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Sustainability Leadership towards
Strategic Sustainability: Examining
Brazilian Organisations
Cássia Ayres
Master in Socia...
 
2	
  
The flying V formation of some birds, like geese, allow the whole group
to add 71 per cent of flying range compare...
 
3	
  
Table of Contents: 	
  
Acknowledgment	
   6	
  
Abstract	
  
7	
  
CHAPTER 1: This project
	
  
8	
  
1.1 Introdu...
 
4	
  
2.2.5 Gaps in the literature
	
  
40	
  
CHAPTER 3: Methodology
	
  
41	
  
3.1 Chapter introduction 41	
  
3.2 Ov...
 
5	
  
	
  
	
  
	
  
	
  	
  
	
  
	
  
Appendices 94	
  
Appendix (A) Denominations of sustainability Leadership 94	
  ...
 
6	
  
Acknowledgments
This project culminates with the completion a significant journey of my masters at Aston
Universit...
 
7	
  
Abstract
This study examines how sustainability leadership drives strategic sustainability by
using four large Bra...
 
8	
  
CHAPTER 1: This project
1.1 Introduction
Our society is currently living in an inversion of patterns of scarcity w...
 
9	
  
companies are able to understand the sustainability challenges as opportunities to
develop internal capabilities a...
 
10	
  
This project considers two assumptions confirmed through data collection:
1- The sample performs strategic sustai...
 
11	
  
increasing awareness about these topics in this particular context and motivating
positive corporate decision mak...
 
12	
  
CHAPTER 2: Literature Review
Chapter introduction
This chapter addresses the understanding of two major topics of...
 
13	
  
practical direction on profitable practices which keep the equilibrium of nature and
humankind wellbeing. Accordi...
 
14	
  
Hence, corporate internal motivations are migrating from cost reduction, risk
management and profit maximization,...
 
15	
  
scholars justify that the cause of fragile performances are due to the company
persistence in transitional stages...
 
16	
  
In other words, to point out the main difference between transitional and
transformational approaches, the first ...
 
17	
  
to think and perform business models, which can address society’s needs with regards
to poverty and other social ...
 
18	
  
Figure 2. The Buzzword Sort. Source: Hart (2010)
2.1.5 SVF through transformational approaches
Cradle-to-Cradle
E...
 
19	
  
Kumar and Putnam (2008). Large products such as cars or electro materials would
have limitations performing throu...
 
20	
  
energy, decomposable characteristics of materials, permanent use of all types of waste
as nutrients to feed syste...
 
21	
  
leadership to foster innovation into the mainstream.
2.1.7 Corporate sustainability in Brazil
In order to have a ...
 
22	
  
Strategic corporate sustainability is a topic that has progressively been part of the
agenda of large organisatio...
 
23	
  
that Eight, (2014, p. 24) states some main trends of consumers are influencing
organisations to meet their needs ...
 
24	
  
2.2 Part B Sustainability Leadership
Introduction
Part B of this chapter dedicates attention to explain the purpo...
 
25	
  
revealed in thematic events since Rio 92 to Rio+20 in 2012. Recent evaluations of the
sustainable development age...
 
26	
  
2.2.2 Definition of sustainability leadership
Sustainability leadership emerged in parallel with sustainable deve...
 
27	
  
sustainability: Leadership Development Framework (LDF) as per its relationship with
the two topics of this study....
 
28	
  
This study reveals characteristics that the current generation and the next generation of
leaders should possess ...
 
29	
  
over attribution of power and self-centrism, undermines changes towards sustainability
since the leader’s narciss...
 
30	
  
of consciousness, representing only 15-20% of society, being the ones able to
implement robust changes as they po...
 
31	
  
Figure 4 - The Seven Action Logics
Source: Rooke and Torbert (2005)
LDF associated to the Five Gears
The second p...
 
32	
  
Before presenting the link between these two elements, it is relevant to describe each
gear individually and what...
 
33	
  
As figure 6 shows, at the point where the correlation is made there is a clear hierarchy
in the mindsets combinin...
 
34	
  
Figure 5: LDF applied to sustainability
Source: McEwan and Schmidt’s (2007)
 
35	
  
Figure 6: Relationship between mindsets and the five Gears
Source: McEwan and Schmidt’s (2007)
 
36	
  
Evaluation of behaviour stream
LDF applied to sustainability integrated to the Five Gears has points of convergen...
 
37	
  
Task Leadership Framework
This model was created as a result of a study conducted with US leaders, which are
form...
 
38	
  
three views are complementary, since the first two are broadly strategic whilst the last
one is focused on strict...
 
39	
  
To summarize these different views of sustainability leadership, the Cambridge
Programme for Sustainability Leade...
 
40	
  
2.2.4 Part B summary
This section examined two different streams and its approaches in sustainability
leadership....
 
41	
  
CHAPTER 3: Methodology
3.1 Chapter introduction
This chapter describes the research methods for this project. The...
 
42	
  
3.3 Samples
This project has investigated four large Brazilian organisations from different sectors
described in ...
 
43	
  
Votorantim Metals
Votorantim metals and mining division is part of a large Brazilian conglomerate known
as Votora...
 
44	
  
• Invested R$ 220 million or approximately U$73 million in smart grids to avoid
losses of energy
• Created progra...
 
45	
  
websites, magazine articles, videos of leaders in story telling format on behalf of
Sustainable Leadership Platfo...
 
46	
  
study approach for this study. Indeed, the case study created a truthful description of
the different aspects of ...
 
47	
  
3.5 Data analysis
The data generated was analyzed using Thematic Analysis as part of the narrative
analysis metho...
 
48	
  
3.6 Ethical issues
	
  
This project will be conducted according to the principles of good practice in research
w...
 
49	
  
CHAPTER 4: Findings
4.1 Chapter introduction
This chapter starts displaying full case studies with an overview of...
 
50	
  
Sustainability leadership characteristics
Duratex considers this leadership as a vital role in the successful imp...
 
51	
  
– Maturity and emotional intelligence to define when to act and when to wait,
strategically
– Commitment to ethic...
 
52	
  
4.2.2 Votorantim Metals
Process towards strategic sustainability
Votorantim has started to approach sustainabilit...
 
53	
  
At the beginning some resistance due to misunderstandings and lack of technical
knowledge was faced by managerial...
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
Cassia ayres's project student n.149141156.final1
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Cassia ayres's project student n.149141156.final1

