Any discussion of sustainability in the workplace usually starts in the same predictable place: Add a recycling bin to your employee cafeteria. Incorporate natural light in your warehouse instead of energy-sucking fixtures. Convert to fuel-efficient company cars. Go paperless. All worthy efforts, to be sure. But is “sustainability” really the target businesses should be aiming for? Or is there some higher goal that today’s corporations are called to achieve?
“More is expected of business today. It’s no longer just about producing products and services of good quality that are profitable for investors in the business,” says Laszlo, professor of organizational behavior at the Weatherhead School of Management at Case Western Reserve University and faculty executive director of the school’s Fowler Center for Business as an Agent of World Benefit. “Customers expect products to be sourced responsibly, manufactured responsibly and able to be used and disposed of responsibly. That’s part of their buying criteria now.”
It’s Laszlo’s aim to reframe the discussion of sustainability, clarifying a term that’s already burdened by a hazy definition to begin with. One of the earliest and oft-cited definitions of sustainability goes back to the United Nations’ 1987 “Report of the World Commission on Environment and Development: Our Common Future,” in which it described sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”
“It’s not a very business-oriented definition. … If the needs you are meeting today are highly unsatisfactory … then why would you want to meet those needs and, even worse, pass on the ability to future generations to meet those needs?” says Laszlo, who is also the author of Flourishing Enterprise: The New Spirit of Business. “That definition never really talked about what is the goal behind sustainability. Is it just to sustain where we are? Or is it about something much more desirable?”
Other definitions of sustainability vary widely. Merriam-Webster takes a decidedly simple approach: Of, relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged. The U.S. Environmental Protection Agency offers this definition: Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. To pursue sustainability is to create and maintain the conditions under which humans and nature can exist in productive harmony to support present and future generations. Meanwhile, MIT Sloan Management Review offers this assessment: At root it’s the idea that systems—including natural and human ones—need to be regenerative and balanced in order to last. We believe that that means all kinds of systems: economic, environmental, societal, and personal.
In 2015, the United Nations offered a fresh perspective on the definition of sustainability in its report, “Transforming our World: The 2030 Agenda for Sustainable Development.” The organization outlined 17 Sustainable Development Goals (SDGs) it will lead the world in achieving by 2030. They’re ambitious goals, with objectives like ending poverty and hunger in the world, ensuring access to clean water and sanitation, protecting life on land and under water, taking action against climate change and ensuring responsible consumption and production.
Getting down to business
So what’s the role of business in working toward such lofty goals?“Our theory is that the world is going to get better because of business,” says Roberta Baskin, executive director of a two-year-old initiative called AIM2Flourish. “It’s not governments or NGOs that are going to accomplish this ambitious program.”
That’s the philosophy that drives AIM2Flourish, which defines itself as “the world’s first global initiative steering future business leaders towards achieving the UN Sustainable Development Goals and a flourishing world for all.” It’s an initiative of the Weatherhead School of Management’s Fowler Center, and has created a curriculum for business schools around the world built around the role of business in achieving the UN SDGs. Students are challenged to find and research for-profit companies creating innovations that contribute to achievement of one or more of the SDGs. The students interview a business leader in each company and write a narrative about that initiative. AIM2Flourish acts as a platform for the exchange of these stories, as well as videos and resources for business schools incorporating this program into their classroom instruction.
The 1,600 members on AIM2Flourish include more than 200 professors, 22 of which have made the AIM2Flourish program part of their regular curriculum. Members of the site also include more than 1,200 students and about 200 other interested individuals, located in 56 countries as far-flung as the U.S. and U.A.E. to Croatia and Cambodia. The site has published 225 business innovation stories that are directly linked to one of the 17 UN SDGs and were written by participating students, such as:
- Indonesia’s ENVIPLAST, which has manufactured 300 tons of plastic bags made from cassava that the company claims will biodegrade into compost within three to six months.
- Conflict Kitchen of Pittsburgh, Pa., which serves food from countries with which the United States is in conflict, including menus rooted in the culinary traditions of Iran, Afganistan, Cuba, North Korea and Venezuela.
- The Guelph, Ont.-based Lucky Iron Fish, which seeks to serve the 3.5 billion people globally who suffer from iron deficiencies by selling a small fish-shaped chunk of iron that can be used in cooking.
