Sustainability: The Foundation of Resilient Business Strategies
Resilient business strategies draw heavily on practices that have been introduced to companies through sustainability objectives and practices. As such, sustainability should be seen both as an outcome of resilient business strategies and as their foundation. There are many examples of such practices, but particularly important are listening to diverse perspectives, futures thinking, long-term value creation, and systems change.
Sustainability has introduced the concept of stakeholder dialogue to business, and diverse perspectives are needed for companies to develop resilient business strategies. And while stakeholder engagement has sometimes been seen as a matter of fairness or, let’s face it, the appeasement of critics, it is also just smart business.
Businesses too often make decisions in narrow echo chambers. Understanding the dynamics in the workplace will not happen without hearing perspectives from experts in DEI; leaders from excluded populations; or rising generations. Climate scientists have made room for themselves in Board deliberations. Disruptions in local communities are less likely when they have a voice that is heard when decisions are made. The point is simple: understanding a changing world will, by definition, be more achievable when listening to a diverse set of voices that are shaping, and that understand, new social and economic directions.
Sustainable development is also defined as preserving opportunities for future generations, and futures thinking is therefore essential to resilient business strategies. ESG investing focuses on long-term value, which further reinforces the importance of scenario planning, which strengthens resilience. This is illustrated by the reliance of the TCFD on scenarios for its framework.
Systems thinking is also at the core of sustainability and is essential both for resilient business and societal resilience. We are seeing multiple systems—food systems, energy systems, and natural ecosystems—under threat and/or being disrupted. Societal resilience is impossible in this context, and so is resilient business, which both shapes and relies on such systems.
No business strategy reaches its potential in a world beset by extreme weather events, fragile infrastructure, endemic poverty, public health crises, systemic exclusion, political dysfunction, economic dislocation, and frayed social safety nets.
Sustainability thinking has long focused on shifting systems. BSR’s “act, enable, and influence” framework is based on the belief that companies are likeliest to achieve their sustainability objectives when they exert leadership in three dimensions: acting within their own boundaries, enabling collective action within ecosystems such as value chains and industry groups, and applying their influence to ensure that public policy and financial incentives are aligned with sustainability leadership. This same thinking is supremely relevant to resilient business strategies. All this shows that the core skills of sustainability teams and the Chief Sustainability Officer (CSO) add distinct value when creating resilient business strategies.