Bringing Environmental Sustainability into Organizational Management

For about a decade or so I’ve been working on the problem of bringing the physical dimensions of sustainability into the routine management of organizations. On a more crowded, resource-challenged world, management is finding environmental costs and risks to be a more significant challenge and cost burden than they once were. These physical dimensions include: energy efficiency and the use of renewable energy, the use of water and other material resources, and management of the waste and environmental impacts produced by an organization’s production and consumption. To date, the research program I lead at Columbia’s Earth Institute in Sustainability Policy and Management has focused on these dimensions through studies in sustainability metrics and sustainable finance.

Metrics are needed because, to paraphrase Peter Drucker, you can’t manage something if you can’t measure it. Without measurement, you can’t tell if management is making things better or worse. Finance is needed because the transition to a renewable resource-based economy will require massive infusions of capital. These projects have been useful starting points for our work, and have been reflected in new courses at Columbia in sustainability metrics and sustainable finance. But a focus on organizational innovation is also needed, because in the final analysis, environmental sustainability will never happen if we do not bring it into the routine functioning of organizational life. We teach about sustainability management, but to do a better job we need to conduct research into the factors that promote or impede the growth of sustainability concerns in modern organizations.

For that reason, we are about to begin a five-year study of sustainability in contemporary organizations. We will examine in granular detail as many private, nonprofit and public organizations as we can gain access to in order to understand their success and failure at bringing environmental concerns into their organizations. Our goal is to collect case information about the efforts to incorporate the function of environmental sustainability into a variety of organizations. This information will be analyzed to identify best and worst practices and develop a handbook of organizational sustainability. I would welcome suggestions, nominations, and all the help I can get in identifying organizations we should study. We are still in the process of designing this research and would be grateful for suggestions about the approach we are taking. The cases will be coded to create a data set that will enable us to identify correlates and possibly causes of success and failure in bringing sustainability concerns into organizational management. We will also mine these case studies for qualitative lessons to develop a “lore” of sustainability management. We hope to enhance the growing case literature now available in sustainability management.

To be specific, our case studies will include information on these eleven areas:

1. Background on the Organization: Sector (public, private for profit, private nonprofit), mission/market niche, number of staff, revenues/expenses/geography, strategy and/or business model.

2. Definition of sustainability in this organization
   1. Does it include non-environmental factors?
   2. Is it a “standard” definition, or does it include some unusual elements perhaps unique to the organization?

3. Leadership
   1. Does the CEO, CFO, COO and governance board support sustainability? How do they demonstrate support or opposition?
   2. Who leads the sustainability function? How is this leader perceived? What is the leader’s relationship to organizational leadership?

4. Organization structure and capacity
   1. Where does the function “sit”?
   2. How is it defined and what kind of people work on it (engineers, environmental experts, PR people, finance folks)?
   3. What is the sustainability team expected to do?

5. Resources: Capital and operating budget and number of personnel devoted to sustainability.
   1. How much staffing and funding is allocated to the sustainability function? Is it adequate?
   2. Is there capital funding for equipment and other needs? Is it sufficient?

6. Strategy: What are the organization’s sustainability goals?
   1. How specific and measurable?
   2. How important to the overall organizational strategy?
   3. What sustainability outputs and outcomes has the organization produced? How does this compare with strategic goals?

7. Sustainability Metrics: How is sustainability measured in this organization?

8. Relations with suppliers and partners: Do they share sustainability goals and work and if so, how?
   1. How is environmental sustainability measured, audited and assured throughout the supply chain?

9. Internal Perceptions of Sustainability
   1. How is sustainability perceived within the organization?
   2. Is it considered a success? Central? Fringe?

10. Importance of Sustainability
    1. Is sustainability an integral part of the organization?
    2. Why or why not?
    3. What contributed to the success or failure to make sustainability an organizational routine (according to insiders, according to outside analysts and observers)?

11. The Future of Sustainability in the Organization
    1. What would be needed to improve the sustainability performance of this organization?
    2. Are any of those steps underway, under discussion or planned?
    3. What is the probable future of the sustainability function in this organization?

Let me reiterate that the case study methodology I summarize above is not set in stone; we expect it will be modified during pilot phase of our study. We are open to comments even before we begin our research. We want to study as many different types of organizations as possible: service, manufacturing, retail, big institutions, small businesses, start-ups, U.S., global–everything. We want to accelerate the process of learning what works and what doesn’t in order to apply the lessons learned to organizational life. Our goal is not knowledge for its own sake, but to accelerate the process of advancing sustainability management worldwide.

This degree of innovation and change has happened before in modern organizations. Accounting was refined and added to organizations as the result of regulations issued by the U.S. Security and Exchange Commission in the 1930s. If a company wanted access to the public equity market they had to report financial results according to government’s rules. This led to ever more sophisticated systems of audit, financial tracking, accounting control and financial management.  Non-financial organizational performance measures were greatly enhanced with the development of computers beginning in the 1960s and continued to pick up steam over the past two decades. Real-time data on organizational performance is now available to managers in ways that could not even be imagined in the twentieth century. Global markets and world-wide inter-organizational networks were added to organizational routines with the development of inexpensive communication, bar codes, GPS, inexpensive computing, and containerized shipping. At first, when international trade led to a global economy at the end of the twentieth century, many organizations had “international trade” desks. Today every desk is an international desk. In this second decade of the 21^st century, many organizations have distinct sustainability desks or organizational units. Our goal is that in a few decades, every desk will be a sustainability desk. Just as today’s leaders routinely think of global trade, tomorrow’s leaders will also think about sustainability.

Our goal should be to accelerate the development of more environmentally sensitive methods of organizational management. Some of the damage we are now doing to the planet will be expensive to repair and some destruction may be irreversible. Young people entering the ranks of organizational management understand the urgency of the issue and we need to provide them with the tools needed to successfully innovate. Our research team is searching for cases, contacts, concepts, collaborators and cash to conduct this long-term study.  While we will undertake this study over a number of years, we do not plan to wait five years to disseminate what we learn. We plan to constantly release cases and analyses and refine our conclusions as we collect more information. Our goal is to learn and apply what we learn as quickly as possible.