Author: Alizara (Lisa) Juangbhanich, Bartlett School of Planning at University College London (UCL), a.juangbhanich.11@ucl.ac.uk
What is a sustainable business? A simple answer to this question would be “a business that operates within the principles of sustainability – say, the Triple Bottom Line or the three pillars (economic, social and environmental). The complex answer to this question would be “it depends”. While there can be some common understandings to what we mean by ‘sustainability’, there is a hidden paradox, one that is especially complicated to untangle for business and industry.
The past decade has seen a soar in number of businesses that have transitioned towards sustainable practice. Concepts such as the “Circular Economy”, “cradle-to-cradle”, “Creating Shared Value” are increasingly adopted by the industry as part of their operational framework. Industry practices are changing, and sustainability is placed at the forefront. Companies are going above and beyond regulatory compliance. These efforts demonstrate the accountability of the private sector to drive forth sustainable change, offering solutions that bridge the for-profit nature of their business conduct together with the pursuit of social and environmental welfare.
However, the relationship between the private sector and the sustainability agenda is one that is complex, and fundamentally paradoxical. The capital system in which our industry is designed to operate is one that is based on the foundation of ‘capitalising’ – or exploiting – potential opportunities. Thus remains a challenge of drawing boundaries: to what extent can businesses be seen as sustainable under the continuous consumption of resources? Even if measures are integrated to mitigate social and environmental impact while the business continues to exploit natural capital, can they be considered as being ‘truly’ sustainable?
The answer to this question would depend on how one defines ‘sustainability’. I was given the opportunity to teach a cohort of sixty postgraduates at a geography department in the UK on sustainable business practice this term. It is from the dialogues we had over this six-week period– those around the nature of and rhetoric used in describing sustainable businesses – that has prompted me to outline some of our discussions in this piece. There are some takeaways that I believe are worth sharing and brought to the fore when discussing sustainability in the business context. Specifically, what is meant by a “sustainable business”; how one could look like; and more importantly, how one should look like.
Our current discourse
The dialogues our class had on our perspectives of what constituted a sustainable business often diverged ever so slightly. We had our common agreements on ‘sustainable practice’ as encompassing the pursuit of social and environmental welfare. However, when it came to the actual operations or business model of how this may look like in practice, this is where views diverged. For example, if a company operates on business-as-usual principles but does so through environmental technology would that be enough to label them as a sustainable business? What if a company utilised and operated based on a closed-loop cycle but do not purchase from local suppliers or have diversity across their workforce? Boundaries are blurred when lines should be drawn to in identifying the sustainability of a business.
Weak vs. Strong paradigms of sustainability
One way to conceptualise the major differences in our expectations of sustainable business is to frame it under the weak vs. strong sustainability paradigm. While there is an understanding in the literature that there is no universal agreement of the term ‘sustainability’ or ‘sustainable development’, there is also the understanding that they way one chooses to define sustainability – which will ultimately lead to what one anticipates of sustainable business practice – can be positioned on a spectrum, depending on one’s worldview. On the two ends of the spectrum are what has been referred to as the weak and strong sustainability paradigms.
Weak sustainability is one that encapsulates our society’s dominant worldview. A technocentric worldview largely based on the idea that humans have control of natural resources and can make-up for their consumption of them (namely by means of technological advancement). This view is largely anthropocentric where human wants and demands are prioritised over natural capital. An example would be, in the case of businesses, thinking primarily about technical solutions (say in the manufacturing process) to reduce environmental impact while still enabling the company to maximise its profit. Discourse within this paradigm tend to be formed on the basis for ‘sustainable growth’.
On the other end of the spectrum is the strong sustainability paradigm. Here sustainability is perceived through an ecocentric worldview. The strong sustainability paradigm addresses nature for its own intrinsic value; natural capital is not seen as expendable or substitutable by other forms of human-made capital. The view is about operating within our ecological limits, thinking about ‘preservation’ rather than the ‘conservation’ of natural resources. Discourse under this paradigm tends to question our position for economic growth at the expense of the environment.
Landrum (2018) refers to the debate as “a basic division between worldviews”: one where “humans control nature” versus one where “humans are part of nature”. A debate that has long existed and is “still an active point of debate today” (ibid)
Sustainable business model archetypes
Depending on the view we identify with (or if we are somewhere mid-way along the spectrum), our thought patterns on the subject of sustainability would conform accordingly. The argument here is that the way we view sustainable business and our anticipation for a sustainable form of business practice would also differ according to these views.
In 2014, through an investigation of current literature and examples from practice Bocken et al. proposed that our current models and strategies for sustainable business can be classified into three main groups: those that are technology-oriented, social-oriented, and organisational-oriented. The three terms (technology, social, organisational) represent different sets of mechanism behind the delivery of sustainability (the paper goes on to detail eight archetypes of sustainable business models across the groups). It is my attempt here to discuss these further and connect some of the archetypes to the weak vs strong sustainability paradigms to provide an overview of how sustainability has been addressed in our current industry landscape.
