This report has been created to provide insight as to why businesses should adopt sustainability practices into their core business strategies. Innovation and technology have not only created increased pressure and transparency, they have also created enormous opportunity for businesses in today's high-demand economy. There are incredible examples covered in the included research which demonstrate how organizations have utilized eco-efficiencies to increase margins while simultaneously benefiting both core and fringe stakeholders. The key concept of this paper is to encourage companies to embrace sustainability into their corporate culture in order to fuel innovation and create competitive advantages. Technology can be leveraged in a wide array of possibilities to maximize operational efficiencies, increase margins, and impact society at the same time. The research conducted to support the main argument of this report includes readings from Saint Cloud State University's MBA 605 - Strategies for Sustainable Development class, as well as multiple external readings from credible internet sources.
Anyone who is employed in a technology field will find this report especially interesting; however, the content is relevant to multiple areas of business and business strategy. Whether you are passionate about sustainability or not, the research in this paper will apply to you if you are interested in maximizing operational efficiencies through innovation and technology. The key eco-efficiencies covered include: reduced material and waste expenses, reduced energy expenses, and reduced water expenses. As companies embrace technology, combined with a sustainable strategy, additional innovations will be constructed as these companies strive towards becoming sustainable. The bottom line is that technology and innovation will fuel the transition to sustainable enterprises. Is your company going to be left behind?
How Innovation and Technology Will Fuel the Transition to Sustainable Enterprises by Eric Cuka
1. How Innovation & Technology Will Fuel the Transition to
Sustainable Enterprises
By Eric Cuka
6/30/2011
Saint Cloud State University - MBA 605
2. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 2
Executive Summary
This report has been created to provide insight as to why businesses should adopt
sustainability practices into their core business strategies. Innovation and technology have not
only created increased pressure and transparency, they have also created enormous opportunity
for businesses in today's high-demand economy. There are incredible examples covered in the
included research which demonstrate how organizations have utilized eco-efficiencies to increase
margins while simultaneously benefiting both core and fringe stakeholders. The key concept of
this paper is to encourage companies to embrace sustainability into their corporate culture in
order to fuel innovation and create competitive advantages. Technology can be leveraged in a
wide array of possibilities to maximize operational efficiencies, increase margins, and impact
society at the same time. The research conducted to support the main argument of this report
includes readings from Saint Cloud State University's MBA 605 - Strategies for Sustainable
Development class, as well as multiple external readings from credible internet sources.
Anyone who is employed in a technology field will find this report especially interesting;
however, the content is relevant to multiple areas of business and business strategy. Whether
you are passionate about sustainability or not, the research in this paper will apply to you if you
are interested in maximizing operational efficiencies through innovation and technology. The
key eco-efficiencies covered include: reduced material and waste expenses, reduced energy
expenses, and reduced water expenses. As companies embrace technology, combined with a
sustainable strategy, additional innovations will be constructed as these companies strive towards
becoming sustainable. The bottom line is that technology and innovation will fuel the transition
to sustainable enterprises. Is your company going to be left behind?
3. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 3
Introduction
Today's rapidly changing business environment has increased innovation exponentially.
Most companies are forced to adapt by constantly researching and developing new, cutting-edge
products. Sustainable enterprises not only maximize efficiencies, but also create competitive
advantages in the marketplace. The key to sustainable enterprises relies on dialogue between
innovators and stakeholders. Through innovation and technology, companies have the ability to
maximize efficiencies, reduce waste, increase profits, and impact society in a positive manner.
Improved machinery, transportation, buildings, hardware, software, standardized reporting
metrics, and disruptive technologies will fuel the transition to sustainable enterprises.
According to Bloomberg Businessweek, companies have historically seen being socially
responsible as handing out checks to victims of natural disasters, being reactive to environmental
groups and NGOs, and greenwashing as a form of marketing to increase sales. "Now the
corporate sustainability movement has a simple premise: saving the planet can save big bucks.
Executives are trying to realize meaningful cost savings by coming up with innovative ways to
go easier on the environment," (Stanford, 2011). "How fully companies adopt sustainability
efforts in this decade could have a real impact on their shareholder value", says Daniel C. Esty,
an environmental policy professor at Yale Law School. The Yale professor thinks that
sustainability will become as transformative for business as the earlier quality and information
technology revolutions, once more executives understand the potential to increase operational
efficiencies, reduces costs, and increase margins through a sustainable enterprise (Stanford,
2011).
