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How Innovation and Technology Will Fuel the Transition to Sustainable Enterprises by Eric Cuka

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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 …

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?


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  • 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 adoptsustainability practices into their core business strategies. Innovation and technology have notonly created increased pressure and transparency, they have also created enormous opportunityfor businesses in todays high-demand economy. There are incredible examples covered in theincluded research which demonstrate how organizations have utilized eco-efficiencies to increasemargins while simultaneously benefiting both core and fringe stakeholders. The key concept ofthis paper is to encourage companies to embrace sustainability into their corporate culture inorder to fuel innovation and create competitive advantages. Technology can be leveraged in awide array of possibilities to maximize operational efficiencies, increase margins, and impactsociety at the same time. The research conducted to support the main argument of this reportincludes readings from Saint Cloud State Universitys MBA 605 - Strategies for SustainableDevelopment 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. Whetheryou are passionate about sustainability or not, the research in this paper will apply to you if youare interested in maximizing operational efficiencies through innovation and technology. Thekey eco-efficiencies covered include: reduced material and waste expenses, reduced energyexpenses, and reduced water expenses. As companies embrace technology, combined with asustainable strategy, additional innovations will be constructed as these companies strive towardsbecoming sustainable. The bottom line is that technology and innovation will fuel the transitionto sustainable enterprises. Is your company going to be left behind?
  • 3. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 3 Introduction Todays rapidly changing business environment has increased innovation exponentially.Most companies are forced to adapt by constantly researching and developing new, cutting-edgeproducts. Sustainable enterprises not only maximize efficiencies, but also create competitiveadvantages in the marketplace. The key to sustainable enterprises relies on dialogue betweeninnovators and stakeholders. Through innovation and technology, companies have the ability tomaximize efficiencies, reduce waste, increase profits, and impact society in a positive manner.Improved machinery, transportation, buildings, hardware, software, standardized reportingmetrics, and disruptive technologies will fuel the transition to sustainable enterprises. According to Bloomberg Businessweek, companies have historically seen being sociallyresponsible as handing out checks to victims of natural disasters, being reactive to environmentalgroups and NGOs, and greenwashing as a form of marketing to increase sales. "Now thecorporate 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 togo easier on the environment," (Stanford, 2011). "How fully companies adopt sustainabilityefforts 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 thatsustainability will become as transformative for business as the earlier quality and informationtechnology revolutions, once more executives understand the potential to increase operationalefficiencies, reduces costs, and increase margins through a sustainable enterprise (Stanford,2011). This paper will discuss how innovation has not only created more pressure for businessesto become socially responsible, but how sustainability actually makes sense for companies to
  • 4. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 4incorporate into their core business strategy. There are several examples that describe howcompanies have saved enormous amounts of money by rethinking shipping solutions, designs,and other efficiency practices. Some of these companies achieve benefits by a sustainablydesigned strategy, whereas others simply make an adjustment to save money without the primarypurpose being the environmental or societal stakeholders. The more that these examples areexamined, the more it makes sense for companies to pursue social responsibility and adoptsustainable practices into core business strategies. When a company is actively looking forsustainable improvements, more opportunities will be uncovered. Additionally, moreinnovations and technological advancements will be created to fuel sustainable enterprises whenengineers are proactively designing with sustainable practices in mind. Theoretical Framework & Empirical Findings The first framework article, Building a New Institutional Infrastructure for CorporateResponsibility, discusses the environment that businesses face in todays 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 theinternet and other related technologies. Companies face new pressures to adopt greater corporateresponsibility. The article says that a key reason for closer attention to CR is that over half ofcompanies 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 companyhas developed. The evolution in the concept of responsibility infrastructure focuses on theintegration of corporate responsibility with business models. Additionally, the integrated
