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In recognition of the ever-increasing calls for organisations to become more environmentally and ethically conscious, Dr Sarah Ivory, Lecturer at the Centre for Business, Climate Change and Sustainability at The University of Edinburgh, gave us an interview to discuss her insights on the importance of building a more sustainable business.
1. What’s the key business challenge that organisations need to address, that your research tackles?
The key issue can be framed around this question: why does your organisation exist? Many will answer that question in relation to what their organisation does (eg ‘recruiting’, ‘providing healthcare’, ‘providing financial services’). That’s great. But then when we dig further in, when asked how they operate and why they choose that, many will focus on efficiency: how can I get the most outputs (and this is often defined as financial returns) for the least inputs (eg costs including employees). Again – fine and understandable: no one wants a very wasteful organisation. But here is the business problem: people confuse this way of doing and staying in business (avoiding waste and generating returns) with why their business exists. In these instances, businesses start to ‘exist’ for profit-maximisation. And many suffer for this: human employees, customers and consumers, the environment and in particular the climate.
2. What advice would you give to executives, based on your findings?
Be honest about why your business exists, and be clear about distinguishing this from how you operate in order to remain in business. These are two different things. Also – be brave about saying this openly.
3. How does your latest research approach this? What do the results indicate?
My research on scaling sustainability in large organisations shows that they are at different stages. Those at an early stage of scaling sustainability can only get traction if the sustainability initiatives contribute immediately and explicitly to efficiency in terms of financial measures. Those at an intermediate stage can get more traction with initiatives that have other impacts – longer term, wider, less able to be monetised. Those at a strategic scale see sustainability initiatives as helping to define why they exist, what they contribute, and how they interact with their stakeholders. They achieve transformation for their organisations.
4. Any final thoughts?
Meeting executives from a range of companies affiliated with KnowledgeBrief has reminded me about the number of executives doing great work on purpose-led organisations, and about the importance of all of us talking about, legitimising, and developing these ideas to ensure they are championed as a way of organisations contributing to – and not causing – the crises we are facing collectively in the climate, mental health, employment, community, etc. Leaders and managers must seek to continually cultivate this purpose, in order to get the most out of their organisations and the people within them.