This paper will discuss how innovation has not only created more pressure for businesses
to become socially responsible, but how sustainability actually makes sense for companies to
4. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 4
incorporate into their core business strategy. There are several examples that describe how
companies have saved enormous amounts of money by rethinking shipping solutions, designs,
and other efficiency practices. Some of these companies achieve benefits by a sustainably
designed strategy, whereas others simply make an adjustment to save money without the primary
purpose being the environmental or societal stakeholders. The more that these examples are
examined, the more it makes sense for companies to pursue social responsibility and adopt
sustainable practices into core business strategies. When a company is actively looking for
sustainable improvements, more opportunities will be uncovered. Additionally, more
innovations and technological advancements will be created to fuel sustainable enterprises when
engineers are proactively designing with sustainable practices in mind.
Theoretical Framework & Empirical Findings
The first framework article, Building a New Institutional Infrastructure for Corporate
Responsibility, discusses the environment that businesses face in today's global economy.
According to the article, there has been a new surge of interest in corporate sustainability (CR)
since the mid 1990s, which has been fueled by the global communications capabilities of the
internet and other related technologies. Companies face new pressures to adopt greater corporate
responsibility. The article says that a key reason for closer attention to CR is that over half of
companies' assets today are intangible assets, such as good-will, reputation, and human capital.
All of these intangible assets rely on the quality of shareholder relationships which the company
has developed. The evolution in the concept of responsibility infrastructure focuses on the
integration of corporate responsibility with business models. Additionally, the integrated
5. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 5
strategy recognizes the impact of companies' business strategies and practices on societies,
stakeholders, and sustainability (Waddock, 2008).
According to Bob Willard's presentation from class, transitioning to a sustainable
enterprise starts with a company's beliefs and culture, then permeates into all aspects of the
business. Willard positions companies on a five-stage sustainability continuum model. Stage
one is known as the pre-compliance stage. Companies at level one cut corners to save costs and
do their best to not get caught for breaking laws. This stage is obviously a very risky position to
be in, and companies do not want to be in this stage. These organizations are illegal and
unsustainable. Stage two is the compliance stage. Companies at stage two do the minimum to
obey the law. While these firms are legal, they are still unsustainable. Stage three is known as
the beyond compliance stage. A company voluntarily moves into stage three when it realizes
that it can save money with proactive, operational eco-efficiencies. Stage four is the integrated
strategy phase. These firms focus on all stakeholders and inject sustainability practices into their
DNA. Stage five is known as passion and purpose. These organizations are unique because they
are created by value-driven founders. These companies do not go through the stage development
model since they are created at level five (Willard, 2011).
According to Willard, sustainability can be used as a tool to accomplish a company's
strategic vision. When integrated properly, sustainability offers seven tremendous benefit areas.
Three of the primary areas of benefit include: reduced material and waste expenses, reduced
energy expenses, and reduced water expenses. These three benefit areas, which this paper will
focus on, help improve the efficiency of links throughout an organization's operations. The other
four benefit areas are: increased revenue and market share, increased employee productivity,
reduced hiring and attrition expenses, and reduced interest on borrowed capital. Willard explains
6. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 6
that increased operational efficiency will improve revenues and market share (Appendix A)
therefore, those are the key areas that this paper will focus on. The core of this paper will cover
each of the three primary benefit areas: reduced material and waste expenses, reduced energy
expenses, and reduced water expenses, in relation to innovation and technology (Willard, 2011).
A key framework article which was covered in class that relates to this paper is The
Biosphere Rules article. This article, by Gregory Unruh, discusses how nature employs
production processes which are surprisingly efficient, environmentally sound, and widely
imitable. The first step for business leaders who wish to implement the biosphere rules is to re-
think sourcing strategies and dramatically simplify the number and types of materials that the
company uses during their production. According to the article, the purpose for this step is that
it is critical if the company is striving to recycle in a cost effective manner (Unruh, 2011).