- Aloterra, an Ohio-based agribusiness that grows 4,000 acres of noninvasive perennial miscanthus grasses that can be used in the production of biodegradable plates and food containers.
In June, the most promising of these innovators will be honored with AIM2Flourish’s 17 inaugural Flourish Prizes — one that corresponds to each of the SDGs — at the Fourth Global Forum for Business as an Agent of World Benefit, an event that assembles educators, business executives and entrepreneurs every three years to tackle strategies that go beyond sustainability and toward flourishing. This year, 400 individuals are expected from 30-plus countries to convene under the theme of “Discovering Flourishing Enterprise: The Key to Great Performance.”“In a lot of these cases you see right now, the big companies are not doing as much as the small and medium-sized companies,” says Michele Hunt, author of DreamMakers: Putting Vision and Values to Work, who is also a member of the advisory board of the Fowler Center and a juror for the upcoming Flourish Prizes. “They are putting people to work, helping people build small businesses and having a win-win-win effect. The businesses win. The communities win. The environment wins. And we are accelerating our journey toward the global goals.”Recent research demonstrates that many in the global business community agree with the notion that business must be a primary driver of progress toward meeting sustainability goals. In the 2016 UN Global Compact-Accenture Strategy CEO Study, researchers surveyed more than 1,000 CEOs from 100-plus countries across more than 25 industries. Nearly 90 percent say commitment to sustainability is translating into real impact in their industry, and nearly 60 percent report that their company is able to accurately quantify the business value of their sustainability initiatives, up from 38 percent in 2013. Eighty-seven percent believe the SDGs provide an opportunity to rethink approaches to sustainable value creation, and nearly half agree that business will be the single most important actor in delivering on the SDGs.
In 2013, the research firm Sustainalytics created the Global Compact 100, a stock index of companies selected for their performance in environmental, social and governance issues that also show consistent profitability. Within the first year of the index, the companies demonstrated a total investment return of 21.8 percent, surpassing the S&P global mid- and large-cap benchmark over the same period.Consumers are on board too: a 2015 global survey of nearly 10,000 consumers indicated that 91 percent expect companies to do more than just make a profit, but also act in a socially and environmentally responsible manner. Seven out of 10 say they are willing to pay more for products made in such a manner, and eight out of 10 says they would buy a product from an unknown brand if it had strong social or environmental commitments. But they’re also skeptical; about half don’t believe companies are acting responsibly unless they hear communications from the business about it.
Business can’t do it alone, cautions Hunt, but “without business, it could not be done in time. Without business, we can’t get to the scale that’s necessary to fulfill the goals by 2030. I believe in collaboration, deep and wide, and business is central.”
Sustainability goes back to school
AIM2Flourish’s focus on higher education as a driving force in achieving the SDGs is intentional: “If you want to change how business operates, you have to change the way it’s taught,” says Baskin.
That’s part of the mandate of the UN’s PRME Initiative (Principles for Responsible Management Education), a partnership between the UN and 650 academic institutions from 85 countries that works to incorporate principles of global social responsibility into management education.PRME was launched in 2007 by UN Secretary-General Ban Ki-moon with a mission to inspire and champion responsible management education, research and thought leadership globally. Working through the Six Principles, PRME engages business schools to ensure they provide future business leaders with the skills needed to balance economic and sustainability goals, while drawing attention to the SDGs and aligning academic institutions with the work of the UN Global Compact.
"The Sustainable Development Goals (SDGs) provide a blueprint for a more sustainable future and will require commitment from a wide variety of stakeholders in order to be successful,” says Jonas Haertle, who leads the PRME Initiative. “As academic institutions developing the world's future business leaders, business and management schools must raise awareness and foster action around the SDGs to ensure companies in the private sector behave more responsibly and in line with the values of the global community.”
The origin of AIM2Flourish began with a hypothetical: What if there were a Nobel Prize for business? Seventy attendees in a small group discussion at the 2014 Third Global Forum on Business as an Agent for World Benefit entertained that question. The discussion was moderated by David Cooperrider, professor of organizational behavior at Weatherhead, faculty founder of the Fowler Center and originator of the theory of Appreciative Inquiry (AI). AI is a method of promoting change in an organization that emphasizes what is already working in that organization and creating strategies to build on those successes, rather than the traditional approach of focusing on problems and trying to find solutions. Over the course of the session, a prototype was created for AIM2Flourish and the accompanying curriculum for business schools.
