This chapter deals with essentials of sustainability from a business management perspective. In this context, sustainability entrepreneurship, sustainable business and sustainability management tools are explained and then sustainability leadership, culture and innovation topics are addressed.

4.1. Introduction

Sustainability is a common problem for everyone in the world and unless necessary actions are taken today, there will not be a world in the future where our next generations are able to live. For this reason, all players should take the necessary responsibility for sustainable development. Businesses are also among these players and understanding sustainability from a business management perspective is important. Therefore, in the following sections, sustainability-related issues within an organization will be explained.

4.2. Definition of sustainability

Sustainability is a term which is used with different meanings in the literature. These different meanings sometimes result in confusion and misuse of the term. For this reason, it is important to clarify the concept first. Basically, the term “sustainable” means “enduring” or “continuing” and generally it is used to depict things which are “long-lasting”. For example, in strategic management literature, “sustainable competitive advantage” is used to refer to the long-lasting competitiveness of the firm. Similarly, in management literature, the term “sustainable human resources” is generally used for retaining human resources in the long run. A different meaning of sustainable is when it refers to a three-dimensional phenomenon, as in “sustainable development”. These dimensions, namely, environmental, social and economic, together constitute the main factors of sustainability, and when this term is used before a word (such as sustainable business), it means applying the philosophy of sustainable development in this area (here, in business). In this chapter, sustainability will be used with this second meaning.

Sustainable development refers to the “development that meets the needs of the present generation without compromising the ability of future generations to meet their needs” [WCE 87]. Since this is a broad definition, it is possible to apply it to many fields (e.g. sustainable agriculture, sustainable architecture) and this possibility has made it a widely used definition. Based on this definition, sustainable development can be regarded as a macro level phenomenon and it is related to the development of nations within the limits of scarce resources. As stated above, it consists of three pillars (economic, social and environmental) and for sustainable development all these factors should be taken together (Figure 4.1). These pillars can be simply described as follows: the environmental dimension of sustainable development is related to preserving nature, the social dimension is related to taking care of the rights of society and the economic dimension is related to using resources efficiently for the socio-economic wellbeing of a community [JON 14].

Corporate sustainability, on the other hand, is related to applying principles of sustainable development in organizations. Based on the definition of sustainable development, corporate sustainability is defined as “meeting the needs of a firm’s direct and indirect stakeholders (such as shareholders, employees, clients, pressure groups, communities etc.), without compromising its ability to meet the needs of future stakeholders as well” [DYL 02]. While achieving this goal, businesses should also take the three pillars of sustainability into account. Therefore, building on this definition, corporate sustainability can be defined as “giving importance to environmental, social and economic issues while meeting the needs of current stakeholders and, in this way, ensuring meeting the needs of future stakeholders”.

4.3. History of sustainability

Sustainability has a long history. The emergence of sustainability issues can be dated back to the first industrial revolution. As a result of industrialization, nations’ wealth has increased and this has triggered society’s consumption. This development has been a great opportunity for the economy but more recently it has been realized that the consumption economy also created some problems. High production and consumption have brought the risk of the depletion of scarce resources. Environmental pollution and societal problems (such as negative effects on health and problems caused by bad working conditions etc.) were also problems caused by industrialization, among others. All these problems showed that action should be taken for the future of the planet, and, later on, that awareness of sustainability issues has increased.

