It’s no surprise that sustainable practices are good for business. What might be surprising is what practices are actually bad for corporate sustainability.
A recent study from Colorado State University’s College of Business found that the most significant hurdles to companies implementing sustainable business practices had nothing to do with a lack of resources, the most commonly cited barrier in recent literature on the subject.
SOURCE recently spoke with the study’s co-author, professor of supply chain management Susan Golicic, about what really inhibits corporate sustainability and what can be done about it.
In this study, you found that a lack of resources was not a significant barrier to sustainability, which was surprising. Isn’t that what companies frequently cite as the reason?
It is what a lot of businesses frequently cite. In fact, when we first put this study together, we looked at past research that had been done in the area. Past research shows that resources are generally the most important potential barrier to consider for a company to move into better sustainability. That was why we included it in our study.
My co-author, Pavlina McGrady, had previously looked into enablers to corporate sustainability in the ski industry. Here we decided to look at the flip side and see what the barriers are, because it’s not automatically the same. So, we looked at the literature, we looked at her past research, and that’s how we came up with the potential barriers: resources in the form of money or people or supply chain partners, and then leadership and governance, both policies as well as metrics.
Was it a big surprise to you during your research?
It was surprising that when we did the statistical tests, resources weren’t a significant barrier, but it wasn’t a huge surprise that leadership was the number one barrier. Pavlina’s research found that leadership was the strongest enabler for corporate sustainability. It makes sense that having leaders in place that back sustainability, support it, and drive it forward are a major factor, and that a lack of leadership would be a major barrier, as well.
So, the actual biggest barriers to sustainability are leadership and what else?
Right, leadership was number one, followed by governance in the form of metrics. In other words, internally do we actually measure achieving sustainability if we don’t have the measurements in place? That’s really true of most everything. If you don’t measure something, it’s not going to get done. It’s the same as, if we don’t have an assignment in class that has a certain number of points you need to get then students aren’t going to do it. There must be a measure of some kind for people to do what they do. If you have the metrics in place, then you will be better off pursuing corporate sustainability, or you’ll be more successful at pursuing it. If you don’t have the metrics in place, well then, it’s not something that necessarily needs to be achieved. So, it’s a barrier.
Why then does it seem like organizations are always so quick to lay the blame on resources?
I really think it’s because the mindset behind some leaders is that if I want to be sustainable, that means they’re going to have to make many substantial changes and that’s going to cost time and money. And especially when we’re looking at publicly held companies in the United States who must report every quarter what they spent and what they made, what they made better be more than what they spent or there’s going to be a bunch of unhappy people. Management can get a little nervous about making those kinds of big changes if they have to report that under their leadership the company had a loss.
Then there’s the old “if it ain’t broke don’t fix it” mentality. Especially for a big, longstanding company, there could be a belief that they’re making good money doing what they’re doing so why make any major changes. That goes back to leadership and what their mindset is. Are they innovative? Are they risk takers?
What can this tell us about how organizations should be focusing on sustainability?
What it tells us is that if a company really wants to pursue corporate sustainability, then it’s critically important that they have strong leadership that supports corporate sustainability in place throughout various levels of the company. If you have the leadership to drive it, then you’re going to end up with policies and measures that trickle down into the company.
Leadership really can make or break things in a company and as well as in an entire supply chain. If there’s not strong leadership leading the direction, then things are not going to happen. That means supporting the leadership; training the leadership; hiring the right people into those leadership positions. All those things are going to matter for companies that want to move forward on sustainability.
The College of Business at Colorado State University is focused on using business to create a better world.
As an AACSB-accredited business school, the College is among the top five percent of business colleges worldwide, providing programs and career support services to more than 2,500 undergraduate and 1,300 graduate students. Faculty help students across our top-ranked on-campus and online programs develop the knowledge, skills and values to navigate a rapidly evolving business world and address global challenges with sustainable business solutions. Our students are known for their creativity, work ethic and resilience—resulting in an undergraduate job offer and placement rate of over 90% within 90 days of graduation.
The College’s highly ranked programs include its Online MBA, which has been recognized as the No. 1 program in Colorado for five years running by U.S. News and World Report and achieved No. 16 for employability worldwide from QS Quacquarelli Symonds. The College’s Impact MBA is also ranked by Corporate Knights as a Top 20 “Better World MBA” worldwide.
