Aileen Ionescu-Somers

Moving Business/Industry Towards Sustainable Consumption:: The Role of NGOs

The negative environmental impact of current consumption patterns is increasing and becoming more evident. Household/consumer behavior plays a significant role in shaping these patterns. A growing number of non-governmental organizations (NGOs) are focusing on this issue. The paper1 examines how NGOs could play an important role as partners to business/industry in promoting sustainable consumption. It exhibits a number of mini case studies on innovative partnerships for product development, labeling, green purchasing, etc. Two essential factors for success have been identified: (1) Consumers need to feel empowered to make a difference through their behavior. (2) They should also be able to improve their quality of life. Furthermore, direct consumer outreach and partnerships with retailers are recommended as effective means of changing consumption patterns.

The economic foundations of corporate sustainability

Purpose – The purpose of this paper is to fill the void of empirical cross‐industry research in the area of corporate sustainability management and its business case.Design/methodology/approach – Nine industries (oil and gas, utility, aviation, automotive, chemical, pharmaceutical, technology, financial services and food and beverage) are compared in terms of their environmental and social issues, the pressure they face from their stakeholders, and the resulting business case for corporate sustainability. For this approach, a mixed methods design was employed featuring semi‐structured interviews with managers (sustainability experts, business managers from various functions) and external stakeholders); and self‐completion questionnaires (also targeting sustainability experts and business managers) to collect complementary quantitative data. It was possible to draw upon more than 400 interviews and 1,100 questionnaires.Findings – It was ascertained that the business case is clearly sector‐specific and diff...

Managing external pressures through corporate diplomacy

Todays corporations face many demands from a plethora of different stakeholders, which are often incongruous. While shareholders demand a decent return on their investment, employees demand safe and well-paid jobs, communities stress upon their tax revenues and public pressure groups call for more social and environmental responsibility. Corporations thus require a great deal of corporate diplomacy to prioritise and – where necessary and possible – reconcile these different demands. This paper describes a framework for managerial/corporate attitudes and external pressure levels. Four case studies illustrate varying attitudes towards corporate diplomacy determine the outcome of controversies over genetically modified food products.

Corporate Sustainability Management

Conceptually, managers must build the most robust business case possible for sustainability, but the use to which the business logic is put in devising strategy around sustainability and integrating that strategy into overall business strategy brings its own challenges. Successful roll out of sustainability concepts within organizations means integration of sustainability into the mainstream of strategic planning and decision-making processes within the company: Aligning an organization behind the business case for sustainability means aligning with the business purpose of the company. (BCS40 — Senior sus-tainability officer)

The Economic Relevance of Sustainability Issues

The primary and secondary activities of companies can be linked to social or environmental externalities. Externalities are either positive or negative impacts on any entity not involved in a given economic transaction. They are non-market forces and occur when decisions cause costs or benefits to third party stakeholders, often, though not always, through use of a public good.1 Moreover, participants in the transaction do not bear its full costs or indeed reap all of its benefits.

Industry and Competitive Analysis

Competition drives the very need for a company to be strategic. As Kenichi Ohmae, Japanese business writer and McKinsey consultant once pointed out: Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as effectively as possible, a sustainable edge over its competitors. (Ohmae, 1983) One of the original meanings of the word ‘strategy’ was ‘to create an advantage’ — usually military — which implied the existence of competition. Our study is concerned with questions related to if, why and how F&B companies integrate social and environmental programmes or actions into business strategy in order to create a sustainable com?parative business advantage.

The Value of Value Drivers

At a panel discussion organized in 2002 by Arthur D. Little, food industry executives were crystal clear about the food industry mandate to primarily improve performance to benefit shareholders and the challenge that integrating social and environmental issues into business strategy brings in this context: Food companies cannot afford to lose sight of the fact that their primary duty is to shareholders. Whatever the demands of consumers and other stakeholders, companies must ensure that corporate responsibility policies do not undermine shareholder value. Markets focus on short-term profit, while sustainability policies tend to involve a longer-term return on investment. While private companies may have more freedom to focus on the future, shareholder owned businesses must be aware of the impact of their policies on profits. (Arthur D. Little, 2002)

The Pressure of Stakeholders

Although the notion of companies serving broader interests than those of stockholders or shareholders has been around since the 1930s (Coase, 1937), the term ‘stakeholder’ first formally appeared with reference to business in a 1963 internal memorandum at the Stanford Research Institute. Researchers at the Institute postulated that instead of an exclusive focus on shareholders, corporations were also responsible for a wider range of entities or interest groups ‘without whose support the corporation would cease to exist’ (Freeman, 1998, p. 602). Society can call into question the right of companies’ legitimacy to exist, that is; their ‘licence to operate’, should they not wield their power responsibly. If society grants legitimacy — and, hence, power — to business, what society giveth, society can equally take away…