The roots of sustainability-related awareness can be traced back to the 20th Century. In 1972, a report entitled “The Limits to Growth” was issued by the Club of Rome, an organization whose members have a common concern for the future of the planet. In this report, results of exponential growth in the world’s population and economy were estimated and attention was paid to the physical limits of the planet. Again, in 1972, the United Nation’s Conference on Human Environment (UNCHE) was held, in Stockholm. In this conference, which aimed to create awareness about the Earth’s environment and development problems, the Stockholm Declaration was issued and thus the issue of the environment was put on the political agenda. After this conference, in 1980, an important step was taken by the International Union for the Conservation of Nature (IUCN). In this milestone, World Conservation Strategy (WCS) was formulated and launched internationally by the joint efforts of IUCN, WWFN (World Wildlife Fund for Nature) and UNEP (The United Nations Environment Program). In the report issued by IUCN, concerns about the environment and development were brought together under the umbrella of “conservation”. Although the concept “sustainable development” was not yet defined, the term was used for the first time, within a chapter heading. This has been regarded as the emergence of the concept of sustainable development. In 1987, the World Commission on Environment and Development (WCED) published a report entitled “Our Common Future” (also known as the Brundtland Report) and, in this report, the definition of sustainable development was established. Since global attention towards sustainable development was created with this report, this was also an important milestone in the history of sustainable development. In 1992, the Rio Conference, which is also known as the United Nations Conference on Environment and Development (UNCED), was held, and in this conference the Rio Declaration, in which human life was mentioned as a central concern for sustainable development, was signed. Another remarkable milestone was the United Nation’s Sustainable Development Summit, which was held in New York in 2015. In this global summit, in which a post-2015 agenda and sustainable development goals were determined, a universal call was made for actions needed for a better world [SEN 16].

Sustainable development is a global concern and everyone has responsibility for it. For this reason, all players in this process should take the necessary responsibilities. Businesses are among these players and for a better world it is important to manage businesses in a way that supports sustainable development (Figure 4.2).

4.4. Sustainability entrepreneurship

Entrepreneurship is a term used to define forming a business from scratch, and entrepreneurs are the people who take action in this process. For a start-up business, entrepreneurs bear the risk of failure and bring the factors of production together. Each enterprise has a reason for being and this reason determines its direction. Not all entrepreneurial activities are related to starting a completely new business. In order to keep up with the necessities of new market conditions, some people, namely, intrapreneurs, may execute entrepreneurial activities within an existing business, and this is called intrapreneurship. Whether it is an entrepreneurship or intrapreneurship several resources are used for serving several parties in the market and some returns (monetary or non-monetary) are gained in turn. In this process, besides other factors, the key issue is the entrepreneur themselves. An entrepreneur seeks new business opportunities and solves problems of the market. It may be hard to determine a common set of entrepreneur characteristics, but it is obvious that these kinds of people have high energy and enthusiasm with an innovative viewpoint. The focus of these innovations determines an entrepreneurship’s type (e.g. social or green entrepreneurship, etc.).

The origin of the term “entrepreneur” dates back to the 17th and 18th Centuries. The French economist Jean Baptiste Say explained the term with its value-creating function. According to him, entrepreneurs take lower productivity resources and transform them into high-gain situations. Later on, in the 20th Century, Joseph Schumpeter defined the term with an innovative viewpoint. With this viewpoint, entrepreneurs are innovators and change agents of the economy. They find new ways of doing things, create new products and processes and move the economy forward. Besides these viewpoints, a widely known contemporary thinker of management, Peter Drucker, focuses on the opportunity issue. An entrepreneur may not need to be a change actor but rather it is critical to realize and take advantage of opportunities as they emerge in the market. This is also valid for not-for-profit organizations and therefore in an entrepreneurship there is no profit aim requirement [DEE 98].

Sustainable development, on the other hand, is closely related with entrepreneurship. New enterprises support economic development and, based on the main goal of an entrepreneur, an enterprise may also serve as a social and/or environmental player. Also, as explained before, sustainable development requires a collective effort of different players and businesses are among these players. As well as current businesses and their leaders playing an important role in this process, forming new businesses to support sustainability is also important. To some extent, businesses can support sustainability and strive for sector leadership in sustainability. However, forming a sustainability business from scratch and operating solely with this aim is important in creating new industries which support sustainable development. For this reason, a special type of entrepreneurship – that is, sustainability entrepreneurship – is an important issue and it needs special attention within the essentials of sustainability.

In order to clarify the relationship between entrepreneurship and sustainable development, and also to explain sustainability entrepreneurship, it is important to illuminate closely related types of entrepreneurship such as ecopreneurship (green/environmental/eco-entrepreneurship) and social entrepreneurship. Although these types of entrepreneurships support sustainable development and are sometimes used interchangeably with sustainability entrepreneurship, they have distinctive specifications.

