Sustainability is not a high priority for most companies, and it is not becoming one -- that is the conclusion of a just-released survey of global executives by the Sloan Management Review. Explanations for the lack of corporate focus on sustainability include the poor economy and the difficulty in determining what is coming next in terms of business challenges.
The results of the survey paint a mixed picture. Less than half of the executives say that their company's business models are changing in order to incorporate sustainability. On the other hand, an increasing number of executives say that sustainability is becoming a competitive necessity, and that it is on the strategic agenda of their corporation. However, they point out that it is not a core strategic consideration at this time.
The survey does not ask if corporations have changed their organization design and management practices to take sustainability into account. Given the results of the survey, however, a good guess is that they have not. They may have talked about sustainability and perhaps changed some policies, but they probably haven't seriously grappled with what it takes to create an organization that performs well financially, socially, and environmentally. This a major failing, because organizations are only able to perform well on the triple bottom line measures of profitability, sustainability, and social impact when they are designed with this objective in mind.
In our recent book, Management Reset, Chris Worley and I point out that designing organizations that perform well on triple bottom line measures requires more than just management giving lip service to it and taking sustainability into account when some decisions are made. It requires a management reset that starts with a business strategy that is intended to produce positive results in all three areas. This is only likely to occur if the organization's leadership believes that sustainable performance is critical and that achieving it can only be accomplished with a management approach that focuses on it.
Just to take one example of what's required, corporate boards need to look very different than they currently do. They need to not just include independent directors, they need to include individuals with expertise in social responsibility and sustainability. Further, they need to receive ongoing performance information with respect to the corporation's financial, social, and environmental performance. They also need to perform audits of the organization's sustainable performance and be sure that shareholders receive reports of the organization's performance in the three areas.
At this point it's hard to be optimistic about companies engaging in the type of redesign that is needed in order for them to become sustainably effective. The business environment is currently working against it, and there isn't likely to be any legislation that would motivate corporations to focus more on sustainability and their social impact. There probably will be some companies that change because their CEOs and senior managers feel it's the right thing to do, but unfortunately they are likely to be the exceptions, not the norm. It is likely that in the foreseeable future, sustainability will continue to get some attention in corporations, but it will not be a major focus or a top priority, and as a result corporations will not have a more positive social and environmental impact.
Crossposted from Forbes.com.