Companies often use toxic-materials screens to weed out undesirable materials from their
supply chains. Toxic-materials screens can be as simple as defining a banned list of substances
which are obvious to laboratory analysis and high dollar consultants. According to the article,
although these screens do make sense, it is often a very slow process for managers to overcome.
The key is to choose materials which are physically capable of being upcycled (Unruh, 2011).
"Upcycling is the process of converting waste materials or useless products into new materials or
products of better quality or a higher environmental value," (Wikipedia.org).
The second step to The Biosphere Rules, which complements step one, is to rethink
design. Innovative product development requires firms to think about product design by looking
at the end first. In other words, to make virtuous recycling work, managers need to plan at the
beginning of the product design for the end of the product's life. If the product is being thrown
away at the end of its useful life, eco-efficient managers need to plan to minimize the amount of
7. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 7
materials in their products. If the materials can be recovered economically, the strategy can be
adjusted accordingly. This article discussed Polyamid 2000, who had nearly five billion tons of
carpet waste being dumped into landfills annually in the 1990s. Less than five percent of waste
carpet was being recycled in that era which led to NGO and governmental uproar. Polyamid
constructed a state-of-the-art facility which was expected to extract 20 million pounds of new
Nylon 6 from 250 million pounds of waste carpet each year. Unfortunately, the strategy failed
because it was neither economical nor sustainable. The company, which was actually trying to
be sustainable through this strategy, ultimately starved itself to death and closed operations.
According to the article, manufacturers can avoid this pitfall by cycling up and designing
recovery value in at the outset (Unruh, 2011).
According to the EPA's website, there are different approaches to reducing material and
waste expenses depending on the type of organization. Reducing transport packaging, changing
office operations, and adjusting manufacturing processes are all possibilities to consider. For
example, many offices have stacks of printed purchase orders and documents that could be
converted into electronic systems like Electronic Data Interchange (EDI). "EDI is the structured
transmission of data between organizations by electronic means. It is used to transfer electronic
documents or business data from one computer system to another computer system, i.e. from one
trading partner to another trading partner without human intervention," (Wikipedia.org).
Another consideration is to use alternative packaging that could use less material or reduce the
weight for shipping costs. Products could also be redesigned to be smaller, use different
materials, weigh less to reduce shipping, etc. (EPA.gov).
8. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 8
Dell has recently developed a sustainable packaging strategy which includes an
innovative mushroom-based packaging solution. This solution is an advanced biotechnology
that has been sponsored by the National Science Foundation, the US EPA, and the US
Department of Agriculture. This innovation is a way to utilize common agricultural waste
products such as rice, cotton, and wheat chaff to replace environmentally unsustainable products
such as polyethylene and styrofoam in packaging. This is a good example of sustainable
upcycling. Not only is this technology environmentally friendly, it also reduces the amount of
packing materials needed. The mushroom packaging is unique because it is actually grown,
rather than manufactured. Waste products, like cotton hulls and wheat chaffs, are placed in a
mold which is inoculated with mushroom spawn. The cushions take five to ten days to grow and
become the root structure of the mushroom. The energy needed to create these mushroom
cushions is supplied naturally by the carbohydrates and sugars from the waste; therefore, there is
no need to use energy which is based on carbon or nuclear fuels. This innovation has been
growing a large amount of support, and similar technologies are being developed globally
(Campbell, 2011).
Dell has made a commitment to developing and delivering packaging solutions that are
environmentally friendly. The company recently adopted a policy that they call the Three Cs,
which focuses on the cube (reducing box size), the content (what materials are used), and the
curb (convenient and acceptable for local recycling services). Dell has an aggressive plan to
eliminate 20 million pounds of packaging materials by 2012. Additionally, Dell has a goal to
ensure that 75 percent of their packaging is curbside recyclable by 2012 (Campbell, 2011).
9. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 9
Pepsi-Cola saved $44 million by making adjustments to their shipping solutions. The
company switched from corrugated to reusable plastic shipping containers which saved 196
million pounds of corrugated materials. Dow Corning saved over $2 million dollars and
conserved 7.8 million pounds of steel by reconditioning their steel drums in 1995. Additionally,
HASBRO, Inc. saved $400,000 and conserved over 763,000 pounds of material simply by
reducing the thickness of their shipping containers by 15 percent. Technological advancement in
shipping solutions has not only positively impacted the environment, but also profitability for
pro-active businesses (EPA.gov).