Within these types of entrepreneurships, ecopreneurship or, in other words, green entrepreneurship, is formed mainly for solving environmental problems and gaining economic value [HOC 10]. Remarkable attention about this type of entrepreneurship emerged in the 1990s and, since it is operated with an environmental driving force, this type of entrepreneurship is also known as environmental entrepreneurship [SCH 02]. Ecopreneurships basically deal with forming an innovative company providing environmental products and services [SCH 02b]. As a more specific definition, Pastakia defines ecopreneurial corporations as:

Corporations which seek to maximize personal/organizational gains by identifying green business opportunities (eco-friendly products and processes) and transforming them into viable business ventures. [ISA 10]

In the definitions above, we can see that an environmental goal is the common characteristic of ecopreneurships. As well as environmental goals, another remarkable characteristic is innovativeness (this topic will be addressed in section 4.7 on sustainability innovation). A business idea is the most critical part of the entrepreneurial process and innovativeness is needed to determine and develop this business idea. Similarly, for an ecopreneurship, innovativeness is important for finding green business solutions and increasing business gains through the necessary innovative developments.

Another sustainability-related type of entrepreneurship is social entrepreneurship. These types of entrepreneurships are new ventures which are formed by a societal driving force. According to Dees (1998), “Social entrepreneurships combine the passion of a social mission with an image of business-like discipline, innovation, and determination” [DEE 98]. Here the core issue is the social mission but, at the same time, a business discipline is important. Social entrepreneurships are generally assumed as best suited to not-for-profit organizations. Although the opposite idea is also existent in the literature, it is obvious that, for a profit-seeking organization, being highly societal is a difficult job. A profit-seeking business faced with this dilemma should decide on whether it will aim to gain more profit or rather prefer to accomplish more social aims.

On the other hand, regardless of the type of an organization (whether it is profit- seeking or a not-for-profit organization), Peredo & McLean put the importance of societal goals, among other goals, on a continuum and regard having exclusively, or in some prominent way, social goals as enough to be classed a social entrepreneurship. Based on this idea it is suggested that:

Social entrepreneurship is exercised where some person or group (1) aim(s) at creating social value, either exclusively or at least in some prominent way; (2) show(s) a capacity to recognize and take advantage of opportunities to create that value (“envision”); (3) employ(s) innovation, ranging from outright invention to adapting someone else’s novelty, in creating and/or distributing social value; (4) is/are willing to accept an above-average degree of risk in creating and disseminating social value; and (5) is/are unusually resourceful in being relatively undaunted by scarce assets in pursuing their social venture. [PER 06]

According to this definition, social entrepreneurships should give more importance to social goals, compared to other goals, and create social value by seeking opportunities, innovating and using scarce resources wisely to support social aims.

Different from other types of entrepreneurships, sustainability entrepreneurships are new ventures formed in order to support sustainable development. In other types of entrepreneurships, explained above, there is a dominant goal, among other goals. In some ventures, the main goal is creating environmental value (ecopreneurships – clean-technology venturing) and in other ventures the goal of creating social value is more important (social entrepreneurships e.g. health, education, community development). However, when it comes to sustainability entrepreneurships there is a balanced combination of economic, social and environmental value creation goals. These types of organizations find solutions for environmental and social problems while creating economic value to sustain the venture’s operations and supporting economic development. While doing this, they monitor and realize social, environmental and economic value creation opportunities, find new ways of doing things and make innovations related to these aims, and also take a pioneering role in creating or transforming an industry to support sustainable development.

In practice, some entrepreneurships may seem to concentrate on one dimension of sustainable development-related goals (e.g. environmental) but, in fact, these different aims directly or indirectly support each other and, in the end, all of them are achieved. For example, an entrepreneurship formed to create clean energy technologies may seem to aim for an environmental goal but, at the same time, it supports social aims (such as providing health protection, increasing quality of life etc.) and economic aims (creating employment opportunities, profit generation for new investments etc.). The key point here is the entrepreneur’s mindset and the enterprise’s focus. Whether this entrepreneurship is formed based on a sustainability focus or not makes this issue clear. Entrepreneurships formed based on inclusive business models, for example, can also be regarded as sustainability entrepreneurships. These kinds of entrepreneurships include low income people in their value chain and create a win-win situation. Additional to social and economic goals, if they also give importance to environmental goals, then we can call them sustainability entrepreneurships.

