Making the Business Case for Sustainable
Development
S
M Mehedi Hasan
Introduction
Sustainable
development is about a different pathway for the future. It involves an
integration of environmental, social and economic considerations into the work
of all human endeavors. An essential part of sustainable development is
questioning the status quo, innovation and new forms of institutions and
governance to guide the process of change. A business case provides the
arguments and rationale to bring about change for SD in any organization.
This
paper lays out the fundamentals of a business case, its role, elements and
advantages of preparing it. It also explores the reasons of resistance to
sustainability and shows the path to overcome them. Finally, the paper attempts
to identify and evaluate success factors in preparing a business case.
Sustainable
development has increasingly engaged the public and organizations in thoughts
and arguments about how to provide for a sustainable future and more equity.
There is a basis of SD law worldwide. Media reporting has multiplied and
sustainability questions are of growing concern among even commonplace people
around the globe. A business case for sustainability merits better study to change the purpose, culture and strategies
and address ‘opportunities and threats’ (Berns et al. 2009, 4) that a corporation,
an NGO, an SME or a government agency may
face ; and develop policies to
place the organization
competitively in future.
What is sustainable development?
The
concept of sustainability and sustainable development became prominent with the
publication of ‘Our Common Future’ (Brundtland Report) in 1987 which
presented an argument for economic development occurring along with protection
of environment (Dresdner 2002, 1).
Sustainable development is defined as the development that ‘meets the needs
of the present without compromising the ability of future generations to meet
their needs’ (UNCED 1987:8). It is a procedure
of change in which the use of means, the way of investments, the mechanical
progress, and institutional modification are made ‘consistent with future as
well as present needs’considered (UNCED 1987: 30).
Sustainable development refers to ‘the
will to follow a rational approach to economic policies; to show respect for
future generations by integrating concern for environmental protection into
decision-making; and progressively to evolve towards the full participation of
all concerned actors’ (Barboza2000 ,71). There has been an appreciation of three traits of
sustainable development namely economic, environmental and social ( Reed 1997;
cited in Harris 2000, 5).
Economic
sustainability is central to business success because
in the long run a firm cannot continue
if expenses surpass revenue, social
sustainability expresses the altruistic perspective of business and relates
to matters of poverty and income inequality and environmental sustainability reflects the effect of business on the
value and amount of natural resources such as environmental concerns, waste management,
renewable energy production as well as better pollution and emissions management etc.(
Haugh&Talwar 2010, 385) .
Sustainable
development is further theorized as ‘a state of dynamic equilibrium between
social demand for a preferred development path and the supply of environmental
and economic goods and services to meet this demand’ (Briassoulis 2001, 410).
The notion has been presented in the following figure:
(Source:
H. Briassoulis 2001, 410)
What is a business case?
A business case is commonly a standard argument which is
proposed to induce a decision maker to accept a certain type of action. It is a method of offering a reasonable and strong explanation for an
important creativity or change.
Sometimes, the documented argument itself is mentioned as a
business case and as a regulation. Most commonly, a business case needs to
articulate resilient way to remarkable profit on investment .It discovers all
realistic methodologies to a particular problem and facilitates business owners
to choose the alternative that best works for the business (http://whatis.techtarget.com
,accessed 23/04/2015).
For instance, when a real estate company finds that
mismanagement of waste creates inefficiency of construction works causing
environmental hazards, the CEO is advised to accommodate recycling of
construction wastes into project design.
As a result, accommodating recycling into project design, waste and
inefficiency has been reduced significantly.
Recycling waste and reuse of on-site materials also generate additional
revenues.
The ‘business case’ for sustainability advances the broad
economic reasoning for business sustainability and refers to a ‘strategic and
profit-driven corporate response to environmental and social issues’ (Salzmann
et al. 2005, 27). Avery & Bergsteiner (2010:1) argue for leadership towards
a business case for sustainability based on a ‘Honeybee Approach” which
integrates stakeholders, believes in social and participatory approach to
leadership, centers on future ,
distributes its outcomes reliably among stakeholders , upkeeps and improves its
societies, efforts to looks after the planet,
safeguards ‘image and brand through ethical behavior’.
The role / purpose of a
business case
The
role of a ‘business case’ for sustainability is to bring about change in the
existing system of an organization and to improve strategies to be more
resource efficient, more equitable and more futuristic. The business case
demonstrates how investing more in learning policies develop strategies for the
future and reinforces the organization’s ‘strong culture and reputation’ (Avery
&Bergsteiner 2010, 1).
