% compared to 30% of traditional companies)
- Mechanisms for execution: the company should create mechanisms for executing sustainability strategies. According to the study:
- 83% of sustainable companies had company-wide management systems for implementing sustainability strategies, compared to only 20% of traditional companies
- 66% of sustainable companies connected sustainability to performance evaluation and compensation (vs. 10% of traditional companies)
References:
This article was compiled using a study by Robert G. Eccles, Kathleen Miller Perkins and George Serafeim (MIT Sloan Management Review). For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the study’s meaning. If you would like to quote these written sources from the original please revert to the link below: