Sustainability: Moving Toward the Mainstream

Editor’s Note: This is a rebuttal to the recently published op/ed piece by Elizabeth Sturcken, managing director of the Environmental Defense Fund.

The original “sustainability” thought piece was authored by Stanley E. Fawcett, Sebastian Brockhaus, A. Michael Knemeyer, and Amydee M. Fawcett

One of the primary goals for our article, Sustainability as Strategy: Caught in the Luxury Trap was to motivate an increased dialogue on the role of sustainability for firms and society at large.

To clarify our stance up front: We are strong proponents of the view that sustainability is and should continue to be one of the key issues that individuals, companies, and society must address. We see the increased dialogue around sustainability as a positive and important development. We firmly believe the tipping point for addressing sustainability issues will arrive sooner rather than later.

Having established the importance of sustainability, we believe that the public and academic dialogue is in dire need for a change of pace. While sustainability promoters like Andrew Winston and Elizabeth Sturcken rightly point out the societal importance of the topic, we think that we have to go above and beyond just recognizing the importance of the topic. As Winston elaborately pointed out in his book with Daniel Esty, there is a way to turn “green into gold”. We believe that this concept represents an important step for making progress on the sustainability agenda.

However, the role for sustainability for business warrants a more nuanced dialogue. Taking a supply chain management perspective, it is crucial to not only “sell” the societal importance for pursuing sustainability but also to help companies translate sustainability into a compelling value proposition.

Only then will customers consistently invest in sustainability. Our perception is that the current company perspective on sustainability is burdened by its heritage: The perception of sustainability as a luxury. As we suggest in our article, the topic of sustainability for modern business was born out of an era of abundance that allowed for a normative, value, and morality driven basis for the sustainability imperative. Sustainability as the “right thing to do” has at its roots a moral argument that it is the right thing to do for society rather than a business-minded value proposition – that it is the right thing to do for business because we can do it profitably.

While we fully agree with the fact that businesses need to become more focused on sustainability, our interactions with companies has convinced us that there is a clear discrepancy between the academic view of sustainability and the reality of sustainability for many firms: Executives feel market pressure to make immediate profits and in light of the “unforgiving” nature of a Wall Street-driven economy we have to move beyond normative arguments.

As Elizabeth Sturcken argued in her reaction to our article, there is a business case for many sustainability efforts and companies are making great progress. However, most of her examples are concerned with cutting costs through leaner operations or tangential benefits like improved costs of capital – something that disproportionately appeals to not only large corporations but more specifically to efficiency optimizers.

Naturally, we are excited for those benefits. They are necessary. But, the striking common feature of these examples pertains to the lack of a true customer value proposition. We believe that firms will only pursue sustainability on a mass scale (we are sure that we can all agree on the fact that this should be our ultimate goal) if they can successfully translate sustainability into customer value—and ultimately into profit.
While this was much easier during economic boom times, this ability is now reserved for firms that are able to appeal to an affluent niche market of consumers who will happily pay a price premium for more sustainable products – even if ultimately they just subconsciously try to distinguish themselves from the crowd.

There is an abundance of evidence that the majority of the studies that propose that consumers are willing to pay a higher price for sustainability are flawed due to an overwhelming social desirability bias and at the end of the day, the group of consumers actually willing to part with more of their income is limited. Further, many of those consumers belong to the LOHAS community, a demographic also sometimes portrayed as “eco-snobs” who are attracted by the exclusivity of more sustainable products rather than concerned with the ecological and social merit of more sustainable consumption.

We do not aspire to judge whether or not this is a correct assessment or just a stereotype, but it is hard to deny that most offers for sustainable products currently target more affluent consumers and use exclusivity and luxury as a selling point. Public debate now features the notion that affluent consumers can afford to be sustainable and buy the more expensive organic, green, eco, etc. products. In a way, sustainability is sometimes depicted as an elite phenomenon – the debate about Whole Foods vs. “Whole Paycheck” illustrates this perspective. Our view is that this is a particularly harmful development.

In reaction to this situation, our article aimed to look into ways companies can develop and communicate a more compelling sustainability value proposition to consumers outside the LOHAS demographic – ultimately, this is the only way to establish sustainability as mainstream practice. We believe that the connection of sustainability to luxury must be severed to enable it to become a mass phenomenon.

Thus, our intent was to challenge industry and academia to move beyond our dependence on the moral roots of sustainability. While we believe the general business case for sustainability has been established, there appears to be a missing ingredient that can enable mass adoption of sustainability principles. Those of us who desire change need to do a better job of helping business ingrain sustainability into their organizations and culture rather than banging on the “there-is-a-business-case” drum—somewhere. Companies are constantly reallocating their budgets and their focus. In order to help them become more sustainable we have to help identify the specific value of each individual sustainability initiative and also accept that some projects will not become reality because sometimes there just isn't a viable business case.

Among sustainability researchers and pundits, we detect a tendency to react emotionally to challenges to the “sustainability view” paralleled by reactions to challenges to religious beliefs – hence our choice of words: “sustainability evangelists”. As such, in order for true progress to be achieved we must have meaningful, respectful and honest dialogue on what needs to change.

We propose that it is time to move beyond “defending” sustainability. The era when sustainability proponents were denigrated as “tree-huggers” is over, at least in informed discourse in academia and industry. Rather than cracking down on “non-believers” we should open up our dialogue on sustainability to rigorous challenges on how to successfully align company motivations and programs to help firms get the most bang for their sustainability buck. Companies at large will not be swayed by the “right thing to do,” but by strategies that help them tap new markets and create loyal, profitable customers. In our article we asserted multiple ways that may help companies get to that point. Sustainability in business has to evolve beyond its “honeymoon period” and we should allow constructive criticism in order to refocus on the true challenge – creating a sustainable economic system.

It must be our goal as sustainability proponents to help establish the importance of sustainability outside of Fortune 500 corporations on one side and the niche markets of True Believers on the other side. In order to move the needle on the topic, sustainability has to become an issue for the majority of companies in the economic mainstream. We shouldn't deny the fact that many sustainability efforts have large upfront investments. It is our duty to equip managers with the rational and tools to push sustainability initiatives past the cumulative cost curve by laying out ways to create immediate customer value. If we expect decision makers in firms across the board (especially in small and medium sized companies – the vast majority of firms around the world) to pursue sustainable practices, we have to do better than “the right thing to do” and the “Dow Jones Sustainability Index”. We have to help them translate sustainability into a pitch to their shareholders that thrives despite a lack of “belief” in the issue.

Sustainability is not THE luxury trap. However, sustainability is currently stuck IN the luxury trap. We encourage a constructive and respectful dialogue on how we can escape the trap and move sustainability into the mainstream. After all, the sustainability story is not fully written. We all want to make sure that sustainability gets its happily-ever-after ending.

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