Individual companies can achieve a contribution to the sustainable development of society through implementation of corporate sustainability strategies into the overall corporate strategy (Baumgartner & Ebner, 2010; Vermeulen & Witjes, 2016). Corporate sustainability (CS) as an integrated part of business strategies and processes is of increasing interest; and it has to be seen as a source of success and profitability. Nowadays it is essential for companies to increase social and environmental performance. A holistic perspective of corporate sustainability is needed to make real progress towards corporate performance.
Several frameworks have been developed to operationalise, quantify, measure and foster sustainability strategies. One of such frameworks is, for example, a framework by Baumgartner and Ebner (2010): they propose typology consisting of introverted strategy (risk mitigation), extroverted strategy (legitimization), conservative strategy (efficiency) and visionary strategy (holistic). The maturity levels of some of the sustainability aspects has been the basis of this typology and it allows understanding the development process and carrying out the appropriate sustainability strategy for the given corporation (Baumgartner & Ebner, 2010).
With multiple strategies having been proposed to implement corporate sustainability supported by the use of instruments (e.g. indicators, management systems, reporting schemes, stakeholder dialogue, balanced scorecard (BSC) and business models), both a proactive and retrospective company approach is needed for a successful corporate contribution to the sustainable development of society (Witjes et al., 2016). Retrospective analysis of CS implementation enables an understanding of the upward dynamic in transformative learning cycles in practice (Vermeulen & Witjes, 2016).
Previously named instruments strongly focus on physical dynamics in companies and assume the effects from social intervention without thorough checks. However, researchers show that considerations of social dynamics and systemic perspective have to be more integrated to achieve faster application of more balanced and ‘inclusive’ CS, that also actually include effective measures on ethical and social issues in all levels of organization (Vermeulen & Witjes, 2016).
Past research was also often focused on large companies. Concerning corporate strategies further studies related to SMEs are important, as they are already seen as important contributors to sustainable development; however, the implementation and even awareness of sustainability management tools are under-researched (Witjes et al., 2016; Johnson, 2013).
With successful CS implementation leading to improve the overall performance of the company (Eccles et al., 2013; Karapatskie and Darnall, 2013), numerous scientific studies have focused on financial performance based on CS strategies. Figge and Hahn (2013) criticise the suitability of the green business case. They state that “corporate environmental strategies need to aim at the creation of environmental value alongside economic value rather than the creation of economic value through environmental management” (Figge & Hahn, 2012, p.92). Another reason for green-washing as mentioned by Baumgartner and Ebner (2010) could be the lack of knowledge by corporations how they can integrate the sustainability issues in their business routines and strategies.
Topic of high interest is strategy making or strategy formation. For example, one question discussed is if planned or emergent sustainability strategies are more successful. Neugebauer, Figge and Hahn (2014) argue that formation is dependent on problem-specific factors: salient and non-wicked problems would demand planned strategy making while non-salient and wicked problems an emergent one.
To foster CS implementation stakeholder oriented approaches are discussed, e.g. crowdsourcing and outsourcing. Examples showed progress to improve corporate sustainability (strategies) through cooperation with stakeholders. Human resources are seen as highly important factors to support CS strategy (Hörisch, Johnson & Schaltegger, 2015; Hörisch, Freeman & Schaltegger, 2014).
Very recent study by Engert and Baumgartner (2016) in automotive industry case study based research was concentrated on successful implementation of corporate strategy. The six success factors identified for bridging the gap between formulation and implementation of sustainability strategy are organizational structure, organizational culture, leadership, management control, employee motivation and qualification, and communication. Hence, the research confirmed the relevance of the multiple success factors identified in previous studies, but additionally it highlighted the internal and external communication as a new important factor for successful implementation of sustainability strategy.
Future research is needed to identify drivers and barriers to address and integrate environmental and social practices into corporate strategies. Studies which concentrated on this topic showed inconclusive results. Schaltegger, Hansen and Lüdeke-Freund (2016) argue that more research is needed to see if the current business models can be adapted, or there is need for completely new business models to create positive external effects for the natural environment and society or reduce negative effects thus creating the change in industries, organizations and society towards sustainable development. Conditions and success factors have to be found to foster CS strategies and their implementation for all type of companies.
For more information - This theme will support the following tracks at the upcoming conference:
Track 5a. Corporate Sustainability Management
(strategies, business models and entrepreneurship)
Baumgartner, R.J., Ebner, D. (2010). Corporate sustainability strategies: Sustainability profiles and maturity levels. Sustainable Development 18(2): 76–89. Doi:10.1002/sd
Engert, S., Baumgartner, R.J. (2016). Corporate sustainability strategy – bridging the gap between formulation and implementation. Journal of Cleaner Production, 113, p822-834. Doi:10.1016/j.jclepro.2015.11.094
Figge, F., Hahn, T. (2012). Is green and profitable sustainable? Assessing the trade-off between economic and environmental aspects. International Journal of Production Economics, 140(1), p. 92-102. Doi:10.1016/j.ijpe.2012.02.001
Hörisch, J., Johnson, M.P., Schaltegger, S. (2015). Implementation of sustainability management and company size: A knowledge-based view. Business Strategy and the Environment, 24, p.765-779. Doi:10.1002/bse.1884
Hörisch, J., Freeman, R.E., Schaltegger, S. (2014). Applying stakeholder theory in sustainability management. Links, similarities, dissimilarities, and a conceptual framework. Organization and Environment, 27(4). Doi:10.1177/1086026614535786
Johnson, M.P. (2013). Sustainability management and small and medium-sized enterprises: Managers’ awareness and implementation of innovative tools. Corporate Social Responsibility and Environmental Management, 22(5). DOI:10.1002/csr.1343
Neugebauer, F., Figge, F., Hahn, T. (2014). Planned or emergent strategy making? Exploring the formation of corporate sustainability strategies. Business Strategy and the Environment. Doi:10.1002/bse.1875
Schaltegger, S., Hansen, E.G., Lüdeke-Freund, F. (2016). Business models for sustainability: Origins, present research, and future avenues. Organization & Environment, 29(1), p3-10. DOI: 10.1177/1086026615599806
Vermeulen, W.J.V., Witjes, S. (2016). On addressing the dual and embedded nature of business and the route towards Corporate Sustainability. Journal of Cleaner Production, 112, p2822-2832. DOI: 10.1016/j.jclepro.2015.09.132
Witjes, S., Vermeulen, W.J.V., Cramer, J.M., 2016. Exploring corporate sustainability integration into business activities. Experiences from 18 small and medium sized enterprises in the Netherlands. Journal of Cleaner Production (in press) doi:10.1016/j.jclepro.2016.02.027