25 Jul 2011 Back

The New Focal Point of Business Strategy

Corporate sustainability: the new focal point of business strategyPROGRAM NEWS: Never before has corporate sustainability been as important and discussed as it is today. Recently, KPMG and the Economist Intelligence Unit (EIU) published a progress report on this subject, noting that sustainability is now a core consideration for successful businesses around the world, growing stronger every day. The report defines corporate sustainability as “adopting business strategies that meet the needs of [an organization] while sustaining the resources, both human and natural, that will be needed in the future.” In the wake of a global economic downturn, how businesses can encourage corporate sustainability development is being taught everywhere, with executive education classrooms leading the way.

Many business schools have begun increasing their offerings of open programs covering this subject; UNC Kenan-Flagler Business School has just announced a new program called Becoming Green: Effective Sustainability Strategies for You and Your Organization. Some schools offer programs relating to sustainability in specific sectors, such as Henley Business School and Harvard University Graduate School of Design’s joint Global Real Estate Sustainability Program.

IEDP spoke to professors at ESADE teaching the school’s upcoming program, Leading Sustainability Strategies: Embedding Social and Environmental Responsibilities into Your Business. The three-day program will be held in October 2011, in conjunction with Cranfield School of Management, and covers:

• the most important sustainability issues;

• sustainable competitiveness and sustainable innovation;

• governance and the leadership of sustainability; and

• engaging employees in sustainability issues.

“Many executives want to link sustainability to their business models and their overall business strategies,” explained the Program Director, Professor Daniel Arenas, highlighting the importance of this topic in executive education. Indeed, the notion of integrating and linking corporate sustainability to business models, business mindsets and within the core of an organization’s corporate values is the main focus of most programs offered on corporate sustainability. At UNC Kenan-Flagler, strategic thinking about corporate sustainability, rather than just strategic business practices is emphasized. At ESADE an internal shift in attitude is taught by encouraging executives to become “internal change agents” and creating a culture where sustainability matters.

“It is not one more issue for companies to add to a cocktail of strategic planning,” says Arenas. “It is about taking the opportunity of the economic crisis to redefine the overall company strategy, so that it is based on providing goods or services that can (economically) add environmental and/or social value.”

Similar to UNC Kenan-Flagler and ESADE, Berkeley’s Haas School of Business also encourages “intimately” connecting sustainability and responsibility to participants’ corporate brand and strategy in their Corporate Responsibility Leadership program. They use a number of “success stories” to demonstrate this, with speakers from companies such as Wal-Mart and BlueSkye Sustainability Consulting also conducting presentations.

Case discussions are also a key part of the ESADE-Cranfield program where, Arenas explained, cases such as Acciona’s transformation from a construction company to a renewable energy company, or Interface’s and Desso’s incorporation of environmental innovation in their carpet designs may be discussed and analyzed. “Often, we do not realize we can learn many things from sectors that may seem unrelated to our own,” he says.

The other important topics highlighted in corporate sustainability programs are innovation, creativity and competition, which serve as the eventual desired outcomes or goals of incorporating sustainability in business models. The importance of innovation in general and its need to be strategically incorporated in business planning, particularly in today’s post-recession economy, is being stressed by professors at every business school. Now, research is demonstrating that the link between sustainability and innovation may be stronger than we realise. KPMG and EIU’s report stresses that sustainability is being viewed as a source of innovation and new growth, with as much as 44 per cent of executives agreeing so.

At ESADE, Professor Marc Vilanova who teaches the session on sustainable competitiveness and innovation also explained that innovation is “a key area through which sustainability seems to have a significant and positive impact on the company, contributing to [creativity] in products and services, business processes, stakeholder relationships and business models.”

Vilanova recently carried out research exploring the nature of the relationship between corporate social responsibility, sustainability and competitiveness, alongside Arenas who is also the Head of Research of the Institute for Social Innovation at ESADE. “We propose that once [corporate social responsibility and sustainability] has been integrated in business processes, in turn it generates innovative practices, and finally, competitiveness.”

Similarly, at UNC Kenan-Flagler a “whole-systems approach” to participants’ businesses is taught, with the ultimate goal again being the unlocking of innovation and creativity. They propose a triple bottom line: people, planet, and profit.

Undoubtedly the demand for corporate sustainability executive education is there, and more companies than ever before are committing themselves to a sustainable agenda. With the array of research conducted in this domain, business schools have picked up that this is not a passing trend, but perhaps the focal point of business strategy from here on.

Additional reading:

ESADE’s profile on IEDP

Cranfield School of Management’s profile on IEDP

UNC Kenan-Flagler’s profile on IEDP

Berkeley’s Haas School of Business’s profile on IEDP

KPMG and the EIU’s Corporate Sustainability Progress Report

Building a Sustainable Business Culture

Embedded vs Bolt-on Sustainability

The Wasteful Cherry Tree

Harvard and Reading Universities Join Forces

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