Marinka Lanne, Janika Miettinen & Katariina Palomäki
Sustainable business has come to stay and companies are now striving for both economically viable and socially and environmentally sustainable solutions and business. This inevitably leads to cross-pressures. Companies have to choose which societal or environmental challenges they grasp and with what intensity. Prioritization is challenging, especially as the operating environment is constantly changing and evolving. However, sustainability and responsibility of business is now a key requirement that needs to guide and even be integrated in companies’ strategies. Tensions offer opportunities for renewal.
Today’s successful innovations must be sustainable and responsible. This should encourage companies to look for new opportunities to develop their business or even to reorient it completely, for example in the form of new business models, products or services. If emerging conflicts and tensions can be identified, they can be turned into sources of potential innovation.
In organizations, tensions present the incompatibility or contradiction of different situations, values, goals, structures, aspirations, and policies (1). Tensions may relate to, for example, inclusion, identity and competing values, renewal and preservation of the old, the balance between cooperation and guidance, or the demands of different stakeholders (2).
Large companies and the tensions of sustainability
We interviewed 14 representatives of large Finnish companies and focused particularly on the ways corporate sustainability is currently being implemented and what tensions are involved. The interviews highlighted several tensions that relate to key organizational functions and are also interlinked:
- Creating image – Being genuine. Storytelling is useful, but if every act is marketed as a sustainable act, the credibility of the term will fade.
- Capable – Inactive. The development of corporate sustainability inevitably involves complex issues that are very difficult to handle. However, by being in the front line of development, a company can gain an advantage. A challenge is that the sustainability goals are sometimes difficult to reconcile with the ‘quartile economy’ of ours, as the future benefits may seem uncertain.
- Separate – Internalized. Sustainability must be integrated into all activities, but to be given sufficient weight, it must also be considered (and managed) separately.
- Regulated – Cooperative. Strict requirements and audits are needed, but so is flexible cooperation that identifies local practices and small actors.
- Broad – Deep. A broad overall view of corporate sustainability is needed, as well as well-formulated detailed and contextual information and understanding.
- New – Traditional. In addition to active innovation and renewal, there is a need to manage transition and change fatigue, and to maintain focus and confidence in practices and business models that ensure continuity. The current, conventional product or service can already be sustainable, which can also slow down development.
- Mess – Measured. It is necessary to measure different factors to increase awareness and transparency and to monitor progress, but comparisons are difficult to make and the overall picture is challenging to draw.
Identifying tensions increases sustainability
Identifying and understanding these tensions promotes the development of sustainable business. There are no simple solutions, but with open dialogue tensions can be turned into opportunities: Are we highlighting the right things with easy metrics, or are we burying something harder to measure but important (e.g., biodiversity) under them? Do we already see our products and services as so superior that we are no longer looking for new ways to deepen our sustainability acts? Are we shifting our responsibility to customers and waiting for changes in their buying behavior instead of providing a sufficiently understandable service or product? Are we submissive to the procurement process or are we actively seeking to increase understanding?
In the company interviews, sustainability was seen as an important starting point for strategy and a vital condition for business, because without sustainability there is no business. The tensions between the different perspectives of sustainability, i.e. economic, social and environmental sustainability, were not emphasized. Some of the pioneering companies in the field of sustainable business saw that large companies have a clear role in the debate on the societal development and in the creation of business environment that promotes sustainability.
“There are no innovations if they are not sustainable”, one of the interviewees concluded. This is an excellent starting point for the future development of Finnish companies. Sustainability thinking is constantly evolving, which requires companies to be awake and take an active approach. Tensions may seem disturbing, but at best they challenge our thinking and fuel the search for new solutions and innovativeness.
(1) Nieminen, M., Talja, H., Heikkilä, J-P., Airola, M., Viitanen, K., & Tuovinen, J. (2017). Muutosjoustavuus: Organisaation resilienssin tukeminen. VTT Technical Research Centre of Finland. VTT Technology No. 318. http://www.vtt.fi/inf/pdf/technology/2017/T318.pdf
(2) Hahn, T., Figge, F., Pinkse, J., & Preuss, L. (2018). A paradox perspective on corporate sustainability: Descriptive, instrumental, and normative aspects. Journal of Business Ethics, 148(2), 235-248.
The blog post is based on:
- Lanne, M. & Miettinen, J. 2021. Jännitteet tarjoavat mahdollisuuksia kestävän liiketoiminnan kehittämiseen. Available at: https://www.vttresearch.com/fi/uutiset-ja-tarinat/jannitteet-tarjoavat-mahdollisuuksia-kestavan-liiketoiminnan-kehittamiseen
- Lanne, M. & Palomäki, K. 2021. Tensions in sustainable business: burdens or enablers? ISPIM Connects Valencia – Reconnect, Rediscover, Reimagine, on 30 November to 2 December 2021. Event Proceedings: LUT Scientific and Expertise Publications: ISBN 978-952-335-691-7. Order number in series 110.
See also the poster summing up the key results of the study: https://seedecosystem.fi/app/uploads/2022/02/tensions-in-sustainable-business.pdf