MBA Dissertation Summary Barriers and Enablers to Environmental Sustainability Implementation in UK Business The purpose of the dissertation was to answer the following research question: What are the barriers and enablers to implementing environmental sustainability for UK businesses? The author considers this question to have been answered through a combination of a comprehensive literature review and thirteen semi-structured interviews consisting of an elite sample of participants. This document summarises the findings, and accordingly makes recommendations for management practice. Introduction Increasing economic activity is putting greater pressure on the environment and its natural resources. According to the Global Footprint Network (2007), the world is in ecological overshoot, utilising more resources and emitting more waste than the earth can regenerate in a year. WWF (2010) states that demand in terms of natural resources has doubled since 1966, with humanity using the equivalent of 1.5 planets to support its activities. If we continue to live beyond the earth s limits, by 2030 we will need the equivalent of two planets productive capacity to meet our annual demands. A key challenge facing any company wanting to compete successfully over the longer term is not whether it should incorporate sustainability into its strategic thinking, but when and how (Kemp et al., 2004). Businesses are being called upon by a whole range of stakeholders, to take responsibility and apply sustainability principles to their operations (Quinn & Dalton, 2009). Moreover, businesses will experience pressure to take on substantive responsibilities for sustainable ecological, economic and social development than in the past (Keijzers, 2002). Companies which both manage and mitigate their exposure to climate-change risks whilst seeking new opportunities for profit will generate competitive advantage over rivals (Wellington & Lash, 2007). Businesses can contribute to ecological sustainability through developing ecologically sustainable competitive strategies and also by influencing affluent populations in industrialised countries so as to reduce their environmental impacts (Shrivastava, 1995). The creation of environmentally conscious organisations depends on creating organisational elements, namely structures, processes and capabilities, which enable a company to proceed towards sustainability (Post & Altma, 1994). With these views in mind, the next section provides a summary of the findings relating to the research question and begins with an explanation of the author s assumptions. Sarah Docherty Page 1 of 6
Findings Assumptions The author has assumed that an enabler can also be a barrier if it exhibits itself in reverse or does not take place in the manner required for it to be an enabler. For example, leadership and ownership of sustainability at the highest level of an organisation was found by James et al. (1999) and most interview participants to be a key enabler. The opposite perspective is that a lack of this type of leadership is a significant barrier to progress. The author presumes this assumption can be made for barriers, i.e. the impediment to progress caused by competing priorities shareholders short-term financial demands and longer-term environmental investments (Bielak et al., 2007) would actually help to drive progress if shareholder and environmental priorities were supportive and focused on longer-term benefits. A number of enablers and barriers have been identified, as detailed below, in terms of recommendations for businesses; enablers are highlighted first, followed by barriers. Notably, details concerning what businesses can do to work towards overcoming such obstacles are also discussed. Enablers Organisations should ensure that enablers are in place and are monitored continuously so that they do not become barriers themselves. The more enablers in place, the more effective an organisation will be at implementing sustainability. Recommendations for business are listed in order of significance; however, any one factor is not sufficient by itself as environmental challenges require businesses to manage complex organisational change and think about all their activities in a holistic, systems framework (Post & Altma, 1994). Effective leadership from the top is critical. Leaders should openly support environmental improvement initiatives and provide clear, visible and consistent leadership; however, top-down leadership is not effective on its own, and change should also be driven from lower levels of the organisation. Sustainability should be integrated into the mindset of the organisation if it is not already part of the culture; this can be achieved through ensuring that the enablers are in place so that sustainable behaviour becomes the norm. However, the strategy and management system employed should blend with the existing organisational culture. Sustainability should be integrated and aligned into the core business strategy, with a comprehensive approach applied throughout the business. Moreover, sustainability factors need to be integrated into mainstream management frameworks, process and procedures, with focus on the environmental concerns most applicable to the organisation. Sarah Docherty Page 2 of 6
Develop an individual reward system which incentivises corporate sustainable practices and thus helps to integrate sustainability into everyday decision-making. However, care should be taken when developing metrics so that they are not open to manipulation. Implement organisational performance management systems to measure and track sustainability progress. Tools such as the SBSC help to achieve business objectives including those related to sustainability. However, care should be ensured when developing metrics as misaligned performance metrics across the business and supply chain can present issues. Management accounting and reporting for sustainability can help facilitate the embedding process. Finding ways to benchmark against competitors and peers in order to obtain detailed insight into environmental performance is also important. Work with employees to set clear strategic goals and objectives and communicate them at all levels of the business. Measure performance and communicate progress against these goals. Sustainability goals must also be fully considered in terms of execution to ensure their realisation. Engage, manage and collaborate with a wide range of stakeholders, and be open to ideas from many different sources and ensure that those with the power to actually make a difference are engaged. Engage and empower employees at all levels through input in terms of strategy/ initiative development, feedback and also by encouraging ideas and innovations. Focusing more on engaging younger employees may make efforts more successful. Ensure that