  1. 1. Sustainability Leadership towards Strategic Sustainability: Examining Brazilian Organisations Cássia Ayres Master in Social Science MSc Social Responsibility and Sustainability Supervisor: Josie Kelly September, 2015
  2. 2.   2   The flying V formation of some birds, like geese, allow the whole group to add 71 per cent of flying range compared to if the bird flew isolated. Flying together also protects a goose when it gets sick, tired or shot down. When it happens, at least two geese fly down and support the bird till it is able to fly back with the group or dies. The V formation is due to the leadership position, which is seen with respect by the group since it is not comfortable for a goose to fly faster while facing the air resistance. Hence, the leader always counts on the back geese’s honk to be encouraged and keep its speed in order to ensure advantages for the whole group. Frequently, the leader has to give away its position, to allow other birds experience to lead as well as to follow (Glouberman, 2003).
  3. 3.   3   Table of Contents:   Acknowledgment   6   Abstract   7   CHAPTER 1: This project   8   1.1 Introduction 8   1.2 Aim and objectives 9   1.3 Research Question 1.4 Significance and inspiration 10     CHAPTER 2: Literature Review 12   2.1 Part A Strategic Sustainability 12   2.1.1 Evolution and motivations 12   2.1.2 Causes of inefficiency 14   2.1.3 Transitional and transformational 15   2.1.4 Sustainability Value Framework 16   2.1.5 SVF through transformational approaches 18   2.1.6 Evaluation of SVF’s 20   2.1.7 Corporate sustainability in Brazil Corporate sustainability in 21   2.2.4 Part A summary   23   2.2 Part B Sustainability leadership 24   2.2.1 New ways to lead are required 24   2.2.2 Definition of sustainability leadership 26   2.2.3 Streams of sustainability leadership 26   2.2.3.1 Behaviour orientated leadership 26     2.2.3.2 Technical-instrumental or task oriented 36     2.2.3 Trends in sustainability leadership 38     2.2.4 Part B summary 40          
  4. 4.   4   2.2.5 Gaps in the literature   40   CHAPTER 3: Methodology   41   3.1 Chapter introduction 41   3.2 Overview of research methodology 41   3.3 Samples 42   3.4 Data Collection process 44   3.4.1 Interviews 45   3.4.2 Case study method 45   3.5 Data analysis 47   3.6 Chapter summary 48   CHAPTER 4: Findings   49   4.1 Chapter introduction 49   4.2 Case studies presentation 49     4.2.1 Duratex SA 49   4.2.2 Votorantim Metals 52   4.2.3 AES Brasil (Eletropaulo) 56   4.2.4 Tetra Pak   59   4.3 Data analysis process 63   4.4 Summary of key findings 67   4.6 Chapter summary 67   CHAPTER 5: Discussion   68   5.1 Chapter introduction 68   5.2 Discussion of the drivers and supporting findings 68   5.2.1 Strategic sustainability 74   5.3 Implications of this study 76   5.4 Limitations of this study 79   5.5 Recommendations for further research 80   4.6 Recommendation for the organisations 81   Conclusion   82   References 83      
  5. 5.   5                 Appendices 94   Appendix (A) Denominations of sustainability Leadership 94   Appendix (B) Coded quotes from sustainability managers 95   List of figures     1 Sustainability Value Framework 17   2 The Buzzword Sort 18   3 Sustainability critical issues 25   4 The Seven Action Logics 31   5 LDF applied to sustainability 34   6 Relationship between mindsets and the five Gears 35   7 CPSL model of leadership 39   8 Analysis process 47   9 Summary of key findings 65   10 Sustainability Leadership Framework 78   List of tables   1 Elements categorized into two major topics 64   2 Conceptualization of elements. 66    
  6. 6.   6   Acknowledgments This project culminates with the completion a significant journey of my masters at Aston University in the UK. More than an examination of topics, this project has tested my knowledge about sustainability acquired so far, and also inspires my next steps in this field. From the point in which I took my decision to return to the classrooms in Luanda, I would like to thank special friends, Cyla Weihsmann, Dr. José Octávio Van-Dúnem and Dr. Cláudio Cardoso and for their warm motivation. This project effectively counted on the support of my supervisor Josie Kelly for her meticulous inputs towards high academic standards, she incentivised me to achieve with this project. I also want to thank to Dr. Chinny Nzekwe-Excel for her precious support during my learning process in each step of this project. This topic was successfully accomplished thanks to Ricardo Voltolini, and his robust and pioneering work about sustainability leadership in Brazil, and for the valuable resources that he made available to me. In the view of this, I also express my special thanks for the Brazilian organisations that voluntarily participated: Duratex, Votorantim, AES Brasil and Tetra Pak. A sustainability representative from each organisation took part in this project. These four knowledgeable professionals, which for ethical reasons I will keep in anonymity, cooperated enormously with their time, informing me about technical information as well as subjective impressions which were crucial for this project contextualization. I thank all my course colleagues for their input, continuous cooperation in person and our digital conferences. I also wish to thank all my dear friends for their emotional support when I needed it the most. Lastly and from my core and spirit I thank God and to Saint Anthony, my guardian, for illuminating me everyday during my path. I thank my mum, Joana Angélica for her example of strength and persistency and to my father, Evandro Ayres, (in memorian), my beloved environmentalist, for his eternal inspiration that I will use to pursue a better society.
  7. 7.   7   Abstract This study examines how sustainability leadership drives strategic sustainability by using four large Brazilian organisations as a sample to analyse how this relationship happens, and the implications of it. The results show that there is a positive influence from this leadership towards corporate sustainability strategies when three main factors are in place: (1) Support of top leadership through its projection of vision, motivation and risk-taking in a innovative way; (2) Skilled leaders which are highly knowledgeable about their business and sustainability as well being able to possess emotional competence; (3) Leadership with a system thinking approach, comprising a holistic vision and co-participation of different actors. The main implication of this study is that developing the leadership in the mentioned factors would lead to improvement of these organisations’ sustainability practices, and possibly towards more transformational ones. Therefore, it is suggested that leadership programmes work to develop the elements found in the model proposed systematically. Eventually, this model and these recommendations can be adapted to the realities of other organisations that resonate with the characteristics found in the sample. Key words: sustainability leadership, strategic sustainability, leadership development, action-logics, transitional sustainability, transformational sustainability, Brazil, sustainable development.
  8. 8.   8   CHAPTER 1: This project 1.1 Introduction Our society is currently living in an inversion of patterns of scarcity when compared to the Industrial Revolution two centuries ago. During that period, there was a shortage of people’s capabilities to deal with the machines and a profuse source of natural recourses available. By contrast, today the workforce has been replaced by modern systems and the natural capital is in deep deficiency and shows the boundaries of economical growth related to Earth’s carrying capacity (Hawken, Lovins, and Lovins, 1999). Practically, society has been not only postponing to tackle this problem effectively, but has also been depleting resources rapidly. Both facts associated have been stressing the resilience ability of ecosystems and decreasing species, exterminating habitats and damaging the health of human beings as a result of the sick planet we are living in (Hawken, 1995). Korten (2001) argues that private organisations are directly part of the problem and have become the most powerful institutions worldwide. Therefore, organisations should be part of the solution, using their power to turn damaging corporate systems into reconstructive ones, enabling natural resilience and meeting the needs of society. Indeed, there is a stream of cutting edge organisations with authentic commitment in changing the current paradigm, but the problem is that the amount of actions is not enough related to the challenges that the planet is currently facing. Clean technologies, for example, have been more frequently used to cooperate with nature’s resilience capacity. Nevertheless, the amount of development owned by organisations is still disproportional when compared to the effects of an unsustainable world: exponential population growth, scarcity and extinction of natural resources, loss of biodiversity habitats destruction and extreme poverty (Stahel, 2007). Despite many other drivers, such as market and governmental incentives, human psychology and absence of sustainability vision, lack of participatory corporate leadership is one of the factors which seriously accentuates these symptoms. (Borland and Paliwoda, 2011). In fact, the way that leaders use their power to make transformations happen is crucial and is in the core of the debates today (Korten, 2001). Presence of leadership orientated to sustainability may explain why some
  9. 9.   9   companies are able to understand the sustainability challenges as opportunities to develop internal capabilities and generate advantages for their businesses, for society and for the environment while others are not able (Doppelt, 2010). Hence, the answer for some organisations to foster corporate sustainability or sustainability embedded into business strategies often starts when the leadership is convinced and committed to implement it (Ferdig, 2007; Borland, 2009). For those leaders who understand that fostering sustainability is a paramount condition for all species survival, but are not convinced that they are the generation to play the role, the issue reveals a permanent defect in mind-set change and lack of participatory leadership (Starkey and Welford, 2001). Consequently, if strategic sustainability represents a gear in which organisations can operate to generate business profitability without leaving behind wellbeing in a long-term perspective by restoring the environment and improving human conditions (Bennett and James, 1998; Borland, 2009), leadership orientated to sustainability or sustainability leadership is therefore a fuel to move this gear, with fundamental roles. These roles encompass support towards other leaders to act upon their corporations, shift mindsets and consumer patterns and partner with governmental structures and other relevant stakeholders in order to focus on common environmental and societal goals (Ferdig, 2007). 1.2 Aim and objectives The predominant aim of this project has been to better understand how sustainability leadership drives strategic sustainability, by identifying and interpreting factors that can be observed through this relationship. This purpose unfolds into the observation of sustainability strategies performed in four Brazilian organisations, and the characteristics of sustainability leadership that is in place in this given environment. This explorative and interpretative study has been focused on the way this leadership has been shaping these organisations and moving beyond its borders of strategic sustainability practices. In complement to this aim, the project has three objectives: • To explore strategic sustainability and sustainability leadership concepts and distinct approaches • To analyse case studies from the perspective of both aforementioned topics • To draw conclusions and produce recommendations to further studies
  10. 10.   10   This project considers two assumptions confirmed through data collection: 1- The sample performs strategic sustainability as part of its corporate orientation, being reflected into its vision, mission and daily practices. 2- The leadership orientated to sustainability performed in all four organisations has been contextualized in this study as sustainability leadership. 1.3 Research Question How does sustainability leadership drive strategic sustainability? This is the main question that this project wants to answer in order to reveal and improve understanding of what factors are connected to sustainability leadership and how they lead to strategic sustainability. This question unfolds into a secondary question: which sort of sustainability leadership has been used to address strategic sustainability? 1.4 Significance and inspiration Despite an abundance of natural resources and biodiversity, Brazil has been dramatically loosing these resources over the last 30 years. Together with this fact, social inequalities are still a major problem in the country that primarily leads to a chronic economic inefficiency and a lack of wellbeing. This scenario requires, therefore, strong corporate policies in place that are associated to public ones to ensure people’s basic needs are met: education, health, safety, decent income as well as nature’s preservation in a long-term view (Barata, 2007). Positively, with a gradual access to products and services for the low middle class and those considered as in the poverty line in the last decade, the corporate’s mission to assume a responsible posture and help to meet the needs of almost 108 million people, or 54% of the population, proportionally increases. Therefore, this new corporate posture concretized in sustainability strategies has a great challenge in Brazil to learn from an empirical process and succeed (Eight, 2014). Currently, there is a wave of sustainability leaders changing their organisations through these strategies and influencing other organisations to follow the same path (Voltolini, 2011). The inspiration of this project derives from this significant movement where Brazilian corporations are involved, creating and sharing strong business cases and therefore impacting society. Its significance arises from the novelty of the topics discussed in this study and the effects it could have for the academic literature and also for other organisations, as per