  • 5. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 5strategy recognizes the impact of companies business strategies and practices on societies,stakeholders, and sustainability (Waddock, 2008). According to Bob Willards presentation from class, transitioning to a sustainableenterprise starts with a companys beliefs and culture, then permeates into all aspects of thebusiness. Willard positions companies on a five-stage sustainability continuum model. Stageone is known as the pre-compliance stage. Companies at level one cut corners to save costs anddo their best to not get caught for breaking laws. This stage is obviously a very risky position tobe in, and companies do not want to be in this stage. These organizations are illegal andunsustainable. Stage two is the compliance stage. Companies at stage two do the minimum toobey the law. While these firms are legal, they are still unsustainable. Stage three is known asthe beyond compliance stage. A company voluntarily moves into stage three when it realizesthat it can save money with proactive, operational eco-efficiencies. Stage four is the integratedstrategy phase. These firms focus on all stakeholders and inject sustainability practices into theirDNA. Stage five is known as passion and purpose. These organizations are unique because theyare created by value-driven founders. These companies do not go through the stage developmentmodel since they are created at level five (Willard, 2011). According to Willard, sustainability can be used as a tool to accomplish a companysstrategic vision. When integrated properly, sustainability offers seven tremendous benefit areas.Three of the primary areas of benefit include: reduced material and waste expenses, reducedenergy expenses, and reduced water expenses. These three benefit areas, which this paper willfocus on, help improve the efficiency of links throughout an organizations operations. The otherfour 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 6that 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 covereach of the three primary benefit areas: reduced material and waste expenses, reduced energyexpenses, 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 TheBiosphere Rules article. This article, by Gregory Unruh, discusses how nature employsproduction processes which are surprisingly efficient, environmentally sound, and widelyimitable. 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 thecompany uses during their production. According to the article, the purpose for this step is thatit 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 theirsupply chains. Toxic-materials screens can be as simple as defining a banned list of substanceswhich 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 orproducts of better quality or a higher environmental value," (Wikipedia.org). The second step to The Biosphere Rules, which complements step one, is to rethinkdesign. Innovative product development requires firms to think about product design by lookingat the end first. In other words, to make virtuous recycling work, managers need to plan at thebeginning of the product design for the end of the products life. If the product is being thrownaway 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 7materials in their products. If the materials can be recovered economically, the strategy can beadjusted accordingly. This article discussed Polyamid 2000, who had nearly five billion tons ofcarpet waste being dumped into landfills annually in the 1990s. Less than five percent of wastecarpet was being recycled in that era which led to NGO and governmental uproar. Polyamidconstructed a state-of-the-art facility which was expected to extract 20 million pounds of newNylon 6 from 250 million pounds of waste carpet each year. Unfortunately, the strategy failedbecause it was neither economical nor sustainable. The company, which was actually trying tobe 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 designingrecovery value in at the outset (Unruh, 2011). According to the EPAs website, there are different approaches to reducing material andwaste expenses depending on the type of organization. Reducing transport packaging, changingoffice operations, and adjusting manufacturing processes are all possibilities to consider. Forexample, many offices have stacks of printed purchase orders and documents that could beconverted into electronic systems like Electronic Data Interchange (EDI). "EDI is the structuredtransmission of data between organizations by electronic means. It is used to transfer electronicdocuments or business data from one computer system to another computer system, i.e. from onetrading partner to another trading partner without human intervention," (Wikipedia.org).Another consideration is to use alternative packaging that could use less material or reduce theweight for shipping costs. Products could also be redesigned to be smaller, use differentmaterials, 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 aninnovative mushroom-based packaging solution. This solution is an advanced biotechnologythat has been sponsored by the National Science Foundation, the US EPA, and the USDepartment of Agriculture. This innovation is a way to utilize common agricultural wasteproducts such as rice, cotton, and wheat chaff to replace environmentally unsustainable productssuch as polyethylene and styrofoam in packaging. This is a good example of sustainableupcycling. Not only is this technology environmentally friendly, it also reduces the amount ofpacking 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 amold which is inoculated with mushroom spawn. The cushions take five to ten days to grow andbecome the root structure of the mushroom. The energy needed to create these mushroomcushions is supplied naturally by the carbohydrates and sugars from the waste; therefore, there isno need to use energy which is based on carbon or nuclear fuels. This innovation has beengrowing 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 areenvironmentally 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 thecurb (convenient and acceptable for local recycling services). Dell has an aggressive plan toeliminate 20 million pounds of packaging materials by 2012. Additionally, Dell has a goal toensure 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. Thecompany switched from corrugated to reusable plastic shipping containers which saved 196million pounds of corrugated materials. Dow Corning saved over $2 million dollars andconserved 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 byreducing the thickness of their shipping containers by 15 percent. Technological advancement inshipping solutions has not only positively impacted the environment, but also profitability forpro-active businesses (EPA.gov). Bob Willards second sustainability benefit that this paper will address is reduced energyexpenses. As demonstrated above, technological advancements in shipping solutions havereduced energy expenses; however, there are other innovations to consider as well. According tothe US Department of Energy, renewable energy technologies and energy efficiency innovationsare the two main categories that businesses can consider. Renewable energy includes a plethoraof topics such as solar power, wind power, water power, biomass, geothermal, hydrogen cells,and fuel cells. Energy efficiency topics include buildings, vehicles, electronics, appliances, ITinfrastructure, and others (U.S. Department of Energy). The article Strategy and Society, by Michael Porter and Mark Kramer, discussed WholeFoods as a company who was founded at stage five of Willards five-stage sustainabilitycontinuum model. The article stated that the company purchased renewable wind energy creditsequal 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 compostingcenters, and their trucks are being converted to run on bio-fuels. The company is committed tonatural and environmentally friendly operating practices. They focus on purchasing from local
  • 10. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 10farmers and avoid approximately 100 common ingredients, which have been deemed unhealthyor environmentally damaging. Nearly every imaginable aspect of the companys value chain isstructured around the social dimensions of its value proposition. The implementation ofsustainability into the strategic alignment of the company has allowed Whole Foods to enjoy acompetitive advantage with the ability to command premium prices through a niche marketselling organic, natural, and healthy foods (Porter & Kramer, 2006). Many organizations, such as Whole Foods, are using renewable energy as part of theirbusiness strategy. The EPA has created the Green Power Partnership which is a voluntaryprogram which encourages companies to buy renewable energy as a way to reduce theenvironmental impacts associated with purchased electricity use. Partners in this programinclude Fortune 500 companies, governmental agencies, universities, and small to medium sizedbusinesses. The EPA lists the following as benefits to the program: avoid carbon dioxideemissions; reduce air pollution; hedge against future electricity prices; serve as a branddifferentiator; generate customer, investor, or stakeholder loyalty and employee pride; enhancepublic image; and demonstrate civic leadership (Green Power Partnership). Intel Corporation is currently ranked number one on the EPAs Green Power Partnership.In fact, the EPAs website states that Intel uses over 87 percent green power. The companypurchases over 2.5 billion kilowatt-hours a year of renewable energy certificates. Thisrenewable energy is generated from wind, solar, low impact hydro, geothermal, and biomasssources, all of which are Green-e certified. Furthermore, Intel was awarded the Green PowerLeadership Award in 2010, the Partner of the Year in 2008, and the Partner of the Year in 2009.Intels investment in green power has the equivalent environmental impact of taking over340,000 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 11electricity to power over 215,000 average-sized American homes annually. Intels President andCEO, Paul Otellini, said, "Our renewable purchase is just one part of a multi-faceted approach toprotect the environment, and one that we hope spurs additional development and demand forrenewable energy," (Partner Profile). In addition to renewable energy, there are numerous innovations that can be leveraged bycompanies to reduce energy usage as well. In 2010, buildings used approximately 40 percent ofthe 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 astronger economy. New innovations in lighting, insulation, climate control, analytics, andmaintenance allow companies to improve efficiencies like never before. In fact, PresidentObama announced the Better Building Initiative to make commercial buildings 20 percent moreefficient by 2020. Additionally, this program will accelerate investments in private sector energyefficiency. This program, announced in February 2011, provides over $500 million in federalfunding which allows communities to expand the building improvement industry and help theUnited States strive towards a cleaner energy future. The Department of Energy is partneringwith organizations to demonstrate innovative and replicable approaches to improve efficienciesin offices, schools, hospitals and homes across the nation (Better Buildings). Another sector which uses a high volume of energy is information technology (IT). Infact, it is estimated that IT accounts for at least two percent of global energy use. Because of thisawareness, there has been a significant amount of discussion revolving around "Green IT" overthe past several years. IBMs website states that data centers use 10 to 30 times more energy persquare foot compared to office space. The goal of Green IT is to make energy efficiency a keymetric when measuring IT operation effectiveness. IBMs website also states, "By combining
