Sustainability

Sustainability

Introduction

The classic definition of sustainability, as “meeting the needs of the present without compromising the ability of future generations to meet their own needs,” remains as relevant today as when it was first articulated in 1987 by the World Commission on Environment and Development. After that the phrase “the triple bottom line” was first coined in 1994 by John Elkington, the founder of a British consultancy called SustainAbility. His argument was that companies should consist of three different bottom lines. The triple bottom line (TBL) thus consists of three Ps: profit, people and planet. It aims to measure the financial, social and environmental performance of the corporation over a period of time. Only a company that produces a TBL is taking account of the full cost involved in doing business. (The triple bottom line – Economist, 2009).

The topic focuses more on the applicability of Sustainability and how the focus is shifting towards the triple bottom line. The triple bottom line has evolved with time and rather than being a choice it’s become more of a necessity to be incorporated in businesses. It is the way to move forward for businesses and it is imperative for businesses to implement sustainable strategies as it drives them more towards innovation.

The adjustment of modern marketing approach response to sustainability issues across the 3 P’s

As it was already stated, sustainability became one of the major concerns of the society. Although there have already been previous “waves” of sustainable production, in modern-day world, with its’ over-population in less developed countries and over-consumption in the more-developed ones, production with decreased influence on the environment is not a privilege anymore (Iansiti & Levien, 2004). It is a necessity. Already in the 20th century countries began introducing eco-friendly legislations, and currently there are various international organizations working on the global sustainability issues, as well as meetings on the highest international governmental levels. And now this global movement towards ecological safety is as strong as it has never been before (Girotra & Netessine, 2013) Both big companies and consumers understand the harmful influence of human activity on the planet and its’ significant consequences. Still, there is one “but” – while understanding the consequences and hazards, the majority of population does not want to significantly decrease the needs and desires. It is a fact that the modern society is a consumerist, which means that “consumption transformed from a means of meeting material needs to a method of creating a personal identity” (Hamilton, 2010, p. 571). With the growing concerns about the environment and one’s influence on the world, the buying behaviors and perceptions of consumers change. Therefore, in order to remain popular companies have to change their images and marketing strategies.

Currently people are more interested in products that are not very harmful for the environment: local foods, electric cars, fair-trade goods etc. Companies, who do not follow the new rules of respecting the nature or treating people well get negative responses from people. For example, several clothes chains were shown to abuse labor (including child labor) in Asian countries, which led to a significant negative response in the society. Therefore, currently, in order to maintain profits companies have to create a positive image.

If some time ago product quality or quality-price adequacy were main identification of a company’s image, nowadays product marketing should be more complex. A company has to show that its’ production does not harm ecology; that employees work in proper conditions; that the company is overall a good example of responsible business. These elements of company image may include industry developments (safe technologies), CSR programs, local production and local materials, products that become more eco-friendly (for example, electric cars vs gas cars), etc. Therefore, in order to adjust to the new requirements of the society, companies can choose various ways – either transform the whole institution and its’ operations, or introduce some minor changes. Either way, the main task still remains the same – to persuade consumers that the company does its’ business responsibly.

Innovation is one of the core elements of the shift towards sustainable business and industrial development. One can talk about technological (new mechanisms and tools) and non-technological innovations (new forms of businesses, alternative spheres), both of which are important (Mariadoss, Tansuhaj & Mouri, 2011). With the growing concerns about human impact on the planet and both governments and industries ready to invest in new technologies, now is the best time for introduction of new inventions.

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The shift towards sustainable businesses has stimulated all the big companies to introduce Corporate Social Responsibility programs, which projects are proudly presented to public and are used as part of the company’s marketing strategy. The two main issues that companies are addressing in their CR programs are problems in the society (which is People of the 3 Ps) and environmental issues (Planet). The corporate social responsibility programs that usually involve insignificant amounts (in terms of international corporations) are used to present the company as a society-friendly and sustainable one, as there are still issues in the measurement and control of 3Ps (Tullberg, 2012). This way seems to be one of the least financially-burdening, as it requires no changes in the company operations and technologies, but still creates a positive image of the financial entity.