“No one else was doing this,” says Claire Sommer, who was a business reporter there to cover the Third Global Forum and is now AIM2Flourish’s communications director. “There are business-for-good websites, people nibbling at the edge of comprehensively collecting and sharing and making useful the good things happening in business, [but] this is something that can inspire students to say, ‘I can do this, now that I know it’s real.’”
Sommer says professors were hungry for business and management curricula that could educate their students about the sustainable development challenge that will face the business leaders of tomorrow.
“We are still churning out by and large MBAs that are taught in the old business extractive model. AIM2Flourish is meant to be an accelerator,” says Sommer. “We are putting society back in the middle of the circle and [showing] how business will serve society and the community and in return generate value for employees, owners, shareholders and stakeholders.”
Stories of innovative companies like those on AIM2Flourish’s website may shine the light on the potential that business has to achieve the UN’s monumental goals, but can they really play a role in getting today’s corporations to go beyond the typical sustainability mindset? Or is this an exercise destined to live solely within the halls of the world’s business schools?
“Historically the way people grow has been through stories instead of facts and figures,” says Hunt. “This goes beyond just writing about a good story. It’s actually learning a different way of doing business, and it’s changing the definition of success, which gives hope for a future for all of us. … When people catch this vision, we hope to inspire them to go back and find ways they can make money by doing well.”
Sommer cites examples of one student who was offered a job as a result of her interview with a business leader for an AIM2Flourish assignment, and another who was asked to serve on the company’s advisory board. Students have gone on to start social enterprises of their own and also report a change in their mindset toward their future careers in business.
“That’s actually our product,” Sommer says. “[Students say], ‘this experience changed how I feel about business and myself as a leader who can do well in the world for my family and community.’ … The data says that millennials now creeping toward middle management are rejecting companies that don’t have purpose in their DNA. … in the race for talent, if you want the best people to work for you, this is the kind of workplace you need to offer them.”Recent research conducted at the Macquarie University Graduate School of Management in Sydney, Australia, that surveyed 1,800 business students from across the world. More than three-fourths of respondents felt that business students should study business ethics and environmental sustainability and agreed that their schools should teach more about the SDGs and the role of business in achieving them. In addition, 92 percent of students responded that it was important to them to work for an employer that is socially and environmentally responsible, with 16 percent responding that this criteria was absolutely essential.
"We are already seeing major interest in the values of sustainability and ethics from today's business school students. [This] survey indicates a large majority wish to increase their academic engagement around corporate responsibility practices, while many prefer to work for companies that behave more responsibly,” says Haertle. “Business schools that integrate the SDGs are more likely to attract this new generation of sustainability-focused graduates."
“It shows a clear demand from the bottom up,” says Sommer. “Students want to learn more about sustainability and ethics and want to know how they can be an agent for change.”
Big goals, small steps
Ask Laszlo today to define sustainability and he’ll describe what he considers to be a flourishing enterprise: “It’s a business that creates prosperity for all, not just profit for the top one percent, and does it in a way that contributes to a healthy, regenerative natural environment and improves human well-being,” he says. “If business is to be an agent of world benefit, we need that radical repositioning of its role. Otherwise business will continue finding new ways to make a profit by selling products and services that serve immediate needs but at the collective level contribute to an increasingly unsustainable world, contributing to declining quality of life for future generations.”
The UN Global Compact provides businesses with specific guidance about what they can do to contribute to goals of corporate sustainability — things like developing a human rights policy, committing to responsible climate adaptation, joining the Sustainable Stock Exchanges Initiative or educating investors on the value of sustainability.
The typical adages about incorporating a sustainability mindset into a business are still good advice, says Laszlo and others — find ways to conserve energy, cut waste and reduce harm to the environment. But successful companies of the future must respond to a higher calling.
The most important change a business can make, Laszlo says, is to focus its powers of innovation on a new, revised goal.
“It’s like how you go about innovating anything … innovating your business model, refreshing your product design, improving a manufacturing or distribution process. You can ask the same questions, ‘How do you do that?’” Laszlo says. “If you look at these questions through a sustainable business lens, you see the same problems … but you also see opportunities for innovation that you don’t otherwise see.”