New | Corporate sustainability is more than just ticking the regulatory box
Leading firms are redefining their approach to sustainability by placing it at the forefront rather than at the periphery of their strategic thinking
Companies are often accused of striving for profitability at any cost, with little regard for social and environmental considerations. The reality, though, is that forward-looking organisations are already leading the emergence of a new sustainability paradigm. This breaks free from a mindset of having only standalone Corporate Social Responsibility (CSR) efforts to bringing in sustainability-related issues as business opportunities into conversations about mainstream business.
Across the globe, investors and regulators are pushing for increased sustainability-related transparency, such as via mandated reporting. However, a focus on such things alone only drives the perception of sustainability as a burden - as a regulatory box that somehow needs to be ticked. Fortunately, leading companies are redefining their sustainability approach from the boardroom down by placing it at the forefront rather than at the periphery of their strategic thinking, and often finding new business benefits and revenue streams in the process.
When sustainability is well-woven into the business, a company's market position might be strengthened and retention and recruitment of top talent can also become easier. When developing a sustainability-related business initiative, it is therefore crucial to always have at least four audiences in mind: the company's senior decision makers, the customers, the other external stakeholders and the wider employee base.
Microsoft's early history in China in the 1990s and its eventual success illustrate the power of external stakeholders and the importance of engaging with them through an appropriate sustainability strategy.
In its early years, Microsoft struggled in China as it remained somewhat inward focused, not fully appreciating how its operations were perceived by all the stakeholders in the Chinese economy. Microsoft was seen as being arrogant and selfish in its approach and limited spill-overs from its business were perceived by the local players in the economy, giving the government little reason to support Microsoft.
Recognising that their Western "market-driven" approach did not mesh with the Chinese economy and that confrontation had little success in encouraging sales or discouraging piracy of its software, Microsoft managers started investing in local ecosystems and relationships, and in bringing about long-term behavioural change in customers.