New sustainable companies and successful transitions to sustainability

Philips company, which is more than 100 years old, is one of a companies that have managed to successfully introduce sustainability as one of the key marketing strategies. Since 2007 ‘Health and Well-being’ became the company’s new strategic positioning, and in 3 years sustainability issue became an integral element of the company’s management agenda (Seebode, Jeanrenaud & Bessant, 2012). Although these significant changes have happened recently, the company paid significant attention to social (People) and environmental (Planet) issues since 1970s. this company was an active participant of numerous meetings and conferences on sustainability issues, as well as introduced some practical implementation of this philosophy. For example, in 2003 Philips introduced a sustainable supply chain programme (Seebode, Jeanrenaud & Bessant, 2012, p. 200). This smooth transition to sustainable management has allowed Philips to blend traditional quality with new requirements of the market and consumers, thus keeping company’s profits high.

Along with the old companies that are shifting towards more responsible production, numerous new businesses have appeared, which have the ideas of eco-friendly entrepreneurship in mind from the very beginning. Thus, a new term “ecopreneurs” has appeared (Dixon & Clifford, 2007). Although such businesses commonly begin without major concerns about their financial success (thus ignoring the Profit component of the 3Ps), many of them develop into successful businesses. For example, Dixon & Clifford (2007) overview Green-Works, a UK-based organization that can be qualified as ecopreneurship. The values, which led to the company’s creation, have in fact stimulated its’ success. Although the company was established as a not-for-profit organization, it has become very popular among UK businesses, as it allows them to conduct CSR activities in a comfortable way. Green-Works has shown how non-technical innovation can create a successful company, which has no competition.

While talking about ecopreneurship one should mention local small businesses, which got new life with the growth of sustainability concerns. Farmers’ Markets, local retailers and productions are gaining popularity. As people become more interested in where their goods come from, local producers can provide the answers easier.

Conclusion

The relationship between businesses and sustainability remains complex, although it is slowly changes. It is clear that both companies and consumers have already realized the drastic effect of human activity on the planet. Overpopulation, consumerism, massive human industrial activity – these are the elements that created the dangerous situation of today. Therefore, many businesses have already started a shift towards sustainable work and 3Ps become integral elements of business management. These changes are stimulated by a number of factors: new legislations; changes in the values and beliefs of consumers; and, of course, personal beliefs of company CEOs and managements. This paper has touched upon the issue of marketing in the society concerned with sustainability issues. Many of the companies created over the past decade were even established with the eco-friendly management in mind. Examples described above show that it is possible to balance the 3 Ps and keep a company successful.

References

Dixon, S. E., & Clifford, A. (2007). Ecopreneurship–a new approach to managing the triple bottom line. Journal of Organizational Change Management, 20(3), 326-345.

Girotra, K., & Netessine, S. (2013). OM Forum-Business Model Innovation for Sustainability. Manufacturing & Service Operations Management, 15(4), 537-544.

Hamilton, C. (2010). Consumerism, self-creation and prospects for a new ecological consciousness. Journal of Cleaner Production, 18(6), 571-575.

Iansiti, M., & Levien, R. (2004). The keystone advantage: what the new dynamics of business ecosystems mean for strategy, innovation, and sustainability. Harvard Business Press.

Mariadoss, B. J., Tansuhaj, P. S., & Mouri, N. (2011). Marketing capabilities and innovation-based strategies for environmental sustainability: An exploratory investigation of B2B firms. Industrial Marketing Management, 40(8), 1305-1318.

Seebode, D., Jeanrenaud, S., & Bessant, J. (2012). Managing innovation for sustainability. R&D Management, 42(3), 195-206.

Tullberg, J. (2012). Triple bottom line–a vaulting ambition?. Business Ethics: A European Review, 21(3), 310-324.

 


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