  • 12. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 12hardware, software and services offerings, IBM can help companies improve service, bettermanage risk, and resolve resource constraints-all while reducing overall energy costs by 15% to40%," (Green IT). As mentioned, studies have shown that IT accounts for at least two percent of the worldsenergy use; therefore, new companies are emerging with innovations to reduce energyconsumption in this space (Appendix B). There have been numerous advancements intechnology 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 submergeservers. According to the companys website, although many industrial machines are alreadyusing 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, itcertainly 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 90percent while reducing server power by 10 to 20 percent at the same time. (Green RevolutionCooling). Another strategy to reduce energy consumption in IT involves a wider use of cloudcomputing technology. Cloud computing, in simplistic terms, means outsourcing a companys ITneeds. These technologies can range from data storage to software applications. Instead of thetraditional IT environment, where servers and data centers are hosted onsite at a company, cloudcomputing consists of having the data servers and/or applications located offsite, and accessedthrough the internet. A recent study by Microsoft, Accenture, and WSP suggests that companiescan 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 13cloud services. Additionally, this study stated that smaller companies can actually enjoy morebenefits realization from cloud computing than larger corporations. For companies with over10,000 users, the reduction of greenhouse gas (CHG) emissions is 30 percent, whereas firmswith 100 users receive a 90 percent reduction (Cloud Computing is Greener, 2011). Bob Willards third benefit of sustainability is reduced water expenses. Less than threepercent of the Earths water is fresh, and the depletion of the worlds water supply degrades ournatural environment and puts the future of mankind at risk. Efficient appliances, innovativeprocesses, improved irrigation practices, and overall behavioral changes can reduce waterconsumption by as much as a third. From a corporate perspective, improving water efficiencynot only satisfies environmental and societal stakeholders, it also impacts the bottom linepositively 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 148billion gallons to 56.8 billion gallons in just six years. These improvements were able to savethe company $130,000 a year in water and sewer costs. Another excellent example is the PacificPower and Light Company in Wyoming which uses dry cooling to eliminate water losses fromcooling-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 carbonsteel tubes which run to 69 fans. These fans force approximately 45 million cubic feet perminute of air through eight million square feet of finned tubes which condense the steam. Thisinnovative system reduced water consumption from 4,000 gallons per minute to about 300gallons 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 transformit into an entirely new asset. As covered in class, Pepsi-Colas Walkers potato chip plant inLeicester, England plans to condense steam and reuse the captured water to reduce sewer andwater costs. Potatoes are 80 percent water, and this factory alone slices and fries 350,000 tons ayear. Most of the water from the potatoes is lost as steam which is released into the atmosphere.According to Martyn Seal, the companys European director of sustainability, this innovationcould save the plant $1 million annually (Stanford, 2011). Analysis Technology and innovation alone will not make companies sustainable. Companies mustleverage technological advancements to empower their business once a sustainability model hasbeen planned and implemented. As the research has shown, through innovation and technology,companies have the ability to maximize efficiencies, reduce waste, increase profits, and impactsociety in a positive manner. Considering the fact that over half of companies assets today areintangible assets such as good-will, reputation, and human capital, corporate social responsibilityis critical for businesses to remain competitive and prosperous (Waddock, 2008). As seen inrecent news with the Mattel/Greenpeace protest, social and viral media can damage a companysreputation, or shift a companys stock price in just a few hours (Hughes, 2011). By including allstakeholders in a companys strategy, these risks can be mitigated while simultaneouslyincreasing profits and the overall value of the firm, as well as positively impacting theenvironment 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 equalopportunity are critical to sustain a productive workforce. For example, companies that createsafer products and working conditions will not only attract customers, but also a higher qualitytalent pool. Additionally, risk is reduced, which will decrease accidents and lawsuits whileincreasing 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 goodfor an organization. This strategy supports sustainability. On the other hand, a healthy societyalso needs healthy companies. "No social program can rival the business sector when it comes tocreating jobs, wealth, and innovation that improve standards of living and social conditions overtime," (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 allcompanies are interested in profitability. This paper has been created to provide some insight asto why corporations need to pay attention to sustainability if they have not already done so. Theconcepts behind sustainability are rather simple; however, the terms and concepts behind thestrategy have been misused, greenwashed, and confused by the majority of the public in theUnited 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. Thekey is for companies to embrace sustainability into their culture, as part of their strategicobjectives and overall business strategy. As companies adopt sustainable practices into theircorporate culture, other efficiencies and innovations will emerge throughout the company,advancing it up Willards five-stage sustainability continuum model. If the corporate cultureembraces sustainability into every aspect of their daily routine, innovations will evolve
  • 16. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 16expeditiously and create new revenue streams, a stronger public image, and a competitiveadvantage. If a company is not founded at level five of Willards model, it should strive toachieve level four, the integrated strategy phase. These firms focus on all stakeholders and injectsustainability practices into their corporate DNA. This paper is not suggesting that becoming a sustainable enterprise is something that willhappen overnight. It is designed to provide insight on the direction of todays dynamic, high-impact business environment. The companies who embrace sustainability as a strategy willovercome adversity and not only survive, but thrive in todays ultra-competitive atmosphere.There are indeed parallels to innovation, international business, and sustainable enterprises. Thestudy of international business is a fairly recent phenomenon, and the accelerated knowledge offoreign business methodologies, individual cultures, and best practices have improved our globaleconomy immensely. Prior to having advanced technology, the costs to seek and gatherinformation were very high, which limited consumers and corporations alike. Competitivepressure forces companies to improve efficiencies and reduce costs. Sustainable enterprisesenjoy the benefit of improving operational efficiencies and reducing costs while satisfying itsfringe stakeholders simultaneously. Although technology and innovation evolves rapidly, a large portion of the world neverbenefits from these innovations. Companies also have a tremendous opportunity to focus moreon the Base of the Pyramid (BOP) to increase market share, maximize profits, benefit society,satisfy shareholder expectations, remain sustainable, and satisfy social and environmentalstakeholders. This phenomenon is known as the "great leap" to the base of the economicpyramid, where there are approximately four billion people aspiring to join the global market forthe 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 17and 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 auniversal reporting standard to provide transparency and apples-to-apples comparisons betweencompanies. In order for mankind to embrace sustainability on a universal scale, companies mustincorporate standardized reporting procedures. The Global Reporting Initiative (GRI) is themost well-known, global network-based organization that strives to provide a universalframework for corporations to adopt universal sustainability reporting. GRIs ReportingFramework is created through a conscious, multi-stakeholder process. This framework isdesigned to establish the principals and performance indicators which organizations can leverageto measure and report their economic, environmental, and social performance. According toGRIs website, the cornerstone of the framework is the Sustainability Reporting Guidelines, andthe third version of the guidelines – known as the G3 Guidelines - was published in 2006 and is afree public asset (Global Reporting Initiative). By adopting sustainability into an organizations strategy, and leveraging a universalframework for reporting standards, stakeholders will have transparency into the good and the badof individual corporations. With accountability, companies will be forced to recognize the valueand the impact of becoming a sustainable enterprise. Other technologies, such as businessintelligence software, need to embrace the universal reporting standards into the development ofthe software. Companies, like Oracle, IBM, SAP, Microsoft, and others, all currently haverobust business intelligence software solutions; however, they are not created equally, and nouniversal standard exists in this arena. By partnering with the Global Reporting Initiative, thesetechnology 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 18strengthening their brands and profitability. I certainly feel that the first company in this spacewho recognizes the importance of this alignment can create a competitive advantage in themarketplace. Most of the reporting solutions available have the functionality to be programmedto meet