Traditionally, the term sustainability has been used within management literature to describe the ability of a company to maintain a steady and improving stream of earnings. More recently, however, the term is often used in a much different way. In this section, which reflects this newer, different use of the term, sustainability is the degree to which a person or entity can meet its present needs without compromising the ability of other people or entities to meet their needs in the future.³¹

To illustrate the meaning of sustainability, assume that as part of its normal production process, an entity rids itself of contaminated waste by dumping it into a river. If this dumping renders the river toxic and unusable for fishing or recreation, the entity would be considered unsustainable. On the other hand, if the entity purifies the waste before dumping it to protect the cleanliness of the river, the entity would be considered sustainable. Overall, the more an entity increases its ability to meet present needs without compromising the ability of others to meet their needs in the future, the more sustainable the entity is.

Building upon the earlier definition of sustainability, a sustainable organization is an organization that has the ability to meet its present needs without compromising the ability of future generations to meet their needs. In building a sustainable organization, management should strive to make the organization sustainable in three areas: the economy, the environment, and society. In terms of the economy, the sustainable organization engages in certain behaviors such as minimizing waste by not overproducing goods and generating a fair profit for stakeholders. Regarding the environment, the sustainable organization engages in certain behaviors that are akin to protecting natural resources like air, water, and land. In terms of society, the sustainable organization engages in certain behaviors such as maintaining the well-being and protection of the communities in which it does business.³²

For example, consider recent events at PepsiCo, with its billion-dollar portfolio of food and beverage brands. After measuring the carbon footprint of its Tropicana orange juice brand, managers discovered that more than one-third of Tropicana’s carbon emissions—the single largest source—came from the use of fertilizers during the growing process. As a result, Tropicana partnered with two manufacturers of low-carbon fertilizers and one of its orange growers, SMR Farms in Bradenton, Florida, to conduct long-term tests of the fertilizers and identify an alternative to reduce Tropicana’s carbon emissions. The study will last at least five years, to match the maturity cycle of orange trees, and its findings could impact global best practices in agriculture. Adopting behaviors that protect the world’s natural resources will help PepsiCo achieve its sustainability goals.³³

Managers have historically focused on the yardstick of profit, or the bottom line, as the primary gauge for evaluating organizational performance. As noted in the previous section, in more recent times, managers are evaluating organizational performance by examining three sustainability gauges: the economy (which includes profit), the environment, and society. All three sustainability gauges for organizational performance considered collectively are commonly referred to as the triple bottom-line.³⁴

The term triple bottom-line emphasizes that managers should focus on building organizations that are sustainable in economic, environmental, and societal activities. Essentially, the overall degree of sustainability achieved by any organization is judged by collective accomplishments in all three of these areas. If any one area is lacking in sustainability, the organization as a whole is lacking in sustainability. Being able to answer “yes” to questions like the following would indicate that an organization is operating in a manner that is consistent with the triple bottom-line standard:

• Is the organization providing a fair return to its stakeholders? (economic area)

• Is the organization protecting or improving the natural environment through its work methods? (environmental area)

• Is the organization protecting or improving the overall quality of life in the communities in which it does business? (societal area)

Some people ask if building sustainable organizations is worthwhile. Management theorists and practicing managers alike present many sound reasons why managers should build sustainable organizations. The following sections discuss a few such reasons.

The actual steps that managers take to increase organizational sustainability can vary drastically from organization to organization. For example, to increase sustainability, a chemical company might take steps to reduce hazardous waste, a shoe manufacturer might take steps to reduce energy consumption, and a food products company might take steps to buy food products only from suppliers who grow food using approved fertilizers.

Overall, to have a successful sustainability effort, a manager must understand the unique characteristics of the particular organization and the industry within which that organization exists. Based on this understanding, management must tailor sustainability activities and processes that best meet the needs of the individual organization.

Despite the fact that many of management’s steps to achieve sustainability can vary significantly from organization to organization, there are some steps that a manager can take to help build a sustainable organization regardless of the organization. These steps include the following:

Setting sustainability goals. Management should set goals that clearly indicate what the organization is attempting to accomplish in the area of sustainability. Such goals provide organization members with clear targets on which they can focus their sustainability efforts. Such targets also provide a vehicle that management can use to ensure that organization members can have a unified, collective impact on organizational sustainability.

