A growing number of companies are turning to collaborations — with suppliers, NGOs, industry alliances, governments and even competitors — to become more sustainable, according to new research by MIT Sloan Management Review, The Boston Consulting Group and the UN Global Compact.
The study, Joining Forces: Collaboration and Leadership for Sustainability, found that, as sustainability issues become increasingly complex, global in nature and pivotal to success, companies are realizing that they can’t make the necessary impact acting alone.
In the report, BSR’s Ryan Schuchard says strategic and transformational needs are driving private- and public-sector partnerships. The goals of these collaborations are varied and can include:
- Developing standards and promoting common practices
- Sharing information to foster discoveries or communicate externally
- Creating a consolidated base of power to influence, e.g. policy makers and suppliers
- Sharing in investments to save costs or reduce risks
Intel, for example, has collaborated with other organizations to bolster access to quality education. Since 2001, it has invested nearly $500 million dollars in literacy and education projects around the world. Understanding that it can’t go it alone or expect public institutions to do the work, Intel partners with teacher groups to provide training and conduct research on the most effective education methods. It also teams up with for-profit entities that depend on educated populations, such as publishers and broadband providers in underserved regions, the report says.
Likewise, German chemical company BASF has taken on global nutrition challenges by becoming a founding member of SAFO, the Strategic Alliance for the Fortification of Oil and other staple foods. BASF works with NGOs such as the Global Alliance for Improved Nutrition (GAIN), along with federal and local governments, to add important nutrients to basic foods. BASF has also launched a public engagement campaign to address challenges in the areas of energy, food and water, and urban living.
The report says the efforts of Intel and BASF are emblematic of a growing trend: Corporate sustainability is moving steadily from the old model — comprised primarily of ad hoc or opportunistic efforts that often produced tense relationships with the public sector — towards strategic and transformational initiatives that engage multiple entities. These collaborations have several goals and include corporate benefits such as influencing standard-setting authorities, garnering access to resources and developing new markets.
However, practice continues to lag behind belief: Only 47 percent of businesses are engaging in sustainability-related partnerships, according to the study. A majority (61 percent) of those assesses their collaborations as “quite” or “very” successful. Altogether, however, these responses indicate that less than 30 percent of all surveyed managers say their companies are engaged in successful sustainability partnerships.
A similar trend is taking place in board rooms: some 86 percent of respondents believe that their boards of directors should play a strong role in driving their company’s sustainability efforts, but only 42 percent of boards are perceived to be at least moderately engaged with the company’s sustainability agenda. This can significantly hamper success — organizations where the board is actively engaged in sustainability collaborations are twice as likely to report success with those efforts.
But examples of collaboration still abound. Outdoor apparel company Timberland is working closely with the Leather Working Group to ensure that the company sources leather from environmentally responsible tanneries. The Electronic Industry Citizenship Coalition (EICC) helps support the development of a responsible global electronics supply chain by facilitating collaboration and dialogue among companies, workers, governments, civil society, investors and academia.
The report finds the key ingredients to successful external collaborations to be: strong internal collaborations, shared language, due diligence of discussing potential partnerships, creating the right entrance and exit strategies, finding and involving the right people, and strong board engagement.
Successful collaborations also requires accountability. The UN Global Compact expelled 372 companies in the second half of 2014 for failure to communicate progress for at least two consecutive years, bringing the total number of expelled companies in 2014 to 657. However, the number of companies joining the Compact continues to exceed the number of expulsions, with 729 companies from around the world joining the initiative from July through December 2014.