  11. 11.   11   increasing awareness about these topics in this particular context and motivating positive corporate decision making-processes.
  12. 12.   12   CHAPTER 2: Literature Review Chapter introduction This chapter addresses the understanding of two major topics of this dissertation: strategic sustainability and sustainability leadership. Shared into two parts, this literature review will examine in depth the concepts and approaches of both topics, discussing its limitations and directing the focus to comprehend the relationship between these topics in order to create a theoretical background to respond the research questions.   2.1 PART A – Strategic sustainability This section describes the evolution of strategic sustainability, reveals the causes of its inefficiency and underlines the difference between transitional to transformational sustainability. Later, this section analyses the Sustainability Value Framework from the view of new sustainability approaches and observes the development towards strategic sustainability within a Brazilian context. 2.1.1 Evolution and motivations The origins of Strategic sustainability can be found in the expression Sustainable Development from The Brundtland Report (Galpin and Whittington, 2012). This term refers to sustainable development as the ability of humans to satisfy their needs without inhibiting the ability of other humans (WCED, 1987). At the time it was launched, this document represented a call for action, finally embracing corporations to participate together with the public and non-profit sector by setting strategic goals to maintain food security, water supply, natural resources and biodiversity preservation, as well as tackling over population, pollution control, climate change among other challenges within its operations (Hawken, Lovins, and Lovins, 1999). Today, strategic sustainability has different but converging definitions among scholars. Its meaning tackles issues without dissociating from profitability (Galpin and Whittington, 2012). For Stead and Stead (2010) Strategic sustainability, or sustainable strategic management, embraces a set of corporate processes and strategies that orientate the organisation’s mission, vision, values and culture, and therefore set
  13. 13.   13   practical direction on profitable practices which keep the equilibrium of nature and humankind wellbeing. According to Elkington (2004), corporate sustainability is the incorporation of the Triple Bottom Line (economy, environment and social) into corporate priorities aiming sustainable development and profitability. Similarly for Hart (2012, p. 19), strategic sustainability represents an opportunity for the organisations “to make money and to make the world a better place” by developing internal capabilities associated to the context in which they operate. Berns et al (2009) argue that these abilities are also motivational factors for the organisations to pursue strategic sustainability, since they also enable the companies’ development against challengers, such as: capacity to work in a system wider basis with society and environment, ability to respond positively to a long-term system thinking, capacity to re-think and re-design its business models (including financial, products and services), and finally, ability to communicate and partner with a wide range of stakeholders. In practice, these capabilities allow the company to move from early stages of performing in a responsive and incremental way, merely integrated to the operations, to a broader perspective in which the company understands itself as part of an interconnected system within nature and society in which it relies upon to prosper (Stead and Stead, 2010). SustainAbility (2004) demonstrates the evolution of strategic sustainability and acquisition of corporate capabilities in four stages as follows: • 1st stage - Compliance (commitment with regulations) • 2nd stage - Profit-orientated/ (integrated into the operation for cost reduction and risk minimization) • 3rd stage - Integration with stakeholders/partner (beyond legal commitment and profit orientation) • 4th stage - Re-engineer/holistic (as a result of co-participation, the organisation expands business models, products and services) Complementary to this overview, Hart (2010, p. 16) summarized these stages of corporate sustainability to demonstrate this evolution through the last 60 years as follows: “Stage 1- Pollution Denial (1945 – 1960s); Stage 2 – End-of-pipe regulation (1970–1980s); Stage 3 – Greening (mid-1980s–1990s); Stage 4 – Beyond Greening (1990s–present).” The term “Greening” is used to refer to continuous improvement in incremental or transitional phases.
  14. 14.   14   Hence, corporate internal motivations are migrating from cost reduction, risk management and profit maximization, towards marketing differentiation, brand image, stakeholder recognition and lastly, reputation in advanced stages (Porter and Kramer, 2006; Marrewijk, 2003). Despite these internal motivations, the evolution of strategic sustainability has been driven also for external motivations from environmental stresses already referred together with stakeholders’ pressure, such as: government legislation, consumers concerns, employee’s interests and social licence to operate from communities (Berns et al, 2009; Stead and Stead, 2010; Porter and Kramer, 2006). In other words, all these motivations demonstrate the levels of an organisation’s commitment with stakeholders spheres beyond its limits, being often translated into external direct impacts such as: stakeholder value-creation, responsible and differentiated markets, customer trust, employees satisfaction, sustainable supply chain, communities wellbeing and environmental preservation (Porter and Kramer, 2006; Marrewijk, 2003; Berns et al. 2009). Consequently, since late of the last Century, strategic sustainability has been part of corporate agenda, no more as an only differential element for market advantages, but mainly as an essential factor for business survival in a long-term view. (Galpin and Whittington, 2012; Blowfield, 2013). 2.1.2 Causes of inefficiency The process towards strategic sustainability is not always successful for organisations and its stakeholders, displaying weaknesses and inconsistences (Porter and Kramer, 2006). The pressure levels and the short-termism view often leads to uncoordinated sustainability activity, ‘‘disconnected from the firm’s strategy, that neither make any meaningful social impact nor strengthen the firm’s long-term competitiveness’’ (Porter and Kramer, 2006 p. 4). In other cases, poor performances and irregular commitments are due to a lack of authenticity in this process since the practices are not genuinely sustainable and seems to exist only to satisfy corporate communications, which are motivated by stakeholder’s influences for the company to state a sustainable policy at the same level or above its peers in the market (Blowfield, 2013; Marrewijk, 2003). In addition to that, Berns et al (2009) comprehend the existence of other factors associated to the weak corporate performances: ignorance and lack of understanding of what sustainability is, difficulty to adapt sustainability into a business model, lack of action, poor measurement and finally, difficulty to pursue a business case. Some other
  15. 15.   15   scholars justify that the cause of fragile performances are due to the company persistence in transitional stages of sustainability strategies, which are no longer enough to address social and environmental issues (Hart, 1997; McDonough and Braungart, 2002). Rather, corporate views require a radical step forward towards transformational strategies added into business which comprises not only reductions and minimising devastation of natural resources, pollution and waste, but also eliminating waste and going beyond simply greening the operations (Hart, 2012; Stead and Stead, 2010). 2.1.3 Transitional and transformational sustainability Even tough scholars agree that many important advances were made since sustainability started to be incorporated into business strategies. One of the most important discussions today is about how organisations can act by doing more than just reducing problems they create, through using less raw materials or preventing pollution, but being regenerative to environment and to tackle social problems such as poverty, food, water, jobs, education and high consumption patterns (Blowfield, 2013). Traditional approaches of reuse, reduce and recycle are not meeting those last issues, but rather, just “doing less bad”. Hence, some responses include a shift from transitional approaches to transformational ones (McDonough and Braungart, 2002, p. 45). Stead and Stead (2010) defend that restorative organisations should be seen from the perspective of close loops systems, incorporating waste back to production, since they are part of an open loop, coexisting with society and environment. Thus, in this permanent interaction with other systems, instead of generating outputs that ecosystems cannot assimilate or social consequences that society alone cannot deal with, companies should be able to learn how to cohabit by making a business ecosystem dedicated to sustainability as the superior purpose. This superior purpose is observed in Hart (1997) as reaching a superior performance by developing a unique value preposition, which is “valuable, rare, difficult-to-imitate and non-substitutable” (Hart, 2010, p. 45). From these viewpoints transformational approaches allow organisations to develop new capabilities through breakthrough strategies that generate new markets oriented to solving social and environmental problems while operating, rather than merely decreasing impacts of its operations (Hart, 1997; Hart, 2010; Stead and Stead, 2010).
  16. 16.   16   In other words, to point out the main difference between transitional and transformational approaches, the first are considered incremental because they are short-lived, or just efficient, such as: reduction or minimisation of ecological inputs and outputs back to nature and also tackle superficially social interventions, such as philanthropy and charity. The later approaches, however, have a problem-solve perspective towards nature and people in a permanent way such as: waste and pollution elimination or transformation into new inputs for production as well as more permanent social outcomes, such as people empowerment. Therefore they are considered effective (Blowfield, 2013; Hart, 2010; Stead and Stead, 2010). 2.1.4 Sustainability Value Framework (SVF) Considering the evolution from transitional to transformational approaches in sustainability as well as emerging market opportunities for organisations, this project will discuss the Sustainability Value Framework (SVF) created by Hart and Milstein (2003), a comprehensive model created to suggest corporative solutions based on both approaches. In order to make SVF even more practical, this project proposes a critical reflection on the application of this model in the light of four transformational sustainability approaches: Cradle-to-Cradle, Circular Economy, Biomimicry and Base of Pyramid. This framework presents business opportunities to companies to develop their sustainability performance considering internal and external expectations as well as short and long-term perspectives, represented as “today” and “tomorrow”, or transitional and transformational sustainability, respectively. Focusing on transformational strategies, Hart and Milstein (2003) defend that they enable organisations to develop advanced market competences beyond operational ones, which leads to more profitability. From this viewpoint, Hart (2010) argues that organisations that are profoundly reliant on fossil fuels, raw resources and toxic materials, for example, would have potential opportunities to acquire new skills by using clean technologies and create a unique differentiation for business and society. Successful cases are already emerging from the automobile, chemical and plastic sector. Observing the external environment of “tomorrow”, the same firms should be able to increase and deepen a relationship with their stakeholders where they become part of the company’s co- creation of products and services; therefore they are integrated into the business process of generating product stewardship. More than creating responsible products and services, the evolution of this process towards social solutions allows organisations
  17. 17.   17   to think and perform business models, which can address society’s needs with regards to poverty and other social inequalities. The focus proposed in this frame is to deliver new business solutions from the base of the pyramid model. From the viewpoint of the organisation, this framework increases legitimacy and reputation as per a deeper level of stakeholder engagement and can turn traditional business models into social oriented business as Hart exemplifies through Grameen Bank in Bangladesh and Hewlett-Packard (Hart, 2010; Mirchandani and Ikerd, 2008). Complementary, Hart (2010) describes the strategies from SVF, which composes this model: The Buzzword Sort. Both frames can be visualized in the figures 1 and 2 below. Figure1. Sustainability Value Framework. Source: Hart and Milstein (2003).
