‘The Role of Leadership and

Innovation in Developing Business

Sustainability’

Sheena Johnston

HIGHLIGHTS

Sustainability

Business Sustainability

What is the role of Business?

Achieving Business Sustainability & the role of:

- Leadership

- Innovation

SUSTAINABILITY ISSUES

Increasing pressure being placed on the planets

resources & environmental systems

Use of finite resources

Resource scarcity e.g. Minerals, water etc

Climate change

Pollution impacts

Ethical & social issues

Environmental & social impacts set to intensify:

Population estimated to increase to 9.31 billion by 2050

Increase in per capita consumption increased by 138% in

developed countries since 1970

SUSTAINABILITY

Bruntland Definition:

‘development which meets the needs of the present

without compromising the ability of future generations

to meet their own needs’

Triple Bottom Line:

‘People, Planet, Profits’

Sustainable Development:

‘Environmental Stewardship, Social Responsibility,

Economic Prosperity’

BUSINESS SUSTAINABILITY

Fundamental role of business

Industry & business have been major contributory

factor to current situation

As such, they play a fundamental role in the solution

Impact to business:

Resource scarcity issues

Supply chain sustainability

Increasing costs – energy/legal compliance

Reputational risks

BUSINESS DRIVERS

Business drivers for sustainability?

These will differ depending on the context of

individual business environments:

Moral/ethical duty

Legal Compliance

Financial savings

Sales & profit margins

Reputation & brand value

Customer & stakeholder pressure

Competitive Advantage

BUSINESS DRIVERS

Recognition of the responsibility business has to

take action

Business Benefits:

Competitive advantage

New markets

Opportunities – green product and services market

estimated to be around $3.2 trillion

ACHIEVING BUSINESS SUSTAINABILITY

Organisational journey

Strategy requires tailoring to specific nature of

individual businesses:

Need to meet specific environmental, social &

financial requirements of companies & their

stakeholders

Challenges:

Organisational Complexity – differing structures,

business models, cultures

Successful engagement of internal/external

stakeholders

Global nature of operations & supply chains

ACHIEVING BUSINESS SUSTAINABILITY

Two key areas in progressing towards business

sustainability:

Leadership

Leadership by an individual or set of individuals

Leadership demonstrated by an organisation to others e.g.

Supply chain, industry & stakeholders

Innovation

Products

Processes

Business Models

Culture & organisational thinking

LEADERSHIP FOR SUSTAINABILITY

Critical for successful & comprehensive

implementation of an organisations

sustainability strategy

Role:

Ensuring the holistic management of the three areas;

People, Planet & Profits

Establishing clear sustainability values & strategy

Ensuring effective communication & integration

throughout organisation

Establishing commitment throughout whole

organisation

ROLE FOR LEADERSHIP - CULTURE

Culture has a key role in the successful

implementation of a sustainability strategy

Supporting Factors:

Behaviours which support the sustainability strategy

Development of ownership of sustainability values by

employees

Active involvement in implementation & delivery of

targets & objectives

CULTURE

Role of Leadership

Clear communication on the company vision

Supporting creation of the right culture

Creating environment of trust & empowerment that

facilitates emergence of innovation

ORGANISATIONAL LEADERSHIP

Demonstrate sustainability leadership to:

Industry sector, supply chain, business networks &

society

Opportunity to exhibit leadership & innovation &

to be the instigators of change & innovation

Effective engagement & cooperation can be

essential in delivery of sustainability goals

Assist in the delivery of new sustainable products,

reduced costs, reduced wastes etc

INNOVATION FOR SUSTAINABILITY

Role of Innovation:

Key factor in how we interact have interacted with our

environment and the resulting impacts

It is also key in addressing these challenges

It is the development of something new that

improves performance in the following areas:

Environmental

Social

Economic

INNOVATION FOR SUSTAINABILITY

Not restricted to technological change, but will

also include changes to:

Business models

Processes

Operating procedures

Products

Systems & Ways of thinking

BUSINESS MODEL INNOVATION

Define how an organisation creates, delivers and

captures value

Key areas:

Products & services a company offers

Relationship with customers

Infrastructure & network of partners

Financial aspects in each of these areas

Format of the business model is key to the

success or failure of a sustainability strategy

BUSINESS MODEL INNOVATION

The model will determine the culture &

behaviour of an organisation & opportunities

that are open to it

Stages of Innovation:

Adjustment

Adoption

Improvement

Redesign

EXAMPLES – BUSINESS MODEL

INNOVATION

IBM

model combines lease financing and asset recovery

programs

ZETA

an organisation which designs & manufactures

custom made sustainable buildings within one

facility & is able to so due to the design of their

business model

SUPPLY CHAIN INNOVATION

Engagement with supply chains integral part of

business sustainability

Complex issue - global nature of supply chains

Role:

Opportunity to exhibit leadership & innovation

To act as instigators of innovation in supply chain

Co-operation and partnership on sustainability

projects

Opportunity to develop solutions to operational

issues e.g. packaging & process wastes

INNOVATION IN STAKEHOLDER

ENGAGEMENT

Organisations are now required to manage

requirements extending beyond legal compliance

Competitive advantage to be gained in developing

innovative engagement plans

Role:

Engagement & collaboration

Manage stakeholder ambiguity/concerns

Supporting mutual sustainability objectives

Developing shared understanding & new ways of doing

things

SUMMARY

How organisations respond to sustainability

challenges may define long term profitability &

viability

Businesses will need to develop new ways of

thinking and adaptation to changing

circumstances

Leadership & Innovation have a key role to play

in the sustainability journey