Defining the S-word

If ever there were a word that was used loosely in the business community, it is “sustainability”. This label has been applied to almost any corporate activity that shows sensitivity to human values, from charitable donations to “green” chemistry research.  Traditional environmental health and safety programs are lumped in along with energy efficiency, waste recycling, labor practices, business ethics, and diversity. For this reason, many companies have chosen to avoid the S-word, and use other terms such as “corporate responsibility” and “citizenship.”
Of course, different definitions of sustainability abound. Here’s my preferred definition: “A sustainable enterprise is a company that achieves enduring growth and superior long-term financial performance by addressing the social, economic, and environmental needs of present and future generations of stakeholders.”What’s yours?To go further, I would argue that in practice there are three levels of corporate sustainability:

Passive sustainability – This is an extension of the old compliance mentality. Companies try to respond to stakeholder expectations by adopting “best practices”such as commissioning LEED buildings and purchasing carbon credits. Essentially, this is a way to stay even with competitors and does not employ sustainability as a source of competitive advantage.

Adaptive sustainability – This is a more active approach in which companies try to be alert to changes in the business environment that could represent risks or opportunities. For example, anticipated regulations or projected shortages of critical raw materials might lead a company to redesign its products or manufacturing processes in order to remain cost-competitive. This requires frequent reexamination of sustainability goals and company practices.

Resilience – This is an emerging approach that has been adopted by a few companies such as Dow Chemical Co. and Cisco Systems Inc. Resilience can be defined as “the capacity to survive, adapt and grow in the face of turbulent change.”In a complex and tightly connected global economy, with supply chains extending around the world, it is impossible to predict future changes in technologies, markets, and political conditions. Instead, resilient companies deliberately design their products and supply chain processes to overcome unforeseen disruptions and to rapidly seize opportunities. This strengthens both short-term business continuity and long-term sustainability. Of course, corporate responsibility is an essential component of enterprise resilience.

Which business model best describes your company?

 

About Joseph Fiksel

Dr. Joseph Fiksel is the Executive Director of the Center for Resilience at The Ohio State University and co-founder of the consulting firm Eco-Nomics LLC, an internationally recognized authority on sustainable business practices. His latest book, Design for Environment: A Guide to Sustainable Product Development, was published by McGraw-Hill in 2009.

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16 Comments
  1. Barry Dambach

    August 18, 2010

    Joe,

    I like your definition and also see Sustainability as an unending journey and companies need to understand and internalize the passive and adaptive approaches as they move towards resilience and embed it in the business strategy and processes. It is interesting that as the scope of elements included in Sustainability definitions continues to grow so does the recognition of the importance and impact of EHS in moving towards Sustainability and Resilience.

  2. Adiel Gavish

    August 18, 2010

    The S word to me is an evolution of the term “environmental”, neither of which connote positive value creation. If “environmentalism” meant being “less bad”, and “sustainability” literally means to “sustain”, then we need a term that help people to see the unlimited possibilities in true, holistic, long-term value creation and growth, the same type of growth found in the natural world.

    I would argue that we need to focus on “life”. Although business and the natural world do not share the same goals, they share the same common interest in both adapting, evolving and creating true value that benefits all life and living things.

    Resilience is a big part of that value creation. I think that combined with a mentality of “positive value creation” any company, any enterprise can not only survive changing conditions, but thrive.

    Our outlook has gone from “being less bad” by focusing on compliance to “going green” and “sustainability” in order to ensure business/human growth. It’s time to graduate from this mentality and focus on “value creation” for ALL LIFE on this planet, ensuring that people, planet and profit all learn, grow, adapt and evolve.

  3. Virginia Hoekenga

    August 18, 2010

    I was glad to see Adiel relay some of the thinking that I’ve heard William McDonough offer in speeches he regularly gives that examine what the word “Sustainability” means and our collective business consciousness moving from “less bad” to “sustainable” and now hopefully, beyond to the next horizon. Bill McDonough jokes, “If someone asked you how your marriage was, would you really want the answer to be sustainable?” In light of the Millennium Ecosystem Assessment (http://www.millenniumassessment.org/en/Index.aspx) and other’s research that finds the majority of the world’s ecosystems are in decline or under severe pressure, I’ve always gravitated toward the term “restorative.” Perhaps this is another way of thinking about the “value creation” Adiel is asserting we need to move towards.