  18. 18.   18   Figure 2. The Buzzword Sort. Source: Hart (2010) 2.1.5 SVF through transformational approaches Cradle-to-Cradle Examining Hart’s model through Cradle-to-Cradle, from pollution prevention to evolved stages of clean technology it represents an added value from eco efficiency to eco effectiveness (Kumar and Putnam, 2008). In Cradle-to-cradle, systems are designed to consider waste as a nutrient in two ways: biological or technical. Therefore, instead of saving resources in an eco efficient way or cradle-to-grave, cradle to cradle approach proposes an upgrade in the life cycle analysis, by closing the loop of production (McDonough and Braungart, 2002). On the one hand, the advantages are that nature can digest biological materials. On the other hand, industry can decompose chemical materials into technical closed cycles, permanently reusing and generating a limited amount of waste as possible, reaching therefore eco effectiveness (McDonough and Braungart, 2002). However, some weaknesses of cradle-to-cradle were observed in
  19. 19.   19   Kumar and Putnam (2008). Large products such as cars or electro materials would have limitations performing through cradle-to-cradle, as there would be drawbacks in reverse logistics since it is difficult and expensive to pick up products either at B2B or B2C levels. Additionally, there is a lack of robust supply chain, making it difficult to disassemble and re-assemble materials because they were not designed for this new purpose. Circular Economy From the view of circular economy product stewardship through stakeholder participation would enable the change from a linear model, or “end of life”, to a circular one. In this circular model innovative solutions to deliver products and services affects not only production with close loops and zero waste, but also changes the relationship of products and its consumption. This suggests new ways of acquisition and usage, such as shared ownership or transforming tangible products into services also known as servitasation, eg. leasing. Organisations like Xerox, Renault, Ricoh, IKEA and Unilever developed this approach in their production and commercialization: leasing their products and receiving them back to the industry until the end of its line (MacArthur, 2013). The common benefits experienced by these companies are: it enables industry innovation, job creations, capital efficiency, and a more resilient economy in the long- term with new ways of consumption instead of traditional consume-dispose (MacArthur, 2013). The limitations of circular economy are associated to its novelty rising from the current capitalism system. Xu and Wu (2009) argue that scaling up, especially in developing countries, would depend upon a very conductive public policy and change in the legislation framework, by first reinforcing compliance, and later generating incentives for technological investments, research and development and know how transfer. Leadership is a paramount key to catalyze this process. Biomimicry Disruptive clean technologies are the target of Biomimicry as an innovative way of designing product systems considering nature as an inspiration in its conception of industrial systems and manufacturing products as well as implementing solutions in agriculture, chemical science, and nanotechnology among others (Benyus, 1997). For this purpose biomimicry imitates nature in its features such as: use of renewable
  20. 20.   20   energy, decomposable characteristics of materials, permanent use of all types of waste as nutrients to feed systems and make use of diversity to constitute strong partnerships in order to ensure resiliency. Health, transportation and IT sectors are benefiting from a biomimicry approach (Benyus, 1997). Criticisms of biomimicry relate to the high level of resistance or corporate facing the risk of not having return on investment after transforming the industrial clean design into products in which the market is not ready to absorb. Hence, consumer mindset shift should move in parallel with research and development (Volstad and Boks, 2012). Bottom of the Pyramid Lastly, the Bottom of the Pyramid or BoP approach applies to a high population living in poverty and other social inequalities. According to Prahlad (2005) it is possible to eradicate extreme poverty and to generate sustainable development with solutions to poor people with added value and low costs of acquisition. These solutions would bring profitability to investors in the long term considering the high volume of purchases, even with small profit margins and also in the supply chain value, by generating jobs and qualifications. Telecoms, cosmetics and large food organisations are among the main pioneers adding value to their business in developing countries (Prahlad, 2005). However, BoP also has some drawbacks that can potentially damage small business and intimidate income generation of other entrepreneurs. It can also contribute to waste generation if clean technologies are not associated to this business model, creating a reverse of its original aims (Warnholz, 2007). 2.1.6 Evaluation of SVF’s Hart’s model has a broad approach that provides opportunities for companies to develop capabilities and improve performance in different stages of development in strategic sustainability. It has been a useful resource to identify the approaches used by Brazilian companies and to understand the developmental stage. However, the complexity of this model resides in being put in to practice for more advanced approaches, as the novelty ais perceived with excitement and reluctance at the same time by the market, especially in developing countries where strategic sustainability is a relative new topic, as will be shown in the next section. Scholars suggest that the reasons for resistance that is delaying more advanced approaches are, on one hand, in the amount of investment in research and development versus the uncertainties of return on investment and, on the other hand, the lack of corporate and political
  21. 21.   21   leadership to foster innovation into the mainstream. 2.1.7 Corporate sustainability in Brazil In order to have a clear understanding of corporate sustainability in contemporary Brazil it is necessary to follow the evolution of historical factors from the 1970s to present day in which society and organisations have been gradually incorporating sustainability into their mindsets and business operations (Paro and Boechat, 2008; Barata, 2007; Gife, 2013). During the 1970s the government was the main inductor of social and environmental investments. However, in the beginning of the 1980s the civil society played a role with social movements against hunger, combating poverty and ensuring basic education. As a result of these social inequalities, individuals and organisations started to act on a philanthropic basis (Young, 2004). In the 1990s firms established a systematic support delineating the first steps of corporate social responsibility, or CSR. This CSR was accelerated by the pressure from stakeholders, consumers, clients, media, and NGOs among others and initiated a response to shortages of natural resources (Young, 2004). Hence, increasing diversity of private actors has allowed perfecting corporate mechanisms to support society’s needs (Paro and Boechat, 2008). One of these models which derives from CSR that gradually gained relevancy since the 1990s was the Private Social Investment, or PSI, in which privative organisations directly intervene in social and environmental issues through investing in foundations and institutes’ programmes in a more strategic manner, as PSI involves metrics of evaluation of return over investment and is more associated to the core business of a company (Gife 2013). Some figures reveal the evolution of organisations and investments that evolved from philanthropy stages to strategic CSR and PSI from the 1980s up to present day. With regards to CSR, Ethos Institute, the main organism, which disseminates and incentivizes CSR culture nationally, congregated 11 organisations when it was founded in 1998. Today, the institution has 586 associated organisations (Ethos, 2015; Young, 2004). On behalf of PSI, more than U$ 833 billion was invested in 2013 by organisations into foundations and institutes aligned its business targets (Gife, 2013). This optimistic scenario in the private sector opens a perspective to the corporate involvement in environmental and social issues through strategic sustainability, the next level of organisational’s intervention according to Eight (2014).
  22. 22.   22   Strategic corporate sustainability is a topic that has progressively been part of the agenda of large organisations in Brazil due to a combination of specific drivers: leadership awareness, scarcity of material resources, public pressure, risk management and reputation and legitimacy (Barata, 2007; Lourenço and Branco, 2013). Some indicators which will be examined in detail below point out this increasing trend: changes in the Brazilian stock market, increasing practices of accountability reporting and change in businesses and consumers mindset (Paro and Boechat, 2008; Exame 2013). The first factor, which incentivizes corporate sustainability, is the Sustainability Index created by São Paulo Stock Exchange-Bovespa that was launched in 2005 aiming to rate the interest of listed organisations committed to sustainability. Similar to other mechanisms such as Down Jones Sustainability Index and FTSE4Good in London Stock Exchange, the Brazilian version is comprised of 40 organisations engaged in 19 different sectors (Bovespa, 2015). The second factor refers to accountability and reporting as a trend, which confirms the increasing commitment of businesses. In this area, 160 Brazilian organisations are currently reporting using Global Reporting Initiative - GRI framework. This number increased from 74 in 2014, placing Brazil as 4th in the international ranking. Furthermore, 11% of worldwide organisations reporting with Integrated Reporting Council – IIRC are Brazilian, placing Brazil in third place, after the United Kingdom and the Netherlands (IR, 2015; GRI, 2015; Exame 2013). The third factor that indicates a conductive environment for strategic sustainability is the Brazilian society mindset. According to Gife (2013), Brazilian expectations of ethical conduct of organisations act beyond their goals and financial and legal responsibilities. Currently most of the public (52%) require business ethics that transcends the classical responsibilities of the private sector. Similarly, environmental issues are part of Brazilian’s concern in which three out of four companies expect a high degree of interest in the environmental behavior of companies. Finally, consumer behavior is also evolving towards responsible choice patterns. According to Gife (2013) 60% of consumers consulted in surveys believe that the power of individual’s choices for ethical products support environmental balance, while 68% agree that they need to consume less in order to increase environmental resilience for future generations, and the other 54% would pay more for sustainable products (Gife, 2013). In complement to
  23. 23.   23   that Eight, (2014, p. 24) states some main trends of consumers are influencing organisations to meet their needs are: collectivism, servitasation or dematerialization of products, shared values and digital competence. Despite of the drivers and positive indicators mentioned, Paro and Boechat (2008) argue about the need of Brazilian organisations to refine sustainability, considering its core business against local needs. In other words, there are disconnections and a lack of alignment between strategies and core business and these lead to poor results to both sides in Brazil (Paro and Boechat, 2008). However, weakness and strengths reflect opportunities and challenges in which Brazilian society is evolving as a result of joined efforts with companies and its stakeholders (Lourenço and Branco, 2013). In complement to these opportunities, Hart (1996, p. 70) argues that emerging economies are mostly using incremental approaches to tackle pollution, depletion and poverty challenges. However, they should take the lessons not learnt from developed nations and can “not afford to repeat these mistakes”.   Part A summary Sustainability embedded into business strategies or strategic sustainability is the next level in which companies can create policies and act and manage results in a responsible manner for society, the environment and the economy. The current scenario described so far requires much more than transitional solutions, but also transformational ones. Hart’s framework suggests advanced approaches in this direction, but it also has drawbacks and difficulties to be implemented in developing nations. The Brazilian context has been evolving from philanthropy to strategic sustainability driven by organizational and consumer awareness. This represents opportunities to engage and perfect sustainability approaches. However, these advanced stages of sustainability are mainly restricted to large organisations as per influence of leadership and finance resources combined.
