What is Sustainability Management?

What is Sustainability Management?


After decades at the periphery of public and private agendas, sustainability and environmental protection have emerged at the center of our economic and political dialogue. As consumption and population rise, the planet’s resources are showing signs of strain, and energy, water, and waste management have added significant costs to the budgets of government and private organizations. Whereas many environmentalists are motivated solely by their love of nature, sustainability managers (who very well might love nature) focus on environmental preservation because they understand the importance of functioning ecosystems to human well-being. Safe water, air, and food are necessities, not luxuries. The ability to achieve sustainability is increasingly seen as an indicator of a well-run organization. As the private sector shifts toward sustainable practices, it brings us close to achieving the type of critical mass that can have a major effect on the global economy. In this chapter, we define sustainability management in public and private enterprises, describe its evolution, and introduce the management case for sustainability.

We will also take a look at the challenges that sustainable practices can present. In this chapter, we will discuss the evolution of the environmental movement, starting with its initial focus on preserving nature, then moving on to its expanded concern for public health and eventual focus on the transition to a renewable economy. The chapter then places sustainability management in the broader context of the evolution of the field of organizational management. In our view, no organization, and therefore no manager, can ignore what we term the physical dimensions of sustainability. Next, we will discuss the increased use of sustainability principles in management and the growing momentum behind these practices, especially in well-managed corporations and sophisticated municipal governments. This is followed by an analysis of the importance of sustainability metrics. It is difficult to manage the transition to a sustainable, renewable economy without knowing precisely what one looks like. Metrics are the key to setting concrete sustainability goals and tracking an organization’s progress. The chapter then concludes by identifying some of the specific needs that must be met if we are to develop a sustainable, renewable economy.

The Challenges of Sustainability

In the past several decades, we have developed what we sometimes call a brain-based economy. The high-value–added elements of modern economic life involve analytic concepts, technological development, mathematical models, communications, and creativity. We have developed a highly mechanized, energy-intensive, high-throughput economy that is using up the planet’s resources at a ferocious pace. This has resulted in rising prices of raw materials and massive destruction of environmental resources that we rely on for “ecological services” such as clean water and air, which is provided free of charge. Shutting down this economy to prevent further damage is not an option. Instead, given the needs of the developing world, international economic production and consumption will grow dramatically through the 21st century. The only way this growth can be both achieved and maintained is if we pay far more attention to the natural resources affected by our economies and the impact of economic development on self-renewing, interconnected ecological systems.

The cost of mistakes such as the BP oil spill, GE’s dumping of PCBs in the Hudson River, or America’s toxic-waste clean-up program will continue to grow if we do not learn how to manage our organizations and their production according to the principles of environmental sustainability. Our planet is more crowded and resource-stressed than ever, and our global economy is more interdependent. Combined, these factors place increased demands on organizational management and inter-organizational networks. Consider that in the 1940s waste products were freely released into the air and water in unpopulated areas where they, supposedly, would not pose a risk to humans. Steel mills emitted so much pollution that people in Pittsburgh would often need to dust off their vehicles in the morning to see through the windshield. A more populous planet means that there aren’t many remote places to dispose of waste, and we also now understand that toxics can stay in the atmosphere or water supply for decades and have a long-term impact on people and the environment. Coordination among the decentralized networks that produce the goods and services we depend on requires well-functioning transportation, water, and energy infrastructure. Our use of energy and consumption of raw materials dwarfs the consumption rate of that from a century ago. The management of our complex and interconnected economy and the maintenance of the planet that it depends on requires sophisticated sustainability managers in the private and public sectors and a set of environmental rules that can’t be bargained away for short-term material wealth.

Sustainability Management

What is sustainability management? The term sustainability itself has numerous definitions and interpretations. Consensus on the interpretation of sustainability remains elusive, despite decades of scholarly work and practical applications. The most commonly used definition is from the 1987 Brundtland Report, Our Common Future, which defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987). Since then, the concept of sustainability management has developed from a conceptual understanding of development to prescriptive strategies that minimize environmental impact and maximize resource conservation. In Steven Cohen’s 2011 work, Sustainability Management, he observed that: “Sustainability management is simply the organizational practices that result in sustainable development” (1).

Sustainability management is economic production and consumption that minimizes environmental impact and maximizes resource conservation and reuse. The depletion and degradation of our natural resources has changed the cost structure of production in all organizations. Leaders and managers must now double down on efforts to make efficient use of energy, water, and other raw materials, and must pay attention to the content and full cost of the waste produced by their production processes. The issue of sustainability is no longer an add-on to other factors routinely addressed by management; it has moved to the core of management concerns (Unruh, 2014). Following the lead of both private sector corporations and public sector policymakers, the field of sustainability management is focused on strategic analysis and implementation of the most effective technologies and policies.

This new field of study combines organizational management with the field of environmental policy (Cohen, 2011). Sustainability management is both a practical and long-term approach to organizational management. In some respects, a focus on sustainability is an effort to correct modern management, moving it away from the abstract world of financial manipulation and back to the concrete world of physical resources and constraints, which had traditionally been at the forefront of management’s concern. The principles of sustainability management are built on an understanding of human dependence on nature for our well-being. Nature is not protected for its own sake, but for ours; this is a key difference between environmentalists and sustainability managers. These physical dimensions of sustainability can no longer be ignored. The field of sustainability management can help us manage our global economy, ensure long-term growth, and secure a sustainable material future, but we need public policies that encourage private management innovation and accelerate the transition to such a sustainable economy.

