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The Business Case for Sustainability

by SustainAbility

Key Conclusions
Evidence in favour of the business case continues to build and is particularly strong in certain area of business performance. However, there still remains a significant gap between what is intuitively logical and what one can prove. We take the following key messages from this journey:

1. Positive Impact
The jury is in - overall, corporate sustainable development performance has a positive impact on business success. A strategic focus on sustainable development performance is aligned with mainstream business purpose.

2. Brand and Reputation
Of the ten measures of business success, brand value & reputation is the measure that appears to be most positively linked to corporate SD performance. It is clear that business case analysis should not focus exclusively on financial measures.

3. Environmental Process
Of the ten dimensions of SD performance, overall environmental performance (in particular, environmental process focus) is supported by the strongest business case. This dimension should continue to play a prominent role in any business case assessment.

4. Financial Results
Positive links between SD performance and verified financial results are supported by business case research. This means that the business case can be developed without having to exclusively rely on indirect or intangible measures of business success.

5. Multiple Measures
The business case is strongest when multiple measures of business success are considered. Companies should adopt a more holistic view of business success - considering both financial results and financial drivers (which influence future financial results).

6. Business Strategy
The business case is strongest when companies incorporate SD performance into mainstream business strategy. The key message for companies is that business case analysis should lead - rather than follow - a decision to improve SD performance.

7. Chicken and Egg
The chicken and egg question: 'Are responsible companies more prosperous, or are prosperous companies more responsible?' cannot yet be put aside. Companies need to look closely at their own business model and other companies' experience to better understand the mechanisms by which improved SD performance can contribute to business success.

8. Sensitivity Testing
The business case is likely to strengthen in coming years, based on current trends. Consequently, any business case analysis should be dynamic, with results tested for sensitivity to various plausible scenarios.

9. Work in Progress
The business case debate is still raging, and the current state of research supplies only partial answers. Companies should use external evidence to supplement, rather than drive, an in-depth analysis of their own particular situation.

10. Research Gap
The biggest research gap plaguing the business case question as a whole is the lack of robust, generally accepted measures of corporate SD performance. We urge companies to follow - and add to - the debate on sustainable development key performance indicators (KPIs) as a central part of any business case strategy.

 

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