  24. 24.   24   2.2 Part B Sustainability Leadership Introduction Part B of this chapter dedicates attention to explain the purpose of sustainability leadership and its concepts that are relevant for the research question of this project. It starts by examining classical approaches of sustainability leadership and controversial points and critiques. Then, the section follows scrutinizing this leadership according to its different streams thoughts: task and behavior orientated. In both streams, this section displays concepts and models and analyses limitations, which represent an opportunity for this study to address. Finally, this section examines new trends in sustainability leadership, stating a multiple factor approach, including contextual factors into the two existing streams and broadening the meaning of sustainability leadership which can respond to current challenges. 2.2.1 New ways to lead are required Leadership is widely recognized as one of the successful factors leads organisations to good performances. It has been described in extant literature as a practice which involves, influences, defines results, accomplishes goals and engages teams to fulfill their potential (Northouse, 2007; Yukl, 2013; Whatmore, 1999). However, the dynamic panorama of business today has been changing from the traditional pattern of produce, consume and dispose, to sustainable ways of using raw resources, manufacturing and consuming (Hart, 2010; Mc Donough and Braungart, 2010). Hence, as it is so important to have physical infrastructures, innovation technology and applied knowledge available, it is needed to count on a leadership which can commit and encourage new behavior patterns and implementing strategies to thrive positive impacts for three systems: organisations, societies and environment, translating sustainability challenges into practical actions (Visser, 2008; Benn, Dunphy and Griffiths, 2014). Consequently, scholars are currently dedicating efforts to apply leadership to sustainability issues, therefore impacting the society positively (McEwan and Schmidt, 2007; Galpin and Whittington, 2012; Ferdig, 2007). The pressure for this type of leadership originates from facts associated to limited progress in corporate sustainability (Bendell and Little, 2015; Sustainability, 2012). According to Accenture (2013) 1/3 of 1,000 corporate leaders recognize that the efforts have not been enough to achieve societal goals. This resonates with scientific data
  25. 25.   25   revealed in thematic events since Rio 92 to Rio+20 in 2012. Recent evaluations of the sustainable development agenda showed that a poor progress was done in comparison with negative figures with regards to shortages of clean water and its pollution, exhaustion of natural resources, loss of biodiversity, and climate change, demonstrated in figure 3 (Sustainability, 2012). This disproportional balance added to the low speed of leaders providing solutions revealed the need for a catalytic leadership applied to sustainability, having a singular ability to cross public sector, business and civil society, building coalitions and sharing responsibilities towards sustainable development (SustinAbility, 2012; SustinAbility, 2015; Benn, Dunphy and Griffiths, 2014). Figure 3. Sustainability critical issues (source: SustainAbility, 2012)
  26. 26.   26   2.2.2 Definition of sustainability leadership Sustainability leadership emerged in parallel with sustainable development’s collective discussions aiming to tackle complex issues aforementioned, therefore its different designations were developed having the sense of purpose and change as a main background (Brown, 2011). Yet, sustainability leadership is not a pure approach, but it derives from conventional leadership classical theories: grounded, situational and individual (Bendell and Little, 2015). In additional to that, there are more than 20 types of different terms for this leadership since academics investigated this topic from different viewpoints, generating an overlap of meanings (Brown, 2011). Despite exploring all these terms which are displayed in appendix 1, this project has focused on the two major classifications of this leadership which will set a background for further discussion: (1) values-orientation, based on behaviour and personal traits; (2) technical- instrumental” or task orientated (Bendell and Little, 2015 and Blowfield, 2013). Definitions of sustainability leadership from the development of leader’ behaviours are seen in Bendell and Little (2015, p. 4) as “the ethical intention of helping groups of people to achieve environmental or social outcomes”. Similarly, Metcalf and Benn (2013) describe it as a process that requires agents’ abilities to predict and act in a complex scenario, engaging teams and adapting constantly. Lastly, Schein (2015) centred sustainability leadership in a leader’s ability to have an ecologically orientated worldview, combined to long-term view and critical capacity, which enables organisations to implement and succeed sustainability practices. Inversely, attributing less emphasis on the leader’s behaviours, yet focusing on power decentralization and purpose, sustainability leadership is seen by Foster (2015) as a collective act which results in a group agreement towards a shared purpose. Hence, this leadership “is extended to anyone who seeks sustainable change regardless of role or position”, therefore the role of the leader is to engage others to seek fundamental changes (Ferdig, 2007, p. 3). 2.2.3 Streams of sustainability leadership 2.2.3.1 Behaviour oriented leadership This first stream encompasses the way the leader’s personal characteristics are conductive to sustainability results. This project will present some of the main classical approaches recognized by its importance for sustainability leadership and the recent perspective of leadership development based on traits and behaviors applied to
  27. 27.   27   sustainability: Leadership Development Framework (LDF) as per its relationship with the two topics of this study. Classic approaches: Transformational Leadership Transformational leadership is based on the belief that leaders and followers can support themselves mutually and progress with motivation, having the leader as a charismatic figure who motivates not only for the accomplishment of the task, but also to excel expectations by the leader’s accurate vision, coaching, integrity, ethical values, commitment and enthusiasm (Avolio and Bass, 1995). This style recognizes differences between individuals and improves their capabilities in order to reach higher levels of performance (Avolio and Bass, 1999). Bass and Avolio (1993) defined the basilar characteristics of transformational leaders, denominating them as the 4I’s: Influence, inspiration motivation, intellectual stimulation and individualized consideration. Because of its relevance and focus on personal leaders’ qualities mentioned above, transformational leadership has been largely utilized to define leaders whose challenges encompass sustainability (Hay, 2010; Hargreaves and Fink, 2012; Timmermans, van der Heiden, and Born, 2014). Common characteristics found on sustainability leaders that echo on transformational leadership are: create a vision of a desirable future, valorise relationships that contribute to mutual development, learn by coaching and systematic reflection (Vinkhuyzen and Vinkhuyzen, 2014; Benn, Dunphy and Griffiths, 2014). Authentic Leadership Authentic leadership is grounded on the principle of authenticity, which means that these leaders are genuine with themselves. Indeed, this principle orientates the authentic relationships as a fundamental value of this model and relies upon social justice, equality, honesty, trustworthiness and responsibility (Avolio and Gardner, 2005). The authentic leaders have an important concern of the way that they are perceived by others, being aware about their moralities, beliefs and visions as well as their own values in the context in which they work. These concerns confer to the leader a high level of self-awareness and self-regulation on an individual level. Connections between authentic leadership’s characteristics and capabilities required for project sustainability managers roles are shown in Lloyd-Walker and Walker (2011).
  28. 28.   28   This study reveals characteristics that the current generation and the next generation of leaders should possess in order to satisfy growing demands across organisations, society and environment: value driven, relationship centered, realistic and confident, positive, visionary and resilient. Visionary Leadership Visionary leadership has been constantly discussed in the literature as the leader’s capacity of inspiring and compelling a vision in which followers can personally identify and pursue. These elements enable organizational change and lead to performance effectiveness (Groves, 2006; Robertson, 2002; Waite, 2013). Visionary leadership applies to uncertain corporate environments and external crises that demand re- organisation of structures in a dynamic way having in visionary leaders a source of robust effort, personal commitment and emotional intelligence. Strong traits that are based on visionary leadership are: self-awareness, communication capacity, positive thinking, determination and consistency (Groves, 2006). Characteristics of visionary leadership play an important role in advanced phases of implementing sustainability such as proactivity and sustaining the corporation targets. In these stages the leader is required to work in a more complex scenario where radical changes in the mindset inside and outside the organization and re-thinking systems and processes are needed (Benn, Dunphy and Griffiths, 2014). In these stages, a personal commitment active network and engagement, enabling third parties’ power constitutes the set of the leaders’ profile. Critiques of classic approaches   Despite the personal characteristics in transformational, authentic and visionary leadership mentioned above being conductive towards strategic sustainability, there are many weaknesses and limitations when using solely these approaches (Benn, Dunphy and Griffiths, 2014; Bendell and Little, 2015). The ground for these limitations relies on two views that these approaches are primarily based on: the dominant Western culture and the anthropocentric paradigm. The first view argues that these leaderships have been predominantly influenced by Western culture, which frequently stereotypes the leader as a hero figure, a self-centered powerful man (Mirvis et al, 2010; Quinn and Dalton, 2009;). The leader’s robust traits of personalities and characteristics enable him to lead from a top-down hierarchical and command and control perspective that the media glamourizes and perpetuates (Mirvis et al, 2010; Higgs, 2009;). Therefore, this
  29. 29.   29   over attribution of power and self-centrism, undermines changes towards sustainability since the leader’s narcissistic view ignores collaboration and incentivizes competition, eventually leading to corruption and illegal activities, bullying, coercion, and bias with gender (Gregory Stone, Russell and Patterson, 2004; Wood, 2007; Van Wart, 2013). The second view, the anthropocentric paradigm, has basis in the scientific revolution during the Renaissance (Schein, 2015) and it influences the leadership overview by stating that nature is a mere instrument for humans to achieve their personal aims, therefore it implicates vulnerabilities of natural resources. Hence, instead of being holistically orientated, including wellbeing of other species at the same level of human issues, this paradigm concerns create ways to control nature in an instrumental manner and using it for granted (Schein, 2015 Foster, 2015). Leadership Development Framework (LDF) A group of scholars in this field: Cook-Greuter (2004) and Rooke and Torbert (2005) agree that good leaders are developed rather than born as leaders. Consequently, the human development unfolds in specific phases from an egocentric perspective to a more holistic one, thus there are two types of development that occur simultaneously and that shape the human mindset: horizontal and vertical. On one hand, the horizontal development is improved along the life through theoretical knowledge and technical abilities, such as those related to formal traditional studies and work skills. On the other hand, the vertical development is formed by a broader capacity of self-awareness and understanding about others and the context where the person is part of; therefore the assimilation of varieties increases the level of consciousness and culminates with transformations of a determined pattern. From this perspective, David Rooke, William R. Torbert and Suzanne Cook-Greuter dedicated 25 years of research on this subject matter. The research included surveys with thousands of managers in different contexts, and as a result of these findings they developed the Leadership Development Framework (LDF) where seven mindsets were primarily identified and then tested against the capacity to transform their organizations, called “Seven Actions Logics: Opportunist, Diplomat, Expert, Achiever, Individualist, Strategist, and Alchemist”. Characteristics are shown in detail in figure 4 (Rooke and Torbert, 2005, p. 43). With this study that originated this framework Rooke and Torbert (2005) concluded that Diplomat, Expert, or Achiever, action-logics are functioning in conventional stages, representing the majority of society (75-80%), while the other action logics: Individualists, Strategists and Alchemists are in post-conventional levels