Consider the following sustainability goal set by Marks & Spencer, one of the largest retailers in the United Kingdom: becoming the first major retailer to ensure that six key raw materials—palm oil, soya, cocoa, beef, leather, coffee—come from sustainable sources that do not contribute to deforestation, one of the biggest causes of climate change.

Marks & Spencer’s sustainability goal is a clear indication that the company will enhance its own sustainability by supporting suppliers who are focused on enhancing their own sustainability. In essence, Marks & Spencer’s sustainability goal is to help eliminate deforestation by doing business with suppliers with the same goal. By establishing this goal and making sure all organization members understand it, Marks & Spencer is guiding its buyers to do business with only those suppliers who will help make Marks & Spencer a more sustainable organization.

Hiring organization members who can help the organization become more sustainable. A primary feature in accomplishing any worthwhile activity in an organization is having appropriately talented people who can perform that activity. If an organization does not have appropriately talented people to accomplish the activity, individuals who possess the necessary talent should be recruited and hired. Such recruiting and hiring will normally increase the probability that the activity is performed successfully.

Following the reasoning given above, hiring appropriately talented people can also be a primary decision to ensure that necessary sustainability activities are successfully performed in organizations. For example, many organizations have sustainability projects that focus on improving the use of energy and materials through new building construction or remodeling. Such projects typically explore topics like energy efficiency, materials selection, water savings, and indoor environmental quality. The U.S. Green Building Business Council runs a program called LEED (Leadership in Energy and Environmental Design), an ecology-oriented certification program that rates the ecology impact of buildings of all types. Hiring individuals who understand the LEED program could help ensure that sustainability-oriented construction or remodeling projects will be performed successfully in the organization.

As another example, Weis Markets, a regional grocery store chain headquartered in Pennsylvania, made a special hire to help with the company’s sustainability efforts.⁴² The company hired Patti Olenick, a sustainability specialist from the Pennsylvania Department of Environmental Protection. Olenick has extensive experience in waste management, recycling, and composting. She was hired to help the company develop a more systematic and coordinated approach to Weis Market sustainability programs.

Rewarding employees who contribute to an organization’s sustainability goals. In all organizations, managers must encourage appropriate behavior, behavior that contributes to the accomplishment of organizational goals. In the sustainability area, managers should reward organization members who contribute to the accomplishment of sustainability goals. The purpose of the reward is to recognize organization members for what they’ve accomplished in the area of sustainability and to increase the probability that such organization members will continue to make contributions toward accomplishing organizational sustainability goals in the future.

The Colorado Department of Health and Public Environment provides an excellent illustration of how management can use rewards to encourage organization members to contribute to the attainment of sustainability goals. Management has designed and implemented an awards program that gives employees who excel in pursuing sustainability activities a cash award at a banquet held at the Denver Museum of Nature and Science. All employees are encouraged to nominate individuals who have implemented a new sustainability program, have demonstrated innovation in sustainability solutions, or have displayed leadership in protecting the environment.

Tracking progress in reaching sustainability goals. As stated previously, setting sustainability goals is a critical component of an organization’s sustainability effort. Such goals set clear targets on which all organization members can focus. However, simply setting such goals is not enough. Managers must also track an organization’s progress in reaching such goals. Knowing if an organization is on schedule, behind schedule, or ahead of schedule in reaching sustainability goals is critical to ensuring that the organization ultimately reaches those goals. If an organization is not on track for reaching sustainability goals, adjustments should be made to get the organization back on track.

DuPont is a science-based company that focuses on creating solutions that contribute to a better, safer, and healthier life. Well-known products offered by DuPont include a material used to coat cooking utensils called Teflon, a component of bulletproof vests called Kevlar, and a solid surface material for making kitchen countertops called Corian. In late 1999, DuPont established an energy goal for 2010 of holding energy consumption at its 1990 level.⁴³ The company did not only established the sustainability goal, but also tracked company progress in reaching the goal. (See Figure 2.2.) Data acquired through such tracking told DuPont management if activities aimed at reaching its 2010 energy consumption goal were working or if a new or modified approach to reaching the goal needed to be instituted. Overall, history showed that the company seemed to be on track to achieve its 2010 energy consumption goal and had attained an overall reduction of 7 percent in energy consumption.