Increasingly complex and persistent sustainability challenges, such as climate change, poverty, and resource deficiencies are negatively impacting ecosystems and societies around the world. To address these issues, societies need to fundamentally restructure consumption and production systems by initiating sustainability transitions. Companies, especially large ones, can play a fundamental role in driving sustainability transitions and advancing society towards sustainable development. However, many companies lack a clear understanding of the different organizational roles they may assume to drive transitions in society. As a result, corporate sustainability efforts often focus on decreasing the environmental impacts of business operations. While contributing to the mitigation of companies’ negative business impacts this approach fails to catalyze sustainability transitions. My study on transformative business roles specifies three transition roles companies may assume beyond mitigation to drive large-scale transitions in society. Companies can act as innovators by investing in the development of new sustainable technologies. They may also adopt an advocator role by promoting new policies, regulations, or programs. Finally, companies can also invest in the development of sustainable infrastructure, acting as infrabuilders. What role or combination of roles companies may assume depends on the combination of their unique resources, motivations, actions, and relationships, as well as their institutional context.
Many companies lack a clear understanding of the different organizational roles they may assume to drive transitions in society. Click To Tweet
The benefit of transitions for business and society
When companies adopt a transformative role, they need to think more broadly about how they can foster changes in the markets and value chains within which they operate. The pursuit of a transformative business role may not only help shape and radically change value chains and markets, but also companies internal organization. Hence, to create new market opportunities in the light of sustainable development, companies may strategically choose to engage in transformative activities in markets that directly relate to their business. A technology company can for instance develop a transition strategy centered around the de-carbonization of the energy system to support the global transition to clean energy while at the same time allowing the company to reduce the impact of its energy-intensive operations, benefitting both the company’s bottom line as well as the public need for clean energy. Thus, by adopting a transition strategy around their specific sustainability priorities, companies may create added value for both their business and society. Because large-scale change processes typically revolve over longer periods companies need to adopt a longer planning horizon. This requires them to develop comprehensive long-term strategies that go beyond the current dominant perspective on short-term profits.
The responsibility of large corporates
Companies are not homogenous entities and possess different resources. The abundant resources of large organizations often place them in a unique position to undertake certain activities and drive sustainability transitions. Large companies can for example leverage their resources to engage in conversations with important stakeholders and push on policies that help trigger change processes. This provides resource-rich companies not only with a unique opportunity but also the responsibility to play an active role in guiding society towards a more desirable state. Because companies cannot all play the same role in driving transitions, they must design transformation strategies that align with their strengths (i.e., resources). Also, the institutional environment of companies is of fundamental importance. This context determines what activities and ultimately what role(s) companies may adopt to drive sustainability transitions in society.
The importance of building relationships
Transitions involve far-reaching changes in a range of elements and dimensions such as technologies, markets, policies, infrastructures, cultures, and institutions. These radical widespread changes impact a lot of different actors. Therefore, corporates need to adopt a systemic perspective and consider their actions in relation to the broader system of which they are part. Companies cannot foster transitions on a unilateral basis but need to develop collaborative approaches. Without cross-sector and multi-level collaboration between various actors (e.g., governments, consumers, other organizations), it is unlikely that transition activities have a chance to overcome contestation and competing practices and diffuse more broadly. Building (inter)organizational relationships is therefore vital to the success of corporate transition activities and fostering sustainable change processes.
Without cross-sector and multi-level collaboration between various actors (e.g., governments, consumers, other organizations), it is unlikely that transition activities have a chance to overcome contestation and competing practices… Click To Tweet
Anna Vlassov graduated this year from the research master program ‘Business in Society: Business and Management’ jointly ran by Vrije Universiteit Amsterdam and the University of Amsterdam. This article is based on research for her master thesis. Recently, Anna started working at a management and consultancy company. As a junior sustainability consultant, she helps companies push the boundaries of sustainability further by conceptualizing, coordinating, and overseeing their sustainability practices. Anna can be contacted at firstname.lastname@example.org