  30. 30.   30   of consciousness, representing only 15-20% of society, being the ones able to implement robust changes as they possess a more developed meaning-making systems (Brown, 2011). LDF applied to sustainability Utilising this LDF background, a study conducted by Avastone Consulting called Mindsets in Action concluded that levels of development in sustainability can be directly linked to leaders’ mindsets (Mc Ewan and Schmidt, 2007). This study was a positive contribution considering that there is a lack of studies aimed at the understanding of the relationship between leadership and sustainability results (Voltolini, 2011). In the first part of this study, Mc Ewan and Schmidt (2007) state that the mindsets characteristics found in Rooke and Torbert (2005) are connected to a set of cognitions that enable sustainability contributions. Mindsets in Action brings the original percentages in the survey’s finding conducted by Rooke and Torbert (2005) during more than two decades and starts with the Diplomat, evolving up to the Achiever mindset. This is not considering the Opportunist, as it is not a significant contribution in sustainability. At the core, the study demonstrates that the leader can improve his/her ability to implement changes, enable processes and integrate all sorts of resources towards sustainable development, depending on the mindset he/she possesses. The LDF application to sustainability is described in detail in figure 5 below.
  31. 31.   31   Figure 4 - The Seven Action Logics Source: Rooke and Torbert (2005) LDF associated to the Five Gears The second part of Mindsets in Action, which complete this framework, is to outline the relationship of these mindsets with the five gears or levels in which an organisation can achieve corporate sustainability. The relationship between these two elements allows comprehension on the ways that leadership is, in practice, applicable to sustainability based on which mindsets are more likely to provoke in profound transformations (McEwan and Schmidt, 2007; Voltolini, 2011).
  32. 32.   32   Before presenting the link between these two elements, it is relevant to describe each gear individually and what they represent with regards to strategic sustainability. The gearing up is a framework created by SustainAbility (2004) and integrates five phases that denominates progress that organisations do in response to sustainability challenges, orientated to strategies. Each of the gears are described as follows according to McEwan and Schmidt (2007) and SustainAbility (2004). The  Five  Gears  Framework     Gear  1:  Comply  –  The  company  has  a  limited  perception  of  strategic  sustainability,  and  still  demonstrates   presence  in  philanthropy  activities  and  compliance  with  regulatory  framework  and  defensive  attitudes   guide  most  of  the  strategies.   Gear  2:  Volunteer  -­‐  The  firm  aims  to  have  a  more  proactive  behavior  beyond  the  law  obedience,   sustainable  development  issues  are  gradually  incorporated  to  processes,  but  in  management  and   operations  the  main  issues  are  risk  management  eco-­‐efficiency.  Prevention,  cost  reduction,  or  benchmark   with  the  peers  is  in  this  stage  of  the  main  drivers.   Gear  3:  Partner  –  At  this  level  the  company  commences  to  incorporate  sustainability  in  a  business   perspective.  The  engagement  with  volunteering  mechanisms  such  as  GRI  and  Global  Compact  evaluate   performance  based  on  the  social  environmental. Gear  4:  Integrate  -­‐  Gradually,  the  business  strategies  incorporate  the  sustainability  agenda  and  this   reflects  in  the  company  business  cases.  The  board  and  other  top  leaders  are  now  involved  and  the   emphasis  is  to  include  sustainability  in  business  portfolio  and  all  processes.  However,  as  much  as  the   complexities  are  happening,  the  organization  still  fluctuates  between  radical  changes  and  traditional   business.   Gear  5:  Re-­‐engineer    -­‐  This  stage  means  that  the  organization  is  ready  to  focus  on  new  markets  and   business  models  and  to  engage  with  other  leaders.  Sustainability  shifts  to  sustainable  operations  such  as   close  loops  and  models  that  re-­‐think  patterns  of  ownership  such  as  servitization,  working  with  external   integration,  through  coalition  and  a  multi  stakeholder  approach,  therefore  incorporating  sustainability   not  only  in  operations,  but  within  the  purpose  of  the  company.
  33. 33.   33   As figure 6 shows, at the point where the correlation is made there is a clear hierarchy in the mindsets combining with the gears, which refers to the levels of complexity while evolving from gear 1 to gear 5 in sustainability, associated to the capacity of the leader to assume and perform according to this increasing complexity. Therefore requiring a more holistic approach, creativity and innovation from the leaders profile (McEwan and Schmidt, 2007). This model will be considered further in the discussion of findings to combine the main topics of this study.  
  34. 34.   34   Figure 5: LDF applied to sustainability Source: McEwan and Schmidt’s (2007)
  35. 35.   35   Figure 6: Relationship between mindsets and the five Gears Source: McEwan and Schmidt’s (2007)
  36. 36.   36   Evaluation of behaviour stream LDF applied to sustainability integrated to the Five Gears has points of convergence with this study when it observes the relationship between sustainability leadership and levels of strategic sustainability. Its contribution to this study consists of clarifying which type of profile or action logic could lead to corporate sustainability progress and understanding a set of conductive traits and behaviours necessary to sustainability leaders from the classical approaches. However, as the focus of this framework is restricted to only one factor: the traits and behaviours, it restricts the observation of the leader’s tasks, roles and situational factors, therefore limiting the purpose of this study which is to verify how leadership drives to sustainability. Hence, if the leadership is narrowed to some factors it will not result in broader comprehension as an important driver. Schein (2015) reinforces this limitation of the behavioural stream, arguing that these traits cannot be generalized since they depend upon a given context to develop, therefore a restricted use of these approaches can fall in bias by the imposition of the Western paradigm. 2.2.3.2 Technical-instrumental or task oriented This second stream focuses on the ways that sustainability leadership responds to challenges through orientated and structured corporate actions (Blowfield, 2013). This stream has its basis on sustainability management. This project grouped three different views aiming to compare and contrast them and reflect about the limitations. Leading Change Towards Sustainability While leading towards strategic sustainability, Doppelt (2010, p. 101) proposes a deep organisational reform, which firstly requires a shift in the internal corporate mindset in which the organization was founded. Secondly, it rearranges the staff structure by selecting people with complementary skills and reorganizing the way that they interact and get results. Thirdly, the leadership should change the organisational goals focused on staff demands as well as all the stakeholders and environmental needs; orienting performance criteria. Finally, the leadership should tackle communication, adjusting the flow of information, conveying a unified sustainability corporate message from outside in and from inside out.
  37. 37.   37   Task Leadership Framework This model was created as a result of a study conducted with US leaders, which are formally implementing sustainability in their organisations in different levels of achievements. The aim was to enable co-creation and co-participation with other relevant actors within the sustainability agenda. It summarizes three main tasks among the leaders’ roles: “setting direction, creating alignment, and maintaining commitment” (Quinn and Dalton, 2009, p. 24). Setting direction defines purpose and vision while initiating sustainability into the organization. The second task, creating alignment, relates to the implementation of strategies and policies to ground the vision and objectives, therefore this task involves creation of sustainable products and services, staff education, stakeholder engagement and communication of results. Lastly, the third task, maintaining commitment, embraces the way the leader keeps processes ongoing by treating the employees and other stakeholders as a true asset, empowering them and valorizing their direct effort and co-leadership (Quinn and Dalton, 2009). Responsible Leadership This model proposed by Mirvis et al (2010) tackles the main leaders’ task, power decentralization empowerment and collaboration as elements of leadership. From this view, numerous actors across organisations are needed to foster collective actions instead of individual efforts to engage a large number of stakeholders. The rationale of this model can be summarized by the expression: “from Me to We to All of Us”. (Mirvis et al, 2010, p. 35 -39). This model allows value creation by embedding distinct spheres of society, reflecting the mutable and global, decentralizing decisions and making local connections to perform with other powerful agents. Therefore, responsible leadership is synonymous of shared leadership with emphasis to bottom-up decisions, integrative capacities and shared tasks in a cross-functional way without the hierarchy divisions. Some business cases were built based on this model represented by Interface, The Body Shop, Novo Nordisk, Oxfan and Unicef (Mirvis et al, 2010). Evaluation of task orientated leadership From the three views presented the authors agree on the role of the leader towards engaging staff and other stakeholders in order to co-create and cooperate. The decentralization of power is emphasized on the last two approaches while the importance to have a clear vision about future and set-directions based on this is accentuated in the first two. Points of contrast were not found among them, rather the
  38. 38.   38   three views are complementary, since the first two are broadly strategic whilst the last one is focused on strict leadership and followership relationship. The importance to this project is to explore the aspects of the leadership tasks’ against the findings. However, despite of the advantages of the focus on tasks that are orientated to the purpose while complementing leader’s traits and behavior with meaningful tasks, some weaknesses about this stream are detected in Kopnina, and Blewitt (2014); Banerjee (2008) and Blowfield (2013) with regards to lack of ethical values. This may lead to bad leadership practices in two ways: the use of business cases as a main expression of corporate success and back of transactional school of leadership to assess effectiveness. In the first, an indication of accomplishment, the case studies can be easily manipulated into greenwashing practices to be used as part of corporate PR strategies to promote company visibility and increase reputation through lying behind and fantasying successful stories (Kopnina, and Blewitt, 2014; Banerjee, 2008). In the second, the tools used for tasks assessment are still hugely associated to the tripod: quantification, motivation and reward/punishment and that contrasts to sustainability while setting innovative goals (Blowfield, 2013). Hence, this approach likely requires the complementing personal characteristics embedded in the leader to ensure ethical conduct of these roles. 2.2.3 Trends in sustainability leadership No single leadership style seems to be enough to face times of uncertainty and different types of leadership could be either appropriate or inappropriate to different types of decision making processes (Blowfield, 2013). In addition to this, Foster (2015) argues that leadership oriented to sustainability simply inserted into the current economic paradigm would not be enough for unknown consequences with regards to environmental destruction and social conflicts. Foster further states that the evolution of leadership from “hard control” during the Industrial Revolution to the “soft control” of modernity and current sustainability leadership towards the “beyond control” stage where a “post-sustainability leadership” should be seen as a collective where the individual leader perspective should replace a team and contextual exercise (Foster, 2015, p. 2). Therefore, the leader could lead with others, instead of or “over others” (Ferdig, 2007, p.3). Bendell and Little (2015, p. 11) forecast sustainability leadership as a result of “critical sociology, deeper psychological reflection and inspiration from wild nature”.
  39. 39.   39   To summarize these different views of sustainability leadership, the Cambridge Programme for Sustainability Leadership (CPSL) has a model that embraces individual characteristics, actions and contexts in a cause-effect relationship with mutual influences as demonstrated in figure 4 below (CPSL, 2011). These contexts consider both internal or organisational aspects, such as a corporate governance model, organisational culture and characteristics of the company’s sector together with external factors such as political, economical, ecological and community. Evaluation of new trends The convergence of leader’s behaviour and tasks viewed above into the context in which sustainability leadership takes place, and together with sociology and environmental sciences seems to form the concept of sustainability leadership with relevant breadth that this study project aims to consider. More comprehensive and complete, the addition of the third element of context, appears to close the gap of fragmented views aforementioned. Figure 7: CPSL model of leadership (2011) Figure 7: adapted from CPSL (2011).
  40. 40.   40   2.2.4 Part B summary This section examined two different streams and its approaches in sustainability leadership. Due to the limitations in each of these approaches and streams, this study considered new trends in sustainability leadership towards more complex and contemporary challenges that are a blend of theories from human to environmental sciences. The Cambridge model represented a comprehensive summary of many relevant characteristics for this project observed including contexts, individual traits and actions. 2.2.5 Gaps in the literature Despite that the contribution of leadership is recognized as a factor that drives organisational policies towards strategic sustainability to be a consensus between scholars, there is a lack of social and environmental sciences disciplines incorporated into the business curriculum that clarifies the comprehension of sustainability leadership applied to business strategies (Schein, 2010). Therefore, the relationship between both issues and the mutual influence that they play still remains in early stages of research, consisting of a gap in the extant literature (Quinn and Dalton, 2009; Brown, 2011). Moreover, this gap applies to critiques and possible negative issues associated to this relationship. Rather, mostly the positive side is evidenced (Quinn and Dalton, 2009). The literature also ignores the roles of sustainability leaders and that despite extensive evidence that they are in position to influence policies and improve organisational performance, scholars have failed to examine the effectiveness of their practices to organisation and societal results and observe closely their values, mindsets and motivations to foster sustainability (Angus-Leppan, Metcalf and Benn; 2010; Sharma and Starik 2002; Visser and Crane, 2010).
  41. 41.   41   CHAPTER 3: Methodology 3.1 Chapter introduction This chapter describes the research methods for this project. The general research methodology is examined first. The following steps explain the rationale for a qualitative methodology, describe the samples and reason for its selection, and follows with a description of data collection, analysis process and observation of ethical issues. 3.2 Overview of research methodology This exploratory and interpretive character of this project has identified drivers of sustainability leadership and has revealed how they act towards strategic sustainability. This fact leads to the use of qualitative methodology, specifically due to four factors: First, because of the nature and purposes of this study has intended to observe a social phenomena and a production of explanations of facts from real life expressed in actions, events, social actors, social constructions and interactions (Denzin, 2010, Mason, 1996); Second, because sustainability is a topic that does not have a single and rigid working methodology but encompasses flexibility, the use of qualitative methods are appropriate (Dalton, 2009). Third, because the research questions related to leadership and sustainability constitutes a new field of studies in Social Science, still in an exploration stage, therefore making qualitative methodology more suitable (Conger, 1998). Finally, qualitative methodology was also appropriated because it permitted a subjective observation of the participant’s experience (Conger, 1998). Supported in this last factor, qualitative methodology also allowed the investigation of the whole picture of the social context in which companies are involved in Brazil and revealed multiple realities and viewpoints of the interviewees as part of a study instead of a single perspective.
  42. 42.   42   3.3 Samples This project has investigated four large Brazilian organisations from different sectors described in this section, which have sustainability embedded in its business strategies, having initiatives towards economical, social and environmental development confirmed on primary and secondary data collection. The selection of these organisations are due to two main reasons: First, due to high relevance they demonstrate strategic sustainability through corporative sustainability reports, volunteering commitment, awards and recognition from the specialized media (Exame, 2013; Voltolini, 2011). Second, because the presence of leaders which put a personal commitment, having singular aspects in their leadership style that all of them have in common (Voltolini, 2011; 2014). The justifications of choosing these four companies are as follows: Duratex Duratex SA is a Brazilian private and publicly traded company, and is the largest producer of wood panels and floors, porcelain and metal fittings in the Southern Hemisphere. Duratex is a leader in the Brazilian market with a portfolio of brands including Durafloor, Duratex, Deca and Hydra. Headquartered in São Paulo, it has approximately 12,000 employees and 15 plants strategically located in seven Brazilian states (Duratex, 2015). Main highlights in sustainability • Duratex was the first Latin American organization to concur the FSC certification • It is the only Latin American company to join the Dow Jones index Sustainability • Holds an Environmental Management System certified according to ISO 14001 • Holds 260,000 hectares of planted forests, conservation areas Is founding member of the Green Building Council (GBC Brazil), whose mission is to develop a sustainable industry in the country
  43. 43.   43   Votorantim Metals Votorantim metals and mining division is part of a large Brazilian conglomerate known as Votorantim Industrial (VID). It was founded more than a century ago and employs 44,000 people in 19 countries. The metal sector was created in 1996 and currently extracts: aluminum, zinc, nickel, copper, silver, metallurgical coal and other minerals that are sold for the transformation industry (Votorantim, 2015) Main highlights in sustainability • In 2013 Votorantim Metals was voted the most sustainable company in the sector by Exame magazine with the reuse of wastes of industrial processes as fertilizer for agricultural activities, making a successful business case (Revista Exame, 2013) • Up to 87% of the energy consumed in Brazil comes from self-production • The company occupies the 13th position among the Brazilian companies with the best reputation • Votorantim protect and restored 2.6 million hectares of ecosystems • R$ 76.5 / US$ 25.3 million invested in social and culture for communities AES Brasil (Eletropaulo) AES Eletropaulo is an electricity distributor that is part of the of AES Brasil Group which is Brazil’s largest electricity provider in terms of distributed energy, representing 34.1% in São Paulo Estate directly serving 20.1 million people with 46,415.3 GWh of energy. The company has 6,152 direct employees and 8,798 contractors and participates in the supply of 9.8% electricity consumed in Brazil (AES Brasil, 2015). Main highlights in sustainability: • The AES Brasil was elected by Exame Magazine as one of 20 model companies in sustainability in Brazil in 2013 (Exame, 2013) • The company is member of Sustainability Index Stock Exchange BM& FBovespa. Portfolio 2015: inclusion in the portfolio for the 10th consecutive year
  44. 44.   44   • Invested R$ 220 million or approximately U$73 million in smart grids to avoid losses of energy • Created programmes of education with the consumer towards behaviour change in safety and energy saving Tetra Pak Privately held, Tetra Pak is part of the Swedish group Tetra Laval. The Brazilian unit is the second largest operation of the Tetra Pak Group. Headquartered in São Paulo, Tetra Pak holds a portfolio of more than 30,000 different types of packages that are used for food and drinks, ensuring that these products will reach the final consumer with its original taste and nutritional values preserved. In the past two years, Tetra Pak has produced more than 25 billion packages, reaching about 95% of Brazilian homes. In addition to the factories, Tetra Pak has several other regional sales offices and technical assistance, employing 2,615 people in Brazil (Tetra Pak, 2015). Main highlights in sustainability: • Elected in 2013 as one of the 20 most sustainable companies in Brazil by Exame Magazine (Exame, 2013) • Production of fully recyclable packaging and certified by Forest Stewardship Council - FSC • Recycle up to 23% of the packages, being the second branch worldwide in sales and revenue • Built the first factory worldwide dedicated to reusing its packages, popularly known as “long life packaging” type 3.4 Data collection process The data for this project was obtained through two main sources: primary and secondary. For the primary data, semi-structured interviews were conducted via Skype with four representatives in sustainability departments in the organisations aforementioned. The process related with the interview is further detailed in this section. For the secondary data, the study utilized sources of data collected in the period between March to July of 2015. This source included corporate sustainability reports,
  45. 45.   45   websites, magazine articles, videos of leaders in story telling format on behalf of Sustainable Leadership Platform, or originally, (Platform Liderança Sustentável) available on the Internet, and relevant facts about the organisations published in Voltolini (2011; 2014). 3.4.1 Interviews The interviews utilized were semi-structured with five open-ended questions directed with purpose to guide the conversation to answer the main research question displayed in the introductory chapter. This type of interview was adopted due to its flexibility (Denzin and Lincoln, 2005). This character of flexibility was used because it allowed the interviewer to have an in depth comprehension of the topic by adding complementary questions depending on the response of the participants, re-ordering the questions according to the conversation flow and extracting more complete answers by elucidating doubts of participants during the process (Denzin and Lincoln, 2005; Silverman, 2010; Saunders et al., 2007). The interviews happened one-on-one via Skype calls using audio and video systems in order to increase the interaction with the participants, facilitating the observation of the non-verbal communication and to ensure descriptive integrity (Mann and Stewart, 2000). This communication also meant a maximised quality of the relationship, allowing the interviewees to be more comfortable in a face meeting environment (Cassel and Symon, 2004). The Internet and the Skype platform were useful resources that minimized costs considering the geographic distance between the interviewer and the interviewees. In some cases, some additional questions requiring further data were sent via e-mail as per complement of the interview, reinforcing completeness and validity aspects of data generation. All the conversations were kept confidential and voice recording with leaders happened with their permission, the interviews had approximately 60 minutes each. 3.4.2 Case study method The case study is a method of empirical inquire appropriated to “understand complex social phenomena” by permitting the researcher to have a broader view of features of real events (Yin, 2014 p. 4). It is widely suggested for research questions which raises description of social occurrences starting with “ how” or “why” for a determined event aiming to explain, describe, demonstrate or clarify causes in existent environments (Cassel and Symon, 2004). Both definitions support the reason for selection of the case
  46. 46.   46   study approach for this study. Indeed, the case study created a truthful description of the different aspects of the leaders identified in the data collection and the intersection of these characteristics to strategic sustainability. In addition to this factor, the case study also permitted that an amount of subjective and objective content from the data collection containing evidences of real facts from the leaders and their organisations could be object of discussion in the extant literature. In this project the case studies have a descriptive and exploratory character, aiming to understand to what extent the leaders are influencing a social process: strategic sustainability. Therefore, the case studies represented in this research are a fundamental tool to comprehend emerging human influence on organisational processes and performances through the everyday practices linked with particular behaviours (Yin, 2014). For this purpose, the case studies were prepared according to a rigorous approach in research design and avoided disadvantages common to case studies displayed in Yin (2014). Firstly, it was written using a high level of impartiality, as a result of a data collection free of personal influences, but using a variety of sources: interviews, documents and observations. Secondly, different from a teaching purpose, in this project the case study refers to sources, contain evidence and display data. Thirdly, the case study has a medium length and uses sections that highlight the main evidence, making it easy and pleasant to read, representing a robust summary of facts related to the research questions and the main objectives of this project and ultimately building each case study through a unique feature material. The construction of the case studies followed the rationale of a chronological sequence of happenings, verifying a possible cause-effect of leadership and strategic sustainability, facilitating the data analysis process by collecting evidences. Other aspects related to the validity and trustworthiness for cases studies (Eisenhardt, 1989) were also observed and applied in this study. Main actions included checking the findings with participants in order to minimise mistakes in data and facts before closing the case study and to search for more in depth evidences behind the relationship with participants to confirm information from primary data.
  47. 47.   47   3.5 Data analysis The data generated was analyzed using Thematic Analysis as part of the narrative analysis method. This positivist method was a useful resource to encode and interpret participants’ experiences through classification according to occurrences of patterns (Boyatzis, 1998; Hinchman and Hinchman, 1997). This method was selected due to the simplicity and straightforward character, which combine case studies with an inductive approach of interpretation (Thomas, 2006). The data analysis procedure encompassed the following stages: data transcription from the interviews, data coding, data interpretation and conceptualization using the literature review, and generation of themes or in the case of this project, drivers (Lindlof, 1995). The visualization of these stages is demonstrated in figure 8 below. Detailing these stages: first, the raw data files from the voice recorder and hard copies from secondary data were transcribed in a common format on Word document. Second, the raw file was coded, using tags to identify the strategies of sustainability in practice by the organisations and the leadership characteristics performed. Third, these findings were interpreted in the extant literature supported by different frameworks and theories in sustainability and leadership already discussed in the literature review chapter. Finally, themes or drivers were identified and discussed generating the contributions of this project. Figure 8: Analysis process Transcript  and   review  data       Code  transcripts   using  tags  in  the   two  major  topics   Interpret    data  by   using  literature   review   Identify  and   Rinalize    themes  or   drivers    
  48. 48.   48   3.6 Ethical issues   This project will be conducted according to the principles of good practice in research which include some obligations for the interviewer in relation to the participants: obtain the interviewee’s informed agreement, be truthful about the planned use of the study, avoid deceptions, do positive good, ‘do no harm’, not causing any embarrassment or psychological risks for all the participants, respect confidentiality and anonymity of the respondents (Bryman and Bell, 2011). It is relevant to identify that there are no reputational risks involved for the organisation or for the participants considering that there is no sensitive or unauthorized material that will be used in this study. Rather, great part of the content produced apart from the interview is considered public domain, since it has been published in open sources authorized by the organisation such as corporate reports, media articles, books and websites. With regards to the interview content, there was an agreement between the researcher and the organisations respecting principles of data protection under the 1998 Data Protection Act. According to this principle, the respondents can renounce at any time they decide to do so (Bryman and Bell, 2011). 3.7 Chapter summary This chapter has explained the stages of research methodology for this project. A qualitative methodology using case studies to communicate the findings and a thematic analysis to interpret data were a suitable manner to conduct this study due to its exploratory character and focus on a social phenomena. Finally, ethical aspects were also carefully observed while conducting this project.
  49. 49.   49   CHAPTER 4: Findings 4.1 Chapter introduction This chapter starts displaying full case studies with an overview of the organisations exploring the topics, demonstrating the data analysis process and concluding by revealing and summarizing the key findings that will be discussed in the next chapter. 4.2 Case studies presentation 4.2.1 Duratex SA Process towards strategic sustainability While developing sustainability, Duratex's leadership realized that the most important challenge to implement consisted of changing the organizational culture. There was a barrier in the perception of the issue by the majority of staff and it was necessary to make a profound change across the enterprise from culture to management. Therefore the following steps to constitute strategic sustainability happened in the management process when Duratex created a committee in its administration board at the request of the president in 2007. Later, in 2011, the company created a committee within the executive board involving senior management to implement the board strategies. Thus, from the governance model, a top down flow quickly reached all areas of business involving other employees in managerial and operational levels, decentralizing sustainability decision-making and evaluation processes. As a result of this process Duratex launched in 2013 its Sustainability Platform, containing objectives to focus and drive sustainability actions until 2016. The pillars of this platform comprises to integrate sustainability into all of the company’s departments and to improve relationships with stakeholders and to make them part of the decision- making process. In order to comprise this platform, Duratex took into account seven material themes after consultation with key stakeholders: People (workforce), Quality of relationships (with a focus on suppliers, customers, communities and experts), Efficient use of natural resources and energy, Quality and impact of products, Waste management and emissions, Conservation and biodiversity, Integration of environmental criteria in the management (Duratex sustainability report, 2014).
  50. 50.   50   Sustainability leadership characteristics Duratex considers this leadership as a vital role in the successful implementation of sustainability into its strategies. However, the sustainability manager appointed two risks for performance through leadership: “Concentration of power in the person and not in the process and traditional use of force in top-down approaches without employees’ previous understanding about sustainability”. For this manager, the first risk decreases performance when the leader for some reason leaves the company, while the second risk affects the team’s engagement and continuity of initiatives. In response to both risks Duratex believes that sustainability leadership should perform from an open, co-creative and co-participative perspective where the engagement of employees and other stakeholders influence the formulation of objectives, development of strategies, validation and permanent performance evaluation. As an example, Duratex has shared its sustainability platform throughout the company structure by using internal communications that primarily allowed employees to acquire knowledge on the subject, extrapolating their area of operation and having a more holistic view about sustainability and how broadly it affects the organisation limits and beyond. Also, external interactive communication is an ongoing process that enables the participation of more stakeholders throughout the process. Using this participatory approach, Duratex assumes to differ from the traditional hierarchical structures, characterized by the use of the command and control towards a reticular perspective where sustainability becomes “a meaningful experience related to stakeholders beliefs as well as to organizational’s values” according to the sustainability manager. Despite success of its initiatives, Duratex’s sustainability manager states that along this journey things do not advance as expected and that “make[s] the leader and teams loose some enthusiasm”, therefore emotional competences are crucial to allow people to manage their dissatisfactions. Thus, “many times, the best move is to stop and wait”. Key attributes of sustainability leaders – Aptitude to be disruptive, to break paradigms and rethink organisation’s directions – Deep understanding of the business in order to make appropriate connections between the organisation and social-environmental development – Capacity to communicate clearly and engage with different stakeholders – Ability to be resilient and persistent against negative answers
  51. 51.   51   – Maturity and emotional intelligence to define when to act and when to wait, strategically – Commitment to ethical values and self-motivation to ensure continuity in the projects Business cases   1. Power generation for domestic consumption   In 2013, the publication of Exame magazine chose Duratex as the most sustainable company of the year in Brazil in the building materials sector. The case published in the magazine highlighted the company's work to reduce emissions of greenhouse gases, emphasizing the replacement of diesel by residues of wood from pipeline as an energy source. This “indoor” solution allowed producing 65% of its energy from biomass eucalyptus since the company owns 23,000 hectares of eucalyptus forests. 2. Eco-efficiency of products: Sustainable use of wood The company states that the environmental impacts of production processes of Duratex in all areas are monitored in a consistent and systematic way, with a focus on reducing the use of natural resources and increasing production efficiency. A specific case illustrating this example is that the wood used in the manufacture of boards and panels comes from 100% of the cases from forest plantations, which are certified by the Forest Stewardship Council (FSC) and ISO 14001. The company has 260 thousand hectares of planted forests; conservation areas in the states of Minas Gerais, Rio Grande do Sul and São Paulo (Duratex sustainability report, 2014). 3. Eco-efficiency of products: sustainable use of water The Deca division brand of Duratex has an eco-efficient line with more than 150 products and items. This includes basins, urinals, exhaust systems, showers and electronic and timed taps that allow water as well as energy conservation . An example of products from this line are the showers, Deca Balance, models with jets of 6 and 12 liters of water per minute, saving the resources without losing the user’s comfort. This is due to a technology of air injection in the water jet, which generates a feeling of greater volume of water even at low flow rates for the user (Duratex sustainability report, 2014).
  52. 52.   52   4.2.2 Votorantim Metals Process towards strategic sustainability Votorantim has started to approach sustainability within the environmental issues due to the high impact the industry generates in its operations. From 2006 onwards, it began to systematize processes that allowed standardized environmental indicators. However, the environment team gradually realized that they needed to go beyond risk assessment and started to evaluate opportunities to implement sustainability in a broader sense. Hence, the higher leadership requested a study to define how sustainability issues should be tackled from a proper department or from different directions having specific roles and responsibilities related to those issues. The study proved that having a department would be a better solution for defining policies, monitoring indicators and developing the topic in the context of the company’s strategic planning, transversally. The sustainability department was constituted in 2009. The next steps towards strategic sustainability happens as follows: first, the team defined what sustainability represented for Votorantim in practice; Second, the department set strategic planning of sustainability, detailing processes and projects connected to sustainability to the core business and stakeholders expectations, through its material themes; Third, changing the model of remuneration based upon sustainability performance, to generate incentives for leaders. This full process was concretized with the 2020 Vision, the updated version of Votorantim strategic planning validated by the sustainability committee. Sustainability leadership characteristics The implementation of sustainability into Votorantim business happened as a result of a combination of two factors: from influence of mid-managers and a final demand from higher leadership. Considered as a top-down approach, the initial challenge of the organisation was to make the rest of the corporation to understand sustainability from Votorantim’s perspective and to be able to perfect its productive industrial processes and foster innovation, therefore impacting transversely diverse businesses and generate value not only for Votorantim’s operations but also for society as a whole.
  53. 53.   53   At the beginning some resistance due to misunderstandings and lack of technical knowledge was faced by managerial structures. Education and communication from sustainability leadership played a fundamental role to clarify concepts and show directions. Therefore, leadership empowerment and capacity building were put in practice from inside out at Votorantim and was extended to its stakeholders. The sustainability manager stated that they had make sustainability more clear for all the departments, “we coached teams and ensured that each one is playing their own role, like an orchestra”. In order to get 2020 Vision in place and exhibiting positive results, the sustainability manager of Votorantim admitted that the department received support from the higher leadership on the board. The sustainability manager stated that “without this support the projects would not have been performed and even if there have been some in progress, the performance would not have been sustainable since Votorantim could have regressed to preview stages of compliance and behaved in reactive manner rather them being innovative and progressive.” Key attributes of sustainability leaders - Capacity to communicate with diverse businesses and interests - Competence of education about sustainability issues: transform complexity into advantages - Skills in mediate conflicts and misunderstandings along the journey - Experience in engaging and building positive alliances - Capacity to build knowledge from a holistic view and deliver tangible values for society as a whole: capacity building for sustainable development - Be guided by ethics

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