The
BC plays a vital role in making the case to meet the interests of all
stakeholders and bring them on board with sustainability including workforces,
consumers, sellers, executives, board members, government, supporters, the
media, controllers, alliance partners, regulatory bodies, integrity agencies
and future generations. Above all, a business case for sustainability welcomes
clarifications and innovations letting commonplace folks to create surprising
effects (Avery &Bergsteiner 2010, 1).
Any
policy, strategy or project can reach goals and bring profits when they are
well planned and designed accurately from the beginning and the connected risks
are taken into consideration. A business case for sustainability offers policy
makers, shareholders and the community with a managing tool for ‘evidence based
and transparent decision making and a framework for the delivery, management and performance monitoring of the
resultant scheme’ (White 2013, p.8).
The aspects of a business case/
process
First
of all, a comprehensive interpretation of sustainability for the organizational
context is important to recognize the basic ‘sustainability drivers, risks and
opportunities’ (www.cgma.org, 2013 ,
Accessed 21/04/2015)
of the organization. Considering the environmental issues along the whole value
chain, a business case discovers new means by improving activities from the
lessons learned from people.
Further,
one of the best ways to develop the business is with input from staff and
stakeholders to build trusts and partnerships. It encourages collaboration,
deliver harmonization; and distribute funds to risk reduction events and
adaptation.
In addition , it is required to
involve customers, service providers, suppliers concerned employees and let
them raise voices in the debates and seminars, and allow them to contribute
while developing strategies to address all of their requirements (www.cgma.org/.../ten-key-elements-to-sustainable-business-practices-in-...2013, Accessed 21/04/2015).
Further,
it is imperative to create sense of responsibility and ownership among the
community people and give chances to improve connections with, and interactions
between societies for holistic management, risk reduction and adaptation. The
links will be articulated in different actions sketched in the operative
outcomes. It will strengthen capacity among the people and improve community
engagement.
A business case for sustainability supports strategies and summarizes
sustainable practices, settlements of the victims due to imminent crisis and
develops organization’s strategic
approach and indicates the relationship between sustainability and
attainment and presents data showing progressive effects that can increase
outcomes making it stress-free to integrate sustainability in the upcoming days (www.gogreenplus.org; accessed 13/04/ 2015).
The diagram below shows aspects of a business case of specific importance and expresses that there are resilient interdependencies among these aspects. This interdependence signifies that a business case needs to be developed as a complete, and there can be iterative adjustment to the business case.
Some
illustrations of these interdependencies are:
- Reduction of known risks is probable to change the scope or requirements statement;
- Data issues may signify a risk, or need extended governance measures; and
- The necessities need to link with the calculated costs and benefits.
(Source:
These elements of a business case and
their interdependencies shown in the diagram describes the reasons for approval
the business, gives a specification what is required to reach the goals,
provides support of the proposal such as that risks are addressed and ,finally,
gives confidence in implementation (www.anao.gov.au/...projectplanning/3_Accessed28/04/2015)
Advantages
of a business case
A
business case increases quality of the organization currently and in the
forthcoming years showing massive progress in staff management ,
operational efficiency, cost minimization risk reduction (Grayson
and Howard 2011,).According to Paul Herman( 2009),
organizations with strong business case and management practices incline to drive more outcomes.
Further, a business case for sustainability
ensures more operational funds, better Supply Chain Management, improves
capacity to build operative supply chain connections and gears up reputation
(Stanberg Consulting 2009, 10). It also appreciates movements in community to design for the longer period as
per new policies, increases public outlooks, improves scientific information,
absorbs influences of social forces and enhances capability to meet
expectations of stakeholders ( Stanberg Consulting 2009, 10).
According to Willard ( 2008; cited in Branagan
et al. 2010,vi) , a business case
for sustainability ensures the benefits
as below;
Increases revenues: Willard (2002) describes
the prospect for
businesses to increase their
revenues by distinguishing their
goods to appeal
‘greenconsumers’.A consumer with passion for sustainability, being
informed with eco-products, can turn towards the brand with sustainability practices and thus the main
streams of revenue increase. Creating a
strong local brand can also help to secure future revenues.
Eco-efficiencies: Though eco- materials are
costlier than other materials
and cannot be beneficial
to firms as per
expected outcomes, benefits
can be seen
resulting from ‘waste
management, transportation
and administrative expenses’( Brenagan et al. 2010,37). Willard (2002,cited in Brenagan et al. 2010,37) compares
wastes with idle
corporate assets and explains numerous eco-efficiency processes.