Bob Willard's second sustainability benefit that this paper will address is reduced energy
expenses. As demonstrated above, technological advancements in shipping solutions have
reduced energy expenses; however, there are other innovations to consider as well. According to
the US Department of Energy, renewable energy technologies and energy efficiency innovations
are the two main categories that businesses can consider. Renewable energy includes a plethora
of topics such as solar power, wind power, water power, biomass, geothermal, hydrogen cells,
and fuel cells. Energy efficiency topics include buildings, vehicles, electronics, appliances, IT
infrastructure, and others (U.S. Department of Energy).
The article Strategy and Society, by Michael Porter and Mark Kramer, discussed Whole
Foods as a company who was founded at stage five of Willard's five-stage sustainability
continuum model. The article stated that the company purchased renewable wind energy credits
equal to one hundred percent of its electricity use for all of its retail stores and facilities.
Additionally, spoiled produce and other biodegradable waste is sent to regional composting
centers, and their trucks are being converted to run on bio-fuels. The company is committed to
natural and environmentally friendly operating practices. They focus on purchasing from local
10. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 10
farmers and avoid approximately 100 common ingredients, which have been deemed unhealthy
or environmentally damaging. Nearly every imaginable aspect of the company's value chain is
structured around the social dimensions of its value proposition. The implementation of
sustainability into the strategic alignment of the company has allowed Whole Foods to enjoy a
competitive advantage with the ability to command premium prices through a niche market
selling organic, natural, and healthy foods (Porter & Kramer, 2006).
Many organizations, such as Whole Foods, are using renewable energy as part of their
business strategy. The EPA has created the Green Power Partnership which is a voluntary
program which encourages companies to buy renewable energy as a way to reduce the
environmental impacts associated with purchased electricity use. Partners in this program
include Fortune 500 companies, governmental agencies, universities, and small to medium sized
businesses. The EPA lists the following as benefits to the program: avoid carbon dioxide
emissions; reduce air pollution; hedge against future electricity prices; serve as a brand
differentiator; generate customer, investor, or stakeholder loyalty and employee pride; enhance
public image; and demonstrate civic leadership (Green Power Partnership).
Intel Corporation is currently ranked number one on the EPA's Green Power Partnership.
In fact, the EPA's website states that Intel uses over 87 percent green power. The company
purchases over 2.5 billion kilowatt-hours a year of renewable energy certificates. This
renewable energy is generated from wind, solar, low impact hydro, geothermal, and biomass
sources, all of which are Green-e certified. Furthermore, Intel was awarded the Green Power
Leadership Award in 2010, the Partner of the Year in 2008, and the Partner of the Year in 2009.
Intel's investment in green power has the equivalent environmental impact of taking over
340,000 passenger cars off of the road annually. This number is also equivalent to the amount of
11. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 11
electricity to power over 215,000 average-sized American homes annually. Intel's President and
CEO, Paul Otellini, said, "Our renewable purchase is just one part of a multi-faceted approach to
protect the environment, and one that we hope spurs additional development and demand for
renewable energy," (Partner Profile).
In addition to renewable energy, there are numerous innovations that can be leveraged by
companies to reduce energy usage as well. In 2010, buildings used approximately 40 percent of
the energy consumed in the United States economy alone, with a cost of over $400 billion.
Improvements in efficiency can be leveraged to make these buildings more efficient and build a
stronger economy. New innovations in lighting, insulation, climate control, analytics, and
maintenance allow companies to improve efficiencies like never before. In fact, President
Obama announced the Better Building Initiative to make commercial buildings 20 percent more
efficient by 2020. Additionally, this program will accelerate investments in private sector energy
efficiency. This program, announced in February 2011, provides over $500 million in federal
funding which allows communities to expand the building improvement industry and help the
United States strive towards a cleaner energy future. The Department of Energy is partnering
with organizations to demonstrate innovative and replicable approaches to improve efficiencies
in offices, schools, hospitals and homes across the nation (Better Buildings).
