Section 5.1: The corporate sustainability journey

Corporate sustainability has shifted from reactionary responses of the mid-1960s to the incorporation of sustainability principles as part of business strategy in the mid-2000s.

As firms move from unsustainable business models towards incorporating sustainability as part of their strategic business framework, they can be positioned along a 5 stage sustainability continuum conceptualized by Bob Willard. Explore the stages of this continuum via the tabs below.

Stage 1: Pre-compliance 
The firm considers no further obligation to its stakeholders, beyond profits. It attempts to cut corners, not get caught if it breaks the law, and seeks exploitative practices that circumvent the system. It ignores notions of sustainability and actively opposes related regulations. Most firms rapidly move onto stage 2 in-order to diversify their markets and avoid fines, prosecution and public disrepute.

Stage 2: Compliance
Firms fulfill their obligations and liabilities in accordance with all relevant laws and regulations (labor, environmental, health and safety). They comply reactively with any legal obligations, and adhere to them well. Safer, healthier and respectful workplace conditions are resultant of meeting these obligations. Higher order environmental/social actions are still regarded as additional costs; sustainability/environmental objectives are achieved through process or end of pipe retrofits; with corporate social responsibility (CSR) not practiced in any form.

Doppelt and Senge et al.

A Stage 1 firm’s actions are unsustainable and often illegal. The actions of a Stage 2 firm are legal but they are still unsustainable. Firms in these stages, adhere to the linear “take, make and waste” economic model and do not actively pursue the principles of a sustainability within their operational processes.

Stage 3: Transcending Compliance
Firms voluntarily move to Stage 3 when they realize that it pays to be environmentally proactive. It saves on expenses through proactive and increased operational eco-efficiencies, cleaner processes and improved waste management.

It recognizes the value of community investment and social marketing in minimizing risks/ uncertainty, improving reputation and maximizing shareholder value. But, sustainability initiatives are sidelined in specialized departments, and considered as optional “green-housekeeping”. Firms at Stage 3 are still unsustainable – but far more eco-efficient and effective than Stage 2 ones.

Stage 4: Integrated Sustainability Strategy
Transformation of a firm’s business model from a “take, make and dispose” design into a sustainable cyclic “borrow-use and return” design is achieved by Stage 4. It re-brands itself as a business that is committed to sustainability (corporate values) and continuously improves how sustainability principles are integrated into its business strategies.

Stage 4 firms capture added value from sustainability initiatives that benefit all stakeholders, and sees environmental and sustainability costs/risks as potential investments and additional opportunities for growth. They source and make cleaner products, apply eco-effectiveness, foster life-cycle stewardship and reap the benefits of its sustainability initiatives.

Stage 5: Passionate and Purpose Driven Corporate Culture
In Stage 5, firms are driven by passion, with value based commitments to improving society, the environment and the firm itself.  The company chooses to adopt and adhere to sustainability goals and principles because it is the right thing to do. At this stage, the firm’s values mirror that its founder/CEO’s values and those values are transferred down the value change to effect change in their partners.

Lovins, Lovins and Hawken; Doppelt; Senge et al.; and Anderson

Firms achieve integrated sustainability at Stage 4 and 5. Sustainability based thinking, perspectives, goals and behaviors are integrated into the daily operations and inculcated as part of the culture of the firm.

Though similar in many aspects, the motivations of Stage 4 firms differ from those in Stage 5.  Stage 4 firms “do the right things” so that they achieve sustainability and become successful businesses.  Stage 5 firms are successful businesses that continue to actively pursue sustainability on order to continue to “do the right things”.Firms achieve integrated sustainability at Stage 4 and 5. Sustainability based thinking, perspectives, goals and behaviors are integrated into the daily operations and inculcated as part of the culture of the firm.

Regardless of where companies and businesses currently place within this continuum, gradual progression along the stages present them with added opportunities to increase value for their stakeholders and enhance their competitive advantage.

%d bloggers like this: