To understand the importance of sustainability, you only have to spend a short period of time in one of China’s major cities where you see firsthand the challenges faced in developing urban systems where balance in economic development, society, and the environment is required.
These systems are growing at speeds never seen before, and are unlikely to abate anytime in the next 35 years as we move towards 7+ billion urban citizens. They are the point where the impact of corporations and individual decision-making is most real, decisions that can add to the challenges being created, or are a positive force that supports the business models for the solutions needed.
In this context, multinational companies operating in China can quickly find themselves in trouble when it comes to implementing global sustainable practices into their local business models because the context of the challenges are very different. The issues that are driven by the global organization may be intangible to their stakeholders here, while the issues that are tangible to stakeholders here may go unnoticed or unsupported by global teams.
Many of these multinational companies or corporations that have been struggling to prioritize or adapt existing sustainability and CSR practices into the local markets, one of the first steps forward may actually start with a step backwards. To step away from the accepted definition of sustainability, and to create a market specific definition that will engage stakeholders, internal and external, into action.
While the go-to definition may be from an environmental viewpoint, tangible definitions should be developed to make it easier for companies to pinpoint areas where improvements can be made at the local level. Improvements that when rolled-up, can be seen at aggregate as having achieved global goals.
With the process of creating working definition being so important, not just to national but international wide company communication, and enabling companies to communicate and implement sustainability into their practices, we would like to offer our insights into how common definitions can be modified to help firm create the strategies and engagements necessary to drive a meaningful programming at the local level.
As a starting point, we would like to offer the following as definitions for common broad categories of sustainability:
- Environmental sustainability – A state in which the demands placed on the environment can be met without reducing its capacity to allow all people to live well, both now and in the future. Issues of importance include: water management and pollution, air pollution, food waste, energy production and consumption, global warming
- Social sustainability – The ability of a community to develop processes and structures which not only meet the needs of its current members but also support the ability of future generations to maintain healthy communities. Issues of importance include: community health, safety and security, labor and working conditions, cultural heritage, social equity, human rights
- Economic sustainability – The use of various strategies for employing existing resources optimally so that that a responsible and beneficial balance can be achieved over the longer term. Issues of importance include: equitable resource allocation, minimal waste, steady economic growth, long term inclusive economic development plan, sustainable corporate business models
More narrowly, we can discuss sustainability in two aspects: social and technical. The social side has had considerably less attention in public and includes aspects such as creating a community of collaboration and giving, creating a healthy workspace, and staff engagement programs. On the technical side, environmental and economic sustainability can come into play, on a large scale in manufacturing and supply chains, and also on a small scale in offices, and day to day operations.
But how do companies transfer this theory into their business? And how can they communicate well to staff the operations that address both company growth and sustainable ideals? Here we outline an example identified through interviews with high level decision makers and managers in the field.
Sustainability in Practice
Sustainability is something that companies, especially Chinese companies are not typically interested in. They don’t believe it provides a monetary return, and thus do not prioritize it. Within a business context, economic sustainability involves using the assorted assets of the company efficiently to allow it to continue functioning profitability over time. Making sustainability a core pillar of your business and sustainability strategy, as well as engaging staff, are key ways to do achieve this.
Integrating sustainability into business is not an easy task but an automobile company achieved this by developing four sustainability pillars into their business model: safety, quality, green, and smart. These pillars encourage safety and quality of the product, environmental enforcements and innovations, and the development of smart technology. This way, sustainability practices are vital to all stages of the product lifecycle integrated into the design, manufacturing and business operations.
“Sustainability is far beyond community service, it’s a part of our strategy. In China, we started from traditional CSR like community and charity part. We want to promote sustainability because it is a core part of our strategy as a corporate approach. Sustainability is (at the) core of our growth strategy in China because we believe sustainability will be key issue in development of Chinese market. Our business model, products managers and operators can do their jobs more economically and sustainably.”
Frankly speaking, implementing sustainability into business is having clearly defined definitions and objectives of how sustainability ties back into business operations. Staff education and creating a healthy work space are also crucial, and drastically improve company morale and staff motivation. No company is perfect, but many can improve by a simple shift in prioritization. Ideally, multinational companies and corporations, as well as local businesses, should want to and successfully be able to implement sustainability practices in all three of these definitions. While that hasn’t been the case, there is hope. It is helpful for the company to clearly define the strategy and goals. Furthermore, while being transparent about sustainability goals and objectives, the company should understand that each local market will be different, and should allow bottom up collaboration and communication.
The challenge for many businesses is to quantify the positive impacts of sustainability, or determine how implementing sustainability measures will create revenue. While staff education and sustainable implementations may have costs up front, a well-executed strategy can provide myriad long-term benefits through increased revenue, reduced energy expenses and waste materials, an increase employee productivity, and the list goes on.
This post was written by Rachel Sorenson, William Morris and Rich Brubaker.