Technology-oriented models of sustainable business are used to describe strategies that address sustainability in their operations primarily through technical innovation (consider e.g. the circular economy, closed-loop supply chains, cradle-to-cradle strategies to be categorised as part of this grouping). The main contribution of this group is on increasing efficiency in resource-use. This includes, for example, seeking opportunities to create value from waste (e.g. reuse, recycling, repurposing resources), substituting raw material with renewable resources. Technology-oriented typologies often choose to tackle sustainable change through the redesign of their product and operational processes to become more efficient, posing less strain on the natural environment. I would argue that this sits within the weaker paradigm of the sustainability debate where environmental ‘conservation’ is prioritised, technological solutions are offered, and firms tend to be concurrently in pursuit of economic growth.
Social-oriented typologies represent strategies for sustainable business that is based off social innovation. The examples given include those that seek to change the type of service they provide (e.g. selling a service rather than ownership of a product – consider instead leasing phones or washing machines and selling upgrades to these as part of the company’s service); those that seek to address change in consumer behaviour (e.g. slow or sustainable fashion); as well as strategies where the firm uptakes a stewardship role in their work with stakeholders across the supply chain (e.g. working with Fair Trade, Marine Council Stewardship, Forest Council Stewardship etc.).
Organisational-oriented the last grouping of sustainable business firms are those that work with (organisational) change as their dominant innovation. In the case of sustainability and business, this ‘change’ often denotes a change in the fiduciary responsibility of the firm. Firms that sought to ‘repurpose’ themselves for social and/or environmental purposes, for instance, is seen as an archetype in this group (i.e. those that no longer prioritise economic growth as their primary agenda – swapping these out for socio-environmental missions). Real-life examples would be those classed as hybrid organisations (see also Haigh and Hoffman, 2011) that often maintain their for-profit nature but redistributes their profit for social or environmental causes. Many of the social enterprises, for instance, can be seen as hybrid organisations; and same goes to the more recent B-corporations. Other examples given under this grouping are businesses formed under alternative ownership or on the basis of crowdfunding or crowdsourcing. Organisational-oriented typologies, I would argue, share characteristics closest to the strong sustainability paradigm in the way they address the subject of economic growth (though their anthropocentric nature can still supposedly be extensively argued).
It is important to note that these divisions are not distinct (Bocken et al., 2014), and strategies across multiple groupings can be used as part of a firm’s strategy for sustainable business. The three groupings were designed as a framework of reference to capture exemplars in sustainable business model innovation. My intention in outlining the above is to showcase the various ways in which sustainability in business has been addressed and how these strategies may closely conform to one end of the sustainability paradigm more than the other.
The question I received from the student cohort while outlining the above groupings, however, was slightly more complicated. Does a business have to incorporate one or more of the three groups of strategies to be deemed sustainable? Do they have to incorporate all strategies across the three? Even if we address all of the strategies from the above groupings, is this what we truly mean by a being sustainable business?
Whether or not I agree, I found myself expressing as a response that in our current industry landscape, it is probably the case that we usually address a business as being ‘sustainable’ even if they advocate one strategy from the above groupings.
Is strong sustainability missing from today’s discourse?
This brings me back to the weak vs strong sustainability paradigm and how our anticipation of sustainable business stems strongly from how we define sustainability in the first place. For those that orient themselves more strongly with the weak sustainability paradigm (anthropocentric and technocentric worldviews) then perhaps addressing the use of green technology and promoting green growth can be acceptable definitions for sustainable business practice. I would further argue that this is the dominant view in our society.
In fact, recent research has found that corporate sustainability models (from academic literature and industry practice) are still framed around the weak sustainability paradigm (Landrum, 2018). Moreover, that our current discourse in business is anchored towards the weak sustainability framework. The example given by Landrum is how our reference to the term ‘environmental management’ in itself signifies the control (i.e. managing) of nature that can be construed as a technocentric worldview.
Landrum in her work identified five stages of corporate sustainability in parallel to the weak vs strong sustainability spectrum (Figure 1). The framework helps to envision how businesses may seek to comply with sustainability at different degrees along the spectrum. Her study found that there were much less conceptualisations of sustainable business practice at the firm-level around the strong sustainability paradigm (particularly those that demonstrate ‘regenerative’ or ‘coevolutionary’ pathways). Drawing on her research, she concludes how “strong sustainability is outside current frames of reference for business and industry” and that it is “these restricted parameters [of] defining sustainability that confine the array of corporate actions and behaviours necessary to achieve sustainability” that is sought after.
Figure 1. Stages of Corporate Sustainability Source: Adapted from Landrum (2018).
Conclusion
My intention of outlining the above is not to commend or criticise particular views on sustainability or advocate for a certain paradigm. It is my aim to shed light on the importance of the need to critically reflect on the present rhetoric within sustainability discourse. The way we discuss sustainability will feed into the way we apply and action its principles in practice.
While increased efforts towards sustainable business should not be taken for granted (and it is not the purpose of this piece to undermine any past effort), it is also necessary to continue to question some of our taken-for-granted assumptions. The balance of growth and consumption in the context of sustainable business practice for instance, is a crucial one that remains complex to address. Critically reflecting and challenging our current modes of practice is, however, the means by which we gain and make progress towards transformative and radical change.
References
Bocken, N.M., Short, S.W., Rana, P. and Evans, S., 2014. A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, pp.42-56.
Haigh, N. and Hoffman, A.J., 2011. Hybrid organizations: the next chapter in sustainable business. Organizational dynamics, 41(2), pp.126-134.
Landrum, N.E., 2018. Stages of corporate sustainability: Integrating the strong sustainability worldview. Organization & Environment, 31(4), pp.287-313.