Sustainability as Strategy: Caught in the Luxury Trap

This is an excerpt of the original article. It was written for the December 2015 edition of Supply Chain Management Review. The full article is available to current subscribers.

December 2015

It’s December, and time once again for our annual Executive Guide to Supply Chain Resources. This is a comprehensive guide to services, products, and educational opportunities targeted specifically to supply chain professionals. The editors at Supply Chain Management Review wish all of our readers a successful year to come.

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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:
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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