One of the main challenges that society faces today is how to build a sustainable world which would allow us to satisfy our present needs, without jeopardizing the abilities of future generations to satisfy their own needs. This challenge, better known as the “sustainability challenge” can only be properly addressed by the active participation of all social actors, and particularly by the committed participation of the private sector. This participation however, requires the vision, commitment, and moreover the genuine involvement of business leaders.

Business Sustainability is the process by which a company finds the balance between economic, ecological and social aims. Far from an “end goal”, Business Sustainability is a journey of continuous improvement and an opportunity for attracting new customers and engaging the best talent to further build the company’s most important asset: its team.

Only a few years ago many companies were operating under the assumption that any expenditures on sustainability related issues, and particularly environmental protection, were an unwanted necessary cost which would diminish the profits of the firm. Accordingly, most companies’ attitudes towards sustainability have been to do the minimum – playing not to lose – to comply with government regulations and to make sure that environmental and socially oriented non-governmental organizations (NGOs) would not criticize the company and negatively affect the bottom line. Some companies have started producing expensive environmental and social responsibility reports to magnify the value of their environmental initiatives and philanthropic contributions to social causes – under the banner of Corporate Social Responsibility or CSR. This attitude has little if any positive impact on consumers and NGOs, and has been labeled as “green washing.”

A new approach has emerged more recently where Business Sustainability has become a core element of business strategy, and the best incentive for a company’s transformation. Business Sustainability provides a key opportunity for companies to become more competitive in the marketplace by attempting to respond to society’s needs and developing new business models, products and services with a long-term horizon, and designed to promote sustainable profitable growth.

Visionary leaders and “Best in Class” companies have started to explore the benefits of sustainability by moving away from the old business paradigm which focuses mainly on increasing shareholder value and adopting a new paradigm which focuses on creating value for all the company’s stakeholders. This includes shareholders, customers, and employees, local communities, NGOs and government authorities. These leaders and Best in Class companies are clearly “Playing to Win.”

Take for example Wal-Mart CEO Lee Scott, who admitted that his company’s sustainability strategy was driven mainly by the company’s need to protect its image. However, after including sustainability in the core of the company’s business model Wal-Mart has saved US$ 25 Million per year in diesel costs by putting small generators to power the cabins of their trucks. Furthermore, Wal-Mart recently announced a worldwide sustainability index initiative. Wal-Mart launched this initiative by recognizing that (1):

”Increasingly, our customers want products that are more efficient, last longer and perform better. They want to know the product’s entire life cycle. They want to know the materials in the product are safe, that it is made well and is produced in a responsible way.”

The implication of Wal-Mart’s initiative is of enormous significance, since the 60,000 retailers that supply Wal-Mart with products and services would have to align now with the company’s sustainability strategy and measure their offerings according to Wal-Mart Sustainability Index.

Allianz has also shown significant leadership to guide the insurance industry on its journey to sustainability by focusing on how to manage sustainability-related risks and creating innovative solutions. Allianz has launched a new product line which offers climate-related insurance products such as agricultural insurance to cover farmers against weather risks and insurance against lost income from carbon credits, if energy generation is disrupted at a renewable energy project(2).

E. ON, a champion of energy innovation and one of the world’s largest energy electricity and gas energy service providers with total sales of € 87 billion in 2008, has started its E.ON Climate and Renewable Business and plans to invest about € 6 billion on renewable energy between 2007 and 2010.

Entrepreneurship and sustainability is a new emerging trend especially at the grass roots level. People are starting to buy and install solar panels in their homes and to build their own wind turbines. Their experience has sprung into a considerable number of successful small business enterprises. In the US this activity has been very successful after Congress passed the bailout bill in the fall of 2008, which added a 30% tax credit for small-wind projects. This action is expected to enable the growth of sustainable entrepreneurship of small and medium wind business to grow by 40% in 2010 even in a dormant market. Sustainable entrepreneurship has the potential to boost the economy.

Business Sustainability is a new paradigm which focuses on a new approach to value creation, long-term profitable growth and transformation. Visionary leaders who recognize the power of addressing the new social trends and are taking the risks of adopting the new business paradigm are “Playing to Win” and will lead the way….the others will follow.

(1) Goleman D., Ecological Intelligence 2009

(2) Allianz. Managing Risks, Creating Solutions. Sustainable Development Summary report 2009.

(3) E.ON Annual Report 2008