How can we get there?
Making the journey to sustainability
In 2010, the challenges of balanced business ecosystems seem far off. Getting there involves a difficult journey, but it is not an impossible one. Four practical, achievable steps will help vanguard companies start this process, highlighting the obstacles that must be overcome and the opportunities that can be seized by businesses, leaders and citizens in the process.
The first step is to firm up the foundation,as the current leading business practices of today become standard business practice and sustainability strategy is integrated into business. This is "relative sustainability," where steps being made are important but still incremental from where we are today. The second step is rebuilding business, in which sustainability is integrated throughout the business, new business models are piloted and demonstrated as being viable. The third step, new value chains, is the beginning of a major shift to new business models, in which sustainability is integrated across value chains and entire chains are moving towards zero net waste. The final step leadsto balanced systems, in which innovation drives sustainable value chains and value is redefined for all stakeholders. This results in a low-carbon system with closed loops and zero waste both along and across value chains, in which sustainable society and sustainable lifestyles are realized.
A picture of this four-step journey emerged from discussions during the Driving Sustainable Consumption roundtable workshops and different World Economic Forum events. The visualization above is explained in more detail in the following pages, with more information on the barriers, enablers and specific strategies to help companies change the way they do business. Also included are four mini case studies to help bring each of the steps to life.
When taken in the context of the rest of the roadmap, these four steps can simplify the journey and help catalyze action through individual companies and along entire value chains.
What it takes
Getting to the summit of sustainable consumption is not a single process, it is many. Nor is getting to the summit outlined above the work of a single company. It will be achieved through the effort, collaboration and innovation of many companies, working with their suppliers, collaborating across value chains and engaging with their customers. Governments must be involved to set the appropriate frameworks and incentives. Society as a whole must be engaged. Some will move quickly, others more slowly. Once the summit is defined, and the intention to reach it is acknowledged, the journey will become easier.
The journey consists of changes on four levels:
- First, a change in business leader mindsets, to support the goal, and to begin to change consumer behaviors and corporate attitudes towards the provision of value.
- Second, organizational change, to embed sustainability into the core of businesses and institutions, so that it becomes a part of the business ways of thinking and working.
- Third, industry-wide change, by promoting collaboration across suppliers, customers, investors and talent pools to build sustainability into extended value chains.
- Fourth, systemic change, involving major public policy changes to shape not just businesses, industries and societies but the global economy and trading system.
While businesses can and do have a major influence on systemic change – demanding a clear and consistent policy framework from governments to allow for long-term investment decisions – the three first levels of change are the starting point for corporate leaders, and they are the starting point here.
What can individual businesses do to build sustainability?
To overcome these obstacles and to unlock these opportunities, organizations need to fundamentally change the way they think and act.
Make the journey towards sustainability as tangible as possible.
Leaders need to sign up to clearly defined targets and performance metrics for measuring their success in achieving sustainability. They need to take collective accountability for these goals. Initial focus should be on gathering momentum and creating positive energy around sustainability by mobilizing action groups to achieve quick wins and celebrating success.
Engage all levels of the company.
Embracing sustainability needs to start at the level of the board, introducing it as a core component of strategy, seen as a critical determinant of future growth and profitability. This requires a compelling and shared vision of what sustainability means for their business, and how it can drive shareholder value and deliver tangible financial benefits.
But once the leadership team of the company is fully committed, sustainability must be embedded throughout the business, through education and alignment of visions of the company's role and future.
Change the business model.
Mainstreaming sustainability into the company will have implications for the customer value proposition and profit model. This requires a cross-functional program with the right people, a robust governance structure and a clear mandate to drive sustainability throughout the organization. Performance should then be evaluated against a set of agreed critical success factors.
Shift values and culture.
Corporate culture and values may need to evolve in order to reflect the objectives of achieving genuine sustainability. Rewards packages and other performance drivers will in most cases need to be updated to incentivize sustainable behaviors. As sustainability will be vital for future growth, activity should focus on driving sustainability innovation by establishing design incubators to test initiatives in a safe environment.
Engage all internal stakeholders.
Managing and implementing change will require internal stakeholder engagement and communications initiatives to build sustainability into the company's DNA and create support and demand for sustainable ways of working. For progress towards absolute sustainability to be self-sustaining rather than managed, all internal stakeholders need to be involved. A sense of ownership of sustainability issues within an organization is directly linked to the understanding of sustainability issues.
Implement sustainable practices across and along value chains.
Once sustainability is embedded in the company itself, the next challenge will be to establish optimal levels of sustainability and remove waste across their value chain, involving suppliers, customers, talent pools and investors in the task. The key will be building collaborative partnerships based on trust and mutually beneficial aims, and establishing standard metrics for measuring sustainability and success. Companies will need to "role model" sustainable behaviors and be seen to lead the way by implementing sustainability initiatives and measures across their value chain. This should include implementing parameters and measures for suppliers, proactively engaging with customers and investors to build their awareness and encourage more sustainable consumption, and attracting and recruiting people from the talent pool who are dedicated to achieving absolute sustainability.
The ideas discussed here can help businesses align their operating models with changes in their customer value propositions and profit models. The framework shows the key components of the operating model, which can be updated to identify specific actions.
Leadership from all stakeholders is required to overcome the challenges, and the business community need not wait to make sustainability a key business imperative and a virtuous source of innovation and value creation. This will require new alliances and partnerships across industry boundaries to engender new competitive advantages.
The journey towards sustainability will not be a smooth path. Still, with prototyping, learning and a collective effort, it can be achieved. Join us to help make it happen.
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