Forum for the Future in the UK has released a report titled “Leader Business Strategies” which explain how sustainability fits into business strategy.
When I started this blog, my aim was to understand, look at examples and provide a convincing case of how sustainability is a business strategy. This reports really takes the lead in providing a framework to take this forward.
I have suggested before that we can look at sustainability as a risk reduction strategy (cost cutting, bottom line focus) or a growth opportunity strategy (new markets, top line focus).
David Bent, a Principal Sustainability Advisor for the Forum of the Future and the report’s author suggest that the shift has happened from risk to opportunity. In fact, David is an e-mail subscriber of this blog.
He writes, “In the past companies have asked us “What should our sustainability strategy be for our business?” Now they’re asking “What should our business strategy be, in the light of sustainability?”
The report summary (Download – PDF) explains why business needs to look at sustainability and framing the issue in a demand-supply equation. It also explains the eco-system issues as capital depletion and how that can detrimental to future business. More importantly, with change in consumer behaviours, and new opportunities for competitors it is becoming imperitive for a new operational model which incorporates the sustainability aspects.
The report suggests a practical model revolving around technologies, markets and contexts or what can be called the larger business eco-system. And an approach to implement based on planning, managing and experimenting.
In an interview David suggests the growing opportunities for SMEs to use sustainability as a business strategy and he sees a good future for companies which take sustainability seriously.
“I feel sympathy with the fact that SMEs don’t have lots of time and resources,” says Bent. “But there are smaller businesses that are experimenting and making it work. Cafédirect, which started off with three people and one bag of coffee, has transformed the UK market tremendously. What we’re trying to get across is that there needn’t be a trade-off between profit and being sustainable. Finding the right way is the task of strategic management.”
Bent has faith in the UK’s entrepreneurs, those who “create the disruptive change”, to spot the market gaps and make them their own. “They become leaders because they can spot opportunities,” reasons Bent. “What will guide them through this growing terrain is if they ask the question: ‘How can we build up our capabilities so that we are better positioned than our competitors to deal with problems like climate change, energy efficiency and social need and make money out of it?'”
The last question that David asks is the crux of the issue. How do we see these problems as opportunities and solve them?. History has provided proof that people who can solve important problems and create a good business model can profit immensely from it.