Another sector which uses a high volume of energy is information technology (IT). In
fact, it is estimated that IT accounts for at least two percent of global energy use. Because of this
awareness, there has been a significant amount of discussion revolving around "Green IT" over
the past several years. IBM's website states that data centers use 10 to 30 times more energy per
square foot compared to office space. The goal of Green IT is to make energy efficiency a key
metric when measuring IT operation effectiveness. IBM's website also states, "By combining
12. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 12
hardware, software and services offerings, IBM can help companies improve service, better
manage risk, and resolve resource constraints-all while reducing overall energy costs by 15% to
40%," (Green IT).
As mentioned, studies have shown that IT accounts for at least two percent of the world's
energy use; therefore, new companies are emerging with innovations to reduce energy
consumption in this space (Appendix B). There have been numerous advancements in
technology that allow companies to save significant amounts of money through IT efficiencies.
In fact, Green Revolution Cooling is a revolutionary company that has developed a non-
conductive white mineral oil that holds 1,200 times more heat by volume than air to submerge
servers. According to the company's website, although many industrial machines are already
using liquid cooled technologies, most servers in large, corporate data centers are still air cooled.
Considering that the cooling costs are many times more expensive than the hardware itself, it
certainly seems like a paradigm shift in IT could make a significant impact on energy efficiency.
According to their website, Green Revolution Cooling can reduce cooling energy use by over 90
percent while reducing server power by 10 to 20 percent at the same time. (Green Revolution
Cooling).
Another strategy to reduce energy consumption in IT involves a wider use of cloud
computing technology. Cloud computing, in simplistic terms, means outsourcing a company's IT
needs. These technologies can range from data storage to software applications. Instead of the
traditional IT environment, where servers and data centers are hosted onsite at a company, cloud
computing consists of having the data servers and/or applications located offsite, and accessed
through the internet. A recent study by Microsoft, Accenture, and WSP suggests that companies
can reduce energy use and carbon footprint of computing by up to 90 percent when leveraging
13. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 13
cloud services. Additionally, this study stated that smaller companies can actually enjoy more
benefits realization from cloud computing than larger corporations. For companies with over
10,000 users, the reduction of greenhouse gas (CHG) emissions is 30 percent, whereas firms
with 100 users receive a 90 percent reduction (Cloud Computing is Greener, 2011).
Bob Willard's third benefit of sustainability is reduced water expenses. Less than three
percent of the Earth's water is fresh, and the depletion of the world's water supply degrades our
natural environment and puts the future of mankind at risk. Efficient appliances, innovative
processes, improved irrigation practices, and overall behavioral changes can reduce water
consumption by as much as a third. From a corporate perspective, improving water efficiency
not only satisfies environmental and societal stakeholders, it also impacts the bottom line
positively through reduced water and sewer expenses (Water Conservation).
Gangi Brothers Packing Company, a tomato processing and canning plant in California,
adopted several water conservation practices in its factory to reduce water consumption from 148
billion gallons to 56.8 billion gallons in just six years. These improvements were able to save
the company $130,000 a year in water and sewer costs. Another excellent example is the Pacific
Power and Light Company in Wyoming which uses dry cooling to eliminate water losses from
cooling-water blow down, evaporation, and drift. The company equipped the station with an air-
cooled condenser, and steam from the turbine is distributed by overhead pipes into finned carbon
steel tubes which run to 69 fans. These fans force approximately 45 million cubic feet per
minute of air through eight million square feet of finned tubes which condense the steam. This
innovative system reduced water consumption from 4,000 gallons per minute to about 300
gallons per minute (Water Conservation).
14. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 14
Innovative technologies have also inspired businesses to take water waste and transform
it into an entirely new asset. As covered in class, Pepsi-Cola's Walkers potato chip plant in
Leicester, England plans to condense steam and reuse the captured water to reduce sewer and
water costs. Potatoes are 80 percent water, and this factory alone slices and fries 350,000 tons a
year. Most of the water from the potatoes is lost as steam which is released into the atmosphere.
According to Martyn Seal, the company's European director of sustainability, this innovation
could save the plant $1 million annually (Stanford, 2011).
