Sustainability and Business Strategy in Emerging Markets

SustainAbility, the organization, along with the International Finance Corporation (IFC), has come out with a “case study + sustainability strategy building steps” report called Market Movers: Lessons from a Frontier of Innovation, where they analyzed in detail 4 companies in the emerging markets of China, India, Brazil and Sri Lanka and how their sustainability focus has influenced their business success.

The report goes on to draw some lessons from their experiences and to make recommendations as to how other emerging-market businesses might create value from sustainability. The report identifies a number of ‘ingredients of success’ – factors that contributed to the strong results in all four case studies and helped them overcome some of the constraints that many emerging-economy companies face. The five ingredients are:

Leadership: the role of the chief executive or chairman in pushing through a strategy based on sustainability.

Integration:
the embedding of sustainability elements in corporate strategies from the very beginning.

Innovation: using sustainability as a source of innovation.

Differentiation: having the courage to be different.

Quality of relationships:
business benefits from strong relationships with stakeholders – suppliers, customers, employees.

The reports using a nice little matrix which provides sustainability parameters like environmental performance, social and governance performance and the business benefits of these startegies. As the case studies show, each company has used a different mix of sustainability parameters for generating business value.

A very interesting read. However, it is important to remember the following advice from the authors.

While we recognise that any measure of the value added either to their bottom line or to society by businesses’ sustainability strategies is necessarily imprecise, it is none the less real for that. In all our cases there is a close correlation between sustainability and business success, even if there is no irrefutable evidence of causation between the two. The entrepreneurs who built up these companies invariably attest to it.

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One thought on “Sustainability and Business Strategy in Emerging Markets

  1. Any business serious about improving its sustainability would value from reading and digesting this information.

    There has been a lot written about organisational sustainability. It has been said that a sustainable organisation is one that behaves in a sustainable manner, whilst focussing on achieving its business goals and outcomes.

    A business must be able to establish sound policies and practices. These must then be delivered in a manner that meets best practice standards and ethical requirements. Legislative and other legal requirements and public expectations must also be met. If you can do this then you are well on the way.

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