Sustainability as Strategy: Caught in the Luxury Trap
Once lauded as the right thing to do, many sustainability efforts have languished post-recession as consumers have balked at paying a luxury tax for sustainable products and services. To drive sustainability back into the mainstream, advocates must begin to think differently at a fundamental level. Supply chain management can play a role.
The sustainability story of the past 20 years is powerful. But, the story, as generally told, is incomplete. Sustainability emerged in the 1990s as the “right thing to do.” Given the earth’s finite resources and growing population, no one could argue against the Brundtland Commission’s definition of sustainable economic development as “development that meets the needs of current generations without compromising the ability of future generations to meet their own needs.” Grounded in such compelling logic, the sustainability view was quickly codified as the “triple bottom line” (see Exhibit 1 Panel A), which argued that decision makers should place equal weight on the three Ps: people, planet, and profit.
Throughout the 1990s and early 2000s, momentum for sustainable decision-making grew. Companies embraced ecological and social performance, touting sustainability efforts to stakeholders. In the consumer space, a new demographic—LOHAS (lifestyle of health and sustainability)—emerged. By 2005, Walmart’s CEO, Lee Scott, championed sustainability, proclaiming:
“Our environmental goals at Walmart are simple and straightforward:
1. to be supplied 100 percent by renewable energy;
2. to create zero waste; and
3. to sell products that sustain our resources and environment.
These goals are both ambitious and aspirational.”
Notably, Lee Scott’s three-pronged strategy revealed sustainability as a supply chain phenomenon. Renewable energy, zero waste, and sustainable-product initiatives don’t just influence supply chain behaviors; rather, obtaining real results requires innovative supply chain collaboration.
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The sustainability story of the past 20 years is powerful. But, the story, as generally told, is incomplete. Sustainability emerged in the 1990s as the “right thing to do.” Given the earth’s finite resources and growing population, no one could argue against the Brundtland Commission’s definition of sustainable economic development as “development that meets the needs of current generations without compromising the ability of future generations to meet their own needs.” Grounded in such compelling logic, the sustainability view was quickly codified as the “triple bottom line” (see Exhibit 1 Panel A), which argued that decision makers should place equal weight on the three Ps: people, planet, and profit.
Throughout the 1990s and early 2000s, momentum for sustainable decision-making grew. Companies embraced ecological and social performance, touting sustainability efforts to stakeholders. In the consumer space, a new demographic—LOHAS (lifestyle of health and sustainability)—emerged. By 2005, Walmart’s CEO, Lee Scott, championed sustainability, proclaiming:
“Our environmental goals at Walmart are simple and straightforward:
to be supplied 100 percent by renewable energy;
to create zero waste; and
- to sell products that sustain our resources and environment.
These goals are both ambitious and aspirational.”
Notably, Lee Scott’s three-pronged strategy revealed sustainability as a supply chain phenomenon. Renewable energy, zero waste, and sustainable-product initiatives don’t just influence supply chain behaviors; rather, obtaining real results requires innovative supply chain collaboration.
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