The Evolution of the Environmental Movement

Many pundits and politicos are stuck in a 20th century notion of environmental protection and seem to have missed the transition to sustainability. When the environment emerged as a political issue in the early 20th century it was all about Teddy Roosevelt–style wilderness conservation. The environment was thought of as a beautiful and even mystical resource, and its protection was seen as an issue for the elite. This definition is out of date, but has persisted since that time. In the 1960s and 1970s we became aware of the interconnectedness of the environment due to the superb analytic and communication skills of environmentalists such as Rachael Carson and Barry Commoner. Their work led to a redefinition of the environment as an issue of public health. We began to worry about environmental quality not because we loved nature, but because a polluted environment could make you sick. Commoner and Carson focused on the transport of toxics through the delicate interconnected web we call ecosystems. The connection of toxics to cancer and other diseases coincided with greater focus on public health by both governments and citizens.

While the issues of conservation and environmental health remain with us in the 21st century, the transformation of the environmental argument to one of sustainability has changed the issue’s definition and brought it from the fringe to the center of the political agenda. Environmental quality was initially defined as something that might be expensive, but, if pursued, would bring benefits such as higher quality of life and better health. Just a few decades ago, environmental protection was an afterthought and was often done after production was complete by treating waste, effluent, or emissions at the end of a pipe. Similarly, waste treatment and disposal and site remediation were undertaken after consumption had taken place, but production processes remained the same. The sustainability perspective turns this traditional definition upside down.

In contrast to the outdated political debate regarding environmental protection—which incorrectly claims there is a trade-off between environmental protection and economic production—the sustainability management framework demonstrates that continued economic prosperity is dependent on the health of the environment. As the population of the planet grows and the consumption of land, food, water, energy, and raw materials grows along with it, we are learning that we cannot simply use stuff up, destroy the landscape, and move on to the next mountain or valley. The current approach to economic life has created a lifestyle previous generations couldn’t even dream of, but it cannot be sustained without a revolution in management, technology, and scientific understanding of our home planet.

The Sustainability Perspective

Sustainability is an effort to sustain production today without impairing our ability to produce in the future. Our goal is not conservation of resources, but the continued productive use of them. We do not conserve resources for posterity, but we manage resources for their continued use. If a resource can be used only once, we try to learn how to reuse it for another purpose or try to avoid using it when possible. Burning fossil fuels for energy is an excellent example of a one-time use of a natural resource. Once it is burned, it is gone. A sustainability perspective might try to reserve the use of these resources for plastics and building materials. Our goal is to base our consumption on resources that can be grown or renewed. A sustainability perspective would lead a CEO to question an entire production process to see if there was some way to manufacture the same good or service without generating pollution and waste in the first place.

The sustainability perspective is an effort to use design, engineering, and public policy to make economic production and consumption efficient and effective. Pollution that poisons people or the planet may have some short-term benefits, but our experience with environmental remediation and restoration tells us that these short-term benefits expire quite rapidly, and are soon replaced by longer-term costs (Lubber, 2008). We might make $50 million selling the good that resulted in pollution, but the pollution might well cost $500 million to clean up. If you are in doubt, ask BP about the costs of restoring the Gulf of Mexico, or ask GE about the costs of dredging PCBs from the Hudson River. Organizations may benefit in the short run, but someone must eventually pay to clean up the mess. When looking at business practices from the sustainability perspective, we ask if there is a way to make the $50 million without paying the $500 million in clean-up costs. Clean-up costs may seem optional, but if the alternative is to allow a key resource to be destroyed, the cost must be paid. Since 1980 and for the foreseeable future, America’s military, industries, and citizens will be paying hundreds of billions of dollars to clean up the toxic wastes dumped throughout the 20th century. China will soon be facing a similar clean-up bill (The Economist, 2013).

In sustainability management, environmental protection and efficient use of resources is central throughout the production process rather than a clean-up step tacked on at the end. The best run organizations try to minimize their use of non-renewable resources and reduce their environmental and carbon footprints. Companies like Walmart do this because they see it as a way to reduce costs and increase revenues. Sustainability becomes yet another cost advantage that helps a company beat the competition. The best, most effective managers will be sustainability managers, and the best-run organizations will adhere to sustainability principles because they lead to stable, long-term production and, in the private sector, profitability (Locke, 2009, 2).

Corporations traditionally focus on short-term gains over everything else, but sustainability management requires that organizations learn how to think about the long term instead of focusing exclusively on weekly, quarterly, or daily reports (Lubber, 2008). In a world of global, 24/7 electronic media; never-ending financial exchange; and low-cost information and communication, the pressure for immediate information, accomplishment, and gratification is overwhelming. Election cycles in politics have become endless, and corporations are no longer managed to the quarter or year, but to the minute. If we are to achieve a sustainable economy and learn how to consume without destroying this planet’s productive capacity, we must figure out a way to slow down the management merry-go-round.

Evolution of Organizational Management