  4. Alex Pollock

    August 18, 2010

    Thanks Joseph for this opportunity to reflect upon how far we’ve come since the Bruntland Commission issued their report in the late 1980’s. Your definition of the S-word is right in line with the definition offered in that report. I like it. Over the years I’ve witnessed many corporations rushing from “here” to “there” with some transformational strategy or another. Many of these organizations I fear are following the Jim Collin’s 5 stages to destruction.(See “How the Mighty Fall.”) The “look good” to “do good” ratio has been out of balance for a long time. Art Kleiner suggests that if you really want to know what an organization stands for explore the characteristics and principles of its “Core Group.” ( See “Who Really Counts.”). What links have been established between long term caring for employees and the S-word? I can’t see how you can genuinely care for about global issues until you’ve met the local ones.
    Thanks for being a beacon in this space for so many years Joseph.

  5. Dean Clevett

    August 18, 2010

    Great definition. From my point of view, any definition that doesn’t include the principles of the triple bottom line is nothing more than greenwashing. I’d also suggest that “passive sustainability” is only a more aggressive form of greenwashing. As you’ve observed, it’s nothing more than an extension of the compliance mentality to embrace stakeholder expectations as well as regulatory constraints. In the long run an organization that is “passively sustainable” will not survive and hence cannot truly be considered sustainable.

    • Kria PDX green broker

      August 19, 2010

      Dean and Joseph

      Most builders don’t yet know how to build to LEED standards. I personally don’t consider LEED to be a “passive” method of going green. I think when it comes to building our environment we need to encourage builders that are building to code that go to energy star and the builders that go from building energy star to building LEED. We are seeing this in my market mostly because we made it possible to highlight green build programs for Realtors.

      Some of the barriers are cost. We need to look at that piece as a society especially when it comes to low income housing.

      I would welcome a small house movement. Mcmansions LEED or not are a waste of energy, water and materials

      • Ashish Java

        August 21, 2010

        Hi Kria,

        I dont think Joseph necessarily meant that complying with LEED makes you passively sustainable. I think the thrust of his argument was towards the mindset that is only concerned with keeping up with the latest movement in the industry and policy rather than proactively doing good.

      • Dean Clevett

        August 22, 2010

        Kria.
        I can’t speak for Joseph, but I don’t necessarily consider building to LEED standards to be passive at this point in time. Down the road, it may become a passive sustainability tool. As someone further down observed, sustainability is not a destination but a journey. Stopping on the journey inevitably leads to stagnation and complacency setting in. As stagnation is a form of slow death, it obviously isn’t sustainable. That’s what I consider to be “passive sustainability”, which as I stated in an earlier post, I consider to be green-washing and not true sustainability.
        Your point about moving to smaller houses is a good one. I suggest that you check out the NOW House movement. It’s about retrofitting the large number of post WWII houses to make them much closer to energy self-sufficient. As you have observed, building McMansions to LEED standards doesn’t necessarily make them sustainable. The owners of the McMansions obviously don’t get the point. I can’t fault the builders, as they’re only building what the market demands. At least they’re trying by going to LEED standards.

  6. Jerry White

    August 19, 2010

    I would like to know where we would fit into your definition as we manufacture recycling units to process removal of mercury, phosphors , clean glass, and end caps on the spot. it is a self contained unit that seperate’s and all units can be reused in the manufacture of new lamps
    This machine will process the complete range of discharge lamps from household CFL’s to larger Sodium and Metal halide lamps. It eliminates transport and is totally mobile. As a side note we are having a very difficult time in finding funding or JV partner .
    I would appreciate your comments

  7. kria PDX green broker

    August 19, 2010

    I would not call LEED a “passive” strategy. Most builders are not yet even doing Energy Star standards. I think it is really important that we as a culture encourage the builders to build better and to learn the new building techniques.

    I also believe that we need to stop celebrating the McMansion “green” built or not it~ McMansions are a waste of our resources.