middle management are engaged, and that their performance objectives do not conflict with sustainability goals. Middle management can have a pivotal role in improving environmental performance, but if not managed properly, they could be a potential barrier. Fully integrate suppliers into environmental policies and strategies through managing, influencing, educating and being open to their ideas; however, establishing how far up and down the supply chain an organisation's responsibility goes can be a challenge. Engage and collaborate externally with NGOs, policymakers, industry bodies, government and customers with the aim of further facilitating the survival of change efforts in the long-term and reducing complexity and uncertainty surrounding sustainability issues. Staff throughout the organisation should be educated in order to raise awareness concerning sustainability issues and connect with people s values. Improving the competence and knowledge of staff enables them to make decisions aligned to achieving sustainability goals. Moreover, the knowledge and understanding of the issues is particularly important at a senior level to ensure that they are equipped to lead; otherwise, inadequate knowledge at the senior level is a major barrier. Sarah Docherty Page 3 of 6
Use common business terminology and language considered relevant and understood by those with whom you are trying to engage, and frame investments and initiatives in the same way as any other strategic threat or opportunity. Communication surrounding environmentally significant issues and progress preferably those demonstrating board support should be consistent, tailored, accessible, innovative and frequent. Appoint environmental champions to help drive and embed change, and ensure they are enabled through training and management support. Either invest in or adapt existing, organisational capability to implement strategy supportive systems and processes, and allow people to have the time to focus on sustainability goals. Importantly, this will help to eliminate any gaps between what the organisation sets out to do and what it actually achieves. Barriers The author suggests that, in order to implement environmental sustainability effectively, organisations should be working towards transforming the barriers into enablers. A couple of the barriers established are recognised as being in the direct control of the business. Ensure that there is commitment, and that sustainability is viewed as a strategic priority. Sustainability issues and impacts need to be understood at the highest level and throughout the organisation. Major investment decisions should consider benefits and return on investment over longer-term horizons. To overcome resistance to behavioural change, ensure that systems and processes supporting the strategy including benefits and incentives are in place. The majority of barriers identified are, to a certain extent, those factors considered to be outside of businesses direct control, it could be argued that business has a responsibility to influence change for the benefit of both business and the environment. The most significant barrier to sustainability is the current macro-economic paradigm which does not value the environment or ecosystems. In order to help realise a shift towards a more ecologically sensitive paradigm, businesses should be at the forefront of the reform agenda to reshape markets, regulation and investor interests; this will help ensure sustainability is viewed as an asset. Accordingly, businesses should also take into account eco-system services in their cost assessments. Business should influence consumption through working with external organisations, such as government and NGOs, to educate consumers regarding the impact of their habits. Educating consumers may, in turn, help to drive political and business leadership on the issue of consumption. Sarah Docherty Page 4 of 6
To help overcome uncertainty, businesses should take the lead on issues, and collaborate with stakeholders for the purpose of sharing knowledge and information. Do not hold off initiatives in an uncertain economic climate, but instead get ahead of the game and fully integrate sustainability so that it becomes part of the culture and the mindset of how the business operates. Businesses should work with the investment community with the aim of reshaping investor interests so that sustainability is valued and included in investment community decisions as this community is critical to raising the profile of sustainability issues. Closing remarks The expected focus on change management which is required for any strategic implementation was prevalent in this research; however, the current macro-economic paradigm that does not value the environment, increasing consumption and specific areas of uncertainly associated with sustainability appears to give an added challenge. In order to implement and embed environmental sustainability, organisations should focus on taking proactive action to transform barriers into enablers. They should also ensure that, once in place, the enablers are revisited regularly so that they do not become barriers themselves. Ultimately, business has a key role to play in this area, but no one group of organisations can make change towards sustainability on their own; it involves concerted effort from all stakeholders. A copy of the full version of this dissertation is available by contacting the author via e-mail: docherty.sarah@gmail.com Sarah Docherty Page 5 of 6
Dissertation summary references Bielak, D., Bonini, S.M. & Oppenheim, J.M., 2007. CEOs on strategy and social issues. McKinsey Quarterly. Global Footprint Network, 2007. Ecological Footprint accounting: Building a Winning Hand. James, P., Ghobadian, A., Viney, H. & Liu, J., 1999. Addressing the divergence between environmental strategy formulation and implementation. pp.page: 338-348. Keijzers, G., 2002. The transition to the sustainable enterprise. Journal of Cleaner Production, Volume 10(Number 4), pp.pp. 349-359 (11). Kemp, V., Stark, A. & Tantram, J., 2004. To Whose Profit? (ii): Evolution: Building Sustainable Corporate Strategy. Post, J.E. & Altma, B.W., 1994. Managing the Environmental Change Process: Barriers and Opportunities. Journal of Organizational Change Management, Volume: 7, Issue: 4, Page: 64-81. Quinn, L. & Dalton, M., 2009. Leading for sustainability: implementing the tasks of leadership. Corporate Governance, pp.volume: 9, Issue: 1, Page: 21-38. Shrivastava, P., 1995. The role of corporations in achieving ecological sustainability. Academy of Management Review, 20(4), pp.936-60. Wellington, F. & Lash, J., 2007. Competitive Advantage on a Warming Planet. Harvard Business Review, pp.96-102. WWF, 2010. Living Planet Report 2010: Biodiversity, bio capacity and development. Sarah Docherty Page 6 of 6