Çöp(m)adam is a good example of a sustainability entrepreneurship and also an inclusive business model. It was formed to support women’s employment and recycling/re-using in Ayvalık, in Turkey. Women who have not worked and earned money before work in this project and they produce creative products (handbags) using packaging which would be or has been thrown away as trash. These handmade products are sold and the women are paid fair wages in turn [ÇÖP 20]. This entrepreneurship has social, environmental and economic goals at the same time and, as a result, provides support for sustainable development.

4.5. Sustainable business

Although it is daunting work, increasing the number of sustainability entrepreneurships is important for our future. As well as forming sustainability entrepreneurships, another way towards sustainable development goals is transforming current businesses and industries into sustainable businesses and sustainable industries. Of course, it is also not easy work to transform all industries in the short term. However, if current businesses take the necessary responsibilities, at least to some extent they can support the sustainable development goals of a country.

Based on the extent and scope of efforts towards sustainability, a business’s steps in this process resemble a ladder of sustainability. In this ladder each rung represents a different progress level and as one goes up this ladder, the number of businesses that achieve this level of progress is expected to decrease. Therefore, it can also be thought of as a pyramid of sustainability. The steps in this ladder of sustainability can be listed as follows [YOU 13]:

1. 1) products and services;
2. 2) processes;
3. 3) business model;
4. 4) company focus;
5. 5) brand identity of company;
6. 6) supplier web and value chain;
7. 7) industry leadership and advocacy role.

Products and services is the basic level of sustainability efforts. Most current businesses start the sustainability journey by adding sustainable products and services to their product portfolios and/or redesigning some of (or all of) their current products as sustainable. Since, compared to other steps, this step is easier, the majority of businesses are expected to fall in this category. These businesses are in the base of the pyramid.

Processes constitutes the second rung of the sustainability ladder. Sustainability is not only related to the production process, which is the transformation of inputs into outputs. In a business, other than production, there are many other processes and together they affect the sustainability performance of an organization. As Michael Porter suggested, value creation is realized through primary (inbound logistics, operations, outbound logistics, marketing and sales, service) and secondary activities (firm infrastructure, HRM, technology development, procurement) and these activities together constitute the value chain of a business. In this value chain, activities are linked to each other and total value created is affected by the interactions of these activities. For this reason, it is called a chain and, whether primary or secondary, each activity is important in the process. Similarly, for sustainability, all processes related to all activities are critical and a business which aims for sustainability may seek to make some part of or all processes sustainable. Since in this step more effort is needed than in the first step, fewer businesses (compared to first step) are expected to achieve it.

Business model is the third step in the sustainability ladder. A business model is composed of several elements which are in interrelationship, such as customer value proposition, profit formula (revenue model and cost structure), key processes and resources, and via these elements the business creates and delivers value to its customers [JOH 08]. Business models are important for all businesses (whether new or established) and based on the changing requirements of the market, the current business model may need to be reformed. In the business model step of the sustainability ladder, businesses not only make arrangements on products/services and processes, but also align their business models based on sustainability. Businesses operated with a sustainability business model create value for its customers based on the sustainability goal and for this reason it is important in the sustainability journey. EPIC Burger, a company opened in Chicago in 2008, is a good example of a sustainability business model. It was formed with a sustainability aim and the business model has been constructed accordingly. That is why its slogan is “a more mindful burger”.

Company focus constitutes another important step in the sustainability ladder. The main driving force of a business affects its direction. Direction includes vision, mission statement, core values and these factors are good reflections of the way the company does business. Basically, the mission statement of a company gives information about its reason for being. The vision statement shows what the company desires to achieve in the long run and the values of a company reflect the business philosophy. A business which aims at sustainability may design sustainable products and services, make processes sustainable and change its business model based on sustainability. However, a sustainability company focus is also critical for a goal of sustainability. Since this goal needs collective action and organization-wide effort, sustainability-based orientation of management and business members affect the success of this process. Businesses at this level of the ladder have a sustainability company focus or at least they integrate sustainability goals into their current company focus.