Analysis
Technology and innovation alone will not make companies sustainable. Companies must
leverage technological advancements to empower their business once a sustainability model has
been planned and implemented. As the research has shown, through innovation and technology,
companies have the ability to maximize efficiencies, reduce waste, increase profits, and impact
society in a positive manner. Considering the fact that over half of companies' assets today are
intangible assets such as good-will, reputation, and human capital, corporate social responsibility
is critical for businesses to remain competitive and prosperous (Waddock, 2008). As seen in
recent news with the Mattel/Greenpeace protest, social and viral media can damage a company's
reputation, or shift a company's stock price in just a few hours (Hughes, 2011). By including all
stakeholders in a company's strategy, these risks can be mitigated while simultaneously
increasing profits and the overall value of the firm, as well as positively impacting the
environment and society. This strategic approach is also known as the triple bottom line.
15. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 15
A successful society fosters successful corporations. Education, health care, and equal
opportunity are critical to sustain a productive workforce. For example, companies that create
safer products and working conditions will not only attract customers, but also a higher quality
talent pool. Additionally, risk is reduced, which will decrease accidents and lawsuits while
increasing profits. When companies efficiently utilize land, water, and other natural resources,
they become more productive. All of these examples explain how doing good can create good
for an organization. This strategy supports sustainability. On the other hand, a healthy society
also needs healthy companies. "No social program can rival the business sector when it comes to
creating jobs, wealth, and innovation that improve standards of living and social conditions over
time," (Porter & Kramer, 2006).
The three benefits that this paper focused on, reduced material and waste expenses,
reduced energy expenses, and reduced water expenses, are the simplest to adopt first because all
companies are interested in profitability. This paper has been created to provide some insight as
to why corporations need to pay attention to sustainability if they have not already done so. The
concepts behind sustainability are rather simple; however, the terms and concepts behind the
strategy have been misused, greenwashed, and confused by the majority of the public in the
United States. Making an adjustment to save money may be environmentally friendly; however,
the intent should not simply stop at attempting to save money on a single, one-off project. The
key is for companies to embrace sustainability into their culture, as part of their strategic
objectives and overall business strategy. As companies adopt sustainable practices into their
corporate culture, other efficiencies and innovations will emerge throughout the company,
advancing it up Willard's five-stage sustainability continuum model. If the corporate culture
embraces sustainability into every aspect of their daily routine, innovations will evolve
16. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 16
expeditiously and create new revenue streams, a stronger public image, and a competitive
advantage. If a company is not founded at level five of Willard's model, it should strive to
achieve level four, the integrated strategy phase. These firms focus on all stakeholders and inject
sustainability practices into their corporate DNA.
This paper is not suggesting that becoming a sustainable enterprise is something that will
happen overnight. It is designed to provide insight on the direction of today's dynamic, high-
impact business environment. The companies who embrace sustainability as a strategy will
overcome adversity and not only survive, but thrive in today's ultra-competitive atmosphere.
There are indeed parallels to innovation, international business, and sustainable enterprises. The
study of international business is a fairly recent phenomenon, and the accelerated knowledge of
foreign business methodologies, individual cultures, and best practices have improved our global
economy immensely. Prior to having advanced technology, the costs to seek and gather
information were very high, which limited consumers and corporations alike. Competitive
pressure forces companies to improve efficiencies and reduce costs. Sustainable enterprises
enjoy the benefit of improving operational efficiencies and reducing costs while satisfying its
fringe stakeholders simultaneously.
Although technology and innovation evolves rapidly, a large portion of the world never
benefits from these innovations. Companies also have a tremendous opportunity to focus more
on the Base of the Pyramid (BOP) to increase market share, maximize profits, benefit society,
satisfy shareholder expectations, remain sustainable, and satisfy social and environmental
stakeholders. This phenomenon is known as the "great leap" to the base of the economic
pyramid, where there are approximately four billion people aspiring to join the global market for
the first time. Although the main reason may be for profit, and not simply to do the right thing
17. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 17
and lift people out of poverty, the leap would be accomplishing both of these at the same time
(Hart & Christensen, 2002).
