How to Become a Sustainable Company

"High sustainability" companies significantly outperformed their counterparts over an 18-year period in terms of both stock market and accounting criteria, such as return on assets and return on equity. They also exhibited lower performance volatility. Currently, organizations that exhibit a broad-based commitment to sustainability on the basis of their original corporate DNA are few and far between. For most companies, becoming sustainable involves a conscious and continuing effort to build long-term value for shareholders by contributing to a sustainable society. The authors studied the organizational models of companies that they refer to as "sustainable" by comparing them with companies that they call "traditional." They focused on two primary questions: (1) How do sustainable companies create the conditions that embed sustainability in the company's strategy and operations, and (2) What are the specific elements of sustainable companies' cultures that differentiate them from those of traditional companies? The authors have developed an identity and cultural model for how to create a sustainable company. While the model is straightforward, implementation is by no means easy, because it is grounded in largescale change - something that few companies seek out or do well. The first stage involves reframing the company's identity through leadership commitment and external engagement. The second stage involves codifying the new identity through employee engagement and mechanisms of execution. Both are ongoing processes. Once the second stage begins, the two stages reinforce each other. Employee engagement enables even more sophisticated external engagement, since a broader range of employees will be able to effectively engage with outside stakeholders. Mechanisms of execution bind leadership commitment, since these organizational-level attributes continue from one generation of leaders to the next.

• Corporate strategy
• Environmental sustainability