Brand identity of company is the fifth rung of the sustainability ladder. A business with a sustainability focus can also create a strong identity which supports sustainability. Brand identity is critical for creating a brand image (customers’ perception of the company) and it includes a set of elements such as a slogan, a logo or a brand name [RUK 20]. A business which is perceived as sustainable by others is closer to a sustainability goal and it becomes a role model for other businesses in the industry. In this way, transforming industries towards sustainable industries may become easier.

Supplier web and value chain is another further step towards the sustainability goal. While doing business, players on the supply chain (or within the supply network) determine the performance of a company and, therefore, businesses are linked to the players beyond the company borders. Similarly, sustainability is not an issue limited to an individual business and, in this step, businesses enlarge their sustainability efforts towards the entire supplier web. In this process the company takes control over its supply web for the sustainability goal and for this, some mechanisms, such as contracts or rules, are used.

Industry leadership and advocacy role is the final step in the sustainability ladder. If a company takes all other steps in this ladder then it becomes a role model for sustainability. This role makes it an industry leader for sustainability and it advocates this goal as a philosophy in the industry. Of course, it is not an easy job and, in reality, achieving this status is questionable. However, being at least as close as possible to this goal is important and this situation is not a barrier to a business having an advocacy role. Since this step is difficult to achieve, it is expected that the least number of businesses are at this level (Figure 4.7).

Businesses need a systematic and disciplined effort to achieve the sustainability leadership level and this requires comprehensive undertakings. Therefore, organizations use sustainability management tools. Sustainability management tools which are addressed here are Environmental Management Systems (EMS), Sustainable Value Stream Mapping (Sus-VSM), Total Quality Environmental Management (TQEM) and Sustainability Balanced Scorecard (SBSC). These tools include different methodologies for applying sustainability principles and businesses may use one or more of these tools in their organizations.

Environmental Management System (EMS) is a series of systematic actions of an organization to manage and increase environmental performance. EMS is a kind of planning and execution tool and it is based on the PDCA (plan-do-check-act) cycle (Figure 4.8). Based on the preference of the business, an environmental management system can be applied formally (certified) or informally (non-certified) in the organization. If it is a certified EMS such as EMAS (Eco-Management and Audit Scheme) or ISO 14001, a scheme of subsequent steps is applied in the process. However, if it is applied informally, the process may be more flexible and management determines its own plan within the organization.

In a certified environmental management system, a five-stage process is followed by organizations [ISO 04]. These stages are:

1. 1) environmental policy;
2. 2) planning;
3. 3) implementation and operation;
4. 4) checking;
5. 5) management review.

Environmental policy is related to the business’s commitment to this program and it shows the philosophy of the business about environmental issues. In the planning stage, objectives are determined based on the environmental policy and after the organizational factors which affect the environment are determined, the necessary action plans are prepared accordingly. In the implementation stage, based on plans, the necessary resources are assigned for operation and the plan is implemented. When it comes to the fourth stage, the results are controlled and compared with the objectives. If there is a gap between the objectives and the results, corrective actions are taken. In the final stage, the overall system is evaluated by management and if there is something wrong with the system, the policy and objectives are revised. For a successful result, the environmental management system needs a systematic approach and organization-wide commitment. Besides, since it takes time to get results, patience and support of the top management is another important issue.

Sustainable Value Stream Mapping is a sustainability management tool developed based on traditional value stream mapping used in lean manufacturing systems. The lean management approach is derived from the Toyota Production System and is based on the elimination of all activities which are non-value added and suitable for elimination (in other words, wastes) in an organization. In this way it aims to lower unnecessary costs and create higher customer value. It is also used for continuous improvement. In this process, value stream mapping is used to determine non-value added activities and after this determination all wastes are eliminated. Sustainable value stream mapping (Sus-VSM) [FAU 12] also works in the same manner. This method is used to determine and eliminate activities which have harmful effects and are against sustainability.