GRI standards; however, I am suggesting that these standards become out-of-the-boxfeatures for companies to leverage. Once companies have the ability to seamlessly integrate transparency through thesetechnologies, creating additional eco-efficiencies will be less complex and more scalable. Forexample, if a company strives to reduce energy consumption by a specified number, it needs tohave the ability to collect, examine, and report the data. All companies have the ability to collectdata; however, most organizations face the challenge of how to consolidate, examine, and reportit. Once mastered, companies can incorporate best practices and methodologies, which havebeen learned from data analysis, into other areas of the business. Most companies currentlyfocus on making inefficient designs more efficient; however, companies with sustainabilityincorporated 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 companiesshould rethink design, by looking at the end first. In other words, businesses need to plan at thebeginning of the product design for the end of the products life. This example again circles backto the argument that as companies embrace technology, additional innovations will beconstructed as the company strives toward becoming a sustainable enterprise. Conclusion In order for growth and survival in todays business environment, companies are facedwith 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 19stakeholders with various objectives. Today, customers are more sophisticated and have higherexpectations 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 areforced to adapt by constantly researching and developing new, cutting-edge products. Thisintense, competitive business environment forces companies to operate more efficiently.Sustainable enterprises not only maximize efficiencies, but also create competitive advantages inthe marketplace. Through innovation and technology, companies have the ability to maximizeefficiencies, reduce waste, increase profits, and impact society in a positive manner. Aspreviously 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 ofshareholder relationships which the company has developed. The evolution in the concept ofresponsibility infrastructure focuses on the integration of corporate responsibility with businessmodels. Additionally, the integrated strategy recognizes the impact of companies businessstrategies and practices on societies, stakeholders, and sustainability. Innovation has createdmore pressure for businesses to become socially responsible. As demonstrated, technology andinnovation have also proven to fuel eco-efficiencies. Furthermore, this paper has shown that ascompanies embrace technology, combined with a sustainable strategy, additional innovationswill 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 AppendicesAppendix A:(Willard, 2011)
  • 21. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 21Appendix B:
  • 22. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 22 Works CitedBetter 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- blogs/direct2dell/b/direct2dell/archive/2011/04/05/dell-plans-pilot-to-ship-products-in- mushroom-packaging.aspxCloud Computing is Greener. (2011, March 2). Retrieved June 26, 2011, from Harvard Business Review: http://blogs.hbr.org/winston/2011/03/cloud-computing-is-greener.htmlEPA.gov. Retrieved June 26, 2011, from: http://www.epa.gov/osw/partnerships/wastewise/wrr/cost.htmGlobal Reporting Initiative. Retrieved June 26, 2011, from: http://www.globalreporting.org/AboutGRI/WhatIsGRI/Green Revolution Cooling. Retrieved June 26, 2011, from http://www.grcooling.com/Green IT. (n.d.). Retrieved June 26, 2011, from IBM.com: http://www- 03.ibm.com/systems/greendc/Green Power Partnership. (n.d.). Retrieved June 26, 2011, from EPA.gov: http://www.epa.gov/greenpower/buygp/index.htmHart, S., & Christensen, C. (2002). The Great Leap: Driving Innovation From the Base of the Pyramid. MIT Sloan Management Review , 51-56.Hughes, S. A. (2011, June 8). Greenpeace protests Barbie at Mattel headquarters. Retrieved June 26, 2011, from Washingtonpost.com: http://www.washingtonpost.com/blogs/blogpost/post/greenpeace-protests-barbie-at-mattel- headquarters/2011/06/08/AG7VwzLH_blog.htmlPartner Profile. (n.d.). Retrieved June 26, 2011, from EPA.gov: http://www.epa.gov/greenpower/partners/partners/intelcorporation.htmPorter, M., & Kramer, M. (2006). Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review , 78-92.Stanford, D. (2011, March 31). Why Sustainability Is Winning Over CEOs. Retrieved June 26, 2011, from Businessweek.com: http://www.businessweek.com/magazine/content/11_15/b4223025579541.htmU.S. Department of Energy. Retrieved June 26, 2011, from: http://www.eere.energy.gov/
  • 23. How Innovation & Technology Will Fuel the Transition to Sustainable Enterprises 23Unruh, G. (2011). The Biosphere Rules . Harvard Business Review , 111-117.Waddock, S. (2008). Building a New Institutional Infrastructure for Corporate Responsibility. Academy of Managment Perspectives , 87-107.Water Conservation. (n.d.). Retrieved June 26, 2011, from Greenbiz.com: http://www.greenbiz.com/business/research/report/2002/08/02/water-conservationWikipedia.org. Retrieved June 26, 2011, from: http://en.wikipedia.org/wiki/Electronic_Data_InterchangeWikipedia.org. Retrieved June 26, 2011, from: http://en.wikipedia.org/wiki/UpcyclingWillard, B. (2011, June 16). Aligning ESG Benefits with the Value Chain. Retrieved June 26, 2011, from Bob Willard: http://sustainabilityadvantage.com/2011/06/14/aligning-esg- benefits-with-the-value-chain/