The Mini Cases 5 Companies, 5 Strategies, 5 Transformations...

The Business of
Sustainability
Findings and Insights from the
First Annual Business of Sustainability Survey
and the Global Thought Leaders’ Research Project
In collaboration with
Knowledge Partner
With support from
Initiative Sponsor
SPECIAL REPORT

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Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Survey and Interview Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Consensus: Sustainability Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Sustainability Is Not a “Topic du Jour” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Opinions Differ on Some Aspects of Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Some Companies Are Acting Decisively and Winning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Most Companies Either Are Not Acting or Are Falling Short on Execution . . . . . . . . . . . . . . . .9
Why Decisive—and Effective—Corporate Action Is Lacking . . . . . . . . . . . . . . 10
Three Major Barriers Impede Decisive Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Necessary Capabilities Are in Short Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Looking Ahead: Seizing Opportunities and Mitigating Risks . . . . . . . . . . . . . . 15
Lessons from First-Class Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Peering over the Horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Report Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mini-Cases: 5 Companies, 5 Strategies, 5 Transformations . . . . . . . . . . . . . . . 24
The Sustainability Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Interviewee List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Survey Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Survey Questions and Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Further Reading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
MIT SLOAN MANAGEMENT REVIEW
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Preface
Sustainability is garnering ever-greater public attention and debate. The subject ranks high on
the legislative agendas of most governments; media coverage of the topic has proliferated; and
sustainability issues are of increasing concern to humankind.
However, the business implications of sustainability merit greater scrutiny. Will sustainability change
the competitive landscape and reshape the opportunities and threats that companies face? If so, how?
How worried are executives and other stakeholders about the impact of sustainability efforts on the
corporate bottom line? What, if anything, are companies doing now to capitalize on sustainability-
driven changes? And what strategies are they pursuing to position themselves competitively for the
future?
To begin answering those questions, the MIT Sloan Management Review and knowledge partner
The Boston Consulting Group, with sponsorship support from business analytics provider SAS,
are collaborating on a project called the Sustainability Initiative. As part of that effort, we recently
launched a global survey of more than 1,500 corporate executives and managers about their
perspectives on the intersection of sustainability and business strategy. (We plan to make this an
annual survey.) Prior to the survey, to form hypotheses and shape its questions, we conducted more
than 50 in-depth interviews with a broad mix of global thought leaders. Our interviewees included