Another important issue to consider is the fact that the world does not currently have a
universal reporting standard to provide transparency and apples-to-apples comparisons between
companies. In order for mankind to embrace sustainability on a universal scale, companies must
incorporate standardized reporting procedures. The Global Reporting Initiative (GRI) is the
most well-known, global network-based organization that strives to provide a universal
framework for corporations to adopt universal sustainability reporting. GRI's Reporting
Framework is created through a conscious, multi-stakeholder process. This framework is
designed to establish the principals and performance indicators which organizations can leverage
to measure and report their economic, environmental, and social performance. According to
GRI's website, the cornerstone of the framework is the Sustainability Reporting Guidelines, and
the third version of the guidelines – known as the G3 Guidelines - was published in 2006 and is a
free public asset (Global Reporting Initiative).
By adopting sustainability into an organization's strategy, and leveraging a universal
framework for reporting standards, stakeholders will have transparency into the good and the bad
of individual corporations. With accountability, companies will be forced to recognize the value
and the impact of becoming a sustainable enterprise. Other technologies, such as business
intelligence software, need to embrace the universal reporting standards into the development of
the software. Companies, like Oracle, IBM, SAP, Microsoft, and others, all currently have
robust business intelligence software solutions; however, they are not created equally, and no
universal standard exists in this arena. By partnering with the Global Reporting Initiative, these
technology companies will provide an enhanced value to their customers, while at the same time
18. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 18
strengthening their brands and profitability. I certainly feel that the first company in this space
who recognizes the importance of this alignment can create a competitive advantage in the
marketplace. Most of the reporting solutions available have the functionality to be programmed
to meet GRI standards; however, I am suggesting that these standards become out-of-the-box
features for companies to leverage.
Once companies have the ability to seamlessly integrate transparency through these
technologies, creating additional eco-efficiencies will be less complex and more scalable. For
example, if a company strives to reduce energy consumption by a specified number, it needs to
have the ability to collect, examine, and report the data. All companies have the ability to collect
data; however, most organizations face the challenge of how to consolidate, examine, and report
it. Once mastered, companies can incorporate best practices and methodologies, which have
been learned from data analysis, into other areas of the business. Most companies currently
focus on making inefficient designs more efficient; however, companies with sustainability
incorporated into their business strategy will instead be able to design efficiently from inception.
This relates back to the second step of The Biosphere Rules, which suggests that companies
should rethink design, by looking at the end first. In other words, businesses need to plan at the
beginning of the product design for the end of the product's life. This example again circles back
to the argument that as companies embrace technology, additional innovations will be
constructed as the company strives toward becoming a sustainable enterprise.
Conclusion
In order for growth and survival in today's business environment, companies are faced
with increasing pressure to not only attract and retain customers, but also to satisfy multiple
19. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 19
stakeholders with various objectives. Today, customers are more sophisticated and have higher
expectations than those in past decades; therefore, better products and services are demanded.
Improved approaches are required by firms in order to remain sustainable, and companies are
forced to adapt by constantly researching and developing new, cutting-edge products. This
intense, competitive business environment forces companies to operate more efficiently.
Sustainable enterprises not only maximize efficiencies, but also create competitive advantages in
the marketplace. Through innovation and technology, companies have the ability to maximize
efficiencies, reduce waste, increase profits, and impact society in a positive manner. As
previously mentioned, over half of companies' assets today are intangible assets such as good-
will, reputation, and human capital. All of these intangible assets rely on the quality of
shareholder relationships which the company has developed. The evolution in the concept of
responsibility infrastructure focuses on the integration of corporate responsibility with business
models. Additionally, the integrated strategy recognizes the impact of companies' business
strategies and practices on societies, stakeholders, and sustainability. Innovation has created
more pressure for businesses to become socially responsible. As demonstrated, technology and
innovation have also proven to fuel eco-efficiencies. Furthermore, this paper has shown that as
companies embrace technology, combined with a sustainable strategy, additional innovations
will be constructed as these companies strive towards becoming sustainable. Simply put,
technology and innovation will fuel the transition to sustainable enterprises.
20. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 20
Appendices
Appendix A:
(Willard, 2011)
21. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 21
Appendix B:
22. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 22
Works Cited
Better Buildings. Retrieved June 26, 2011, from U.S. Department of Energy:
http://www1.eere.energy.gov/buildings/betterbuildings/
Campbell, O. (2011, April 5). Dell Plans Pilot to Ship Products in Mushroom Packaging
#Fortunegreen. Retrieved June 26, 2011, from Dell.com: http://en.community.dell.com/dell-
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