Among retailers and consumer-goods manufacturers, commitment to environmental and social objectives can take many forms—whether it’s distributing fair-trade products, reducing materials used in packaging, or ensuring humane working conditions at suppliers’ factories. Unilever, for one, has a detailed Sustainable Living Plan, and among the company’s goals for 2020 is to halve the greenhouse-gas impact of its products over their life cycles. Swedish furniture maker IKEA has installed more than 700,000 solar panels in its buildings worldwide and has committed to own and operate more than 300 wind turbines. British retail group Kingfisher’s sustainability plan, which it calls Net Positive, aims not only to make frugal use of natural resources but also to restore and regenerate the environment—“putting back more than we take out,” as the company says.

These programs can be powerful agents of change, both toward greater alignment between customer and corporate interests and toward a culture of systemwide innovation in products and business models. Yet some skepticism remains as to whether sustainability efforts have any impact on financial performance in the short and medium term.

Ultimately, each company must define its own sustainability philosophy in the context of its specific business and mission. The examples described here illustrate the competitive advantages that sustainability initiatives can offer. That said, even the most exemplary commitment to sustainability doesn’t change the fact that the earth’s natural resources are limited. A longer-term solution will therefore require new—circular and regenerative—business models that decouple economic growth from resource consumption.

Comment