Business transformation towards sustainability

Abstract

Sustainability is becoming increasingly important in today’s corporate world and can contribute to the current and future success of organizations. Integrating ecological, social, and economic objectives into corporate decisions is a key success factor for transformation towards sustainability. As sustainability is not achieved by single actions, but rather is an on-going process, decision-makers must have means to analyze the current state of an organization. For this, we first illustrate how companies can structure the field of action for the transformation towards sustainability. Furthermore, we propose a decision model to determine how sustainability actions should be implemented in accordance with the paradigm of value-based management, i.e., considering their economic effects. We illustrate the application of the approach using the example of a German medium-sized company. Executive summary: Recently, organizations have recognized sustainability as an emerging mega-trend and as an increasingly important strategic goal. Its integration into the business model can be a key success factor, but also a challenge that requires a systematic approach. In order to comprehensively steer corporate sustainability, with the aim of minimizing negative externalities while maximizing positive effects, companies first need to structure their processes to achieve transparency on where sustainability actions can be incorporated. By furthermore considering the three dimensions of sustainability, possible starting points for sustainability actions can be identified. These two perspectives are complemented by adapting the basic idea of stages of development and maturity to sustainability context, as a way to capture the progress of sustainability actions within each corporate activity. The resulting “Sustainability Maturity Cube” serves as a blueprint, i.e., a first generic approach, of how an organization can structure the field of action for the transformation towards sustainability. Considering the paradigm of value-based management in business context, economic effects of the transformation towards sustainability have to be regarded. We therefore, also propose a decision model, which allows aligning ecological, social and economic objectives in order to draw economically useful conclusions by determining the optimal increase of the sustainability maturity level. To evaluate whether our approach proves useful for subject matter experts who are involved in sustainability decisions, we provide a first example of how a specific company can transform towards sustainability.