There are three main stages in applying Sus-VSM. These stages are as follows [ROT 03]:

1. 1) current state map;
2. 2) future state map;
3. 3) implementation plan.

In the first step, by using sustainability metrics (such as energy consumption, ergonomics or time waste), the current situation of the value stream is evaluated and mapped. After that, wastes are determined based on selected metrics. In the second step, the desired value stream map is prepared and in the third step, an action plan is prepared and applied by the organization. Sustainable value stream mapping is a comprehensive tool and can be used for one product line, product family or the whole value chain of an organization.

Total Quality Environmental Management (TQEM) is a sustainability management tool derived from Total Quality Management (TQM). Total Quality Management is a contemporary management approach which aims to ensure quality throughout the organization and seeks customer satisfaction. TQM is a management philosophy and it is based on the inclusion of everyone (from top to bottom in the organizational hierarchy) in this process.

In Total Quality Management philosophy there are four main principles. These principles are as follows [CHA 99]:

1. 1) customer orientation;
2. 2) continuous improvement;
3. 3) doing the job right the first time;
4. 4) system approach.

Total Quality Management aims at customer satisfaction at all times. According to TQM philosophy, the customer is not only the one who buys products and services of a company. Since output of a unit is used as input of another unit, members of the organization are also regarded as customers, namely, internal customers. Therefore, in TQM, there are two types of customers, internal and external, and satisfaction of both types of customer is important for the organization. Similarly, Total Quality Environmental Management aims for customer satisfaction. Today, quality expectations of people are evolved and support for sustainable development goals is also a criterion for quality perception. In TQEM philosophy, from top management to the employee at the lowest level, everyone is committed to this aim and organization is managed with this philosophy. Another principle of TQM is continuous improvement. In order to maintain quality and constant customer satisfaction, everyone searches for areas of improvement all the time and quality standards are maintained. This principle also supports innovation and, in this way, innovations do not become obsolete in time. Similarly, TQEM applies continuous improvement for the environmental performance of the organization. For this aim, an organization which applies TQEM uses similar quality improvement tools of TQM, such as the PDCA cycle. Doing the job right the first time is another principle of TQM. This principle is related with zero defect and the excellence aims of the organization. After happening, solving quality problems are costly and affect the customer satisfaction negatively. Therefore, preventive actions are taken at the beginning and jobs are done right at first. In TQEM, on the other hand, preventive actions are taken to increase the environmental performance of the organization. Environmental planning can be used in this process. In TQM, the system approach reflects a holistic viewpoint. In order to guarantee quality throughout the organization a holistic approach is needed. In this way, the origins of problems can be detected corrently and can be prevented before happening again. Similarly, for the success of TQEM, a system approach is needed. In order to improve environmental performance all interrelated parts of organization and their effects should be understood well.

TQEM is a comprehensive management tool and also has a cultural aspect. Therefore, it needs transformation and is not easy to apply. However, if applied successfully, results can be achieved permanently. Although this management tool is called “environmental management”, the same principles can also be applied to the sustainable development goal. Therefore, it is regarded as a sustainability management tool.

Sustainability Balanced Scorecard (SBSC) is a sustainability management tool derived from the traditional Balanced Scorecard. Balanced Scorecard was developed by Harvard professors R. Kaplan and D. Norton as a new performance management tool, in the early 1900s [BIE 02]. While a classic organizational performance management system includes only financial performance indicators, the Balanced Scorecard method takes other indicators (such as customer satisfaction, internal processes, and innovation and learning performance indicators) which support financial results into consideration. Financial results are important for an organization’s performance but, at the same time, there are many aspects which affect the success of the organization and are interrelated with each other.

Although the type and number of indicators used may differ, the widely-used indicators (perspectives) of Balanced Scorecard are as follows [KAP 92]:

1. 1) financial perspective;
2. 2) customer perspective;
3. 3) internal processes perspective;
4. 4) innovation and learning perspective.

