Living In The Times Of Sustainable Businesses - Eaton Business School
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Living In The Times Of Sustainable Businesses

Sustainability as a concept draws its origin a little way back in time. In fact, to the times of Carl von Carlowitz, the Saxony-based accountant who coined the term in the context of forestry in his book Sylvicultura oeconomica in 1713. The theme has since evolved massively through many favourable milestones such as Brundtland Report, Agenda 21 and others. Today, sustainable development is considered as an integral framework of three pillars – environmental, social and economic. Business organizations across the world are under pressure to reorganize their activities to suit the mandates of this framework. Long term systems thinking approach have inevitably become important, especially in the wake of climate change, poverty, and discrimination on one hand and globalization as well as development on the other hand.

There are three areas where organizations with a sustainability culture typically focus on. Let’s take a look at each with simple examples that help us understand these focal points.

  • Sustainable production – Harald Krüger, Chairman of the Board of Bayerische Motoren Werke (BMW) Aktiengesellschaft, comments that sustainable management is not an altruistic idea, it’s essential for company to be successful (www.bmwgroup.com, 2018). So how did the auto manufacturer implement sustainability in its production area? BMW sustainability report cites how the company has reduced CO2-emissions in their global new vehicle fleet by 141 grams per kilometer. The company also increased its share of electric vehicles in their product portfolio and sold over 100,000 electric vehicles in 2017. In Europe where they are the market leaders for electric vehicles, BMW sources its electricity free of CO2. But the biggest number they put forward is impressive – that increasingly efficient use of resources has gained the manufacturer €161 million since 2006.
  • Sustainable consumption – In patterns of consumption, there has always been a difference between the developed and developing countries. How do organizations consume sustainably? A simple case will help us understand sustainable consumption. Ben & Jerry’s, an American premium ice cream brand, exemplifies how business can be used as a tool for social and environmental change in an industry that is dependent on agriculture and dairy farms for its ingredients. In an attempt to reduce its impact on climate, Ben & Jerry’s sources its ingredients (such as cocoa, vanilla, sugarcane, bananas, nuts etc.) from the developing countries through the Fairtrade. Even while adopting local sourcing for ingredients produced locally, such as in the case of Ben & Jerry’s Europe, the procurement is done through the Caring Dairy programme. Caring Dairy has twelve categories that make up sustainable farming practices: animal husbandry, biodiversity, nutrient management, soil fertility and health, soil loss, pest management, farm economics, energy, water, farm workers, farmer and farm family and community (https://www.benjerry.com, 2017).
  • Sustainable organization of activities – A great example of how an organization can bring sustainability into every thread of its existence is exemplified by a 57-year old Indian chain store that retails in fashion and ethnic products – Fabindia. What is profound is not the fact that it is a retailer with more than 200 stores in different Indian cities and at least 10 abroad, but the fact that it has played an enormous role in linking the rural artisans of India to the urban markets. Fabindia was successful in building a strong ecosystem with ideal linkages for the artisan communities – the supplier base thus became the company’s greatest asset and has since evolved into a sustainable business model.

Such organizational endeavors clearly open up the idea that sustainability is important in the corporate world and is not a term that can be comfortably sidelined to the environment glossary.

References

Benjerry.com, 2017. Dairy Statement: January 2017. [Online]
Available at: https://www.benjerry.com/values/how-we-do-business/caring-dairy/dairy-statement-january-2017

Bmwgroup.com, 2018. Sustainability at the BMW Group. [Online]
Available at: https://www.bmwgroup.com/en/responsibility/sustainability-at-the-bmw-group.html

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