It includes decreasing, recycling and reusing wastes; and minimizing
transport administrative expenditures. Sustainability practitioners need to
conscious of such possible savings in these areas.
Reduces risk, costs and regulatory threats: The firms that
develop the practical skills
to work with
the demands eco-products and deal with stronglawmaking can increase a competitive advantage in future by escaping fines and other regulatory
threats. The internal rules introduced about sustainability in an organization
can inspire the practices of all businesses and get them more protected from
the harmful effects of regulatory changes.
Increases employee productivity:
Several employees who feel proud in their work love the challenges
presented by new sustainability practices. They can help raise a sense of pride
in their coworkers.The sustainability practitioners must beconscious about this
business benefit from better quality of the eco- projects.
Reduces attrition: If employees engage with the firm and take pride in their work, it will build long term connections with
the firm. It is important in moving towards sustainability because they will be
unwilling to move somewhere else. It is
proven that workers who continue with the company long enough are assets for
the firm.
Resistance to sustainability
Interested
parties time and again resist change towards sustainability causing concern for
those wishing to integrate sustainability. There are numerous reasons, both
internal and external, that turn as resistances to sustainability.
Among the internal reasons human laziness, conservatism,
threat of losing power of the decision makers, staffs and other concerned
bodies are of great significance because people naturally do not alter their
common practices. While low rate of ‘eco-literacy’ (Branagan et al. 2010, ix)
and high price of eco-products play as external reasons for resistance.
Overcoming resistance
Now
we are going to present arguments as to how to overcome resistance to
sustainability. We need to take collective inventiveness integrating all concerned
agencies and take programs for comprehensive management where community people
will be called to provide assistances to manage crisis through local methods.
Provision of training and awareness building sessions, simulation programs can be
of great value to overcome laziness and conservatism and to raise the rate of
eco-literacy.
We
must allow the personnel and community people to participate and provoke them
to come with new ideas as to how to overcome the resistance giving
institutional supports research grant and sufficient time. It would help lay
the bases to institutionalize risk reduction approach and framework and
popularize the Risk Reduction’ and Climate change adaptation at all regions
(CDMP II 2010).
It is imperative to develop efficiency and relevance of response by
improving management aptitude, directions and networking abilities at all
levels. By providing technical materials at subsidized rates from CSR funds,
counseling facilities and needed assets, we can motivate progressive changes in
social behavior to sustainability. In addition, sustainability-related
regulations can force different organizations to act rapidly to meet harder
sustainability necessities.
Katherine
Esty (2013) finds five ways to overcome resistance to sustainability in the
developing arena of green business. They are-
1.
Embracing Resistance:
Buy-in comes bit
by bit. Adept innovators frequently set the procedure in motion by conversation
with individuals one-on-one. In conversations, they exchange views about the
resistance instead of criticizing or indicating faults in the other’s thoughts. They
prudently ask about all probable doubts, responses and anxieties.
2. Creating a compelling story
For individuals to receive a new item for consumption or notion,
they must know why it matters. A convincing description with emotion will involve them and gather
their support.
3. Maintaining your focus
Spending much time to
promote certain idea remaining ‘dead-set’ (Esty 2013, 1) on that particular
idea can help overcome resistance.
Extensive touring, meeting with resistant stakeholders and attending to
news from managers can
improve schemes for better
effectiveness to overcome resistance to sustainability.
4. Engaging small groups
Study
has proved that engaging people in a small conversation group is a brilliant
technique to get people to involve into a new idea. Peer group discussion are
far better effective in ‘making ideas catch on’ (Esty 2013, 2) than formal
lecture or written documents.
5. Flexibility and patience
To
overcome stubbornness and resistance to change innovators need to be flexible
and patient in marketing their favored idea of business for sustainability. If
the first plan to convince fails they must appear with the second or third plan
or even further.
Conclusion:
Therefore,
for any the business innovativeness, sustainable development means implementing
business approaches and events that meet the necessities of the organization
and its stakeholders for today while caring, supporting and augmenting the
human and natural capitals for tomorrow. Defending capital base of an
organization or of a community is an acknowledged business value and a business
case helps when sustainable development is to reach its goal ; and it must be
incorporated into the ‘planning and measurement systems of business enterprises
in the future’ ( IISD, Deloitte Touch; WBCSD 1992).
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