    One thing that greatly encourages builders to go green is having a green MLS (multple listing systems). When I greened our MLS in portland there was a stepping up to the plate that happened and is continuing to happen with builders. Builders that resisted any flavor of “green” were willing to learn the techniques and build to those standards.

  8. I would also echo that I don’t consider LEED to be a “passive” strategy. Despite the short economic pay back periods, environmental professionals still struggle at communicating the value of these projects. Last December I did an EHS Thought Leader interview with an environmental professional that spearheaded one of the most visible LEED project in the northeastern United States. He indicated that one of the biggest challenges was overcoming the perception that it was too expensive to go green. Click on the above link for more details. While this conversation has twisted towards more of a discussion on LEED, I believe it’s really a discussion on what sustainability business model does your company follow. I am intrigue by the term “resilience” and would like to hear the others thoughts on that model.

  9. William D'Alessandro

    August 21, 2010

    There are almost as many models for sustainability as there are corporations. Evidence of this is had simply by reading a hundred sustainability reports.

    Several attempts are underway right now to narrow the meaning down to some common and measurable form, and then to require companies to be accountable for it.

    In an entirely different realm, completely divorced from these other initiatives, the people in the Obama administration have written their own definition:

    “‘Sustainability’ and ‘sustainable’ mean to create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations.”

  10. Verle Hansen

    August 21, 2010

    The possibility that any enterprise can achieve enduring growth and superior long-term financial performance is if the natural, social, and economic systems that sustain it are themselves healthy and functional. Therefore, a sustainable enterprise is one that is aligned with: (1) natural systems that remain whole and healthy enough to perpetually renew and maintain themselves; (2) social systems that provide options and opportunities for all individuals and groups to meet their needs at all levels; and (3) economic systems that equitably and efficiently allocate resources to needs.

  11. Jeff Gerken

    August 21, 2010

    In 2001, when I was part of a team working on the technology plan for my former company, a large electric utility based in central Ohio, we were charged with ensuring that “sustainability” was addressed in that plan. I challenged the team to define sustainability, and got answers ranging from “environmentally sensitive” to “well, you know, SUSTAINABILITY!” In the end, we never came up with a definition that was acceptable to everyone, and so settled for ensuring that a concern for environmental issues was addressed in the plan.
    In the years since, I have thought about that exercise continually, and have decided that I will not be satisfied with any definition that simply provides for continued corporate profits for some short-range period, say ten years, or even fifty years. I think that a truly sustainable enterprise should operate in such a way that they can truly sustain their business FOREVER, or along a path that foreseeably leads to operating FOREVER. (I might accept a thousand years, or perhaps five hundred years, as a definition of FOREVER, but not twenty-five or fifty years.)
    In my field of interest, energy, the continued burning of coal, oil, or even natural gas would not be sustainable, in part because of the environmental effects of continuing production of greenhouse gases, but also because those resources will not be available FOREVER, even as I have defined that term. Nuclear energy could be sustainable, if we use breeder reactors to manufacture new fuel, and if we develop thorium reactors. Renewable energy sources must be a part of the answer, although I do not believe they can ever be the total solution. The third leg of a sustainable energy supply must be a drastic reduction in the amount of energy that we use, i.e., serious conservation.
    Even with those steps, however, I question whether we can operate the earth in a sustainable manner with a human population of 6.5 billion, let alone nine or ten billion.

  12. Georjean L Adams

    August 22, 2010

    I like your concept of resiliency, Joe. I’ve blogged on the subject, too, most recently in response to a post by Joel Makower: http://lcthinking.wordpress.com/2010/07/27/what-do-we-call-it/

    “Sustainability” is too often talked about as an endpoint. I think it’s more about how you do whatever you do and along with a commitment to continually learn and practice life cycle thinking.

  13. Paul O'Connor

    August 24, 2010

    I enjoyed these 15 comments and am amazed by how the ‘S’ word generated such healthy debate. Most interesting was the somewhat widespread agreement that this is an evolving journey for each of us. Regardless of the definition used, what are the essential cultural changes needed for organizations to become more sustainable?

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