Financial perspective is related to traditional financial performance indicators (e.g. profitability), customer perspective is related to the indicators which give information about the performance results of customer value creation (e.g. customer satisfaction), and internal processes perspective (e.g. core competencies) is related to performance indicators which give information about the success of an organization’s key internal processes. Finally, innovation and learning perspective (e.g. employee growth and development) is related to performance indicators which give information about organization’s capacity for development and change.

Sustainable Balanced Scorecard (SBSC) also works with the same principles. In preparation of SBSC, based on the preference of management, one of two alternatives can be selected. One alternative is preparing a SBSC by adding a fifth perspective (Sustainability Perspective) which includes sustainability performance indicators of the organization to BSC. The second alternative is embedding sustainability performance indicators to the current BSC perspectives of the organization. Sustainable Balanced Scorecard is a strong tool for management of sustainability in organizations. Any sustainability effort will be more successful if it is linked to company direction (mission and vision) and strategy. Since in SBSC the indicators are determined based on the direction and strategy of the organization, it gives a greater opportunity to organization for realizing sustainability objectives.

Businesses may choose one or more of these sustainability management tools to increase their sustainability performance. Whatever the tool(s) chosen, the important thing is applying these tools intentionally and decisively.

4.6. Sustainability leadership and culture

Leadership has a key role in the success of any businesses. Monitoring environmental changes, deciding on the right actions and applying them. While listing these behaviors, it seems easy, but in reality many organizations fail just because of the leadership style, which is not suitable for the current situation. Similarly, for a sustainable business, leadership is critical and without the right leader for sustainability it is impossible to achieve the sustainable business goals. As explained previously, it is a long journey toward becoming a sustainable business and, in this process, organizations may apply different sustainability management tools (i.e. EMS, TQEM, etc.). In all of these methodologies the success depends mainly on the support of the top management. First of all, the leader should believe in the sustainability business goal and exert effort towards it. By definition, the leader is the person who motivates others (followers) to achieve a common goal and, in leadership processes, being a role model is important. Besides, the leader should ensure any necessary conditions within the organization for a successful operation. Therefore, additional to basic leadership specifications, such as determination or being visionary etc., a sustainability leader can be defined as the person who:

1. 1) is conscious about sustainable development;
2. 2) believes in the goal of sustainable business;
3. 3) has concern for the current and future needs of stakeholders;
4. 4) acts based on sustainability values;
5. 5) prepares the necessary conditions and takes action with others for sustainability.

As is seen from the above specifications, a sustainability leader should be conscious about sustainable development and set goals accordingly. Based on the sustainable development goal, the leader should give balanced importance to environmental, social, economic areas and ensure the longevity of the business. Of course, behaving in this way needs values (such as respect for nature, responsibility etc.) which support sustainability. Therefore, a sustainability leader should be a role model by acting based on sustainability values. Another important point in this process is preparing the necessary conditions. For a sustainable business, a system which ensures sustainability throughout the organization is important. The participation of every member (from the top to the bottom of the pyramid) in this process is necessary and this requires an organizational culture which supports sustainability. Organizational culture is related to deeply held values and the leader has a critical role in creating an organizational culture. Therefore, for a sustainable business, the leader (sustainable leader) should ensure a sustainability culture within the organization.

Although there are different viewpoints on cultural dimensions, classifications are typically based on organizational values and practices [LIN 10]. In the literature, sustainability culture is defined as “a company’s recognition of the impact of the company’s activities on society and communities and the need to minimize it, which translates into a philosophy and values that drive the decision-making process of the firm” [MAR 15]. In organizations which have a sustainability culture, a shared vision of and deeply held values of sustainability are critical. Based on these values, a sustainability-oriented behavioral pattern is created and maintained in a typical organization which has a sustainability culture. Basically, main characteristics of a sustainability culture can be listed as follows:

1. 1) sustainability-oriented direction (mission, vision, values);
2. 2) sustainability-oriented strategy and goals;
3. 3) sustainability-oriented activities on the whole value chain;
4. 4) providing necessary opportunities (by owners and leadership) and fostering innovation for improvement of sustainability performance;
5. 5) commitment and involvement of everyone in the organization (from the top to the bottom of the pyramid) in the sustainability operations.

