The State of Sustainability
Holden, Greg, Research-Technology Management
For the past several years, surveys asking executives about their organizations' sustainability practices and values revealed a focus on brand reputation and outward appearance. Respondents to these surveys frequently commented that implementing sustainability in a holistic way was easier said than done, and often the costs and benefits associated with implementing green initiatives were unclear.
But something has apparently changed. In a late-2011 McKinsey survey, 33 percent of respondents indicated that "lowering operational costs and improving efficiency" was the top reason for pursuing sustainability--a 14 percent increase from the previous year's survey. This made cutting costs and boosting efficiency the number one reason for implementing measures to improve sustainability, above "brand reputation," which held steady from the previous year at 32 percent, as well as "alignment with company mission and values," which rose to 31 percent. Companies are starting to see that true sustainability can bring real value beyond marketing or public relations efforts.
However, surveys reveal that companies often struggle to bridge the gap between the fuzzy rhetoric of sustainability and the concrete realities of implementation. A 2010 study of sustainability theory and practice by Deloitte, which included 48 large companies working to implement sustainability in the United States, revealed that there is often a gap between company aspirations and actions. Deloitte's survey revealed that although organizations tend to embrace sustainability in theory, referencing all three components of the triple bottom line (people, planet, profit) in company mission statements, most focus their actual efforts solely on environmental initiatives--the planet piece--ignoring the economic and social elements (profit and people).
A 2012 survey by the Boston Consulting Group (BCG) and MIT Sloan Management Review supports these findings. The BCG/MIT analysis states that corporate sustainability initiatives often fail to address the tradeoffs between present and future value and rarely look beyond the environmental. The BCG/MIT survey remarked that two-thirds of the 4,700 respondents believed that sustainability was critical for competitiveness in today's economy, but only a quarter of that segment indicated that any competitive advantage had actually been achieved as a result of their organizations' sustainability practices.
Nike: A Sustainable Transformation
Although these surveys suggest that success stories are hard to come by, they also reveal a growing trend toward at least considering triple-bottom-line sustainability. Nike stands out as one such organization. Starting from the top down, Nike has embraced sustainability, engaging in a comprehensive effort to steer the organization's culture in that direction, starting with its supply chain. Stung by reports of exploitative labor practices at its offshore suppliers in the 1990s, Nike has in the past decade systematically reoriented its approach to every element of its business, from its supply chain to its marketing practices.
As might be expected, environmental efforts have attracted the most attention. Nike has built a partnership with Adidas, Puma, H&M, C&A, Li Ning, and G-Star to establish a goal of reaching zero discharge of hazardous chemicals (ZDHC) across the companies' entire supply chains by 2020. This collaboration is seen as a model for other industries, as it becomes more clear that cooperation--with competitors as well as suppliers and customers--will be a vital element in a successful sustainability program.
The environmental strategy represents the standard sustainability effort of most organizations, covering the environmental sphere. But Nike is also running the extra mile, pursuing efforts to ensure sustainability in people and profits, by enforcing labor standards and by developing innovative technologies that promise better performance and offer increased recyclability. …