PMI San Diego Chapter

Below, I review my understanding of the concept of sustainability, the triple bottom line, drivers of sustainability, engagement of stakeholders in relation to sustainability, and the importance of sustainability programs as part of the strategy of business organizations. My essay here is meant less to persuade you to a particular point-of-view and more to convey to you a sense of my professional focus and understanding to date.

Sustainability is a term that is used broadly in today’s context. The concept of sustainability is in part an outgrowth of the Brundtland Commission definition of sustainable development which describes development as sustainable if it meets the needs of the present while allowing for future generations to meet their needs. Thus, sustainability as a concept has as its underpinning the notions of a shared future, a valuing of intergenerational equity and a focus on needs in the context of ongoing development. Numerous variations on the concept of sustainability have been espoused; but, in this context of sustainability in business strategy, I define sustainability as “the approach to, attainment and maintenance of desirable outcomes into perpetuity with respect to the financial, social and environmental performance of an organization”. This definition acknowledges that different organizations may choose different outcome priorities; that sustainability involves objectives, processes and continuous improvement; and that there is a broader purview than the traditional financial ‘bottom line’, i.e. the triple bottom line concept.

The triple bottom line concept engenders two additional ‘bottom lines’ of environmental and social performance in addition to traditional financial performance in the context of corporate business strategy. Historically, examples abound of failures by organizations to address impacts on the environment and societal stakeholders – such failures have ultimately brought negative impact to the financial bottom line. Such impacts to business organizations manifest as liabilities, lawsuits, impacts on sales revenue; loss of market share and brand equity; poor public relations; negative differentiation; competitive disadvantage and other detrimental effects. It is these latter matters in relation to the triple bottom line that have often historically served as drivers of business organizations toward addressing sustainability or corporate responsibility.
Times have changed, though, and there is now growing evidence that some successful business organizations are proactively adopting an environmental and social perspective that moves beyond the traditional financial bottom line, beyond the standard quarterly report and beyond the strict legal view of increasing shareholder value at expense of other socially-significant objectives – while, ultimately, still maintaining focus on financial goals and objectives of the organization. As business organizations face an increasingly complex stakeholder environment – an environment presenting many risks and opportunities – there is growing recognition that taking proactive leadership in the area of sustainability can lead to financial rewards. This is what is meant by ‘walking the talk’ and ‘doing well by doing good’.

Corporations such as Proctor & Gamble, Fed Ex, UPS; Bank of America, IBM, Wal-Mart; Herman Miller, Interface, GE; Timberland, Starbucks, Dell; Coca Cola, Nestle` and many other industry leaders are now proactively developing and pursuing sustainability and corporate social responsibility programs that are changing the faces of industries – addressing environmental and social performance while also contributing to the growth of the financial bottom line. Those organizations that incorporate sustainability into their business strategy through understanding and taking action on their potential and actual environmental and social impacts; those who strategize with respect to their stakeholder environment and engage their key stakeholders as partners; those that find opportunities for shared value, accept accountability, provide transparency and learn to set their objectives into organized sustainability programs, are creating a better quality of life for all stakeholders into the future.

The means by which this achievement is being attained include addressing energy efficiency, adopting renewable energy sourcing; decreasing and/or offsetting carbon/GHG emissions; conserving water, decreasing toxic and hazardous materials inputs and outputs; engaging employees and management in transformation; promoting health and safety; ‘greening’ supply chains, maintaining working conditions according to global standards; eliminating and reducing waste, redesigning and changing processes, products and services; building new governance structures; setting and sharing objectives and related rewards; and keeping the corporate eye on the ball via sustainability reporting programs that provide the quantitative basis for managing ongoing transformation. Sustainability as an applied concept is now changing global society, in part through its adoption by business leaders and incorporation into strategy.