In a sustainability culture, all of the aspects of an organization reflect the sustainability orientation. This reflection mainly starts with the direction of an organization. In these kinds of organizations, sustainability is integrated with the company’s mission, vision and the core values. This orientation is also reflected in the strategy and goals of the organization. Accordingly, all functions throughout the organization or, in other words, all activities on the value chain are accomplished based on this orientation. In this process, employee commitment and involvement is critical. Therefore, in order to maintain this, leaders should provide the necessary opportunities for improvement of sustainability performance. Motivating organizational members towards the shared sustainability goals and fostering sustainability innovation can be regarded among leaders’ supportive activities.

As it is in every cultural arrangement, creating a sustainability culture is difficult and it needs a long time to build. Therefore, it needs passion and determination to be achieved.

4.7. Sustainability innovation

In a sustainable business, another critical point is making innovations to improve the sustainability performance of the organization. Although the variety of innovation definitions makes it difficult to pinpoint, there is a common factor of “newness” in all definitions. In one definition, innovation is defined as the “search for, and the discovery, experimentation, development, initiation, and adoption of new products, new production processes and new organizational set-ups” [DOS 88]. On the other hand, OECD defines the term as “implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations” [OEC 05]. When it comes to taxonomy of the term, based on different criteria, such as the object or extent of change, innovation is categorized differently. While it is categorized by OECD as product, process, marketing and organizational innovations (based on the object of change) [VAR 10], in another categorization (based on the extent of change) it is classified as incremental or radical innovation. Product (or service) innovation refers to the organization’s new product or service offerings and process innovation is related to the changes in organizational operations [ROW 11]. On the other hand, marketing innovation refers to the marketing method changes in 4Ps, and organizational innovation refers to the new organizational methods in business practices, workplace organization and external relations [OEC 05]. Besides, based on the extent of innovation, radical innovation refers to significant changes whereas incremental innovation refers to minimal changes [ROW 11].

Regardless of the types explained above, another categorization can be made, as classical or sustainability innovation. Classical innovation is the innovation of any kind explained above; on the other hand, sustainability innovation is defined as “new or modified processes, techniques, practices, systems and products to reduce social and environmental harm” [KUS 19]. Although this is not a wrong definition, the economic dimension can also be added to it for businesses. Therefore, by adding this third dimension (the economic dimension) to the definition, sustainability innovation can be defined as “new or modified processes, techniques, practices, systems and products to reduce social and environmental harm while ensuring the economic goal of business”. Although this revised definition is right, the aim of sustainability innovation is not limited to reducing harm. Finding solutions for current sustainability problems or creating new products and technologies that increase the quality of life also constitutes the aims of sustainability innovation.

Sustainable businesses should always search for sustainability innovation areas in the organization and make the necessary developments. While doing this, as well as the creativity of employees being important, the organization also needs sustainability leaders (explained above). Therefore, sustainability innovation is not an issue that can be considered alone and, for a successful sustainability innovation process, all interrelated factors should be maintained in the organization.

4.8. Conclusion

Sustainable development needs the collective efforts of each player in society and businesses are a group of these critical players. In order to support sustainable development goals, businesses either need to be formed as a sustainability entrepreneurship or transformed into sustainable businesses. Either way, businesses need systematic effort and the necessary conditions to achieve a sustainability advocacy role. In this process the leader bears a critical role. Applying appropriate sustainability management tool(s), creating the necessary conditions (i.e. sustainability culture) which support sustainability and fostering innovation for improved sustainability performance are among the responsibilities of sustainability leaders. On the other hand, each employee in the organization (from the top to the bottom of the organizational pyramid) should believe in this process and behave accordingly. As is seen from the explanations above, for a successful sustainable business, a systematic and collective effort throughout the organization is needed and this process starts with business leaders who see their organizations through a sustainability lens. Therefore, this chapter provides a roadmap for businesses towards sustainability.

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