Sustainability and Innovation

Tales Andreassi, FGV-EAESPProf. and Vice-Dean at FGV-EAESP Tales Andreassi looks into the historical roots of the sustainable development movement and its future

From the paper INNOVATION AND SUSTAINABILITY: NEW MODELS AND PROPOSITIONS by Professors Tales Andreassi, José Carlos Barbieri, Isabella Freitas Gouveia de Vasconcelos, and Flávio Carvalho de Vasconcelos

 Roots and blooms

CSR, leadership, social enterprise, management, philanthropy, diversity, gender equity, healthcare, sustainability, ethics, industrial relations, healthcare, employee wellbeing, Council on Business & Society, Global Voice magazine, ESSEC Business School, ESSEC Asia-Pacific, FGV-EAESP, Trinity College Dublin Business School, Keio Business School, Warwick Business School, School of Management Fudan University, Tom Gamble, Tales AndreassiIn all appearances, the sustainable development movement is one of the most important social movements of the new century. Over the last twenty years or so, countless voluntary initiatives related to SD have been undertaken by companies from banks and insurance firms to hotels and chemical plants – with the participation of some of the largest groups in those sectors.

Although the roots of sustainable development can be traced back to the 19th century ecology movement and the wave of ecological movements in the public sphere of the 1970s, its official beginning took place not much more than thirty years ago, with the 1987 launching of a report by the World Commission on Environment and Development (WCED), known as the Brundtland Commission. A point of interest was that this was mainly a concept “invented” by developed Western countries, virtually ignoring contributions from other regions and countries such as that proposed by Chico Mendes, a Brazilian activist and environmentalist of the 1970s-80s who already had a socio-environmental pro­position that was proper to the concept of sustainable development. Parallel to this was the quality movement that saw a fledgling debut in the immediate post-war period but which really began to thrive in the 1980s: here, companies adhered to sustainable development more in order to counter the criticism and objections to the role of companies and their negative impact on society and the environment. By 2010, however, a new factor began to attract companies to the notion of sustainable development – sustainable development as a competitive factor that either differentiated or qualified them and, moreover, helped them stay in business.

Praise and criticism

CSR, leadership, social enterprise, management, philanthropy, diversity, gender equity, healthcare, sustainability, ethics, industrial relations, healthcare, employee wellbeing, Council on Business & Society, Global Voice magazine, ESSEC Business School, ESSEC Asia-Pacific, FGV-EAESP, Trinity College Dublin Business School, Keio Business School, Warwick Business School, School of Management Fudan University, Tom Gamble, Tales AndreassiWhile many environmentalist currents have adhered to the movement for sustainable development, many others have also have expressed severe criticism of it. Their view is that sustainable development puts humans before both the animal world and the planet and is merely a reformist approach because it fails to represent a deep change. Moreover, much criticism stems from the fact that the sustainable development movement is largely impelled by large multinational companies which had previously boycotted the so-called “eco-development” proposition. Linked to this is the view that sustainable development deems economic growth as a necessary condition for eradicating poverty –critics arguing that economic growth is the source of the severe environmental and social proble­ms found in contemporary world. Indeed, although there are new business aspirations behind the sustainability agenda – the growth in wind or solar energy, for example – some might see it as just the continuation of the old desire for multinationals to control and dominate the world’s resources. This criticism comes to a head in the British environmentalist and writer Sir Jonathan Porrit’s suggestion that sustainable development should be called “marginally less unsustainable development”.

But, despite all the criticism aimed at it, by 2010 sustainable development had become one of the most important “social movements” of modern times, taking no more than just two decades to become an institutionalised feature of business at the crossroads of society. Why is that?

Part of the answer is claimed to be that the power of this concept ini­tially lay in its very vagueness and impreciseness, and the exploitation of its contradictions and weaknesses was a path already walked which did not bring significant results. Others stated that that the concept of sustainable development provided a practical vehicle for a minimum political agreement on a global level of the issues tackled by it. The effect of media, social and environmentalist movement, opinion leader and government pressure cannot be underestimated either given the speed and geographical spread achieved so quickly and in such a short space of time. Moreover, when new values become institutionalised in society, typically becoming “myths” to be followed in a given sector, organisations will respond to these pressures by adopting these models and practices considered the best ones in a given social system. This is exactly the case for sus­tainable development and respect for environmental po­licies.

The rise of a new breed of organisation

CSR, leadership, social enterprise, management, philanthropy, diversity, gender equity, healthcare, sustainability, ethics, industrial relations, healthcare, employee wellbeing, Council on Business & Society, Global Voice magazine, ESSEC Business School, ESSEC Asia-Pacific, FGV-EAESP, Trinity College Dublin Business School, Keio Business School, Warwick Business School, School of Management Fudan University, Tom Gamble, Tales AndreassiAs a company commits to sustai­nable development, it must necessarily change its way of operating in order to at least reduce adverse social and envi­ronmental impacts. This requires a new way of facing innovation for its products and services and has consequently led to the notion of sustainable innovation – that is, a type of innovation that contributes to achieving sustainable development. Indeed, we now speak of “sustainable organisations” – those seeking profit while at the same time attempting to achieve respect for the environment and social justice, typically promoting social inclusion, gender balance and equity, and protection for minorities. In short, it is not enough for compa­nies simply to innovate constantly, but to innovate con­sidering the three dimensions of sustainability, namely:

  • The social dimension – a concern for the social impacts of innovations on human communities both internally and externally to the organisation (unemployment; social exclusion; poverty; organizational diversity; etc.)
  • The environmental dimension – a concern for environ­mental impacts caused by the use of natural resources and the emission of pollutants
  • The economic dimension – a concern for economic effi­ciency – making profit and generating competitive advantages in the markets they operate in, without which they would not be able to continue doing business.

Meeting these dimensions makes the innovation pro­cess more sophisticated and demanding – requiring a greater effort from organisations in order to technically meet this condition. In turn, this brings new perspectives to the management of innovation, with innovations necessarily developing other evaluation criteria than conventional ones. The issue becomes even more complex when taking into the account the dimension of measuring the possible impact of innovations, for while economic effects are relatively easy to predict (a battery of instruments exist to help companies do this), social and environmental effects are more difficult to assess in advance as they involve many other varia­bles, uncertainties and interactions. A negative result of this conundrum is that companies may be inclined to use their existing, traditional tools and understanding of impact assessment while blending in a sustainable development message as a mere display of good intention or even, in the worst scenario, for obtaining positive public image and importance among opinion leaders. In short, “greenwashing”.

However, not all is bleak (or even a greyer shade of green). The success stories are out there. Radical new and novel products are increasingly not enough to convince people. Consumer pressure, especially among Milennials, combined with increasingly strict law and an institutionalised awareness of the need for businesses to behave responsibly, have brought about a spate of innovations that adhere to the triple-bottom line of People, Planet and Profit, including Chakr’s ink made from recycled diesel fuel pollutants, Allbird’s flip-flops made from sugar cane, Dyson’s bagless hoovers and car manufacturers’ moves to establish electric and hybrid vehicles as a standard offer. All in all, sustainable development requires a combination of technical and social changes, since both are deeply related. There seems to be hope. The technology and willingness are out there. It seems that all it requires is now the capacity to go fast, go clean – and outpace the rate at which the planet’s health is deteriorating with products and services that are both socially responsible, environmentally friendly, and that employ sustainable business practices such as recycling, local distribution networks or cleaner, shorter supply chains.

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